Financial Services (Implementation of Legislation) Bill [ Lords ] (First sitting)

Debate between Thelma Walker and John Glen

Tuesday 26th February 2019 Public Bill Committees

[Thelma Walker]

Thank you for calling me, Sir Edward. Who would know that this is my first Bill Committee?

I rise again to speak on the amendment and the new clause in the names of my hon. Friends the Members for Oxford East and for Stalybridge and Hyde. The global financial crisis showed us all the devastating human cost of inadequate regulation and excessive risk taking in the banking system. We need a clear demonstration from the Government that they have learned from past mistakes, are serious about financial reform and will do everything in their power to ensure that financial stability is placed at the heart of our regulatory agenda. I fear that the Bill represents the exact opposite of such sentiments.

The Government are undertaking a series of far-reaching Brexit-related changes through statutory instruments. Secondary legislation is something that only lawyers, parliamentarians, policy makers and a handful of others are familiar with. For that reason, it is important that that sort of legislation is used only for technical, non-partisan, uncontroversial matters, such as to fill in details, but that is not what has happened in the past few weeks, as the Government have realised they have not planned properly for Brexit.

As a relatively new MP—who would guess?—I have sat on numerous Delegated Legislation Committees and been profoundly shocked as the Government have forced through complex and opaque EU financial regulation, adapting it, adjusting it and transferring powers to financial institutions in the UK. My constituents expect there to be proper time to call for evidence, to consider the different bodies that might be given powers to take forward EU regulations, and to ensure that definitions in the regulatory regime are appropriate.

When financial regulation goes wrong, we all suffer the consequences, so we all should have the right to have a say. That is the cornerstone of our democracy. Our communities have been made to pay these past painful years for a crisis they did not cause. Nine long years of Tory failure have left our economy weak and unprepared for the future. People across the UK are suffering as a result of this Government’s failed austerity programme, which has undermined the very fabric of our society and left public services at breaking point. Can the Minister give an absolute and firm guarantee that my constituents will not be worse off as a result of the Bill, and that the powers in it will not be used for the purpose of deregulation?

[John Glen]

I thank the Opposition spokespeople for their contributions. I also thank the hon. Member for Colne Valley for her maiden Bill Committee speech. I did not agree with much of what she said, but I will address the substantive points that were made.

Amendment 5 seeks to remove the ability under the Bill for regulations to make any provision that could be made by an Act of Parliament. Amendment 14 is more targeted, seeking to remove only the power to effect changes to primary legislation when implementing the EU files in question. An amendment with a similar effect to amendment 5 was moved and then withdrawn by those on the Labour Front Bench in Committee in the Lords.

I appreciate that there are many concerns across the House about Henry VIII powers, as the hon. Member for Oxford East set out. It is clear that, where they are proposed, their necessity must be well evidenced. In the case of the financial services legislation to which the power in the Bill will apply, I feel that such a power is necessary.

An inability to amend existing primary legislation—the Financial Services and Markets Act 2000, for example—would make it impossible for the UK to implement the relevant EU legislation. Therefore, both these amendments would render the Bill completely ineffective. Furthermore, as Committee members will be aware, the exercise of many functions under financial services legislation is carried out by the independent regulators, the Financial Conduct Authority and the Bank of England. That was always intended. The capacity and expertise of the financial regulators will be crucial in the effective implementation, where appropriate, of that legislation.

Amendment 5 would remove the ability to delegate to the regulators, because as a general rule, a power to make secondary legislation does not include a power to sub-delegate. An inability effectively to delegate powers to the regulators would completely undermine the value of transposing the relevant EU legislation into UK law.

I acknowledge the wider points made about the undesirability of no deal, but this is a contingency arrangement and I believe that the Government have set out clearly the rationale for use of these powers and how they will be used in the circumstance of no deal, which would be wholly different from anything that we are familiar with. Given this context, I hope that the hon. Members will feel able to withdraw their amendments.

Draft EEA Passport Rights (amendment, Etc., and Transitional Provisions) (EU Exit) Regulations 2018

Debate between Thelma Walker and John Glen

Wednesday 24th October 2018 General Committees

[John Glen]

I will be very happy to address that point in due course, either in my introduction or when summing up.

That work will provide the UK’s financial services sector with much-needed certainty about regulatory requirements in the event of no deal, and ensure that firms can continue to do business in the UK. That is consistent with the Government’s position that, although the best outcome is for the UK to leave with a deal, in the meantime we must—and we will—continue preparing for no deal. I want to underscore the point that the tabling of this statutory instrument was a planned activity that was widely anticipated by the regulator and industry.

[Thelma Walker (Colne Valley) (Lab)]

Has the Minister ever seen a Treasury matter of comparable scope and importance debated in a Delegated Legislation Committee?