Draft Short Selling (Amendment) (EU Exit) Regulations 2018

Debate between Seema Malhotra and Alison Thewliss

Wednesday 21st November 2018 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

It is not just the enthusiasm from the Finance Bill but from the Scotland win last night, that has brought me here this morning. I am delighted to be here, and to report that news to the Committee, if Members have not already heard.

I have many of the same concerns about this instrument as the hon. Member for Stalybridge and Hyde. I continue to be concerned that we are putting an additional burden on the FCA and the Treasury, and I am yet to be convinced that we have not just the expertise, but the numbers of staff and the capacity, to take this on in addition to all the other SIs that have already been laid before the House, or will be in the weeks and months ahead. I would like some more information from the Minister about the detail of that.

Secondly, with all these powers going to the FCA and the Treasury, what will be the role of this House in scrutinising the measures as we go forward? Obviously, these are very important regulations, given the issues that arose in the 2008 crash, which might not have happened if we had had greater scrutiny at the time. After 10 years of progress on developing regulations, we do not want to slip back again once we fall out of the European Union mechanism for co-operation. I want safeguards to be put in place to make sure, should we move away from the current co-operation mechanism, that we do not end up in the same circumstances as we were in during the financial crash.

I was concerned to hear the Minister discuss the deleting of co-operation provisions. Clearly, that is a result of coming out of the EU, but I want to know a bit more about what might replace those provisions in future, or what mechanisms will be set up for European co-operation in this area. It is in all of our interests to have those mechanisms—to have some means of working together—and just saying, “We will find a way of doing that in future” does not really cut it when we are talking about something that, if it is not done absolutely correctly, could bring down the entire economy.

[Seema Malhotra]

Further to my intervention on the Minister, and regarding the point that the hon. Lady has eloquently made, there appears to be an assumption that the volume of activity that this instrument may lead to will just be absorbed by the existing resources. Combined with the fact that it is not going to be business as usual post-Brexit, or indeed in the run-up to Brexit, does the hon. Lady agree that the issue of resources needs to be looked at more seriously as a result of this and other measures?

[Alison Thewliss]

I absolutely share the hon. Lady’s concerns. As I said, we already have many SIs, and lots more are coming down the line. I am sure that many more exciting Committee sittings will take place to examine the details of those SIs. I would like a bit more clarity about the numbers of people who will be required to implement this regime, monitor it, and make sure that it works in future.

I would also like to know a bit more about the implications of this SI. The explanatory memorandum states:

“Wherever practicable, the proposed approach is that the same laws and rules that are currently in place in the UK would continue to apply at the point of exit”,

and it goes on to talk about continuity, certainty and all of those things. It would be useful to know how tightly we need to remain aligned to existing measures, now that we no longer follow those rules or have any influence in making them. I would question the whole point of leaving the EU in the first place if we have to stay that closely aligned—what is the point in leaving and having an inferior deal? Of course that is not what Scotland voted for, and that remains the case. Those are my questions. Other points were raised by other hon. Members, so I am happy to sit down and let the Minister reply.