Forty Seventh Report Contents

Appendix 2: Financial Services (Implementation of Legislation) Bill [HL]: Government Response

Letter from the Rt Hon. Lord Bates, Lords Spokesperson for HM Treasury, to the Rt Hon. Lord Blencathra, Chairman of the Delegated Powers and Regulatory Reform Committee

I am grateful to the Delegated Powers and Regulatory Reform Committee for its report of 18 December on the Financial Services (Implementation of Legislation) Bill. The Government has considered carefully the Committee’s conclusions and recommendations and our response to each of these is set out below.

The Committee firstly noted that, while section 20(1) of the EUWA defines exit day as 29 March 2019 at 11 pm, section 20(4) allows the time of exit day to be changed if the EU Treaties continue to apply to the UK after 29 March 2019 because a withdrawal agreement has been concluded. The Committee therefore recommended that the provisions fixing the period when the powers under clause 1 may be exercised, and the provisions governing reporting, should be consistent. The Government accepts this recommendation and ensured that, in amendments tabled ahead of Report stage to bolster the Bill’s reporting requirements, the drafting is consistent.

Secondly, the Committee considered that the power to make adjustments was inappropriate in so far as it relates to EU legislation that has already been adopted, and recommended that the power should in that case be limited to a power to remedy deficiencies arising from the UK’s withdrawal from the EU. The Government understands the concerns expressed by the Committee, and raised by peers in debate, and accepts the principle that this is agreed law that has already received UK approval at EU level. The Government therefore tabled an amendment ahead of Report stage to ensure that the power to make any changes will be strictly limited to the fixing of deficiencies, following the model set in the EU (Withdrawal) Act.

Finally, the Committee recommended in its report that specific provisions should only be identified in clause 1 (2) if those provisions are necessarily going to be implemented in UK law in full. The Government, after careful consideration, is unable to accept this recommendation. While we are broadly content with the relevant files in clause 1 of the Bill, which have already been agreed at EU level, we cannot know the full context facing the financial services industry in a no deal scenario. Our priority will be to protect the UK industry in all circumstances—it will therefore be important that we should therefore confirm the intention closer to the time to implement these files. That is why, in the absence of the power to adjust these files, the Government requires the discretion to implement them. Our decision on whether we implement them in a no-deal context will, of course, be supported by full engagement with industry and Parliament.

I would like once again to thank the Committee for its work in considering the Bill.

5 February 2019

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