Thirteenth Report Contents

Instruments of interest

Draft Northern Ireland (Ministerial Appointment Functions) Regulations 2019

1.In the absence of a devolved government, the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018 (“the Act”) addresses the urgent need for key appointments to be made in Northern Ireland that would normally require Northern Ireland Ministers to be in office. The Act specified five offices in the policing and criminal justice field to include: Member of the Northern Ireland Judicial Appointments Commission; Member of the Northern Ireland Policing Board; Member of the Police Service of Northern Ireland above the rank of chief superintendent; Member, chair or deputy chair of the Probation Board for Northern Ireland; and Police Ombudsman for Northern Ireland. These Regulations add six further offices in respect of which the appointment functions of a Northern Ireland Minister may be exercised by the Secretary of State. These are deemed critical appointments and include: the Attorney General for Northern Ireland; Commissioner for Children and Young People for Northern Ireland; Member of the Commission for Victims and Survivors for Northern Ireland; Member, chair or vice-chair of the Northern Ireland Housing Executive; Member or chair of the Livestock and Meat Commission; and Member or chair of the Northern Ireland Local Government Officers’ Superannuation Committee. The Northern Ireland Office (NIO) has explained that the appointment process for each of these bodies (with the exception of the Attorney General) is regulated by the Office of the Commissioner for Public Appointment NI (CPANI). The NIO has assured us that “… in taking her decision on whom to appoint the Secretary of State will seek assurance on the robustness of the process, including how it has adhered to the CPANI code of practise. The Secretary of State will make these appointments in accordance with the CPANI Code of Practice, whilst also adhering to her Ministerial code. Although the Attorney General appointment is not regulated by CPANI code; in line with best practise the Secretary of State will also follow this code when making this appointment.”

Draft Pesticides (Maximum Residue Levels) (Amendment etc.) (EU Exit) Regulations 2019

Draft Plant Protection Products (Miscellaneous Amendments) (EU Exit) Regulations 2019

2.These two sets of draft Regulations, laid by the Department for Environment, Food and Rural Affairs (Defra), propose the establishment of a stand-alone UK regulatory regime for plant protection products, as part of the Department’s contingency preparations for a possible ‘no deal’ EU exit. Defra says that the new regime is to mirror the current EU regime, with minimal modifications. The key changes proposed include the transfer of decision-making powers and legislative functions from the EU to national level, including in relation to the Maximum Residue Levels that are permitted in food and feed. The instruments also propose the creation of a new statutory register for the listing of approved so-called active substances (the active components against pests or plant diseases in a plant protection product) and the introduction of a new national power to establish a UK renewal programme for these substances to replace the current EU power, as their approval is time-limited. Furthermore, the instruments propose to remove provisions for parallel trade permits, which allow a plant protection product that is authorised in one Member State to be authorised in another and which, according to Defra, will become inoperable after exit. The Explanatory Memoranda to the draft Regulations, and a shared assessment of their impact, refer to additional costs for government from operating the new national regime, but do not quantify these costs. The Department told the Committee that the extra costs are expected to amount to less than £10 million per year and will be funded through taxation. Defra also said that a separate statutory instrument will be laid before Parliament in due course to make minor adjustments to some of the fees that the Health and Safety Executive, as the UK’s national regulator, charges for its plant protection work.

Draft Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019

HM Treasury Impact Assessment - Correspondence

3.In the Explanatory Memorandum (EM) to these Regulations, HM Treasury (HMT) says that the Solvency 2 Directive,1 which implemented a harmonised prudential framework for insurance and reinsurance firms in the EU, has been transposed into UK law by statutory instrument2 and through the Prudential Regulation Authority Rulebook. Current UK Solvency 2 legislation is drafted on the basis that the UK is a member of the EU, and treats countries in the EEA differently to other third countries. This instrument will amend the legislation implementing Solvency 2 so that it operates effectively in a UK-only context.

4.In the EM, HMT refers to the possibility that, as a result of changes made by these Regulations, some UK insurers could face higher capital requirements unless they divest themselves of European Economic Area risk-weighted assets and exposures which will no longer be given preferential treatment. HMT has laid an Impact Assessment (IA) with these Regulations, but this offers no quantification of the costs that might arise to UK insurers if that possibility came to pass. HMT has told us that

“the impact of removing the preferential treatment of EU assets and exposures will depend on the exposures of individual firms. We do not hold this information and unfortunately it was not possible to quantify the estimated impact on the insurance industry in the time available. As we were unable to estimate the impact, it is not reflected in the table on pages 47 and 48 [of the IA] as this covers only the monetised non-familiarisation costs of the various SIs.”

5.HMT laid the same IA alongside the draft Credit Rating Agencies (Amendment, etc.) (EU Exit) Regulations 2019, which we previously drew to the attention of the House.3 We wrote to the Economic Secretary to the Treasury about that IA, and have now received a reply. We are publishing that correspondence at Appendix 1 to this report.

Sanctions (Amendment) (EU Exit) Regulations (SI 2019/26)

6.This instrument, laid by the Foreign and Commonwealth Office, maintains elements of the existing UN arms embargo regimes in respect of Afghanistan, the Central African Republic, Lebanon, Somalia, and Sudan, which currently operate through EU Council Regulations. In particular, it relates to the prohibitions on providing technical assistance, financing or brokering services in relation to arms. This instrument will ensure continuity of these sanctions regimes between exit day and new regulations being made under the Sanctions Act 2018 to replace these regimes substantially. Existing prohibitions on the sale, supply, transfer or export of arms are contained in EU Council Decisions (which will not be retained EU law), and so will continue to be implemented domestically using the Export Control Order 2008 (SI 2008/3231) after exit day. A separate instrument to maintain asset-freezing measures will be also be brought forward shortly.

2 Solvency 2 Regulations 2015 (SI 2015/575).

3 11th Report, Session 17–19 (HL 260).

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