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

Part of the debate – in the House of Lords at 6:30 pm on 8th January 2019.

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Photo of Lord Bates Lord Bates The Minister of State, Department for International Development 6:30 pm, 8th January 2019

I thank the noble Lord, Lord Adonis, for introducing his amendment, and all noble Lords who have spoken. I will touch on some of the points made, but before I do, perhaps I may say that, as we are moving rapidly through the different groups, it is important that we keep updating where we are. In earlier groups, I was responding positively to my noble friend Lord Deben’s point that the legislature needed to be better informed about the effects where changes are made and where we are derogating from existing directives that are in flight. I dealt with the concerns that had been raised by the Delegated Powers and Regulatory Reform Committee, and agreed to meet and talk further about them—so as we move along I do not want to lose sight of the fact that this is an unfolding story. Already, three hours into Committee, we have agreed to undertake and look carefully at some of the points raised.

I recognise the immense wealth of expertise which is here, not least in ministerial office from the noble Lord, Lord Adonis. I would not dare try to calculate the years of ministerial office represented by my noble friend Lord Deben, especially when I have my noble friend Lord Young of Cookham to my left; between them they could put up a cricket score of years.

There needs to be proper scrutiny; I accept that. The Secondary Legislation Scrutiny Committee already scrutinises all instruments laid before each House that are subject to parliamentary proceedings, and it is required to draw to the special attention of the House those instruments which are politically or legally important, or which give rise to issues of public policy likely to be of interest to the House. In addition, Standing Orders set out that the Joint Committee on Statutory Instruments must report on affirmative statutory instruments before debates can be scheduled. This is the established process for scrutinising statutory instruments, and it is a model we have sought to follow.

Any House of Commons committee—including the Treasury Select Committee—can scrutinise draft statutory instruments once they have been laid, if they choose. I can reassure noble Lords that when taking forward any statutory instruments under this power, the Government will engage extensively with Members of both Houses, including members of the Treasury Select Committee, as well as stakeholders among the regulators and in industry.

Amendments 11B, 12A and 15A seek to place a duty on the Bank of England, alongside the Treasury, to produce a separate report on the exercise of powers under this Bill. The noble Lord clearly recognises that the capacity and expertise of the regulators, including the Bank of England’s Prudential Regulation Authority, will be crucial in the effective implementation of the legislation contained in this Bill.

However, in our view it would not be appropriate for the Bank of England to report on the exercise of a function that falls entirely within the remit of the Treasury. While it is certainly the case that the regulators will be consulted on the design and implementation of the legislation introduced under this Bill, the question of what legislation is brought forward and how it is amended is ultimately one for government. It is difficult to see how a body that does not have the ability to exercise this power can meaningfully report on its use. When I was listening to the debate—and perhaps we can clarify this in the discussions that will take place ahead of Report—it was not clear to me whether the noble Lord and the noble Baroness were referring to reporting on the powers which are sub-delegated to the Bank of England as a result of the SIs, or to offering a view on the package or simply on areas within its remit. Perhaps in the gap between Committee and Report we could explore that a little further.