Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018

Lord Wrigglesworth Excerpts

Wednesday 17th October 2018 Grand Committee

Following the approach set by Parliament in the FSMA, our regulators are best placed to ensure that EU technical standards are fit for purpose as we prepare to withdraw from the EU and in the period following exit. I hope that the Committee will join me in supporting these regulations and our regulators in this important preparation period which is now taking place. I commend the regulations to the Committee.

[Lord Wrigglesworth (LD)]

My Lords, I am grateful to the Minister for introducing the SI. I am sorry that my colleagues and noble friends Lady Bowles and Lady Kramer cannot be with us today, which is why I am here rather late in the day.

Returning to retail banking and other matters—it is a long time since I was last involved in it, both in the City and the north-east—when I saw the Explanatory Memorandum and the mention of some of the Acts, I realised that I am more familiar with the Acts that I remember were passed when I was in the House of Commons back in the 1980s than some of the legislation that has been coming through in recent times.

However, this is a very different situation from any we have ever faced. Therefore, before I go on to ask questions and seek assurances about the contents of this SI, I wish to say something about the political position that has led to this. I regard all this as a complete and utter waste of time and effort. It would never have been necessary if it had not been for the Conservative Government getting us into the predicament that we are in at the moment. The referendum and the decisions that have been taken since then have given rise to a massive distraction from the many problems facing this country. I frequently sit in the Chamber of this House and think we must have gone mad. Although this SI has big implications it is one small example of many thousands of other problems that are taking place because of the distraction of Brexit on the country, the Government and Parliament. These SIs today are symbolic of the terrible problem we face as a country. It is completely fatuous that we should be doing this but we have got to live with it and hope to get through to the other side. This is really the Treasury’s equivalent of preparing the M20 and M26 as car parks, and I assume other departments are doing similar things.

I give my broad acceptance to these regulations. We have questions to ask and assurances to seek. The Minister has already given some in his comments introducing the statutory instrument, but the first thing I would like to ask is: where is the impact assessment? It is mentioned in the Explanatory Memorandum but we still do not have it. It is vital that we know the impact that this is going to have on the important and complex financial services sector. I will be grateful if the Minister will tell us where it is, and when not just the Houses of Parliament but the industry can expect to see it.

I was pleased to hear what the Minister said about openness and the consultation that will be done by the bodies taking over the binding technical standards. That was one of my major queries about how this is going to operate. Can he say a little more? He mentioned some 7,000 pages of regulation, which gives an indication of the scale of the work that these organisations will be involved in, but it is vital that institutions in the City and the financial services sector are consulted properly on changes that might be made. In addition to publication in the way that the Minister described, I hope that active consultation will take place with City institutions and the different sectors that work in financial services to ensure their input in any changes in the regulations that will so profoundly affect them. I will be grateful if the Minister will give some indication of how the financial services sector will be consulted on any changes that take place.

Will the Minister also give us an assurance that if there is any amendment to the principal financial services legislation it will be done through a Bill rather than by statutory instrument? I take it that that will be the case and that if some of the financial services legislation is to be amended it will be done through the normal procedure of a Bill and that the Government will not try to make changes—even minor amendments —to primary legislation through statutory instruments. If the Minister can give assurances on the way in which this will operate, he will have our support for the statutory instrument coming into operation.

--- Later in debate ---

[Lord Bates]

We are in the process of preparing five impact assessments covering financial services and onshoring legislation. They will be considered by the Regulatory Policy Committee, the independent body that scrutinises impact assessments before they are released. As has been said many times, we are in extraordinary times in terms of what we are seeking to do with this work. I think we all recognise that the conventional form would be that the impact assessment would have been available at the same time. With that explanation about the context of the decision—

[Lord Wrigglesworth]

I wonder whether the Minister will mind if I emphasise the importance of this. We are dealing with thousands of businesses whose procedures are possibly going to be changed as a result of this. Not only are businesses going to be affected: millions of customers may possibly be affected. It is tremendously important that they and their customers know what impact this will have, so that if necessary they can change their forms and procedures, move their money and do whatever they want to do in the light of the impact of this. If changes are in the pipeline as a result of this, and they are going to affect businesses, it is vital that businesses know about them as soon as possible.

[Lord Tunnicliffe]

On the same point, I draw attention to page 33 of the statutory instrument:

“Explanatory Note (This note is not part of the Regulations)”.


The final paragraph states:

“An impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector will be available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and published alongside this instrument”.


I apologise for this, but if we are going to get impact assessments, the Government have to realise the irritation it causes to the Opposition and our colleagues in the Liberal Democrats if we do not have them published on time.