Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019

Lord Bridges of Headley Excerpts

Monday 18th February 2019 Lords Chamber

which is set out in the impact assessment. It seems to me fundamentally wrong. In a case of this kind where there is a significant impact which could become greater over time, as our rules diverge, where there has been an attempt to quantify that impact and where we have so many people affected—2,113 is the minimum number of companies directly affected, but the real number will be significantly higher—not to have undertaken any consultation is simply and straightforwardly unacceptable. I repeat the point I make obsessively on these regulations: in no other context would this House regard it as acceptable not to have a consultation on changes of this kind. In any other context, the normal rules would apply. They require a Cabinet Office 12-week consultation with a proper opportunity for people to respond, and then the Government respond to the consultation and publish the consultation responses and their own response.

[Lord Bridges of Headley (Con)]

I should declare an interest as I am an adviser to Banco Santander and take considerable interest in these matters. Is the noble Lord saying that the finance industry, including UK Finance, agrees with him that there has been no consultation whatever?

[Lord Adonis]

My Lords, there has been no public consultation. The bank to which the noble Lord is now an adviser may have been consulted. I do not know. He can perhaps tell us—because private sources of information are the main ones—whether it has been one of the organisations which have been engaged with privately by the Government.

[Lord Bridges of Headley]

I had not had direct contract with the Government on these matters. However, I shall read to the noble Lord a newsletter that has just come into my inbox from the CEO of UK Finance:

“We are working closely with members and partners with regard to onshoring, to emphasise continuity with EU law and to avoid sudden and unpredictable legal changes in the UK in light of a ‘no-deal’ outcome. We have to date assessed close to 40 legal instruments relating directly to financial services which have been published and/or laid in Parliament, with a handful more to come. We have also responded to a number of onshoring relating consultations issued by the Financial Conduct Authority … and the Bank of England”—


a point that I am sure the noble Lord will have heard Sam Woods make to the Select Committee in the other place last month. Therefore, what precisely does he mean when he says “no consultation”? Does he mean “no consultation” or “extensive engagement”?

[Lord Adonis]

I mean precisely what the Government themselves say in paragraph 10 of the Explanatory Memorandum of these regulations:

“HM Treasury has not undertaken a consultation on the instrument”.


That is what I mean.

--- Later in debate ---

[Lord Bridges of Headley]

The noble Lord needs to be very clear, because that paragraph then goes on to say that the Treasury,

“has engaged with relevant stakeholders on its approach to financial services legislation under the European Union (Withdrawal) Act 2018, including on this instrument, in order to familiarise them with the legislation ahead of laying”.

Therefore, there has been extensive engagement. Perhaps the noble Lord would be very precise on this matter.

[Lord Adonis]

My Lords, I read the words of paragraph 10 very precisely. Regarding the engagement with stakeholders, the noble Lord should be very careful about making himself a defence industry for the Treasury on these matters. The reality is that there has been engagement with stakeholders—it says so here. However, the only way that we will know about the engagement is if those who have been engaged with relay that to us. If they are fortunate enough to have former Ministers such as the noble Lord retained for these purposes, those people may tell the House via a circular route what has been happening. However, the way in which our parliamentary processes should work is that the consultation should be conducted formally and publicly, with the results being formally published and reported. That is not happening in the regime that is being set up at the moment.

The noble Lord is a former Minister in the Cabinet Office. It is the rules of the very department in which he was a Minister that require in all other circumstances, apart from these no-deal regulations, a formal 12-week public consultation. I am surprised that he should somehow think that it is adequate for that to be replaced by engagement with relevant stakeholders, undefined in paragraph 10.1. The noble Lord has aided the House greatly by starting to read out some of those who have been consulted with. There is no other way, apart from his intervention, in which we would have known who these stakeholders were. The way that this whole process is being conducted at the moment is utterly inadequate.

[Lord Bridges of Headley]

I am making the point that the noble Lord’s amendment—I am obsessive about these things—includes the words “no consultation”. This House should be absolutely aware that there has been plenty of engagement. I am sure that if he were to write to UK Finance and others, he would find out more. I totally accept the point that several on the Liberal Democrat Benches have made about the inadequacy of some of the processes. I was fully aware of that when we started and that point was well made. However, it is very important that when we have these debates we are very accurate. As far as I understand it—I have not been directly involved in this matter at all myself—there has been quite extensive engagement, so I would like the noble Lord to make that clear to the House.

[Lord Adonis]

My Lords, the noble Lord said that I should be precise and accurate. My amendment to the Motion says that,

“this House regrets that no consultation was undertaken on this instrument”.

Paragraph 10.1 of the Explanatory Memorandum in respect of these regulations says:

“HM Treasury has not undertaken a consultation on the instrument”.


Those are the exact words, so I cannot understand at all the point that the noble Lord is making. He is trying to excuse the fact that there has not been a consultation by saying that there has been a lesser form of engagement. However, that engagement is not a substitute for formal public consultation. Is he suggesting that it is an adequate substitute?

[Lord Bridges of Headley]

I am more than happy to rise on this point. Obviously I would much rather not be in this situation, having voted to remain, but, given the time that we have, I think that the Treasury has done an extremely good job with the level of consultation that it has undertaken, as have the regulatory bodies. I completely understand the desire of the noble Lord and others in this House to have proper scrutiny of this SI, but I just wish to make sure that all Members of this House are aware of the situation. The noble Lord is quite right that there has been no formal consultation but there has certainly been extensive engagement and it is very important that we make that clear.

[Lord Adonis]

I am grateful to the noble Lord for making that clear. However, perhaps I may also make it clear to him that the time we have available is down to the Government. It is not because of some extra-terrestrial force that has been at work; it is because of the Government that we are operating within these confines. It is therefore absolutely appropriate that noble Lords who do not accept that we should be in this straitjacket in the first place do not accept for a moment the point that the noble Lord has just made—that dispensing with normal parliamentary and government procedures in respect of consultation is satisfactory because we are limited for time.