My Lords, I thank noble Lords for their questions and their scrutiny. The noble Lord, Lord Tunnicliffe, is typically assiduous, as he is on all these matters—he has even gone through the 1,569 pages of the FiSMA, which is some achievement. We appreciate that, and we appreciate the noble Baroness, Lady Kramer, stepping in for the noble Baroness, Lady Bowles, at such short notice. Let me start by dealing with as many of the questions for which it is possible to get immediate answers, and I will then review the debate and write to noble Lords if necessary.
All three noble Lords who contributed commented on what is happening with the impact assessments. Five impact assessments have been prepared across the financial services SIs. Noble Lords will be familiar with the process for this: they go before the Regulatory Policy Committee, which is the non-departmental public body under BEIS, and it assesses the impact of the regulations. What we are trying to do is save British consumers and businesses the costs that would come into effect were we to leave with no deal and not have these statutory instruments in place. That would imply a cost. We are not being as bold as to say that the effect of the SI is to make a saving, but that is the reason why the attempts to quantify this have been challenging. However, they are under way, as I said.
The noble Lord, Lord Tunnicliffe, asked about quality control for these instruments. They have passed through the usual quality control procedures and the Treasury has engaged with industry on their content. We published these SIs in draft on
The noble Lord asked about SEPA itself. The single European payments area is an initiative to simplify payments between participating states. It covers the EEA and a number of non-EEA countries. I will come back at a later stage to my noble friend Lord Kirkhope’s question about Andorra’s status.
The noble Lord, Lord Tunnicliffe, also asked what would happen to these no-deal SIs in the event of a deal. The legislation has been put in place to ensure that, in the event of a no-deal exit in March 2019, there is a functioning legal regime for financial services from day one. The legislation would not come into effect in March in the event of an implementation period, which would be delivered through a separate piece of legislation, the EU withdrawal and agreement Bill, which of course would be primary legislation before your Lordships’ House.
I touched on consultation. In terms of the powers to extend the duration of the regime, which was asked about by the noble Baroness, Lady Kramer, while the Financial Conduct Authority has a credible working estimate of the number of eligible EEA firms that will apply for authorisation under the onshored payment service and electronic money regulations, there is an unavoidable degree of uncertainty about the process. That, coupled with the varying degrees of complexity in some of these firms’ applications, means that a power to extend the length of the regime is necessary.
The noble Baroness and the noble Lord, Lord Tunnicliffe, asked about how Parliament would be able to scrutinise any extension of the regime. The overall powers in these regulations are subject to the scrutiny of Parliament now through this affirmative instrument. As I noted previously, tight restrictions have been placed on the use of this power. It will not simply be relied on as a matter of course. Parliament will be able to scrutinise and question both Treasury Ministers and regulators on the use of the power through the Select Committee system as Parliament does now.
On the point raised by the noble Baroness, Lady Kramer, about whether EEA firms would be required to set up a subsidiary, the electronic money and payment services SI provides powers to the Financial Conduct Authority to create a temporary permissions regime that will enable EEA payment services providers who currently provide payment services under financial services passports to continue providing services in the UK for a limited period after exit. An EEA payment firm will be required to set up a subsidiary on leaving the temporary permissions regime if it wishes to continue providing payment services, as it would then be a third-party country for those purposes.