Parliament set for big Summer battles on finance bill detail

After the excitement of the Coronation and another parliamentary recess, MPs and Peers return to Westminster on 5 June to crunch through some key legislation.

First up is the Illegal Migration Bill, which the Government hopes will enable it to fulfil its promise to ‘stop the boats’. The Bill will change the law so that those who arrive in the UK illegally will not be able to stay and will instead be detained and then promptly removed, either to their home country or a third country, such as Rwanda.

Peers from across the House of Lords, including the Archbishop of Canterbury and Conservatives, have strongly criticised the Bill, claiming it breaches international law and is unworkable in practice. Hundreds of amendments have been tabled, many concerned with protecting unaccompanied children and LGBT individuals.

The Bill is currently in Committee, so the decisive votes will be at Report Stage, but the debates in the weeks ahead will determine which key issues the Lords are likely to take a firm stand on, and whether compromise with the Government will be possible.

Key votes will, though, take place this month on the Financial Services and Markets Bill – the legislation establishing the new financial regulatory framework post-Brexit. Three days have been carved out for the Bill’s Report Stage.

Seeing a likely defeat in offing, the Government has already u-turned on demands to protect free access to cash, tabling amendments giving the FCA the power to ensure reasonable provision of both cash deposits and withdrawals.  At the time of writing other amendments that Peers are focused on include:

• the regulator’s accountability to Parliament (including through the creation of a new Office for Regulatory Accountability);
• protection of the ring fence around retail banks;
• removal of UK politicians from enhanced financial scrutiny requirements for ‘politically exposed persons’;
• for firms using AI, the mandated designation of an AI Officer responsible for its safe, ethical, unbiased and non-discriminatory use.

In the Commons, the Finance Bill, implementing measures from the Budget in March, will likely complete its stages before heading to the Lords. As it’s a key finance measure, it’s highly unlikely the Government will lose a vote in the Commons.

With the convention being that the House of Lords doesn’t seek to amendment a Finance Bill it will likely be on the statute book in its current form, barring some technical tidying up amendments from the Government, before Parliament rises for the summer recess in July.

Another key piece of legislation nearing the end of its parliamentary scrutiny is the Retained EU Law (Revocation and Reform) Bill. On 6 June the Commons is due to consider the amendments made to the Bill by the House of Lords.

The Government lost votes on two key amendments: one giving Parliament more scrutiny over which rules should be abandoned, and another enabling devolved governments, rather than Westminster ministers, the final say on whether EU rights and rules should be kept.

On the first, the Government has now abandoned the widely perceived as impractical deadline of the end of this year for sunsetting all EU legislation, which caused the Lords to step in with its amendments. The Government will, though, certainly want to hold firm and oppose the second amendment.

For each home nation to choose which EU legislation it wants to retain would likely have severe implications for the UK’s own internal market. The Government is currently opposing the amendment on the basis that it conflicts with the European Union (Withdrawal) Act and its abolition of the supremacy of EU law.

Meanwhile legislation on minimum service levels for key sectors during industrial action is ‘ping-ponging’ between the Lords and Commons, with the Lords set to consider amendments that Commons is proposing to those it made to the Bill itself.

The two main issues still in contention are whether employers should have to prove that an employee has received a notice requiring them to work, and whether unions should be required to take reasonable steps to ensure their members comply with a notice.

With the Government’s Online Safety Bill also due to complete its Committee Stage in the House of Lords, Parliament is set for a busy June deciding on important aspects of the Government’s legislative programme.