Fifteenth Report Contents

Instruments of interest

15.The Committee noted with concern that a number of the instruments before us this week were laid close to the Christmas recess and came into effect before the House returned.9 We regard this as poor practice as it limits the Committee and the House’s ability to comment on the legislation before it comes into effect. We have drawn attention to Departments curtailing the scrutiny period in this way once already this session, in our 2nd Report10, and maintain our view that it is a less than ideal result of poor planning by Departments.

Draft Financial Assistance Scheme (Increased Cap for Long Service) Regulations 2018

16.This instrument relates to the Financial Assistance Scheme (FAS) which is operated by the Board of the Pension Protection Fund (PPF). These Regulations will allow any FAS member who has 21 years’ or more pensionable service within a single pension scheme to have their existing cap increased by 3% for each full year of pensionable service over 20 years subject to a maximum of double the standard FAS cap (that is, a new maximum of £68,458). The FAS provides financial assistance in relation to pension schemes that started to wind up between 1 January 1997 and 6 April 2005. After this date, eligible individuals would instead receive compensation from the PPF. It is Government policy to ensure parity of treatment between members of the PPF and FAS where possible and the change to the long service cap was implemented in the PPF on 6 April 2017.11 However the Explanatory Memorandum (EM) to this instrument makes reference to a court case before the European Court of Justice which may affect this policy, and supplementary material on this matter is included at Appendix 3 of this Report. The Committee also questioned whether the implementation costs indicated in the EM were proportionate to the low number of claimants likely to benefit from the change, the DWP response is also included in the Appendix.

Draft Human Tissue (Quality and Safety for Human Application) (Amendment) Regulations 2018

Draft Human Fertilisation and Embryology (Amendment) Regulations 2018

17.These Regulations transpose two European Union (EU) Commission Directives relating to human tissue and cells intended for use in a patient’s treatment (e.g. stem cells, bone, corneas, gametes and embryos) into UK legislation:

18.Although the UK has not experienced any major incidents involving problems with identification or traceability in the past, tissue and cells now regularly move between licensed establishments and across international borders, making the need for an internationally recognisable identification code more important in order to mitigate future patient safety risks. The UK already has legislation in place that achieves the aims of the coding and import Directives but needs to amend the existing legislation to be consistent with the rest of the EU and EEA.

Roads Vehicles (Payment of Duty by Credit Card) (Prescribed Fee) Regulations 2017 (SI 2017/1239)

19.These Regulations are made in consequence of Directive 2015/2366/EU, the Revised Payment Services Directive (“PSD2”)12, which prohibits the charging of fees for certain transactions. The effect of these Regulations is, from 13 January, to remove the requirement to pay a transaction fee to DVLA when paying for Vehicle Excise Duty using a personal credit card. A £2.50 fee will however continue to be applied where Vehicle Excise Duty is paid using a business credit card or business credit card account.

Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 (SI 2017/1301)

20.HM Treasury (HMT) has laid these Regulations with an Explanatory Memorandum (EM) and Impact Assessment. HMT explains that the instrument provides the Financial Conduct Authority (FCA) with a new role overseeing the anti-money laundering and counter terrorist financing supervision by the 22 self-regulatory organisations (SROs) in the accountancy and legal sectors.13 As background, HMT says that in October 2015 the Government published the “National risk assessment of money laundering and terrorist financing”14, which found that the effectiveness of the UK’s supervisory regime was inconsistent; and that the large number of SROs in some sectors presented a particular challenge. Areas for improvement included supervisors’ understanding and application of a risk-based approach; supervisors’ provision of a credible deterrent; and the sharing of information both among supervisors and between supervisors and law enforcement. These Regulations will provide the FCA with a new role to work with SROs to ensure that they fulfil their obligations.

9 For example Financial Services and Markets Act 2000 (Markets in Financial Instruments) (No.2) Regulations 2017 (SI 2017/1255) and Superannuation (Admission to Schedule1 to the Superannuation Act 1972) Order 2017 (SI 2017/1261).

10 2nd Report, Session 2017–19 (HL Paper 8)

11 Pension Protection Fund (Modification) (Amendment) Regulations 2017 (SI 2017/324).

12 We published information about the Payment Services Regulations 2017 (SI 2017/752), implementing this Directive, in the 4th Report of this Session (HL Paper 17).

13 The SROs in question are listed in Schedule 1 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692). The Committee drew SI 2017/692 to the special attention of the House in its 2nd Report, Session 2017–19 (HL Paper 8).

14 See: HMRC, UK national risk assessment of money laundering and terrorist financing, October 2015: [accessed 10 January 2017]

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