I reassure the Minister that I also welcome the opportunity to give him my views, once again—we have the opportunity at frequent intervals. I will say, right from the outset, that of course we support wholeheartedly the principles of the Kimberley process. It is not perfect and can certainly be improved on regarding impact, but it has certainly had a substantial impact in diminishing that awful, illicit trade in war diamonds. It is extremely welcome that we will continue to apply the principles after Brexit, and certainly ensure there are no gaps that could potentially be exploited.
One area of criticism is the fact that, as an exit SI, it is caught up in this overwhelming number that are coming forward, and whether there has been sufficient time for proper scrutiny. Irrespective of that—I have called this an “SI stampede”—whatever we have, the Explanatory Memorandum sets out, as the Minister has said, the reasons for this. It is an unusual SI in terms of an exit SI, because it is required in its provisions whether there is a deal or no deal. It is just that, if there were a deal within the transitional period, we would be able to ensure that our transition from EU involvement to being an independent participant goes smoothly.
There is a slight difference between a deal or no-deal situation. As the Minister said, 82 countries are members, and Sir Alan Duncan said in the other place that he was confident our existing participant status would be embraced by the 81 as we reapply on a slightly different basis. But doing so within the terms of an agreement to leave the EU is different from coming out at the end of March. We are faced with possible consequences, and it is those consequences that I will address.
As the Minister said, in the event that we are unable to enter an implementation period, our participation through the EU would end and UK trade would be frozen until our application for participation was approved by the other participants in the Kimberley process. In either case, as he says, this draft legislation will ensure that we continue to comply with the requirements of the process. It will secure our borders, prevent any non-compliant rough diamonds entering the UK supply chain, et cetera.
What assessment have the Government made of the impact such a break in our coverage of the process would have on our conflict prevention objectives and obligations? We have been a prime mover of this, so would there be any sort of impact? While we are saying we are going to ensure we remain compliant even outside the process, I want a better understanding of what assessment has been made if we are outside it.
Sir Alan Duncan said that the cost would be the same as now. Likewise, the impact is unchanged, hence the absence of a need for an impact assessment. Paragraph 13 of the Secondary Legislation Scrutiny Committee’s report quotes the Explanatory Memorandum on why there would be no significant impact on business—because it broadly replicates what we have now, and will apply in a no-deal situation. But the committee—I want to ask the Minister about this—found the Explanatory Memorandum,
“deficient for not articulating more clearly the potential financial and commercial consequences for the trade if endorsement of the UK’s application to the Scheme is delayed”,
coming back to this point that inevitably, if we fall out of EU at the end of March, there will be a period when we are not covered. What does that actually mean?
Is the Minister able to say categorically that a no-deal scenario, where for a period we may be outside the scheme, would not involve any additional cost to the UK diamond trade? Sir Alan Duncan responded to Bob Stewart in the other place on the fact that this is about rough diamonds, not the sort of imports and exports that Hatton Garden would have. He said that this SI,
“is about a particular category of diamond. The draft regulations mean that if we were a participant, anything legal in the Kimberley process would include us in that process; if we do not pass them today, it would not”.—[Official Report, Commons, Seventh Delegated Legislation Committee, 5/2/19; col. 8.]
I understand that this is a case for making this SI. I do not have any objection, but I want to be absolutely clear that, in this no-deal scenario, the Government are completely satisfied that there will be no financial impact, particularly on small businesses. Has there been any consultation with the trade on this specific point?
With these few remarks, I will leave it for the Minister to respond.