Financial Services (Implementation of Legislation) Bill [HL] - Committee (1st Day)

Part of the debate – in the House of Lords at 3:45 pm on 8th January 2019.

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Photo of Lord Adonis Lord Adonis Labour 3:45 pm, 8th January 2019

My Lords, my noble friend Lady Liddell has made an extremely important point. As the debates and scrutiny have progressed and further information has become available on the Bill since it was initiated, the concerns have become greater.

In my experience with legislation, as Ministers—particularly Ministers of the calibre of the noble Lord, Lord Bates—explain issues to the House and seek to meet concerns, there is normally a narrowing of points of difference. But in this case the points of difference have expanded as it has become clear that the extent of the powers granted under the Bill is much greater than originally explained; they were, as my noble friend said, to do with in-flight provisions. As we have elucidated the scale of the potential breadth of these powers, the concern has become greater, not only because of the report which my noble friend referred to but because we have now been able to look at the list of measures to which they will apply. We have also been able to study the Minister’s speeches at Second Reading, which have led me to be considerably more concerned than I was before.

In his opening and closing speeches at Second Reading, the Minister said, in essence, that in the event of provisions coming forward which are not to do with continuity or in-flight but are basically to do with us either anticipating changes that will be made by the European Union or implementing those which have been made in the institutions of the European Union—to which we may or may not have agreed ourselves—the Government have the right to implement them on their own judgment, by decree, provided that it is within a two-year period. I think we will be pressing the Minister time and again—and, to be blunt, this may well lead to him losing significant parts of the Bill on Report—on the fact that there is a complete answer to the situation in which he finds himself.

In any area to do with legislation which is not a continuity provision or a very narrowly defined in-flight provision, the normal, primary legislative provisions should apply. In his speech at Second Reading, the Minister referred to a number of directives and provisions that are in the pipeline, including the prospectus directive and so on, and said that we have to have these powers because they are so important to our financial services industry. My response to him, and I look forward to his reply, is: yes; these are important issues, but they are vital issues to do with the law of the land. A lot of contentious issues are embedded in those proposals, which is precisely why we have our primary legislative procedures to deal with them. We have Second Reading, Committee, Report and Third Reading, and these stages take place in both Houses. In the Minister’s Second Reading speech he said, “But of course, this will be by the affirmative procedure, so they can be debated”. But the affirmative procedure provision does not give any opportunity to amend whatever. It effectively neuters this House, because we have only the nuclear option of entirely rejecting provisions; we can neither amend them nor in any satisfactory way send them back to the House of Commons for further consideration. The only way we can do that effectively is by rejecting them, and if we do that, we get accused of behaving unconstitutionally. My response to the Minister—I look forward to his reply—is: in the areas where this is not to do with continuity or in-flight provisions, why is it not satisfactory for us to follow our normal legislative procedures and require primary legislation to be enacted where changes to the law are proposed? What does not make that applicable in this case?

If I may anticipate the Minister’s response, I suspect that he might say something about needing to respond quickly and something about the legislative burden. On responding quickly, this issue arises all the time in respect of legislation, and it is not satisfactory for the Government to make major changes to the law of the land by decree simply because they do not believe that there is enough time for Parliament to debate them. That argument could apply to all legislation at any time, and it does not seem to justify the powers in the Bill. On there not being enough parliamentary time, I am sorry to keep returning to this, but parliamentary time is a commodity at the disposal of the Government and this House. When it comes to major changes to the law of the land, such as significant reforms to financial services regulation—things like the prospectus directive that the Minister refers to will apply to potentially every company in the country, affecting vitally their business and their ability to compete in the global marketplace—it is perfectly reasonable that this House and the Government should make enough time for us to debate propositions in a way that they can be amended and go through the normal legislative procedures. No case is made for the provisions set out in the Bill.