Instruments of interest
Draft Solvency 2 (Group Supervision) (Amendment) Regulations 2021
23.These draft Regulations propose changes to avoid duplication of supervisory work in relation to insurance groups. HM Treasury (HMT) explains that the purpose of the instrument is to ensure that the Prudential Regulation Authority (PRA), where it is group supervisor of a UK insurance group with a parent in a third country (including the EU), can defer to the supervisory authority in that third country in certain circumstances and if the insurance group supervision regime in the third country has been assessed as equivalent to the UK’s regime. Without this instrument, current temporary arrangements would expire on 31 March 2022. HMT says that the changes will avoid unnecessary duplication, reduce regulatory compliance cost for UK insurance groups with a parent in an equivalent third country, reduce supervisory cost for the PRA and reduce the need for co-ordination between third country supervisory authorities and the PRA. We note, however, the absence of a level playing field: while the UK has granted equivalence to the EU in relation to the supervision of insurance groups, the EU has not reciprocated.
National Security and Investment Act 2021 (Procedure for Service) Regulations 2021 (SI 2021/1267)
National Security and Investment Act 2021 (Prescribed Form and Content of Notices and Validation Applications) Regulations 2021 (SI 2021/1272)
24.These two instruments have been made under the National Security and Investment Act 2021 (“the Act”). SI 2021/1267 specifies the procedure to be followed where the Secretary of State issues notices and other documents to other persons, or where persons give documents to the Secretary of State. Such a document could be, for example, an information or penalty notice or an interim order requiring a company to pause an acquisition.
25.SI 2021/1272 specifies the form and content of the notifications which were introduced by the Act and which, according to the Department for Business, Energy and Industrial Strategy (BEIS), will enable the Secretary of State to assess acquisitions and decide whether to intervene where risks to national security are identified. BEIS says that the instrument reflects a commitment the Government made during the passage of the Act through Parliament that the notification forms would be clear and simple.
26.The Department expects the National Security and Investment (NSI) system to deal with more than 1,000 acquisitions per year, requiring the review of large numbers of notices and other documents. BEIS says that these two instruments will enable the system to operate quickly and effectively through the new online NSI portal. As the regime will impact on large numbers of companies, including some very small businesses, we asked BEIS how it was raising awareness of the new requirements and processes. The Department told us that:
“BEIS ministers and officials have [ … ] conducted targeted and extensive engagement with organisations most likely to be impacted by the NSI Act, including organisations that invest in or acquire companies in the 17 areas of the economy caught by mandatory notification requirements and those providing third party legal or financial advice on UK acquisitions.
In addition to publishing and circulating extensive guidance about the Act, BEIS has met and spoken to over 200 cross-economy organisations through workshops, teach-ins and presentations including to The Law Society, Institute of Chartered Accountants, Tech UK, international investors and UK universities. Additionally, tailored communications have been sent to around 100 industry bodies in the 17 mandatory areas of the economy, 70 major law and financial service firms, 36 international investors and 550,000 businesses via Companies House. Additional care has been taken to reach small and medium enterprises via a specific SME targeted event being planned for December and through associations such as the British Chambers of Commerce and the Confederation of British Industry.
BEIS officials have also used the Government’s extensive network of contacts to spread the word about the NSI Act internationally, reaching all of our Trade Advisory Groups and [the Department for International Trade] DIT’s globally reaching Investment Council. BEIS will continue to proactively engage directly with organisations on the NSI Act ahead of commencement through teach-ins, workshops and meetings, and assist DIT in international engagement.”
Products Containing Meat etc. (England) (Amendment) Regulations 2021 (SI 2021/1271)
27.This instrument keeps in force the minimum meat content requirements for certain products such as pies, sausages and burgers, as provided in the Products Containing Meat etc. (England) Regulations 20149 (“the 2014 Regulations”), by removing a sunset provision with an expiry date of 13 December 2021 from the 2014 Regulations. This will also have the effect that the same minimum standards are maintained across Great Britain, as equivalent regulations in Scotland and Wales do not include sunset provisions.
28.To give food businesses more time to adjust, the instrument also extends until 1 October 2022 a transition period during which the import of certain products containing meat imported into England from the EU, the European Economic Area (EEA) and Turkey remains permitted, even if these products do not meet the minimum meat content requirements in the 2014 Regulations. The House may wish to note that this continued recognition is unilateral, and that there will not be a level playing field until next year: while producers in England have to meet the minimum standards in the 2014 Regulations, these standards will not apply to exporters from the EU/EEA and Turkey until October 2022. Relevant meat products imported into England from other parts of the UK may also still be sold in England, even if they do not meet the standards in the 2014 Regulations, by virtue of the market access principles in the United Kingdom Internal Market Act 2020.
Universal Credit (Work Allowance and Taper) (Amendment) Regulations 2021 (SI 2021/1283)
29.This instrument amends the Universal Credit single earnings taper rate, so that for every £1 earned the claimant will retain 45p rather than the current 37p. It also increases the lower and higher work allowances by £500 per annum (rounded up to £42 per month) that claimants can earn before the taper applies and their Universal Credit award is reduced.
30.The Department for Work and Pensions estimates that these two measures will directly benefit 1.9 million working households and allow them to keep, on average, around an extra £1,000 a year. The increase in the work allowance will also increase the Universal Credit caseload by around 300,000 households. The Chancellor of the Exchequer announced these changes in the Budget on 27 October 2021, and they are intended to be reflected in Universal Credit payments from 1 December 2021.
9 Products Containing Meat etc. (England) Regulations 2014 (SI 2014/3001).