A SENIOR SNP MP has accused the UK government of trying to make life easier for the financial sector post-Brexit by trying to sneak legislative changes on deregulation plans through a little-known committee.
Roger Mullin, the party’s Treasury spokesperson, was speaking to The National after the Commons Regulatory Reform Committee issued a seemingly innocuous report on its endorsement of “Deregulation plans for Private Fund Limited Partnerships”.
It came as the Department for Business, Energy and Industrial Strategy (BEIS) was reviewing Scottish Limited Partnerships (SLPs), after numerous reports that some of these were being used for money laundering and other criminal activity.
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The Treasury used a Legislative Reform Order (LRO) – a device to change legislation that bypasses the normal legislative process through the Commons, instead sending it through a committee for recommendation.
“The Treasury wanted to create a new form of limited partnership that would have no more protection than SLPs for private fund equity managers in the City of London and thought they would sneak this through,” said Mullin. “By pure happenchance they chose this obscure one that hardly ever meets and I’m the SNP member on it. I was opposing this LRO and not getting very far because of the majority of Tories, but I kept hammering the point that it was ridiculous to bring forward something like this when another department, the BEIS, is running a consultation on SLPs. I indicated to the committee that I was going to oppose this LRO unless they either radically changed or delayed it until such time as this inquiry is completed and lessons learned from it.”
Mullin then drew a question to the prime minister last week, in which he suggested it was ridiculous bringing the LRO when a review was taking place. While leaving the chamber he had a discussion with a Treasury minister who did not appear to know who had put through the LRO.
“There was a scurrying around and very late on Friday we eventually got the draft report to be approved by committee on Monday. The very last part in the draft in red said we’re going to do exactly as I asked – to delay the proposed changes until the BEIS review was completed.
“It would be an exaggeration to say in the aftermath of Brexit they want to turn the UK into a tax haven, but it certainly suggests the government are wanting to do as much deregulating and make things as easy as possible for the financial sector post-Brexit. They are really worried about the situation they’re getting into and this is one example of it.”
Committee chair Andrew Bridgen, said: “The government’s timing has been unfortunate, with the Treasury putting the plans forward on the same day that BEIS launched its limited partnership law consultation. It would be sensible for Ministers to only proceed once they have received convincing assurances from the consultation that there are no wider issues to address.”
A Treasury spokesperson said: “The UK is home to world’s leading financial service. It employs over one million people, including 150,000 people in Scotland. The changes we have made to the rules around Limited Partnership Act are uncontroversial. First announced in 2013, they update legislation that is over 100 years old and ensures that the UK will continue to compete with our international competitors.”