My Lords, I will be relatively brief on this statutory instrument. Again, it makes sense, but I have a couple of questions. One was raised by the Minister’s comment: I think he said we could be in a situation where we had an EEA entity effectively being supervised by the UK regulator, but its deposit guarantee scheme would be an EEA scheme. That sounds like a recipe for serious trouble. Surely one would expect the deposit guarantee scheme and the supervision to go together. Perhaps he could enlighten me as to whether I misunderstood that point.
Noble Lords will be aware that the reason there is a single, cross-EU level of deposit guarantee is to stop countries competing with each other. I think that Ireland at one time provided unlimited guarantees, so deposits flooded from across the EU, including the UK, into Ireland to take advantage of that greater level of protection. This was to try to bring everybody into a fairly narrow range, so that that unhealthy competitive element would not be there distorting the financial markets. Is it the Government’s intention to stay in line, basically, with the EU in this arena? If so, we come across a couple of curiosities. At the moment the UK guarantee is fixed at £85,000. If I understand the SI and the Minister correctly, that remains the level until a review in 2021. Of course, since that period we have had a devaluation of sterling, so if one was to do a current valuation of the €100,000 cap, it would be something more like £87,500. I understand that there is no need to review that till 2021, but a discrepancy is building.
I note that the Statutory Instrument says that:
“The first review … must not commence before 2021 unless unforeseen events necessitate an earlier review”.
Many people would say that a no-deal scenario would inevitably lead to a very sharp devaluation in sterling. Would that be considered an unforeseen event? I think it might be considered to be a foreseen event by many people, but for the purposes of this would it be considered an unforeseen event such as would necessitate an earlier review? It would be helpful to know, and to understand the intent that sits behind all that. Will the Minister help me with those issues?