Documents considered by the Committee on 24 April 2019 Contents

Meeting Summary

The Committee looks at the significance of EU proposals and decides whether to clear the document from scrutiny or withhold clearance and ask questions of the Government. The Committee also has the power to recommend documents for debate.

Brexit-related issues

The Committee is now looking at documents in the light of the UK’s decision to withdraw from the EU. Issues are explored in greater detail in report chapters and, where appropriate, in the summaries below.

Summary

Ending seasonal time changes

The proposed Directive, announced in European Commission President Juncker’s State of the Union speech in September 2018, would discontinue the twice-yearly clock changes in March and October and require each Member State to decide whether to observe summer time (GMT+1 in the UK) or standard (GMT) time all year round. The proposal cites an internal market legal base, despite the fact that the changes could result in more rather than less variation in time across the EU than under the current arrangements. For this reason, the Government shares the Committee’s concern that the use of an internal market legal base may not justified and indicates that other Member States also question whether it is appropriate. In her latest update, the Minister for Small Business, Consumers and Corporate Responsibility (Kelly Tolhurst MP) provides a brief update on the European Parliament’s position (agreed in March) which would delay implementation of the Directive until 2021 to allow time for further consultation at Member State level. The European Scrutiny Committee requests further information on the changes put forward by the European Parliament (“EP”), the prospects for securing an agreement within the Council so that trilogue negotiations with the EP can start during the current Romanian Presidency, and the Government’s plans for carrying out a stakeholder consultation, given continued uncertainty as to the date on which the UK will leave the EU.

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee and the Committee on Exiting the European Union

New European prudential rules for banks

The Committee has published a final report on the EU’s banking “risk reduction measures”, which aim to bring European law on capital requirements for banks in line with the latest international standards. Controversially, the new legislation also introduces further restrictions on bankers’ bonuses, which the Government is expected to reluctantly support given the need to establish new market access arrangements for financial services from the U.K. to the EU after it leaves the Single Market, which will rely largely on the European Commission’s assessment of the “equivalence” between UK and EU law.

The new rules could affect the British banking sector directly during any post-Brexit transitional period, during which EU law would continue to apply here as if the UK were still an EU Member State. If the Withdrawal Agreement is ratified, the legislation would need to be implemented by the Bank of England and the Financial Conduct Authority.

Cleared from scrutiny; drawn to the attention of the Treasury Committee

Documents drawn to the attention of select committees:

(‘NC’ indicates document is ‘not cleared’ from scrutiny; ‘C’ indicates document is ‘cleared’)

Business, Energy and Industrial Strategy Committee: Ending seasonal time changes [Proposed Directive (NC)]

Committee on Exiting the European Union: Ending seasonal time changes [Proposed Directive (NC)]

International Trade Committee: Protection of intra-EU investment [Communication (NC)]

Treasury Committee: Banking reform: risk reduction measures [Proposed (a)-(b) Directives; (c) Regulation (C)]





Published: 30 April 2019