John Glen
MP for Salisbury · Conservative · United Kingdom
“I welcome the Chief Secretary to her new position, but what words of comfort could she give the residents of Salisbury in Wiltshire, a unitary authority? We are not part of a combined authority and we do not have a metro mayor.”
“Sam Moody is my constituent. He is the chief executive of Rockhopper. During my time in this House, he has been absolutely scrupulous in following the laws of this country and respecting the Falkland Islanders.”
“I listened carefully to what the Minister said about the process, and I respect that. But most people who take a pretty level-headed, pragmatic view of the need for a transition over time still cannot get their heads around the short-term reality: when we have so much turmoil in the middle east, why would we extend the time that we are no…”
“It is 55 days till the Budget. Given the market’s reaction to the Prime Minister’s statement on Tuesday, and given that our gilt rates are higher than those of our peers in the G7, could we have a debate on the implications of higher taxes for growth?”
“Before the hon. Lady makes her statement on Thursday, will she, when reflecting on the arrangement in Wiltshire that would embrace Wessex—although we have been told that that is not the Government’s view—address the prevailing concern that the people of rural Wiltshire will be considerably worse off without having the opportunity to embra…”
“I recognise that the Minister wants to come to what the Government are going to do, but does he not accept that the decisions already made in the last two years—with respect to the price of employment and the national living wage, the cost of employment with regard to legislation, and business rates—have depressed the appetite of many sma…”
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“A transitional regime is also made for group supervision under the Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019, so that where a group is supervised by an EEA supervisor, the relevant provisions that impose requirements on the Prudential Regulation Authority as a group supervisor do not apply for a period of two years after exit day. The Treasury has worked closely with the financial services regulators in the drafting of the EU exit instruments amended by the instrument. We have also engaged extensively with the financial services industry on the instruments to which the SI relates.”
“Finally, the SI makes transitional and saving provisions to address deficiencies that arise from the UK’s withdrawal from the EU and to limit disruption to the financial services industry if the UK leaves without a deal. For example, a minor change is made to article 7 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, which excludes deposits held in lawyers’ client accounts from being regulated under financial services law, as they are already regulated by the Law Society. European-registered lawyers are currently included in the exemption, and the SI ensures that the exemption will continue for a limited period after Brexit.”
“We are talking about 10 or 12 in 1,000 pages of SIs. Thirdly, the SI revokes three UK statutory instruments that relate to EU regimes that will not be applicable to the UK in the event of a no-deal exit, given that they implement EU law that is being revoked at exit day under separate instruments. Fourthly, the SI makes amendments to or revokes retained EU law to ensure consistency with other EU exit instruments that have been made and to remove references to EU institutions that will no longer be relevant post-exit. For example, part of regulation 33 revokes EU regulations providing for functions and administration of the European Central Bank.”
“A number of the amendments are being made in this instrument because they are consequential on other instruments that have only recently been made, such as the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019. A minority of the amendments correct drafting errors and improve the clarity of drafting. For example, a duplicate provision is omitted from the Bank of England (Amendment) (EU Exit) Regulations 2018, as the same amendment is made by the Deposit Guarantee Scheme and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018. At this point, it would be appropriate for me to acknowledge the enormous amount of work done by my colleagues in the Treasury to minimise the number of amendments that have been necessary.”
“Specifically, the SI removes references to EU institutions and regimes in four Acts of Parliament: the Insolvency Act 1986, the Financial Services and Markets Act 2000, the Income Tax Act 2007 and the Corporation Tax Act 2009. The amendments will ensure that provisions that are irrelevant in a UK-only context are not retained on the UK statute book. The SI also makes minor technical amendments to seven pieces of secondary legislation to reflect changes made by other legislation. For example, it updates the definition of “credit institution” as introduced by the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019. Secondly, the SI makes minor technical amendments to 12 other financial services EU exit instruments that have been previously debated by the House.”
“The instrument revokes a number of pieces of UK domestic law and retained EU law that it would not be appropriate to keep on the statute book after exit. It also makes amendments to a number of financial services EU exit SIs to reflect other instruments that have been laid as part of the wider legislative programme, corrects minor errors identified in legislation after making and makes amendments to ensure consistency between EU exit instruments. Turning to the substance of the SI, it has five main components. First, the SI amends UK domestic law to ensure continuity with other legislation that has been amended under the 2018 Act. Specifically, it makes amendments to primary and secondary legislation that does not fall within the remit of changes made by other instruments.”
“I beg to move, That the Committee has considered the draft Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019. May I say what a pleasure it is to serve under your chairmanship, Mr Bailey? As the Committee will be aware, the Treasury has been undertaking a programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury has been laying statutory instruments under the EU (Withdrawal) Act 2018 to deliver that, and most of them have now been debated and approved and are in place for exit day should they be needed. The SI being debated today is one of the final parts of the programme. I believe it is the 51st SI and the 31st debate in which I have taken part.”
“Nevertheless, I will reflect fully on his comments and where I can offer him some more substantive words of reassurance I will do so. Having given that response, I hope that the comments I made on the necessity for this SI in ensuring a functioning and coherent legislative and regulatory regime for financial services have been heard. I commend this regulation to the Committee. Question put and agreed to.”
“I acknowledge that the Bill is outstanding, but at this point in time I am not in a position to give him the information he seeks. The hon. Gentleman referred to the move from negative to affirmative process. I undertake to write to him about that. My understanding is that it was moved in that direction because of the sheer volume of small amendments. I reassure him that it was always envisaged when this process was designed, and when I saw that spreadsheet back in October, that there would be mop-up measures given the nature of the complexity of the exercise. I reassure the hon. Gentleman that there have been no meaningful policy changes through this SI. These are technical changes, often to remove reference to the EU, and the drafting errors are a significant minority.”
“I thank the hon. Member for Stalybridge and Hyde for his comments. I acknowledge the courteous and thorough way in which he has gone about his work. Where there have been differences between us, he has raised them in the spirit of constructive scrutiny, and he has worked extremely hard with his team. As someone who was responsible for supporting the shadow Chancellor in a previous era, I know how challenging it is to do that sort of work, so I pay tribute to his office and those who have supported him. I will thank my hon. Friends at a later point, because I still have more to do. The hon. Gentleman raises significant and substantive points. I cannot assist him with respect to the timing of the Financial Services (Implementation of Legislation) Bill.”
“Members’ attention to HMRC’s online tracing tool, which is available via gov.uk. Of course, people can still contact HMRC by telephone or post if they so choose.”
“There are many complex and overlapping reasons for the lack of engagement, but the Government are working with industry to actively seek holders of the accounts. Child trust fund providers are required to send regular statements to the child’s last known address and are taking steps to trace those who have moved. They have a statutory obligation to send such statements on the child’s seventh, 10th and 15th birthday, but in line with Financial Conduct Authority guidance, most do so annually. The national insurance notification letter that HMRC sends to all 16-year-olds has recently been amended to include details about how child trust funds can be located; the hon. Lady referred to the size and colour of the font used, which is clearly a matter that I can take on board and examine. I also draw hon.”
“The Government currently pay £200 into the accounts of children who have been in care for at least one year. The Department for Education has provided the Share Foundation with funding totalling £531,624 for that administration, and 120,000 payments of £200 have been made to children in care since 2012. We want those children to leave care with money to their name and the means to continue saving as they become independent. I should stress that junior ISAs are just one element of our work to promote financial education among young people. We want all children to enter the world of work understanding the importance of budgeting and saving, so financial literacy is now taught as part of the citizenship curriculum for 11 to 16-year-olds. Let me turn to the so-called lost child trust funds, which were the core of the hon. Lady’s speech.”
“I strongly believe that learning financial skills at a young age equips young people to make better decisions when they are older, so I am pleased to have this opportunity to set out the Government’s view. The Government introduced junior individual savings accounts in place of child trust funds in November 2011, providing continued tax incentives to encourage families to put money away for their children’s future. Under legislation introduced in 2015, existing child trust fund accounts can be transferred into a junior ISA, providing families with the flexibility to choose the right option for their child. The Government also sought to make specific provision for children in care; as the hon. Lady pointed out, we contracted the Share Foundation to work with local authorities to open a junior ISA account on behalf of looked-after children.”
“It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for Bishop Auckland (Helen Goodman) on securing this debate; I recognise that she has taken a keen interest in the issue and has been a doughty campaigner on matters of childcare and child poverty, following her 11 months as a Minister in the last Labour Government. I also acknowledge and will try to address the points made by other hon. Members. The Government share the commitment of hon. Members of all parties to supporting people to save at every stage of life, irrespective of income or background. Financial inclusion is one of my key priorities as Economic Secretary, and in the past year I have met many organisations and experts in the field.”
“I am grateful for that question about the regional and income breakdown of the distribution of child trust funds. Such information is published by HMRC and discriminates by region and county and by whether additional contributions were made; no income distribution data is collected by HMRC. I am happy to look into the matter further; if I can give the hon. Gentleman any more information, I will write to him. Looking to the future, approximately 6 million child trust funds have not yet been transferred to junior ISAs. The first of those accounts will mature next September, and a further 55,000 will mature every month thereafter until 2029. What young people choose to do with their money is ultimately a matter for them, but we want them to engage in the process so that they can make the best decision for their individual circumstances.”
“The key question is how an individual child knows what they have. The hon. Lady’s allegation is that this money is lost, but it is not lost; it is just that the individuals have not come to the point at which they can engage with it, which will happen at age 16 when they get a letter with their national insurance number. At 16, they are allowed to make decisions about their investment choices for that fund, and at 18 they can access it. They get the letter, along with their national insurance information, at 16, the age when they can start making individual decisions about that money. I think it has been suggested that the Share Foundation should interrogate data from the Department for Work and Pensions, cross-reference it with HMRC’s, and somehow write to these individuals—”
“The key point is that children have access to this money when they are 18, but can influence decisions about it from the age of 16, when they are paying tax and have a national insurance number. They will gain that access mechanism when they secure their national insurance number. The hon. Member for Bishop Auckland made a point about how this issue should be depicted on the form when 16-year-olds get their NI number, but that number provides the key to unlock awareness of, and access to, the fund that has been invested for them.”
“There are 69 providers currently managing child trust funds, and the Share Foundation’s analysis appears to be based on accounts held with just one provider: the Share Centre, which represents only 1.5% of the number of accounts. The hon. Lady might want to contradict that by extrapolating the data to all of them, but the Government are working together with the industry to encourage child trust fund holders to re-engage with their accounts. As I said, we have developed an online tracing mechanism and recently amended the national insurance notification letter to 16-year-olds to include a reference to child trust funds. That happened in January in order to take into account the points raised. Any account holders who are unable to retrieve their account details online are encouraged to contact HMRC directly.”
“The point I am making is that all individuals, no matter what their background is, will gain access to the funds at the point when they can gain their national insurance number, by reference to the letter that has been provided. I have had extensive conversations with my officials, and I note the hon. Lady’s reference to bureaucrats. She worked for over 20 years at the Treasury—I have the highest regard for it and the accuracy of the material it has given me. No funds or accounts have been lost. All child trust funds have been managed by child trust fund providers—either by the original provider with which the account was set up, or by a subsequent provider to which the funds have been transferred.”
“In summary, both junior ISAs and child trust funds allow parents and guardians to save on behalf of their children, tax free. People have the option to convert their child trust fund into a junior ISA, and we are working with providers to reunite dormant accounts with their intended owners. However, all remaining child trust funds will continue to enjoy tax-free status, even after they mature. The amount that young people can save in child trust funds and junior ISAs will increase by the rate of inflation in April—it is currently £4,260 a year.”
“I do not think that the hon. Lady’s raising her voice in an aggressive manner is going to help anyone. I have just set out the Government’s position and explained the detail of the provision. The hon. Lady has extrapolated some figures from one piece of analysis by one of the providers, which is not a reliable way of carrying on. I have told her about the action we took in January. The issue is not just about the online portal, but about being able to call up HMRC. Last year’s Budget included a commitment to consult on draft regulations that will ensure that investments currently held in child trust fund accounts can retain their tax-free status after maturity. The consultation will take place later this spring, when the Government will lay regulations before the House, well in advance of the first accounts maturing in September 2020.”
“On behalf of the Under-Secretary of State for Education, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who is the Minister responsible for this area and is currently before a Select Committee, I would be very happy to offer a meeting with hon. Members to discuss this matter further. It is his responsibility, and I am sure he would be very happy to attend. We have made efforts to provide young people with savings to draw on as they reach adulthood, and we hope this encourages further saving at every stage of life. The points made by the hon. Member for Bishop Auckland on access have been comprehensively addressed by the Government’s sending a letter to 16-year-olds.”
“The key point here is: when does somebody have access to make investment decisions as a young person? It is when they turn 16, and then they can access it when they are 18. Trying to overlap the letter with the mother when actually it is about the beneficiary, who is the child, is not the route to go down.”
“The best way forward would be for the hon. Lady, who is clearly shaking her head and dissatisfied, to meet my colleague from the Department for Education. Hopefully, that will provide her with the answers she needs. Question put and agreed to.”
“To maximise transparency, the Treasury has worked closely on the instrument with the Financial Conduct Authority, the Bank of England and industry. The Treasury consulted on changes to the uncertificated securities regulations as part of implementing the CSDR in 2015, and undertook an informal consultation with industry in October 2018. The current form of the instrument, which includes EU exit changes, was laid on 17 January 2019. Provisions relating to the consultation are dealt with in parts 1 to 4. Part 5 of the instrument deals with the EU exit changes.”
“That transitional power ensures that operators can continue to operate under the previous USR regime, pending their authorisation or recognition as a CSD under the EU CSDR regime. The SI also inserts a provision into the UK’s Central Securities Depositories Regulations 2014 that grants the Bank of England the power to charge fees to third-country CSDs. That is considered necessary in relation to its new role in recognising third-country CSDs following exit day. That role was granted by the Central Securities Depositories (Amendment) (EU Exit) Regulations 2018, which have been agreed by this House. Finally, the draft regulations amend article 15 of the EU short selling regulation to change its scope from the EU to the UK. The change ensures legal certainty on the scope of that provision after exit day.”
“Article 49 allows issuers the right to issue securities into a CSD in any European economic area member state. Accordingly, amendments have been made to ensure that no provisions in the USRs are incompatible with that right. By removing the duplication between CSDR and USR requirements for operators of relevant systems, the instrument provides clarity to the industry in the area. Further, USR operators now gain operator status by virtue of gaining authorised CSD, EEA CSD or third-country CSD status for CSDR purposes, not via the USR recognition regime, which will be revoked by this SI. Secondly, the SI will provide transitional provisions for UK operators of systems that were approved under the USRs before 30 March 2017, when the period for CSDs to apply for authorisation or recognition under the CSDR began.”
“The instrument also contains provisions to address deficiencies in UK law and retained EU law that arise due to the UK’s withdrawal from the European Union. The changes to the USRs that implement CSDR will come into effect on the day after the draft regulations are made in Parliament in any scenario. However, the changes made under the EU (Withdrawal) Act to fix deficiencies in the legislation arising as a result of the UK’s withdrawal from the EU will only come into effect on exit day in the event that the UK leaves without a deal or an implementation period. First, the draft regulations make amendments to ensure that the USRs align with both the EU regulation and the UK implementing legislation concerning the CSDR. That includes authorisation and recognition of CSDs and article 49 of the CSDR.”
“The SI also uses the powers in section 2(2) of the European Communities Act to amend UK law as necessary to ensure that the directly applicable EU central securities depository regulation, or CSDR, operates effectively in the UK. The draft regulations amend the Uncertificated Securities Regulations 2001, or USRs, which concern the registering and transfer of securities such as bonds or shares electronically on computer-based systems. Certain requirements within the USRs are also subject to the CSDR, which creates a common authorisation, supervision and regulatory framework for central security depositaries, or CSDs, across the EU. The SI makes the necessary changes to UK legislation to ensure that the EU regime operates effectively in the UK.”
“I beg to move, That the Committee has considered the draft Uncertificated Securities (Amendment and EU Exit) Regulations 2019. It is a pleasure to serve once again under your chairmanship, Mr Sharma. The Treasury is laying this statutory instrument under both the European Union (Withdrawal) Act 2018 and the European Communities Act 1972. The Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period there continues to be a functioning legislative and regulatory regime for financial services in the UK. This draft SI is part of that programme. It has been debated by the House of Lords and was approved on 25 February.”
“I am sure that my hon. Friend will understand that the Bank of England routinely issues fees under many financial services regulations. This power is consistent with that general responsibility and will be exercised in consultation with those subject to the fee, as in all the other areas of regulation the Bank engages with. Regulators and industry have welcomed the Government’s approach to the SI. The Government believe that the proposed legislation is necessary to ensure the smooth functioning of UK financial markets if the UK leaves the EU without a deal or an implementation period. Relevant parts of the SI are also needed in any scenario to ensure the effective functioning of the CSDR. I hope that colleagues will join me in supporting the regulations, which I commend to the Committee.”
“The Government believe that the proposed legislation is necessary to ensure the smooth functioning of financial markets in the UK if it leaves the EU without a deal or an implementation period. Relevant parts of this SI are also needed in any scenario to ensure the effective functioning of the CSDR. I hope my comments clarify matters sufficiently and that the Committee will be able to support these regulations. Question put and agreed to.”
“Lady asked about the regulators’ resourcing and the impact of taking on provisions of this SI. We are confident that the regulators are making adequate preparations and are effectively allocating resources ahead of the end of March. They have considerable experience and technical expertise. We have participated in a large number of groups with them and I am confident they are well resourced and ready for all outcomes. I acknowledge the broader points made by all three Members about the Bank of England’s fee-raising powers. I will evaluate thoroughly what has been said, and where I can bring greater clarity following discussion with officials, I will write to the Committee if that is appropriate.”
“A central aim of this instrument is to implement the right, under article 49 of the EU CSD regulation 2014, for issuers of securities to use a CSD established in any EU member state. The 2015 consultation draft instrument contemplated that the uncertificated securities regulations might be extended to apply to securities governed by a foreign law. Following industry feedback, the Treasury changed its approach so the uncertificated securities regulations would not be extended to foreign law-governed securities where article 49 is used. In order to avoid duplication and to provide legal certainty, the 2015 consultation draft instrument removed provisions from the existing uncertificated securities regulations, which are now governed by the EU central securities depositories regulation 2014. This element has not changed. The hon.”
“I thank the hon. Members for Stalybridge and Hyde and for Glasgow Central for their observations, and I welcome their broad agreement with the main elements of the SI. Both made significant observations on the fees. Why does this SI contain a provision on the Bank of England fees? As a result of the UK leaving the EU and the changes made by the Central Securities Depositories (Amendment) (EU Exit) Regulations 2018, the Bank of England will have the power to recognise third-country CSDs. On why the Bank of England collects fees for the FCA, this SI concerns the Bank of England fees only. The assessment of other countries charging fees is a decision for other jurisdictions, so I do not have any clear observations on that. The hon. Member for Glasgow Central asked how the SI had changed since the 2015 consultation draft.”
“On 12 December 2018, the Treasury published the distance marketing regulations in draft, along with an explanatory policy note to maximise transparency for Parliament and the industry. In summary, the Government believe that the proposed legislation is necessary to fix deficiencies arising as a result of the UK’s withdrawal from the EU, both to maintain compliant practices for UK mortgage lending activity and so that the UK distance marketing regime continues to protect consumers, and to ensure that the legislation continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope colleagues will join me in supporting the regulations and I commend them to the Committee.”
“Passporting EEA firms operating in the UK are regulated to the same standard in their home state, as they will be subject to the distance marketing directive and, as a result, the UK’s distance marketing regime does not apply to them. However, the onshored distance marketing regulations will now cover certain EEA firms that will operate in the UK post-exit under a temporary permission. FCA rules will also be amended where appropriate, ensuring that such firms will be subject to the UK’s distance marketing regime and that consumer protection is maintained. The Treasury has worked closely with the Financial Conduct Authority in the drafting of the regulations. It has also engaged with the financial services industry, and will continue to do so going forward.”
“To address deficiencies stemming from exit, the regulations will remove EU references that will no longer have legal effect. However, they will maintain the distance marketing regime as set out in the distance marketing directive. More materially, and to ensure that consumers continue to receive the appropriate information from firms undertaking distance marketing, they expand the scope, where necessary, of the Financial Services (Distance Marketing) Regulations 2004, which will now cover certain EEA firms that will operate in the UK post exit under one of the temporary permission regimes that have previously been debated by the House.”
“Broadly, firms operating from an establishment in the UK, and which undertake regulated activity, are subject to FCA distance marketing rules, and firms undertaking unregulated activity from an establishment in the UK are subject to the distance marketing regulations. Nevertheless, some of the distance marketing regulations apply to all activity, whether regulated or unregulated. Should the UK leave the EU without a deal, retained EU and domestic law relating to the regulation of distance marketing and financial services needs to be amended to ensure that such provisions operate effectively. By making these changes, we will ensure firms continue to supply consumers with the information that they need to make decisions about financial services products.”
“The UK’s regulatory regime for the distance marketing of consumer financial services stems from the EU’s distance marketing directive. Currently, EEA financial services firms that carry out distance marketing from an EEA establishment to UK consumers are not subject to the UK’s distance marketing regime. This is on the basis that such firms are subject to equivalent regulation in their own EEA state, as the distance marketing directive operates on a country of origin basis. As a result, the UK’s distance marketing regime, which consists of both FCA rules and the distance marketing regulations, applies only to firms undertaking activity from a UK establishment.”
“The APRC is a standardised calculation of the cost of credit that provides the borrower with the total cost of the mortgage over its full term. It is necessary to confer this power on the Treasury to ensure the APRC remains accurate post-exit. On 22 November 2018, the Treasury published this SI in draft form, along with an explanatory policy note to maximise transparency for Parliament and the industry. Turning to the draft Financial Services (Distance Marketing) (Amendment and Savings Provisions) (EU Exit) Regulations 2019, this statutory instrument will fix deficiencies in UK law related to the distance marketing of consumer financial services, such as by telephone, email or fax, to ensure the regime operates effectively post exit.”
“Under current arrangements, the 2015 order prescribes that when a lender protects a borrower from exchange rate risk by allowing that borrower to convert the loan into a different currency, that currency must be that of the EEA state in which the borrower is resident, or the currency in which the borrower holds their main income or assets. Once the UK leaves the EU, the pound sterling will no longer be an EEA currency, and this provision has been made to ensure that UK borrowers with those types of loans can continue to convert them into pounds sterling. Thirdly, the SI transfers from the European Commission to the Treasury the responsibility to update the remarks and assumptions that accompany the calculation of the annual percentage rate of charge.”
“That change will apply to a very small number of loans, and will not affect consumer buy-to-let lending relating to land in the EEA that was entered into before exit day, which will continue to be covered by Financial Conduct Authority regulation. Secondly, the SI amends the rules on consumer buy-to-let foreign currency mortgages. A foreign currency mortgage is a loan denominated in a different currency to that of the borrower’s income or assets. The SI equips lenders who lend to UK borrowers through a consumer buy-to-let foreign currency mortgage with the option to allow borrowers to convert their loan into pounds sterling, in order to meet the requirement to protect borrowers from exchange rate risk.”
“A consumer buy-to-let mortgage is a loan that can be offered to a borrower who is letting out their home, but not for the purpose of business or as an investment. In the event of a no-deal exit, the UK would be outside the European economic area and the EU’s legal, supervisory and financial regulatory framework. The mortgage credit directive order therefore needs to be updated to ensure that provisions work properly in a no-deal scenario. This SI makes three main changes to the regulatory regime of consumer buy-to-let mortgages. First, it amends the territorial scope of regulated consumer buy-to-let lending, so that in future it applies only to lending relating to property in the UK, not in the EEA.”
“These two SIs were debated and approved in the House of Lords on 5 March 2019. The approach taken in this legislation aligns with that of other SIs that have been laid before the House under the withdrawal Act: to provide continuity by maintaining existing legislation at the point of exit, but amending where necessary to ensure that the regime works effectively in a no-deal context. The first SI, the draft Mortgage Credit (Amendment) (EU Exit) Regulations 2019, concerns the regulation of consumer buy-to-let mortgages. Many members of the Committee will be familiar with the Mortgage Credit Directive Order 2015, which implemented the 2014 mortgage credit directive in the UK. That order established a national framework regulating consumer buy-to-let mortgage contracts.”
“It is a pleasure to serve under your chairmanship, Mrs Moon. As the Committee will be aware, the Treasury has been undertaking a legislative programme under the auspices of the European Union (Withdrawal) Act 2018 to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. A number of debates—some 29, I believe—have been undertaken in this place and in the House of Lords about statutory instruments that are part of that programme. That figure includes the two SIs that are to be debated today, which fix deficiencies in UK law relating to the regulation of consumer buy-to-let mortgages and the distance marketing of consumer financial services.”
“DRAFT FINANCIAL SERVICES (DISTANCE MARKETING) (AMENDMENT AND SAVINGS PROVISIONS) (EU EXIT) REGULATIONS 2019 Resolved, That the Committee has considered the draft Financial Services (Distance Marketing) (Amendment and Savings Provisions) (EU Exit) Regulations 2019. —(John Glen.)”
“However, no reduction in our regulatory oversight is intended as a consequence of the draft regulations. I will look very carefully at the text of the hon. Gentleman’s speech, and if he raised any other points that I have not responded to, I will seek to get back to him, but I do not think I can add anything else at this point. In conclusion, the regulations are needed to ensure that legislation concerning consumer buy-to-let mortgages continue to function appropriately if the UK leaves the EU without a deal or implementation period, and that consumers continue to receive the appropriate information in distance marketing about the financial services products that they might seek. I hope the Committee finds those explanations at least adequate, and that we might now be able to agree the draft regulations. Question put and agreed to.”
“The changes proposed in the draft regulations do not affect existing consumer protections and the FCA will continue to regulate consumer buy-to-let loans taken out in relation to an EEA property outside the UK before exit day. The regulatory status of post-exit lending to consumers relating to any property outside the UK will be decided under the regulatory regime for consumer credit, as is currently the case for property outside the EEA. On the draft distance marketing regulations, the hon. Member for Stalybridge and Hyde referred to a review launched within the EU in December 2018. The Treasury will take a close interest in that in all circumstances. Obviously, if we leave with a deal, we will face a different scenario in how we onshore the regulations, which will ultimately depend on the passage of the in-flight files Bill.”