Draft Financial Regulators' Powers (Technical Standards Etc.) (Amendment Etc.) (EU Exit) Regulations 2018
Debate between John Baron and Kevan Jones(5 years, 6 months ago)
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Mr Jones
He did try, to be fair to him; he is not a bad Minister. This puts a spotlight on a cost of Brexit that is not being factored in. Those 800 SIs will all have a cost to them. It would be interesting if the Minister supplied information about not just the number of SIs relating to this regulation, but the estimated cost of each of them, including the cost of preparations by the Department. That will be a huge cost across Government.
My hon. Friend the Member for Oxford East and the hon. Member for Glasgow Central made a good point about the capacity of the Bank of England, PRA and FCA to implement this and take over this responsibility. I have sat on many Committees since I have been in Parliament, and I do read the explanatory notes, even when the subject is boring or dry, as this may be. Uniquely for an explanatory note on a piece of legislation, no costs are included in this one. It will be interesting to see if all the SIs we get have explanatory notes in which no costs are included, as though this were a zero-cost game.
There is not just the question of what the SI will cost; there are other costs. Clearly, the tasks being taken on by the Bank of England, the PRA and the FCA will involve cost. If we are to do justice to the transparency of the Brexit process and those claiming great wins for the taxpayer out of it, the full extent of those costs needs to be known. It is unfair on those organisations to be given extra responsibilities but no cash to go with them, unlike other parts of Whitehall, where hundreds of millions are being spent employing new civil servants. This is a hidden cost of Brexit. This is one piece of legislation; how many times will it be duplicated across Government? I suggest many, many times, adding up to millions and millions of taxpayers’ pounds.
The explanatory notes state that no consultation was done, although the statutory instrument was published in draft in April. The notes say:
“The financial services regulators plan to undertake public consultation on any changes they propose to make to Binding Technical Standards or rules made under the powers conferred upon them by the Financial Services and Markets Act 2000 using the powers delegated to them”.
The important point there is about who will decide. Will there be ministerial or parliamentary oversight of what is in the consultation? Who draws it up? Is that left to the regulators to do? There will obviously be controversy on the issue that the hon. Member for Basildon and Billericay raised, and people will complain about it. Again, how will that be dealt with? Will Parliament or a Minister have any say over the regulators and how they conduct the consultation? It is said that the devil is always in the detail, and that was clearly demonstrated by the hon. Gentleman.
There may well be unintended consequences to taking on some of these regulations. There may well be better ways of doing things—I do not disagree with that—but where will the political pressure to get the authorities to change the regulations come from, if there is simply a general consultation? For example, someone has already decided that the regulation the hon. Gentleman referred to does not need looking at, but Parliament does need to look at it. Ministerial oversight is needed—not just of the draft regulations, but in a whole load of areas. Basically, we are delegating our responsibility to determine what should and should not be looked at to statutory bodies. In many cases, we might have a very different view from regulators.
We are all told that the draft regulations are being put in place for the nightmare scenario in which we do not get any deal in the negotiations that are taking place. I am interested in what happens to the SI if we do get a deal. Can the Minister explain—he may not be party to this—where this small piece of possible legislation is in the great negotiations? What happens if we get a deal? Does the SI fall?
As for regulators taking over these responsibilities, what will happen in future? Let us suppose we get no deal, the draft regulations go through and we try to transpose everything into UK legislation—this point was made eloquently by the hon. Member for Glasgow Central. What happens if our regulations get out of kilter with the EU regulations? Clearly, the sector is not based on a single company; We are talking about global business—money moving around the world—that does not recognise boundaries. What is the mechanism to ensure that if there are changes in EU regulations, we reflect them, or take them on board directly? Again, will that be left to the regulators? Will they decide which option we take, or will the decision come back to Parliament?
If such decisions are to come back to Parliament, we will be very busy in a whole host of areas for years to come. Basically, when EU regulations in this or any other area change, how do we ensure that we are not at a competitive disadvantage, or that the regulations for institutions based both in the EU and here do not somehow clash? This is not easy. It demonstrates one of the problems with what someone—I cannot remember who—on the leave side said: they said that that the deal would be the easiest ever done. No, it will not. This demonstrates in one small area the technical detail that will hit us.
I worry, because if our regulations are rather weaker—the hon. Member for Basildon and Billericay seems to think that our savers or investors are disadvantaged by the current regulations—and savers and investors are somehow less protected, that leads us to the point made by the hon. Member for Glasgow Central about what came out of the 2008 crash. What we needed was not more regulation for regulation’s sake, but international regulation to ensure that people in this country investing in a pension fund that might be investing overseas were protected, and vice versa. When people ask, “Will these dry regulations affect ordinary people?” the answer is: yes, they will if we get them wrong. That is why this is important.
Mr Baron
The right hon. Gentleman makes some good points. For absolute clarity, I was suggesting that current EU regulation was not serving investors well, and if it is to be encapsulated in our regulatory governance in March next year, we need to act quickly to put it right, because the consequences could almost make for a mis-selling scandal, if not a perfect storm. I just want to make him aware of that.
Mr Jones
I do not have expertise in this field, as the hon. Gentleman does, and I defer to him, but that is one area; what else is there? A proper consultation might have thrown these things up. The sector in which he is involved may well have made representations, particularly around the points he made.
Even if these measures are incorporated into UK legislation post March next year, how do they get unpicked? Who decides that? I sit on the important Regulatory Reform Committee, and we may well be very busy if we get flooded with things that have to be incorporated and then must be unpicked later on.
This statutory instrument seems quite mundane, boring and dry on the face of it, but it demonstrates the bigger picture that will hit Parliament. Not only will it have to spend an amount of time on this, but there will be unintended consequences that may not be relevant straightaway, but certainly will be. All those people said that leaving the EU would be simple, but these are the unintended consequences.
Defence Spending
Debate between John Baron and Kevan Jones(9 years, 1 month ago)
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Mr Baron
If I go down, hon. Members will know why.
Falling defence budgets across NATO have emboldened the Russian President, who has concluded that the heart has gone out of the alliance. This is dangerous, and it underlines the point that well-resourced and capable armed forces can, by deterring potential aggressors, make future conflict less likely. How many times have we foolishly discounted or underestimated that fact?
As we heard in the statement, the benefits of strong defence are not confined just to deterring potential aggressors. Strong armed forces can help us and others to face many of the emerging global challenges for which we need to be better prepared. Armed forces training has a wide skill base—everything from medicine and catering to construction and telecoms—and is a key component of our disaster relief capabilities, as shown by our response to the hurricane in the Philippines and the Ebola outbreak in Sierra Leone.
That skill base will be in increasing demand because the emerging global challenges include those posed by the fact that Africa’s population will be two and a half times that of Europe’s by 2050, the reverse of the proportions in only 1950; by resource scarcity, including water scarcity, which now affects one in three people; by temperature anomalies, which increasingly affect north Africa and the middle east; by fast-emerging middle classes who question political systems that struggle to deliver the goods; and by a growing tendency, aided by social media, for social unrest. Yet it could be argued that this is happening at a time when, in large measure, the international community is failing to produce co-ordinated responses on the scale needed to meet many of the most pressing challenges facing mankind, including poverty, organised crime, conflict, disease, hunger and inequalities. All that points to the need for investment in our foreign policy making and defence capabilities not only so that we are better sighted, but so that we can retain the maximum possible number of policy options by way of response.
How are we faring? Following a strategic defence and security review driven largely by financial pressures, rather than strategic design, the current Government have markedly reduced our armed forces. Plans to replace 20,000 regular troops with 30,000 reservists have created unacceptable capability gaps in the short term and false economies in the long term. Particularly given the fact that the original idea was to hold on to the 20,000 regulars until we knew that the plan to replace them with 30,000 reservists was going to work, I suggest that it was incompetent to let 20,000 regulars march out of the door while only adding 500 to the trained strength of the Army Reserve in the two years that the plan has been in operation.
Defence Reforms
Debate between John Baron and Kevan Jones(10 years, 6 months ago)
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Mr Baron
My hon. Friend is absolutely right about the original plan, which was to allow the build-up of the reserves before we axed regular battalions because it was deemed that deployability was terribly important. Exchanges took place on the Floor of the House in 2011 between the then Defence Secretary, my right hon. Friend the Member for North Somerset (Dr Fox), and my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), which clearly confirm that the plan was to get the balance right—to build up the reservists before winding down the regulars.
My first questions, then, to the Minister of State, Ministry of Defence, who is replying to the debate, are: why and when did the plan change? To make this debate as productive as possible, I would be delighted to take interventions from my right hon. Friend if he wishes to answer the questions we pose as the debate proceeds. I think that the questions why and when the plan changed are wholly legitimate ones, because the plan has changed and the House should be in no doubt whatever about that. Just two years ago, the plan was to say, “We will not wind down the regular troops until we know that the reservists are up to strength”. That plan has changed.
Mr Kevan Jones (North Durham) (Lab)
I agree with the hon. Gentleman, and the plan also changed in respect of the original strategic defence and security review. It initially planned for a reduction of 7,000 troops, but it suddenly increased to 13,000 and if recent press reports are to be believed, it might be even higher.
Mr Baron
The hon. Gentleman makes a good point. A number of changes to the plan have occurred, but to my knowledge, at no time have we had any explanation from the Dispatch Box of why the plans have changed, of the cost implications or indeed of when they changed.
The entire Army reforms depend on the successful recruitment of reserves. Let us examine that for a moment, and let us remember that without such recruitment up to 30,000, the Army reform plans fall apart. What do we know about recruitment so far? We know that TA numbers have been falling, not rising, since 2009 and are now at their lowest ebb since 2007. We know today that new reservist recruitment targets are being missed. The front page of The Daily Telegraph, under the heading “Reforms have left the Army in chaos” refers to documents clearly showing that reservist recruitment targets both for this and next year are being missed—and not just by a small margin, but by a massive margin—thus bringing the whole plan into doubt. Various reasons are put forward, including criticism of the Ministry of Defence for closing down local recruitment offices, and there is talk about privatisation and Capita, but I think that is somewhat overplayed. What we know is that there has been a lack of communication in the IT systems in the MOD as between Capita and Atlas. There are all sorts of reasons, but the bottom line is that key reserve recruitment targets are being missed.
Nuclear Deterrent
Debate between John Baron and Kevan Jones(11 years, 3 months ago)
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Mr John Baron (Basildon and Billericay) (Con)
Most Members will be aware of this, but for the record I should like to state that I firmly believe in our nuclear deterrent. In this uncertain world where countries that are not necessarily friendly to the west have nuclear weapons, it is an unfortunate fact of life that we need them as well to guarantee Britain’s safety. However, that does not stop us also working towards arms reduction. When President Obama launched his global zero initiative, I very much welcomed it. We also owe a debt of thanks to the Royal Navy and our Vanguard submariners, who are always on patrol, for safeguarding the country and providing the essential British contribution to NATO.
I want to suggest that our commitment to our nuclear deterrent should not just be about the current capability and future plans. There is a legacy from the dawn of our deterrent that we have still not yet fully recognised. We have to acknowledge a debt of gratitude to another group of people, who also deserve our recognition and thanks, without whom Britain would never have joined the top tier of nuclear powers. They are, of course, our nuclear test veterans.
In the 1950s and 1960s, in the largest tri-service operation since the D-day landings, 20,000 service personnel participated in British nuclear weapon tests in the south Pacific and Australia. These men’s service was unique. When they took part, the science was largely unknown. Pre-test precautions were primitive and inadequate and failed to protect individuals fully from the effects of heat, blast shock and ionising radiation. Many veterans believe that their health was adversely affected by those tests, a view substantiated by scientific research undertaken in New Zealand by Professor Rowland that was peer-reviewed and accepted by the then New Zealand Government.
Some years ago, following an inquiry from a constituent, I became involved with the British Nuclear Test Veterans Association and I am now its patron. After a long campaign, the BNTVA and I succeeded in persuading the Ministry of Defence to undertake a health needs analysis of all surviving veterans. It showed that 84% of them believed that their main health condition was caused by radiation. If anybody thinks that that was an easy task and analysis to accomplish, they have not dealt with the MOD, but I thank it for taking that on.
Mr Baron
To a certain extent, yes.
Many helpful, practical measures are now being introduced as a result—for example, small but important things such as markers denoting veteran status on NHS records.
Following the success of the health needs analysis, the BNTVA and I recently started a new campaign with three objectives. The first is to secure a lasting legacy for these men and their descendants. There is still much to learn about the effects of exposure to radiation and how we can continue to make nuclear energy safe. The second is to secure public recognition from the Prime Minister of our debt to these veterans. That could include recognition through the medal system by adding a clasp to the general service medal. The third is to establish a benevolent fund courtesy of Government, the suggested figure being £25 million. This would support atomic veterans and, more importantly, their descendants, who have also suffered medical setbacks that can be attributed to their fathers’ exposure.
Mr Jones
I am grateful to the hon. Gentleman for giving way. I was pleased to put in place the health study, against the opposition of a lot of the civil service, when I was a Defence Minister. A generous settlement proposal was put to the lawyers—I got the Treasury to agree to it—but it was rejected. That was an opportunity missed for veterans to get some compensation.
Mr Baron
I recognise the part that the hon. Gentleman played in the health needs analysis. However, let us be absolutely clear about a confusion that is all too readily accepted by the MOD: the BNTVA has never participated in the legal cases that some individual veterans have brought. That is a vital distinction to make and I ask the House to take it on board.
Although £25 million sounds like a lot of money, we should set it in the context of how other nuclear countries have treated their veterans. The US gives each veteran £47,000 plus a further £47,000 for any secondary attributable illness. No causal link is required between the cancer suffered by the veteran and the fact that they were there. If they were at the tests and they have cancer, they automatically get the compensation. Canada pays more than £15,000 in addition to money, from pensions and compensation legislation. The Isle of Man makes an ex gratia payment of £8,000 to any resident test veteran.
In all three cases, the service personnel in question have access to free health care provision. The MOD argument that veterans in this country have access to the NHS therefore does not stack up. The fact remains that this country’s nuclear test veterans are almost at the bottom of the scale in the international comparisons going by how they are treated by this country. I hope that the House will accept that that needs to be put right. Against those comparisons, the campaign for £25 million, which works out at about £6,000 per veteran, is modest.
I should at this stage repeat what I said to the hon. Member for North Durham (Mr Jones) and make it clear that the BNTVA has never participated in the legal challenges brought by some veterans.
We have had several meetings at the MOD with successive Ministers for veterans. I wrote to the Government in November to set out the details of our campaign. Despite chase-ups, I still await a response. No doubt the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), will carry that message back to the MOD. Meanwhile, I have written to all Back Benchers requesting their support for our campaign for recognition. As the hon. Member for Bridgend (Mrs Moon) mentioned, many have been kind enough to write back positively. I will be taking the matter further in due course.
In conclusion, as the Government are on the verge of commissioning the next iteration of our nuclear deterrent, it is right that we remember those who first created it and finally, after so long, repay the debt that we owe them.