5.These draft Regulations aim to facilitate access to invoice finance for businesses, by nullifying terms in business contracts which prohibit or restrict the assignment of receivables. The assignment of receivables (that is, invoices and other rights to be paid money under a contract) is a mechanism which enables businesses to raise finance based on money owed to them. Under this mechanism, businesses assign their right to future payment to a finance provider in exchange for funds. The Department for Business, Energy and Industrial Strategy (BEIS) explains that while this type of finance is particularly valuable in sectors where businesses have to wait a long time between issuing an invoice and receiving payment, many commercial contracts routinely contain provisions that prohibit it. According to BEIS, the draft Regulations would ensure that such provisions have no effect, enabling more businesses to access invoice finance. BEIS says that an earlier version of the Regulations was laid in 2017 and subsequently withdrawn after the legal profession raised concerns, in particular about their potential impact on the use of English law for large international contracts. BEIS explains that the new draft Regulations address these concerns by exempting a number of contracts, including those where the supplier is a large enterprise or where none of the parties carry out business in the UK.
6.We have received a submission from a member of the public that expresses concerns about the current draft Regulations, including the fact that the Impact Assessment (IA) that has been laid alongside the Regulations was not revised following the decision to exempt large enterprises from the Regulations. We have put these concerns to BEIS and are publishing the Department’s response on our website.
7.This statutory instrument is the first to be badged with “EU Exit” in its title. It is understood that the Government mean to include “EU Exit” in the title of all regulations intended to implement the UK’s withdrawal from the European Union, whether or not the instrument is made under the EU (Withdrawal) Act 2018.
8.Appendix EU to the Immigration Rules will provide a basis on which resident EU citizens and their family members, and the family members of certain British citizens, can apply for leave to remain in the UK beyond the end of the planned post-exit implementation period on 31 December 2020. The Home Office states that the proposal is consistent with Articles 17 and 17a of the draft Withdrawal Agreement. Where a person chooses to apply for leave to remain under Appendix EU, the changes made by these Regulations provide for their biometric information (that is, fingerprints and a facial photograph) to be enrolled and retained as part of the UK’s intended EU Settlement Scheme. Fingerprints will normally be retained for 10 years and facial photographs until the person obtains a British passport. The Home Office states that these requirements align with existing provisions for visas and residence permits.
9.This instrument introduces a charging scheme for licences that Natural England issues on behalf of the Department for Environment, Food and Rural Affairs (Defra) for work that may affect wildlife and its habitat. According to Defra, the licensing service balances the protection of certain protected species, for example bats or barn owls, with wider societal needs, such as land development, public health or heritage conservation, allowing licence-holders to undertake work which would otherwise be illegal. To date, the licensing service has been free to use, but, in line with wider Government policy of recovering the costs of public services, this instrument introduces user charges aimed at cost recovery. The Explanatory Memorandum (EM) states that Defra expects to charge for around 8,400 licences annually at a cost of £1.3 million to applicants. The Order sets out individual charges ranging from £35 to £700.
10.The Explanatory Memorandum (EM) sets out the expected impact of the new charging scheme. Defra says that it will invest a significant proportion of the revenue from the new charges into service improvements, and that it expects a reduction in the number of licences that are issued late, leading to a financial net benefit to applicants. We found, however, that two different figures were used in the EM in relation to this expected benefit, and that an estimate for an anticipated net saving for taxpayers lacked context. We have sought clarification of these figures from Defra and the Department has replaced the EM, so that a clear picture of the expected impact of the new licensing scheme is publicly available. We are publishing our correspondence with Defra at Appendix 1.
11.EU Regulation No 598/2014 establishes the rules and procedures for the introduction of noise-related operating restrictions at airports with more than 50,000 civil aircraft movements per year. These Regulations, laid by the Department for Transport, provide for the relevant local planning authority to be the competent authority for any planning matter requiring compliance with the Balanced Approach. The local authority will also be the competent authority for monitoring compliance with any operating restrictions imposed as part of the development consent. The Regulations identify the Secretary of State as the competent authority for strategically important development consent applications, including the proposed third runway at Heathrow, and for any planning application appeals. Welsh Ministers will perform the same functions in Wales.
12.On 2 July, Lord Agnew of Oulton repeated a written ministerial statement, “Childcare Update”, which referred to the laying of these Regulations and the two changes made by them. The first is to remove disqualification by association - meaning that an individual can be disqualified from working in childcare because of an offence committed by someone who lives or works in their household - in non-domestic childcare provision (including schools, nurseries and other registered non-domestic settings). Disqualification by association arrangements will remain in place in domestic settings. The second change is to extend eligibility for 30 hours free childcare to three- and four-year-old children in foster care, provided that the foster parents meet the eligibility criteria.
13.In the Explanatory Memorandum, the Department for Education (DfE) says that it consulted on reforming disqualification by association in the summer of 2016. It received around 450 responses, almost 60% of which favoured removing such disqualification in non-domestic settings. When it launched its consultation, DfE said that its response would be published in summer 2016; in fact, the response appeared only in July 2018. Asked about this delay, DfE has told us that “… there was meaningful support for the alternatives [to removing disqualification by association] put forward in the consultation document. Given the consultation yielded this response, we undertook further extensive deliberations with a range of safeguarding professionals and others in the school and early years sectors, to satisfy ourselves that the perceived risk associated with removing by association could be mitigated in all of the relevant settings. As you will recall, post May 2016 there were significant changes within Government and the ministers considering the consultation response were different to those who agreed the consultation.”
14.These Regulations update the UK’s application of the European Union Free Movement Directive to take account of several recent decisions in the European courts. Several of the cases turned on the derived right of residence of a third country national living with a EU citizen or a British citizen exercising their right of free movement in another country. The Regulations also allow EEA family permits under the 2016 Regulations to be issued in an electronic form as an alternative to a hard-copy form. This is to facilitate future modernisation of operational practices as the Home Office states that it is often quicker, more secure, and more cost effective to issue permits electronically.
1 The Committee considered the 2017 draft regulations in its of Session 2017–19 (HL Paper 23).
2 See [accessed 18 July 2018].
3 A draft of Appendix EU was published on 21 June 2018 as part of a Statement of Intent on the EU Settlement Scheme [accessed 18 July 2018].
4 A four-strand practice promoted by the International Civil Aviation Organisation which aims to reduce noise from airports by reducing noise at source, land-use planning, operational noise abatement and operating restrictions. [accessed 18 July 2018].
5 , 2 July 2018 [Lords Written Statement].
6 See Department for Education, Consultation outcome: Childcare workers: changes to disqualification arrangements: [accessed 18 July 2018].
7 Immigration (European Economic Area) (Amendment) Regulations 2016 (SI 2016/1052) as amended.