Oral Answers to Questions
Sarah Champion Excerpts(1 year, 6 months ago)
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Sarah Champion (Rotherham) (Lab)
I listened with interest to the answer that the Minister gave about support for households, but it does not match the reality in Rotherham, where constituents have had increases in rent, mortgages, fuel and food, as well as cuts to public services. What is he going to do to deliver the support that we need to make ends meet, because the offers on the table are not cutting it?
John Glen
Everyone can see that the Government have made a range of interventions over the past two years, which means support for all of those on means-tested benefits—8 million people. Eight million pensioner households will benefit from the non-discretionary payments, effectively. The household support fund, which we repeated, provides another £1 billion to give local authorities discretion in individual circumstances to offer supplementary support. Of course, I recognise that this is an incredibly challenging time for the most vulnerable, but we have tried to target those interventions on them, listening to the Low Pay Commission and increasing the national living wage to £10.42. We recognise that these are difficult times, but we will get through them.
Oral Answers to Questions
Sarah Champion Excerpts(2 years ago)
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John Glen
I am aware of the outstanding bid from my hon. Friend’s constituency. I cannot reveal the outcome of the deliberations on that competitive process, but I will be looking carefully at her bid and liaising with other Ministers on the outcome of that round.
Sarah Champion (Rotherham) (Lab)
Jeremy Hunt
I believe it will do that, because the cost of living crisis is at the top of our minds. We recognise the hard work that public servants do in a whole range of sectors and, as I know, with my background, in the health service as well. We must tread a fine line, however, because if we give inflation-busting pay awards to people who may deserve them and may be working extremely hard, that will fuel further inflation. We need to get the right long-term solution that brings down the root cause of people’s anger, which is over-high inflation.
Draft Social Security (Contributions) (Amendment No. 2) Regulations 2022
Sarah Champion Excerpts(2 years, 8 months ago)
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Lucy Frazer
The hon. Gentleman is right to point that out. It is a point that I have considered with my team. He is right that there will be an impact on some WASPI women. He knows that the decision on those women was a decision to equalise the state pension age. It dates back to 1995. That was the decision taken at that time on fairness, and fairness is the point that I am moving to now.
We need to ensure that the draft measure is fair across the board. Women who pay the reduced rate will benefit from the record investment in our NHS and social care system brought about by the new levy. Therefore, to exempt those paying the married women’s reduced rate from the health and social care levy would give them an unfair advantage compared with others.
I will briefly touch on the timeframe for introducing this draft instrument. I appreciate that the introduction of the measure is slightly delayed, such that we have had to accelerate our consideration of it. I reassure Members that we have written to both the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee to explain the reasons for the delay. The reason is that Her Majesty’s Revenue and Customs had previously identified a different legislative vehicle for this draft measure, but it turned out not to be a viable option.
Sarah Champion (Rotherham) (Lab)
I appreciate the Minister giving way and her accepting all the questions. Has she written to the women who will be impacted? One of the biggest problems with WASPI was the lack of awareness until the changes actually hit those women.
Lucy Frazer
The hon. Lady makes an important point about notification. One of the reasons for the draft measure is that we have already stated on gov.uk and through payroll systems that this will be brought in. If we were not to pass the SI, we would not be doing what we had already stated that we will do. That is the reason for today’s SI.
HMRC has quickly moved to prepare the relevant legislation. I am sure that Members across the House will appreciate that it is critical for the health and social care levy to be applied fairly across the population. As a result, the draft regulations must come into force before the levy’s introduction on 6 April.
Sarah Champion (Rotherham) (Lab)
It is a pleasure to serve under your chairship, Mr Hosie.
I was not planning to speak either, but I cannot let the Minister just go ahead with a cut that will impact directly on a group of women who, as we have recognised, are likely to have already been hit owing to their being WASPI women, with all the unnecessary impacts on their pension. This is a group of women who will effectively get a 20% tax hike that they were not anticipating, at a time when people in all Members’ constituencies are facing real economic hardship because of the cost of living increases. We are talking about 1,000 women who have already been discriminated against; and, in the scheme of things, for such a small amount of money to be raised with such a large impact on those women’s lives, I urge the Minister to reconsider.
Of course we want social care protected, but we have been calling for that for the last 10 years and it has not happened. Rather than these 1,000 women having to pick up some of the burden, when they are likely to be older married women or widowed and facing a tough time already, please, Minister, let us have some charity and common sense, especially given the scale of the investment for these women versus the savings for the Treasury.
Lucy Frazer
These regulations are not being made on the basis of what revenue we will raise; they are being made on the basis of being fair to everybody. On the hon. Gentleman’s point, as I have already said, the process is already in place, and if we were to stop the process happening, that would be a cost for payroll providers, because they would have to reverse what they are already doing. However, I am not standing here today and saying that we are going to raise millions of pounds through a measure that I have already highlighted will affect only a small number of individuals.
Sarah Champion
Minister, I ask one favour. It is £1,000 to write to these women—I will stuff the envelopes if need be. To give them some notice that this is coming would enable them to manage their budgets a little bit better. Will the Minister please commit to doing that?
Lucy Frazer
The hon. Member asks very nicely and politely, and while I will take that suggestion away, I am not promising her that we will do it. As I have said repeatedly to various Members across the Committee, we do not believe that these individuals do not believe that this is coming. This is not a situation in which we are making a change, but I will take away the hon. Member’s suggestion and think about it further with my officials.
Question put.
Working People’s Finances: Government Policy
Sarah Champion Excerpts(3 years, 2 months ago)
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Carolyn Harris (Swansea East) (Lab)
It is a pleasure to follow the maiden speech of the hon. Member for Hartlepool (Jill Mortimer). It is also wonderful to see her colleagues gathered around her to show her such support—support I know she will be sharing with the hard-working people of Hartlepool who may be suffering from the Government’s fiscal policies.
I am not sure if the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), who has now left his place, does the weekly shop, but it is something I try to do myself every weekend. Deliveries would be easier, but I find out far more in the aisle of Morrisons about what is happening in my constituency and about people’s problems than I ever do in casework surgery. At the moment, by far the biggest issue the people of Swansea East are facing is the steep rise in the cost of living, while at the same time the money coming in is being hit hard from every angle. I have lost count of the number of times I have heard, “Have you seen the price of this?” or “I can’t afford to buy that anymore”. Some will blame the pandemic and others will blame Brexit for the reasons behind the rising costs and reduced incomes, but either way, it boils down to the same thing: working-class communities are struggling more than ever before, and this Government need to hold up their hands and take responsibility for that.
I would like to take this opportunity to talk about what it is actually like for families who struggle every week to stay afloat. It was in the summer of 2016 that I became aware of the scale of the problem for families in Swansea East. Just a few days into the school holidays, the local food bank called, asking if my office could put out an appeal for donations as its shelves were almost empty—empty because parents were struggling to replace the free school meals that had kept their children fed during term time. From this, our first kids summer lunch club was born. Every year, my team makes sandwiches and delivers them to local free holiday clubs. Year on year, this has evolved and grown, and now every school holiday we try to do something to help families in the constituency who just cannot make money stretch far enough.
Sarah Champion (Rotherham) (Lab)
I thank my hon. Friend for the very hands-on approach she has taken to feeding her families, but does she share my pain and sadness that food banks and social supermarkets have become the norm, not the exception, in the last nine years alone?
Carolyn Harris
I certainly do. I see that week in, week out when I visit my communities: there is not one that does not have a food bank facility, albeit an ad hoc version.
This year, we added to the lunch club, delivering a Morrisons bag full of breakfast provisions for a family for a week—so we were providing breakfast and lunch. At least once a month, we distribute what some might consider to be luxury items, such as soap, shampoo, sanitary towels and deodorant, courtesy of the wonderful Beauty Banks charity. We deliver them to a community organisation for families who, if they cannot afford to feed themselves, certainly cannot afford personal hygiene products.
By far our biggest project was last December’s “Everyone Deserves a Christmas” campaign. It is the fourth year we have done it, and last year was like no other. We were inundated with requests and recommendations about families who needed help. Thanks to support from the city’s Swans football club, the Ospreys rugby team, Swansea Council, local businesses, local community groups and people including the incredible Welsh football star Gareth Bale, who personally paid for 300 Christmas hampers, we ended up making and delivering 1,300 hampers. On Christmas eve, we cooked more than 100 dinners and delivered them to people who would not have had a Christmas otherwise.
The highlight for me was when one of the drivers returned from making his deliveries to thank me for letting him be involved in the scheme. He said that he was so touched by the excitement of a child who had opened up the hamper box and rejoiced that it was the best present he had ever had, because among the festive food were a tin of Quality Street and half a dozen Christmas crackers. That family had not had a tin of sweets before, because £4 on offer was too much to spend on something non-essential.
With summer now behind us, we are once again planning our Christmas hamper campaign, but with the scrapping of the £20 universal credit uplift, the steep increase in energy prices and the ongoing fallout from business closures, job losses and reduced incomes for those on furlough, 2021 is likely to have hit even more families than 2020. Thousands more people will be sitting at home right now worrying about how they will get through the next week or the next month, let alone buy Christmas presents and other extras. I worry for the families in my constituency, in my city, across Wales and across the UK. The past 18 months have been cruel to so many, but the Government clawing back more money from those who can least afford it is crueller still.
My team—and Gareth Bale, I hope, if he is listening—will help again. We will happily keep on fundraising, packing boxes and putting smiles on faces in Swansea East with a box of sweets in a Christmas hamper. It is an honour to do so, but anyone in this House who makes that necessary because they think that those families do not need the extra £20 universal credit payment, or that they can spend their already stretched incomes on huge hikes in energy bills, should think of those kids and be utterly ashamed of their actions. When the Minister refers to universal credit as a product, when in reality it is a lifeline, I fear that he sees claimants more as a commodity than as individuals.
0.7% Official Development Assistance Target
Sarah Champion Excerpts(3 years, 5 months ago)
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Steve Barclay
The point is that we have made a number of difficult decisions, and I will come on to that, but we are also continuing to spend £10 billion in response to the commitments that we have made. I am sure that my hon. Friend, as a former Treasury Minister, is well aware of the fiscal reality we face.
Strong public finances mean making difficult decisions, such as increasing corporation tax. That is one of the difficult decisions that my right hon. Friend the Chancellor has made, alongside the decision around overseas aid. Indeed, this is something that the International Development (Official Development Assistance Target) Act 2015 explicitly anticipates when it refers to the effects of one or more of the following:
“(a) economic circumstances and, in particular, any substantial change in gross national income;
(b) fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing;
(c) circumstances arising outside the United Kingdom.”
In other words, the 2015 Act clearly envisages situations in which a departure from the target may be necessary. It provides for the Secretary of State’s accountability to Parliament by way of the requirement to lay a statement before Parliament and, if relevant, makes reference to economic and fiscal circumstances, as well as circumstances outside the United Kingdom. Indeed, the Foreign Secretary has already committed to doing that, as required by the Act.
Sarah Champion (Rotherham) (Lab)
That accounts for the cuts in July, but surely it was a political decision, and potentially an unlawful one, to cut to 0.5% in November.
Steve Barclay
The provisional data shows that for the 2020 ODA figures, the 0.7% was met. The point is that the Act allows for the economic and fiscal instance that I just set out—it is in section 2. If the UK were to spend 0.7% of gross national income as ODA, it would cost the country an additional £4.3 billion this year. Given our commitment to fiscal sustainability, we could offset that either by raising taxes or by cutting public spending. [Interruption.] We can come on to that. To put that in context, it means a 1p increase in the basic rate of income tax or about a 1% increase in the standard rate of VAT at a time when taxes are at a historical high.
Sarah Champion (Rotherham) (Lab)
Thank you, Mr Speaker, for your assistance in securing this debate. The number of people not only who have campaigned on this issue for the past year but who want to speak today shows the true strength of feeling on this issue and the cross-party support for it.
I wish to talk about hypocrisy, which it is something I just cannot stand. Unfortunately, the Government’s approach to ODA foreign aid spend is dripping in hypocrisy. The Government have stated their seven global priorities, and we know the priorities for the upcoming G7, but unfortunately what the Government actually do does not match up in any way. I wish to use this speech to highlight specific examples of where the Government are failing.
On global health security, we are cutting by 95% our funding for the global polio eradication initiative, at the exact moment when we are about to eradicate polio. Funding for UNAIDS is cut by 83%, impacting the provision of life-saving HIV treatment to the most marginalised. A programme by the Liverpool School of Tropical Medicine to build stronger, more resilient health systems in low and middle-income countries is cancelled. The King’s Global Health Partnerships programme “Saving Lives”, which was due to improve care for thousands of pregnant women, is cancelled.
Funding for neglected tropical diseases is wiped out. Funding for life-saving water, sanitation and hygiene projects is slashed by 80% in the face of covid-19 and climate change. The Concern Worldwide project to provide healthcare to people living in remote and disadvantaged areas of Bangladesh is terminated. The project was due to reach 2.6 million people, including 140,000 people living with a disability.
The G7 Foreign Ministers have committed to end violence against women and girls, while girls’ education is a key priority for the Government, yet the women’s integrated sexual health programme is cut by £72 million. The International Planned Parenthood Federation described the “brutal cuts” as
“a tragic blow for the world’s poorest and most marginalised women and girls.”
The UK Bangladesh Education Trust project to educate girls forced into domestic labour has been cut entirely. In Tanzania, the projects of Children in Crossfire and EdUKaid to support children, including disabled children, to access education have been cut entirely.
The United Nations Population Fund is cut by 85%, potentially leading to 25,000 unintended pregnancies. STiR Education projects supported marginalised families across Uganda to access education but have been cut entirely. The projects of S.A.L.V.E.—Support and Love Via Education International—to support girls living on the streets to return to school are cut entirely.
The Women for Women International female empowerment projects in Nigeria and Afghanistan are terminated, leaving thousands of marginalised women abandoned. UNICEF’s core funding is cut by 60%, impacting its ability to provide children with access to water, sanitation, education and health services. An International Rescue Committee project in Lebanon to prevent and respond to gender-based violence, and for child protection, has been cut, depriving 107,000 people of those services. In Sierra Leone, the budget for an IRC programme was cut by 60%. It reached more than 3 million people, mostly adolescent girls.
Humanitarian preparedness and response is also a priority, alongside the G7 commitment to supporting developing countries to tackle and prevent humanitarian threats, but aid to support Rohingya refugees in Bangladesh has been cut by 42%. Mines Advisory Group programmes have been cut by almost 50%, with all funding for work in Lebanon withdrawn. Humanity & Inclusion projects providing speech and physiotherapy sessions for disabled Syrian refugees have been cut entirely. The Tomorrow’s Cities project, working to reduce the risk to poor countries of disasters such as earthquakes, volcanic eruptions and landslides, has been cut by 70%, compromising the ability of vulnerable communities to respond to disasters. Aid to Yemen has been slashed by nearly 60% in the face of catastrophic famine.
I could go on and on; that is only the beginning of the cuts that this Government are bringing about. That wrecks not only our international standing but the security of this country, because we are cutting money not just for humanitarian projects, but for projects that prevent conflict and poverty. What are some of the main drivers of conflict around the world? Unstable Governments, famine and lack of opportunity.
We were the world’s leading country on a number of those projects, which kept us safe and allowed the world to prosper. By cutting them, and by stubbornly refusing to give us the data on when fiscal circumstances will allow us to go back to 0.7%, the Government are undermining this country and the investment made thus far by the taxpayer.
Oral Answers to Questions
Sarah Champion Excerpts(4 years, 4 months ago)
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Steve Barclay
If the hon. Gentleman had listened to the answer I gave a moment ago, he would have seen that we are learning from the lessons of the 2008 crash. One of the measures that was put in place then saw a fall of a third in the number of small house builders, so part of the £450 million fund is providing the finance to enable small house builders to build the schemes that Members on both sides of the House agree on. It is about learning the lessons of the schemes that Labour put in place in 2008, which led to a fall in construction work.
Sarah Champion (Rotherham) (Lab)
Anna McMorrin (Cardiff North) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Through the coronavirus job retention scheme and the self-employment income support scheme, the Government have protected 9.4 million jobs and supported the incomes of 2.7 million self-employed. I remain committed to helping the unemployed return to work and supporting those who are most vulnerable to job loss. We will continue to monitor economic conditions to ensure our labour market policy response is both appropriate and effective.
Sarah Champion [V]
In his announcement of the self-employment income support scheme, the Chancellor told self-employed people that they have not been forgotten and no one will be left behind, but the Treasury Committee has found that more than a million people have been unable to benefit from either that scheme or the job retention scheme. That is certainly what I am finding in Rotherham. Will he commit to acting to ensure that, true to his word, no one is left to face this crisis alone?
Rishi Sunak
Some 95% of those who are majority self-employed are able to benefit from the self-employment scheme. In its design, its duration, the breadth of its coverage and the generosity of its support, the scheme remains the most generous and comprehensive self-employment support scheme in the world.
Covid-19
Sarah Champion Excerpts(4 years, 6 months ago)
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Sarah Champion (Rotherham) (Lab) [V]
I thank the people of Rotherham for following the lockdown rules, and for proactively helping the people in our town who are vulnerable; you have shown real community spirit and I am proud to represent you.
Tonight, however, I will speak as Chair of the Select Committee on International Development, as we are currently conducting an inquiry into the impact of the coronavirus pandemic in developing countries. There have been some clear and consistent messages. First, the ability to prevent infections in the global south is simply not there. How is it possible to maintain social distancing in a refugee camp or at a food distribution point? In Bangladesh, for example, 850,000 Rohingya refugees live in just 26 sq km. Secondly, healthcare systems in so many areas have been destroyed, like in Syria or Yemen, or are vastly under-resourced, like in Mali, with its single ventilator for the entire country. Thirdly, the economic impact has been immediate in the global south. This alone is estimated to have undone the development work of the last 30 years.
The consensus in our evidence to date is as follows. The coronavirus pandemic is emerging across the global south, with no country being safe. The outbreak is likely to peak in the next two or three months. The direct challenge of the disease and the seriousness of its effect on children will be exacerbated where there are existing illnesses, other morbidities and poor nutrition, as well as a weak health system and infrastructure. For example, it is estimated that only 51% of health centres in Yemen are fully functional. In north-east Syria, no district can even meet the basic emergency threshold of 10 hospital beds per 10,000 population. In north-east Nigeria, vaccine coverage is only 8% in some areas, and 2.7 million women and children need nutritional support.
The preventive measures that we have adopted in the UK will obviously be challenging, if not impossible, in crowded settlements such as refugee camps. Other illnesses are likely to embed, as existing health services are crowded out or avoided. Traditional vaccine provision, maternal and neonatal health, and basic public health—nutrition and hygiene advice, in particular—will be at risk. Where lockdown is being used as a preventive measure, our evidence makes it clear that the stress that this can impose, alongside the threat of family illness and loss of income, all place disproportionate risk on women and children. Lockdown-related domestic violence has been evidenced everywhere. Child abuse is likely to increase. The Committee received evidence that child marriage and child sexual exploitation, including via the internet, could be used by some to mitigate losses of income from a lockdown economy.
Food security continues to be a major concern, particularly in Africa and the middle east. Public trust and social cohesion are worsening across some countries, with increasing protests against Governments. The threat of successful radicalisation and recruitment by extremist organisations seems inevitable in the face of rising unemployment and deprivation. There have also been reports of very negative sentiments about the role of international NGOs and foreigners in relation to the spread of the disease.
I have welcomed the UK’s response to the emergence of coronavirus in the global south. However, in our evidence, NGOs considered the £20 million allocated by the Department for International Development for them to tackle covid-19 to be insufficient. There is also a consistent message that multilateral organisations are not reactive enough to disburse funds to frontline delivery in these urgent situations. I urge the Government to allow UK NGOs more flexibility in how they already use their existing funding. The UK’s response—totalled at £744 million—is weighted strongly towards the allocation of official development assistance funding for the development of a vaccine, so it is concerning that the Government have yet to enact safeguards or place conditions on the use of the funding to ensure—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am terribly sorry, Sarah, but we have to leave it there.
Lotteries Regulation
Sarah Champion Excerpts(5 years, 4 months ago)
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Mims Davies
I thank my right hon. Friend for her question. She has consistently campaigned to support society lotteries, recognising all the good work that they do in her constituency and many others. It is important that society lotteries demonstrate the highest levels of transparency. The changes that we have announced, alongside the Gambling Commission’s plans to consult on measures to tighten the national lottery licensing framework, will help to give players of the national lottery a clear understanding of where the money is spent locally and the good causes that it is spent on. It is absolutely right that we support society lotteries and grow the pie for them, while keeping the unique position of the national lottery. As the charities Minister, I am clear that all money for good causes is very welcome.
Sarah Champion (Rotherham) (Lab)
Will the Minister explain what steps she has taken to increase the transparency of how the proceeds, particularly from large-scale lotteries, are spent?
Mims Davies
This issue has come up significantly in conversations with the national lottery and the sector. Transparency is vital when people play the lottery, so there will be further transparency measures with the change to £50 million, alongside work by the Gambling Commission. The hon. Lady will see from the consultation documents that we seek to ensure that everybody in this space understands where the money for good causes goes and what is spent on marketing, and I am sure that she will contribute to any further conversations.
Oral Answers to Questions
Sarah Champion Excerpts(5 years, 6 months ago)
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Mr Hammond
We always have to find the most cost-effective way to deliver the effect we are looking for. We have chosen so far to do that by raising the personal allowance thresholds, but the hon. Gentleman makes a perfectly legitimate argument for a different approach in the future. As I have said, we will have choices as a result of the much improved state of the public finances.
Sarah Champion (Rotherham) (Lab)
The Chancellor of the Exchequer (Mr Philip Hammond)
My principal focus is to ensure the continued resilience of the UK economy at a time of domestic and international economic uncertainty. By maintaining our balanced approach to the public finances and continuing to focus on investment and cutting taxes for working families, we have ensured that public debt is now falling sustainably, employment is at a record high, wages are rising and Britain’s economy is forecast to grow more than three times as fast as Germany’s this year.
Sarah Champion
The report by the all-party group on adult survivors of childhood sexual abuse demonstrated the economic impact of not supporting victims: 72% said it had had a negative impact on their career; 65% on their education; and 46% on their financial situation. The Chief Secretary to the Treasury said about survivors that
“it should be government’s responsibility to prioritise support for these people”.
Will the Chancellor prioritise support for these services in the spending review?
Draft Financial Regulators' Powers (Technical Standards Etc.) (Amendment Etc.) (EU Exit) Regulations 2018
Sarah Champion Excerpts(6 years, 1 month ago)
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The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018.
It is a pleasure to serve under your chairmanship, Sir David. Since the UK’s 2016 referendum decision to leave the EU, Her Majesty’s Treasury has undertaken a significant amount of work on the withdrawal negotiations and in preparing for the range of potential negotiation outcomes. The best outcome is for the UK to leave with a good deal, and we have put forward a serious and credible proposal for the future relationship. Although we remain confident of agreement later this autumn, in the meantime we must and will continue the work of preparing for no deal.
As the Department responsible for financial services, the Treasury has undertaken particularly intensive work to ensure that there will continue to be a functioning legislative and regulatory regime for financial services in a scenario in which the UK leaves the EU without a deal or an implementation period. An essential part of that work involves using powers delegated to Ministers under the European Union (Withdrawal) Act 2018 to fix deficiencies in applicable EU law that will be transferred directly to the UK statute book at the point of exit. The approach taken in the Act is to maintain existing legislation at the point of exit to provide continuity.
Although the fundamental elements of the current financial services legislation will remain the same after exit, that legislation still needs to be amended to ensure that it will work effectively once the UK has left the EU. To achieve that, I am delighted to say that the Treasury is in the process of laying approximately 70 statutory instruments ahead of exit day. A key decision for my Department in approaching that work is how to divide responsibility for the huge body of financial services legislation that the Act brings to the statute book.
An important component of that legislation is level 2 legislation—technical standards, which run to 7,000 to 8,000 pages. The responsibility for developing technical standards currently lies with the European supervisory authorities, and they are adopted by the European Commission. As required by EU law, they do not take policy decisions; they set out at a granular level the requirements that firms need to meet to implement policy set out in higher EU legislation. Common examples of technical standards include those that set out the process for firms to provide supervisory information to regulators, including the specific form templates that they should use.
The 2018 Act will transfer those technical standards into UK law at the point of exit in the event that we do not reach an agreement with the EU on an implementation period. Many of them will be deficient and will need to be fixed by the appropriate body or regulator. The Government propose to allocate responsibility for them consistently with the UK’s existing regulatory framework, as approved by Parliament in successive pieces of legislation.
The Financial Services and Markets Act 2000—the key piece of framework legislation for regulation of financial services in the UK—delegates responsibility to the Prudential Regulation Authority and the Financial Conduct Authority for making the detailed rules that apply to firms in order to operationalise the framework that Parliament has set in legislation. On the same basis, the Government propose to transfer responsibility for technical standards from the European supervisory authorities to the Bank of England, the PRA, the FCA and the Payment Systems Regulator. That transfer will be made through statutory instruments to amend EU regulations in relation to each sector of the financial services industry. They will amend each mandate to make technical standards to give power to the appropriate regulator; for example, the SI to amend the capital requirements regulation will transfer the relevant technical standards to the PRA. Each SI doing that will be subject to parliamentary approval through the affirmative resolution procedure.
The SI that we are discussing today amends the FSMA and other relevant Acts to set out the procedure that the regulators will use when they are given the power to make technical standards by the relevant sectoral SIs. That approach is consistent with the FSMA framework, and recognises the fact that it is the UK regulators that have the necessary expertise and resources to maintain standards after the UK’s exit from the EU. That is particularly true given the important role the UK regulators have played in the EU to develop those standards, through their membership of the boards and working groups of the European supervisory authorities.
Sarah Champion (Rotherham) (Lab)
I am listening to the Minister with interest. He is talking just about financial services. Has any estimation been made across Government Departments of how many years of SIs we are likely to have post Brexit to tie everything up?
John Glen
I cannot speak for other Departments; I can set out only what I am responsible for in the Treasury. Other Ministers will introduce SIs and that will be a matter for the scrutiny of the House. I do not have a holistic answer today. I will investigate, and if possible I will write to the hon. Lady.
The SI will also sub-delegate the section 8 deficiency-fixing power in the European Union (Withdrawal) Act to enable the regulators to make the necessary corrections to the technical standards, as well as to regulator rules made under FSMA, so all those rules will operate effectively from day one of exit. The same constraints that apply to Ministers when acting under that power would apply to the regulators. It could be used only to make changes to correct deficiencies in EU law, and would be subject to a two-year time limit. To ensure that the regulators fixed deficiencies in technical standards in line with the fixes Parliament will approve in onshoring SIs, the SI will require the Treasury to approve the deficiency fixes the regulators propose to make.
In advance of laying the SI, the Treasury published the instrument in draft, along with an explanatory policy note, in April 2018, in order to maximise transparency to Parliament and industry. We have engaged stakeholders on these issues and will continue to do so, and we are publishing advance drafts of our onshoring SIs throughout the autumn—I think some were published in the last few days. The regulators are also committed to a fully transparent process for fixing deficiencies in technical standards and their own FSMA rules. The regulators plan to issue consultations on their proposed deficiency fixes. The first of those has been launched today by the FCA, and the Bank of England will follow shortly.
In conclusion, the SI will be essential for ensuring that EU technical standards for financial services continue to work effectively in the UK from day one of exit. UK regulators operating within the statutory framework set by Parliament in FSMA are best placed to ensure that the technical standards are fit for purpose as we prepare to withdraw from the EU and in the period following exit. They will exercise that function in an open and transparent way, with their ongoing responsibility for technical standards made subject to the statutory requirements for consultation as set out in FSMA. I hope that all colleagues will join me in supporting the regulations, which I commend to the Committee.
Mr Jones
He did try, to be fair to him; he is not a bad Minister. This puts a spotlight on a cost of Brexit that is not being factored in. Those 800 SIs will all have a cost to them. It would be interesting if the Minister supplied information about not just the number of SIs relating to this regulation, but the estimated cost of each of them, including the cost of preparations by the Department. That will be a huge cost across Government.
My hon. Friend the Member for Oxford East and the hon. Member for Glasgow Central made a good point about the capacity of the Bank of England, PRA and FCA to implement this and take over this responsibility. I have sat on many Committees since I have been in Parliament, and I do read the explanatory notes, even when the subject is boring or dry, as this may be. Uniquely for an explanatory note on a piece of legislation, no costs are included in this one. It will be interesting to see if all the SIs we get have explanatory notes in which no costs are included, as though this were a zero-cost game.
There is not just the question of what the SI will cost; there are other costs. Clearly, the tasks being taken on by the Bank of England, the PRA and the FCA will involve cost. If we are to do justice to the transparency of the Brexit process and those claiming great wins for the taxpayer out of it, the full extent of those costs needs to be known. It is unfair on those organisations to be given extra responsibilities but no cash to go with them, unlike other parts of Whitehall, where hundreds of millions are being spent employing new civil servants. This is a hidden cost of Brexit. This is one piece of legislation; how many times will it be duplicated across Government? I suggest many, many times, adding up to millions and millions of taxpayers’ pounds.
The explanatory notes state that no consultation was done, although the statutory instrument was published in draft in April. The notes say:
“The financial services regulators plan to undertake public consultation on any changes they propose to make to Binding Technical Standards or rules made under the powers conferred upon them by the Financial Services and Markets Act 2000 using the powers delegated to them”.
The important point there is about who will decide. Will there be ministerial or parliamentary oversight of what is in the consultation? Who draws it up? Is that left to the regulators to do? There will obviously be controversy on the issue that the hon. Member for Basildon and Billericay raised, and people will complain about it. Again, how will that be dealt with? Will Parliament or a Minister have any say over the regulators and how they conduct the consultation? It is said that the devil is always in the detail, and that was clearly demonstrated by the hon. Gentleman.
There may well be unintended consequences to taking on some of these regulations. There may well be better ways of doing things—I do not disagree with that—but where will the political pressure to get the authorities to change the regulations come from, if there is simply a general consultation? For example, someone has already decided that the regulation the hon. Gentleman referred to does not need looking at, but Parliament does need to look at it. Ministerial oversight is needed—not just of the draft regulations, but in a whole load of areas. Basically, we are delegating our responsibility to determine what should and should not be looked at to statutory bodies. In many cases, we might have a very different view from regulators.
We are all told that the draft regulations are being put in place for the nightmare scenario in which we do not get any deal in the negotiations that are taking place. I am interested in what happens to the SI if we do get a deal. Can the Minister explain—he may not be party to this—where this small piece of possible legislation is in the great negotiations? What happens if we get a deal? Does the SI fall?
As for regulators taking over these responsibilities, what will happen in future? Let us suppose we get no deal, the draft regulations go through and we try to transpose everything into UK legislation—this point was made eloquently by the hon. Member for Glasgow Central. What happens if our regulations get out of kilter with the EU regulations? Clearly, the sector is not based on a single company; We are talking about global business—money moving around the world—that does not recognise boundaries. What is the mechanism to ensure that if there are changes in EU regulations, we reflect them, or take them on board directly? Again, will that be left to the regulators? Will they decide which option we take, or will the decision come back to Parliament?
If such decisions are to come back to Parliament, we will be very busy in a whole host of areas for years to come. Basically, when EU regulations in this or any other area change, how do we ensure that we are not at a competitive disadvantage, or that the regulations for institutions based both in the EU and here do not somehow clash? This is not easy. It demonstrates one of the problems with what someone—I cannot remember who—on the leave side said: they said that that the deal would be the easiest ever done. No, it will not. This demonstrates in one small area the technical detail that will hit us.
I worry, because if our regulations are rather weaker—the hon. Member for Basildon and Billericay seems to think that our savers or investors are disadvantaged by the current regulations—and savers and investors are somehow less protected, that leads us to the point made by the hon. Member for Glasgow Central about what came out of the 2008 crash. What we needed was not more regulation for regulation’s sake, but international regulation to ensure that people in this country investing in a pension fund that might be investing overseas were protected, and vice versa. When people ask, “Will these dry regulations affect ordinary people?” the answer is: yes, they will if we get them wrong. That is why this is important.
John Glen
With respect to that, we have prepared a narrative on the impact assessment, and I believe there is a conversation going on with the appropriate Committee to determine that, but we have not concluded that assessment. Obviously, it is necessary to move quickly to secure all these statutory instruments before the end of March. That has been our objective.
Sarah Champion
For clarity, is the Minister saying that we need to pass 800 statutory instruments before March? I thought he meant before the whole process was concluded.
John Glen
I need to write to the hon. Lady about the distribution of the 800 statutory instruments. As I understand it, 800 statutory instruments will be required across Government through the exit process.
I hope that I have dealt with the points that have been raised. I am sincerely sorry about those points that I have not dealt with, and I will write to hon. Members. I hope that it is clear that we have had full scrutiny of this statutory instrument, and that the Committee will now approve it.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018.