Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019
(4 years, 6 months ago)
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17:20 - Division on Lord Stevenson of Balmacara’s amendment to the Motion - Ayes: 204 / Noes: 132 - Amendment to the Motion agreed.
Lord Duncan of Springbank
That the draft Regulations laid before the House on 11 July be approved.
Relevant document: 58th Report, Session 2017–19, from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)
My Lords, I stress at the outset that a deal with the EU would render the provisions of this instrument unnecessary until the end of any agreed implementation period. The regulations are required only in the event of the UK leaving the EU without a deal, a reality which the UK cannot guarantee unilaterally but for which it must necessarily prepare.
A number of noble Lords have raised concerns with me over whether these regulations will remove the rights of EU nationals to establish a business or provide services in the UK. I am grateful to the noble Lord, Lord Stevenson, for meeting me earlier today to discuss this issue and those that he will raise in moving his amendment. I take this opportunity to put on the record that these regulations do not impose any new restrictions on EU nationals or EU-based businesses, or the nationals or businesses of countries with associated agreements, at the point at which we exit the EU. This is because the UK’s underlying legislative framework is compliant with these rights and, importantly, because EU retained law under the withdrawal Act will also apply.
The regulations do not impact on the immigration regime applying to the EEA or to Turkish and Swiss nationals in the UK. Indeed, they explicitly carve out any potential impact on the immigration rights of Swiss nationals and Turkish nationals to ensure that any changes come into force separately via primary legislation, which will be scrutinised in the normal way.
The regulations do not impact on the rights of EU citizens resident in the UK at the point of exit; those are protected separately. All EU citizens resident in the UK by exit day will still be able to work, study and access benefits and services, whichever scenario plays out.
The instrument addresses the reality, once we leave the EU, of reciprocity and necessary legal certainty affecting EU states and those states with which the EU has association arrangements. It covers the definition of “services”, rights of establishment and the provision of services, free movement of services, and the prohibition of non-discrimination, as set out in the relevant articles of the Treaty on the Functioning of the European Union and similar provisions contained in EU association agreements.
The Treaty on the Functioning of the European Union provides rights for nationals of member states and is founded on the principle of reciprocal rights, including in the areas of services and establishment. If the rights were not disapplied, this would create certain legal issues for the UK. Going forward, the UK could be in breach of the WTO’s General Agreement on the Trade in Services—the most favoured nation principle.
Unilateral provision of the measures could be interpreted as granting EU nationals additional rights to challenge the UK’s laws and decisions in the future, and could restrict the Government’s ability to regulate in the future. It would also create an uneven playing field in which EU nationals benefited and UK nationals in the EU did not.
The Government have sought the widest scrutiny of this instrument. The necessary consent of the devolved Administrations in Scotland and Wales was sought and secured, and the Northern Ireland Civil Service has been notified.
The Joint Committee on Statutory Instruments considered these regulations but chose not to report them to either House. The Secondary Legislation Scrutiny Committee chose to draw the instrument to the attention of the House, noting, in particular, compliance with WTO law and matters relating to satellite decoder cards.
To reiterate, the regulations impose no additional restrictions on EU nationals or EU-based businesses, or the nationals and businesses of countries with associated agreements, when we exit the EU, as the UK’s existing legislation is compliant with these rights. All relevant Whitehall departments have examined UK legislation to identify where direct impacts might arise from the regulations and underlying UK legislation is not already in line with the treaty rights. I am satisfied that UK legislation is compliant with the rights.
The regulations will impact on the use in the UK of satellite decoder devices intended for EU audiences—that is, dishonestly receiving programmes without payment. In essence, it brings the law into alignment with the rules for non-EU satellite decoder devices.
All EU citizens resident in the UK by exit day will still be able to work, study and access benefits and services, whatever the scenario. Further, the regulations will have no impact on the immigration regime applied to EEA, Turkish and Swiss nationals in the UK, save to ensure that changes to the immigration regime applied to Swiss nationals and Turkish nationals will come into force separately via primary legislation.
These regulations are necessary. They ensure the UK’s compliance with international law and protect the UK’s right to regulate in the future. On that basis, I commend them to the House.
Amendment to the Motion
Lord Stevenson of Balmacara
At end insert “but that this House regrets that the draft Regulations will remove certain rights for European Union, European Economic Area, Swiss and Turkish nationals, namely to be self-employed, own and manage a company and provide services in the United Kingdom without facing additional restrictions; further regrets the impact this may have for many long-residing individuals and families, as well as the wider consequences for the United Kingdom economy and employment; expresses concern that this change may result in the loss of rights for United Kingdom citizens resident elsewhere in the European Union, European Economic Area, Switzerland or Turkey; and calls on Her Majesty’s Government to immediately and unilaterally guarantee the continuation of the relevant rights of European Union, European Economic Area, Swiss and Turkish nationals in the United Kingdom beyond exit day.”
Lord Stevenson of Balmacara (Lab)
My Lords, I am grateful to the Minister both for our meeting earlier today and for his introduction to the regulations. I belatedly welcome him to the Front Bench; although we have crossed swords at Questions, this, I think, is the first time that he has dealt with me on a substantive issue. I look forward to more of those.
These regulations will come into force only in the event of a no-deal Brexit, which now seems extremely unlikely to happen, but they are also contingent on the becalmed immigration Bill; that separation is continuing, is causing concern and is troublesome. However, were they to come into force, they would significantly impact on the rights of EU, EEA, Swiss and Turkish nationals. Specifically, they disapply the basis under which these nationals enjoy their rights to be self-employed, own or manage companies, or provide services to the UK on the same basis as UK nationals, and their right to bring nationality discrimination claims in relation to these rights.
As the Minister said, these regulations were drawn to the special attention of your Lordships’ House by the Secondary Legislation Scrutiny Committee because they remove EU treaty rights and make significant policy changes. As he said, they were debated in the Third Delegated Legislation Committee of the House of Commons on Monday and have just been subject to a vote in the Commons, so they are drawing quite a lot of attention.
It surely makes no sense to decide immigration rights for those who are self-employed or are running businesses, separately from determining the immigration rights of other people, but that is what these regulations do. As recent correspondence has amply demonstrated, thousands of self-employed, business-owning or business-managing providers of services—including many who are contributing to our social and cultural life, the health service and our prosperity as a nation—need assurances that they will not be disadvantaged and that their right to stay will not be questioned or removed as we move forward. Does the Minister agree that the department could do more to explain what is happening to those affected by this measure, perhaps by writing to them once we know which way we are going?
In essence, I have three main concerns. First, the draft regulations are being made under Section 8 of the withdrawal Act, which gives the Government power to amend retained EU law in order to correct or mitigate “deficiencies” or,
“a failure of retained EU law”,
to operate effectively after Brexit. But are these really deficiencies? In what sense has there been a “failure” of retained EU Law? Is it appropriate for the Government to use Henry VIII powers in Section 8 as a vehicle for policy changes? That Act was never intended to address how, whether or how quickly we could meet our obligations under the WTO.
Secondly, the regulations disapply the rights of EU, EEA, Swiss and Turkish nationals who are presently self-employed, owning and managing companies or providing services in the UK, and precludes them from bringing nationality discrimination claims in respect of those rights. In drawing the regulations to the special attention of the House on public policy grounds, the SLSC has described them as appearing,
“to be a significant reduction of rights”.
The Minister said that the SI has had a wide review but, because there is no impact assessment, we do not know how many people will be affected; nor have they —or anyone—been consulted. In a previous debate, on a no-deal Brexit SI on metrology on 7 October, the Minister said on the question of stakeholder involvement in that SI:
“We did this the wrong way round—there should have been greater engagement in advance of such a complex and dense series of materials, to ensure that we had captured all the elements the first time. We did not do that, and … I acknowledge that this is the wrong way round, and I have said that on the record”.—[Official Report, 7/10/19; col. 1913.]
It is a pity that, in his short time in the department, he has not been able to change its view on how it deals with SIs such as this one.
Thirdly, if the House accepts that a change of policy of such profound character should not be made by way of secondary legislation, the question then becomes: why is this issue not included in primary legislation such as the immigration Bill, which, as I said, is becalmed but is still around? In particular, how does this square with the fact that, on 5 September 2019, the Home Secretary released a policy paper in which she stated that free movement would be ended after exit day by way of primary legislation—a commitment from a Cabinet member?
In his opening remarks, the Minister said that, as well as protecting our WTO most favoured nation status, the Government were progressing on the basis that there was no guarantee that the EU would offer reciprocity on this matter. However, it is not so long ago that the Government chose to allow EU and EEA firms the right to continue to have full access after Brexit to electronic data held in the UK, with absolutely no guarantee that our firms would be offered those rights in return. Reciprocity was not a barrier for BEIS on that occasion, but it seems to be here—really?
Despite the Minister’s assurances, which I accept, we have before us an SI which many of those affected think removes the rights to be self-employed, to own and manage companies or to provide services in the UK on the same basis as UK nationals. That, in turn, at face value, may affect the underlying basis of their lawful residence in the UK, because it is dependent on the immigration Bill, which we do not yet know the timetable for. The very strong impression given by the proposed SI is that it is a continuation of the Government’s “hostile” immigration policy.
Given where we are, and where we are likely to be in the not-too-distant future, I believe the regulations should be withdrawn and that, as my amendment says, Her Majesty’s Government should immediately and unilaterally guarantee the continuation of the relevant rights of EU, EEA, Swiss and Turkish nationals in the UK beyond exit day using primary legislation, if that is required. I beg to move.
Lord Oates (LD)
My Lords, I support the amendment in the name of the noble Lord, Lord Stevenson. During the referendum campaign, a number of categorical commitments were made to EU citizens resident in the UK by the current Prime Minister and Home Secretary, among others. In June 2016, they said that,
“there will be no change for EU citizens already lawfully resident in the UK. These … citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present”.
I have often repeated that statement to the House, and I make no apology for doing so again; first, because to the shame of the Government that undertaking remains unhonoured to this day; secondly, because it bears significantly on the level of trust that it is prudent to place in any assertions from this Administration; and, thirdly and most importantly, because it bears significantly on the regulations we are discussing today.
As we have heard, these regulations remove certain rights of EU, EEA, Swiss and Turkish citizens in the event of a no-deal Brexit, in relation to self-employment, the establishment and management of businesses, and the provision of services in the UK. They do so despite the fact that, during the passage of the European Union (Withdrawal) Act 2018, the Government pledged that no policy changes would be made via delegated legislation. The then Secretary of State, David Davis, told the House of Commons on 30 March 2017 that this went “without saying”. Nevertheless, MPs were sensible enough to insist that he actually said it, which he subsequently did. He told the House that,
“no change should be made to rights through delegated legislation”,
and added:
“Let me reiterate that the use of delegated legislation will be for technical changes”.—[Official Report, Commons, 30/3/17; col. 431.]
However, the Explanatory Memorandum that accompanies these regulations states that,
“the removal of these rights is not expected to prevent those EU, EEA EFTA, Swiss or Turkish nationals who are operating businesses or providing services immediately before exit day from continuing to be able to do so immediately after exit day (where they retain residence rights)”.
So the Government’s Explanatory Memorandum concedes that rights will be removed, in breach of Mr Davis’s undertaking. Having dispensed with the removal of rights, notwithstanding this undertaking, the best that the Government can tell us about the impact of the removal of these rights is that they do not expect that this will prevent EU-plus nationals from continuing to run their businesses or provide services.
It is deeply troubling that the Government can offer no more assurance than an expectation, because these regulations are causing great anxiety among EU-plus nationals resident in the UK about the impact they will have on their status and their ability to continue with their business or in self-employment. I hope that the Minister will be able to give them some considerably greater reassurance in his reply than that which has been given to date. I would be grateful in particular for the Minister’s response on the following points.
Lord Pannick (CB)
My Lords, I share the concerns expressed by the noble Lords, Lord Stevenson and Lord Oates. In his opening remarks, the Minister emphasised that these regulations impose no new obligations, but that is not the concern; the concern is whether they remove existing rights. He was anxious to downplay their impact, yet at the same time he told the House that they are necessary because, unless they are implemented, this country might face problems at WTO level. I am puzzled as to how those two matters can be reconciled. I would be grateful for his elaboration on that point.
In any event, it seems to me, as it does to the noble Lords, Lord Stevenson and Lord Oates, that these are very complex matters, and in my view they are highly inappropriate for a statutory instrument. They surely cry out for detailed assessment as to their purpose and effect as a matter of policy by primary legislation. The method being used by the Government is delegated legislation under Section 8 of the European Union (Withdrawal) Act 2018. Noble Lords will recall the sensitivity of that issue, the care and attention which this House in particular gave to the powers being conferred on the Government and its anxiety to constrain the use of such powers so that they did not relate to matters of policy. As the noble Lord, Lord Oates, indicated by reference to the speech of David Davis, the then Secretary of State, that was the view of the Government themselves.
I remind the House that the Government have made it clear from the outset that these delegated powers would be used only in the most circumscribed way. The White Paper that preceded the publication of the Bill Legislating for the United Kingdom’s Withdrawal from the European Union said at paragraph 3.17:
“Crucially, we will ensure that the power”—
that is, the power to make delegated legislation—
“will not be available where Government wishes to make a policy change which is not designed to deal with deficiencies in preserved EU-derived law arising out of our exit from the EU”.
The Explanatory Notes that accompanied the EU withdrawal Bill 2018 said at paragraph 14:
“The Bill does not aim to make major changes to policy or establish new legal frameworks in the UK beyond those which are appropriate to ensure the law continues to function properly from day one. The Government will introduce separate primary legislation to make such policy changes which will establish new legal frameworks”.
It seems to me, as it does to the noble Lords, Lord Stevenson and Lord Oates, that these regulations are in breach of those statements. I share the regret which the amendment proposed by the noble Lord expresses.
Baroness McIntosh of Pickering (Con)
My Lords, since the noble Lord, Lord Oates, and I entered the House together on the same day, I always follow closely what he says. He said that the position of UK nationals could be placed in jeopardy in the member states and other countries mentioned in the statutory instrument.
Paragraph 2.4 of the Explanatory Memorandum states:
“Directly effective rights derived from TFEU Articles are based on reciprocal relationships between EU Member State territories. Directly effective rights derived from EU bilateral and multilateral agreements are based on reciprocal relationships between EU Member State territories and certain non-EU territories”.
The Parliamentary Under-Secretary of State for the department who introduced the statutory instrument in Committee in the other place said that a reason for it was sovereignty. He stated:
“Given that the rights will no longer be reciprocated, failing to disapply the rights in UK law would leave a lack of clarity as to whether EU nationals and nationals of countries with associated agreements had additional rights, compared with nationals of other countries, to challenge the laws and decisions of UK authorities after Brexit”.—[Official Report, Commons, Third Delegated Legislation Committee, 21/10/19; col. 4.]
The SI and this debate so far seem to be silent on what the position will be of British nationals working, either having established their service or with free movement to provide services, in another EU country.
I would be grateful if my noble friend the Minister could put my mind at rest by saying that those people will not be disadvantaged. Are we moving away from reciprocity? Will he confirm that we are seeking to negotiate their future rights? What is the position of lawyers? I remind my noble friend that I am a non-practising Scottish advocate who practised EU law in Brussels. I would be very pleased to know that these rights will remain reciprocated after 31 October.
The Lord Bishop of Salisbury
My Lords, I support the regret amendment tabled by the noble Lord, Lord Stevenson, and echo the sorts of points that have been made already. One strength of the Church of England is that there is the Diocese in Europe and a Church of England presence in Europe that will continue beyond our membership of the European Union. The Bishop in Europe, in response to this SI, said that: “From a Brussels perspective, we are aghast that EU and EAA citizens’ rights in the UK could be restricted in this way. It surely invites reprisals on UK citizens running businesses in the EU”.
This is not just a technical issue. This is an issue about the way in which we see people who live in this community and the way in which UK citizens will be seen within the EU. If this is preparation for the theoretical possibility of a no-deal Brexit, it is profoundly unhelpful to the people directly named within it and affected by it and the way that they are viewed within their own community here in the UK. It arises, as the Minister said, because of a conflict with WTO terms for most favoured nation principles, but it also raises questions about the reliability of government in relation to the continuing status of EU/EAA citizens within the UK and, by implication, of UK citizens within the EU.
This seems to me to be a very good example of why the withdrawal Bill will need careful scrutiny regarding what might or might not be involved in our taking back control. What do the Government see as the implications of this matter and proceeding in this way on UK citizens in the EU?
Lord Campbell-Savours (Lab)
My Lords, as I was about to retire to go to bed last night, I received a rather distressed message from a family in Maidenhead, the former Prime Minister’s constituency. So, late last night, I read up on the background to this debate. Most of what I was going to say has been said and I have never been into tedious repetition, so I will simply place on record the email that I received, which said that:
“This very important matter has only very recently come to our attention and could have great impact on members of my immediate family. Hence our writing to you with so little time to spare”.
As I say, it was received late last night. I would like the Minister to follow this, because perhaps, in this case, we will be able to establish the real position. The email continues:
“Our son-in-law is a Swiss national who has lived in the UK for 24 years and been married to our daughter for 10 years. They have 2 children. Apart from an initial period as a student our son-in-law has supported himself and his family through self-employed work and, for the last 8 years, has run his own business … You can see why we are very worried by the laying of these Regulations which appear to be intended to affect the underlying basis for our son-in-law’s lawful residence in the UK as an economically active person. This would result in an extremely significant change and loss of rights which would make pursuing his trades very difficult and could undermine his status for staying in the UK. He is a photographer and an athletic coach to disabled British athletes. One of his athletes, a severely injured ex-serviceman, won an Olympic medal for Britain in 2016 … We are concerned that these changes, which could adversely affect many hundreds of thousands of people, are being introduced by secondary legislation, seemingly in contradiction of government assurances”—
previous government assurances, that is, which were alluded to by colleagues. The email asks that,
“as a matter of urgency, you would look into this issue, which is causing us much unexpected concern for the stability of our daughter’s and grandchildren’s family life in their home country”.
I read that out in light of very good advice I was given many years ago, 40 years ago almost, by Tam Dalyell. Tam’s theory was always that whenever there is a real problem and no one really knows where they stand, one should always bring in some personal testimony, because it always adds to the debate and concentrates the minds of Ministers when having to reply from the Dispatch Box.
Lord Anderson of Ipswich (CB)
My Lords, the main issue from a legal perspective is how the use of delegated legislation can be justified, contrary to past undertakings, for a significant policy change that reduces, or appears to reduce, acquired rights. I agree with everything that the noble Lord, Lord Stevenson of Balmacara, and my noble friend Lord Pannick have said about that, and I need not weary your Lordships with any more, but I shall address two other points. The first relates to the practical effect of what the Minister in the Commons accepted on Monday is the potential disapplication of rights. The Government must accept that those rights have some value, as my noble friend Lord Pannick said, because of the position that to maintain these rights in favour of EU-plus nationals might violate the most favoured nation principle of the WTO. Indeed, the Secondary Legislation Scrutiny Committee records BEIS as saying that those rights afford a guarantee against,
“additional restrictions or barriers that may apply to nationals and businesses from other countries”.
I am puzzled by the suggestion that the removal of these directly effective rights, in particular the right not to be discriminated against in the delivery of services or in owning or managing businesses, will have limited or no practical impact.
The Minister has said, no doubt rightly, that our law will be in accordance with EU law on exit day, but because the rights have direct effect they afford protection, by definition, over and above that contained in domestic law. Without these rights, where are the equivalent entitlements and remedies not to be discriminated against to be found in our law? Nor am I entirely clear whether the right of all EU nationals to apply for settled or pre-settled status, even if that right is successfully exercised by the end of 2020, is a full substitute for the right of residence derived from the directly effective right of establishment under the Immigration (European Economic Area) Regulations 2016. Will he explain further whether it is the case—and if so, why—that the removal of these important rights, leaving aside the special issue of satellite decoders, will have only de minimis impact in the respect I have identified?
My last point relates to the specific power under which these regulations are made, Section 8 of the European Union (Withdrawal) Act 2018, which is available only where there is a failure of retained law to operate effectively, or some other deficiency in retained EU law, as was said by the noble Lord, Lord Stevenson. I make another point in relation to that: deficiencies in retained EU law are exhaustively defined in Section 8(2) and (3) of the Act, but I cannot find any definition there that fits the present case. There is some suggestion in the Explanatory Memorandum that the deficiency consists of lack of reciprocity, but it is not clear, certainly to me, how a deficiency could arise from the possibility that others might choose to withhold equivalent rights in their own law. If that were the case, then the scope of Section 8 would be very broad indeed. Can the Minister say any more about which provision of Section 8 is relied upon as a sufficient basis for these regulations and, if so, how?
Lord Greaves (LD)
My Lords, I have been listening with great admiration to the knowledge and expert understanding of all this of noble Lords who have spoken. I thank the noble Lord, Lord Stevenson, for tabling his amendment and my noble friend Lord Oates for explaining it all, so that I understand it a bit more.
The right reverend Prelate and other noble Lords referred to UK citizens living in other EU countries and the effect that the whole Brexit thing is having on them. We have friends who live in the south of France and operate a small business there, and they have just held up their hands and applied for and obtained French citizenship as the only way they thought they could secure their position and their business there. There is a clear understanding among a lot of British citizens in other EU countries that in the negotiations so far, the Government have not taken their interests fully into account.
On this regulation, when we were discussing settled status during Question Time this afternoon, the noble Lord on the Opposition Front Bench declared a personal interest, so I suppose I ought to declare a personal interest in that my daughter’s husband is a European Union citizen and they live in this country. They work from home; I must confess that I do not know whether they are technically self-employed, have a zero-hours contract or both, but they certainly have a highly technical, successful operation, which is inherently insecure as it depends on the organisation that provides them with work. Sometimes there is none and at other times there is a lot. They are very concerned, not only about these regulations but about their position, so they asked me to take a look at this.
I looked at it and read the Explanatory Memorandum, knowing that this is where I would find the truth, the whole truth and nothing but the truth from the Government. It asks:
“Why is it being changed?”
As noble Lords have said, it says that Section 4 of the European Union (Withdrawal) Act provides the rights in domestic law, and so on. It then says in paragraph 2.11:
“To address any inoperability and to ensure UK law continues to function effectively, with legal clarity, and that the UK is compliant with its World Trade Organization … obligations, including the General Agreement on Trade in Services, these rights need to be disapplied”.
I have read it again and again and I do not understand why, and I have heard noble Lords speak today and I still do not understand why. However, what concerns me is not that I do not understand this—what inoperability there may be or what conflicts there may be with the rules of the WTO—but that the Government do not seem to know either. The Explanatory Memorandum talks about “any inoperability”; is there any or is there not? I presume that the Government have taken legal advice on this and have a belief as to whether there is or is not. Because they think this legislation is necessary, I assume that they think there is, but they do not want to tell us exactly what it is.
Later, paragraph 2.12 says:
“These directly effective rights of establishment and free movement of services would appear to have limited practical effect, post-exit in a no deal scenario”,
but the Minister is telling us that the Government do not think that it will have any effect in practice. Will it have a limited effect or not really any effect? If it will have a limited effect, can the Minister tell us exactly what that limited effect is, in words that I, as a non-lawyer and a non-expert in these WTO matters, might understand? The Minister himself used the word “could” about three times—“It could have an effect”. But will it or will it not? What is the legal advice, or is it all very vague and nobody knows?
However, the Explanatory Memorandum reassures the individuals and businesses concerned:
“Individuals and businesses will be able to check published no deal planning guidance on gov.uk”.
If I were to look at GOV.UK this afternoon, would I find advice on whether there is inoperability and limited practical effect, or would it tell me not to bother because there is not? If it tells me not to bother because there is not, why is this all coming here anyway?
The Earl of Clancarty (CB)
My Lords, at the beginning of this debate, the noble Lord, Lord Stevenson, said that parliamentarians are talking about this issue. The noble Lord, Lord Oates, and others, said that EU citizens are talking about this issue, and indeed, the British living and working in Europe are doing so too. They are all very worried. There is something about this issue to which the noble Lord, Lord Greaves, referred. It is a confidence issue, a trust issue and a perception issue. That is very important. There is a sense that a safety net is being removed in preparation for worse to come, despite the Minister’s assurances.
I would be appalled by any legislation that attempted to reduce the rights of EU citizens to run businesses or be self-employed in this country under a no-deal scenario. Such legislation should surely be in an immigration Bill, not presented to the House in this form as a fait accompli. As the noble Lord, Lord Stevenson, noted, we are talking about a wide variety of industries being affected. The so-called gig economy, the NHS, IT and the creative industries would be hit hard if EU citizens felt forced out, and we would be culturally impoverished as a result. However, as the noble Lord pointed out, it is not only the livelihoods of EU citizens that will be at risk, but the livelihoods of British citizens living in Europe.
It is a widely held view, but a misconception, that most British abroad are retirees. Of the 1.24 million UK citizens in Europe, Britain in Europe estimates that only 20% do not work. Many of those in work are self-employed, in as wide a variety of service industries as in the UK. It feels, however, as though the Government do not care enough about the British living in Europe, or about their livelihoods, which will without a doubt be threatened through any reciprocal effect. A number of us in this House have repeatedly asked the Government to protect the rights of the British working in Europe. This is not the right way to go about it, and that is apart from the message being sent through this legislation to EU citizens who run businesses or are self-employed in this country.
Lord Purvis of Tweed (LD)
In the absence of an impact assessment, I have four questions for the Minister. In many respects, they support the points raised by my noble friend Lord Oates.
The first is linked to the questions asked by the noble Lords, Lord Anderson and Lord Pannick. Can the Minister be clear with the House about what the Government consider the current preferential trading environment to be? If we offer a preferential trading environment to those providing services to a national of a country with which we do not have a trade agreement, we fall foul of the WTO. The Minister said that there would be no difference to those providing business services in the UK if they were EU, Swiss or EEA nationals. If that is the case, there should be no difficulty with the WTO, because we would not be offering any preferential arrangement. At the same time, if the WTO considered it a preferential trading agreement, and therefore discriminating against third countries other than EU countries, what would that preferential trading environment be for those that the WTO considered the UK to be falling foul of?
Given our consideration of the Trade Bill, we also looked at the draft services schedule presented by the UK to the WTO. There was no reference to that in the Minister’s remarks. Given that the services schedule has been lodged at the WTO for nearly a year now, what is the interaction with that services schedule? The Minister will know that there is a specific reference in it to those providing financial services, yet there was no reference to that in his remarks today. Will there be a difference for those EU nationals currently providing financial services products to UK citizens? I see the Minister nodding his head from his sedentary position, but that is contrary to the understanding of others. If the operation of the European financial single market ended on a no-deal Brexit, such people would not have the same level of protections. I would be most grateful if the Minister could clarify that.
My second point is linked to that. We also considered a continuity treaty with the Swiss Confederation. That treaty has specific clauses providing for elements of those who would be offering services. There was no mention of that in the Minister’s remarks so I am interested to know whether he can clarify something on the interaction with the treaty that Parliament has agreed, which offers, on a no-deal basis, a preferential level of support for those Swiss nationals. With this instrument, it seems as though things would contradict that because mentions of Swiss nationals run throughout it. If the Minister can clarify the point on how this will interact with the treaty that we agreed with the Swiss Confederation, I would be grateful.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I am another lawyer, but I must not be mistaken for one who has worked on this particular problem. Indeed, I was not alive to it until I came into the Chamber this afternoon, so I am not another Lord Pannick or Lord Anderson of Ipswich—I am genuinely seeking a little clarification.
Perhaps I may focus the Minister’s attention on paragraph 7.8 of the Explanatory Memorandum. As I understand it, the whole question arises only if we leave with no deal, but the instrument is not required on leaving with no deal as matters currently stand, and there is nothing inconsistent with the directly effective rights currently enjoyed. The whole object, as I understand it from paragraph 7.8, is to prepare the ground so as to allow the Government, at some future date,
“to make policies and legislative changes which depart from the directly effective rights”.
Paragraph 4 of the report of the Secondary Legislation Scrutiny Committee states that it would,
“enable the Department to introduce new policies and regulations that depart from this approach, for example by introducing new restrictions on EEA, Swiss and Turkish nationals or businesses”.
My question is this. If there comes, post leaving with no deal, a future point at which the Government do want to make policy and legislative changes to restrict rights, can they not at the same time as they would need the legislation to introduce those policies and legislative changes also do what is necessary to disapply what otherwise, absent this instrument, would be the continuing directly effective rights? In other words, why can we not wait until we see what future restrictive policies or legislation the Government would like to introduce post leaving with no deal? Can we not leave it until then to make any change that is then required and which is intended, by this instrument, to anticipate those future possibilities?
Lord Hope of Craighead (CB)
My Lords, I should like to return very briefly to the points made by the noble Lords, Lord Anderson of Ipswich and Lord Purvis of Tweed. They relate to the extent to which the Government have informed themselves about the impact of the instrument we are discussing. Like the noble Lord, Lord Greaves, I tend to look at the Explanatory Memorandum for guidance, and what I looked at first was paragraph 10, dealing with consultation. It is a most surprising paragraph, against the background of what we have heard in the Chamber this afternoon, because all it tells us is that the only area in which the directly effective rights of establishment or the free movement of services have been identified to have a direct impact on UK business is that of satellite decoders. That suggests that those who have been considering this instrument have a very narrow vision of the extent to which they are disrupting the system that has existed during our time in the EU. I am concerned about the extent of the consultation and therefore the about lack of information that has been gathered by the Government about the effect of the instrument. If it is to be taken away, I hope that a further and more wide-ranging consultation will be undertaken so that there will be a better awareness of the effect of this instrument.
The Earl of Clancarty
My Lords, does the noble and learned Lord agree that there is one impact that we do know about, which is the impact of a climate of concern?
Baroness Bull (CB)
My Lords, the House has heard from many noble and noble and learned Lords. I rise briefly to add my support to this amendment and to put on record that the concerns set out by the noble Lord, Lord Stevenson, and which have been elucidated by so many distinguished and legal brains, are shared more broadly across the House. Those of us without legal backgrounds rely on the expertise of the House’s Secondary Legislation Scrutiny Committee, which has highlighted that removing treaty rights means that EU-plus citizens will no longer be able to use these rights to challenge new restrictions. It describes this as a, “significant reduction of rights”—yet, as we have heard, there has been no impact assessment, so we really do not know the scope and the extent of the impact of this reduction in rights.
I have two very simple questions, and they echo questions which have already been asked. First, what will be the impact of this on reciprocity and on the livelihoods of UK citizens who have established businesses in or provide services across other EU countries? Secondly, can the Minister clarify whether this does in effect apply retrospectively? As the noble Lords, Lord Oates and Lord Greaves, pointed out, paragraph 2.12 of the Explanatory Memorandum uses phrases such as, “It is anticipated” and “it is not expected”. To this non-legal brain, that does not seem very decisive.
Similarly, in paragraph 2.17 we read:
“This Instrument ensures that Swiss nationals operating a business or providing services in the UK immediately before exit day will not lose residence rights by virtue of the disapplication of the directly effective rights”.
That clarifies residence rights, but I would be grateful if the Minister could confirm that this extends to the right to carry on owning or managing businesses or providing services, because it is not clear.
Like the noble Lord, Lord Oates, I heard the Minister twice repeat that these groups would be able to live, work, study and access services and benefits, but he specifically did not say that they would be able to continue to be self-employed, own and manage companies or provide services. Can he clarify whether this will be the case?
None of this is particularly clear, and it is not surprising that I, like other noble Lords around the House, have been written to by members of the public asking, for example, whether this means that Turkish nationals will no longer be able to own and run a Turkish restaurant.
If there really is no problem here, perhaps the Minister might agree that the Government could be a little clearer about this and clarify the intention behind the SI and its impact on EU nationals who have made their home here. The memorandum says:
“Individuals and businesses will be able to check published no deal planning guidance on gov.uk”—
which is not particularly reassuring to the people around the UK who are concerned.
The Prime Minster has made much in recent speeches and statements about the contribution of EU nationals to the UK and its prosperity, success, culture and economy. This SI seems rather at odds with this newly warm and welcoming tone.
Lord Duncan of Springbank
My Lords, this has been a complicated debate, but I am drawn to the remarks by the noble Lord, Lord Campbell-Savours, as a way of helping us step into the debate. Tam Dalyell was absolutely right: it is the person who will help us understand the reality who we need to hear today. The individual spoken of by the noble Lord, Lord Campbell-Savours, has lived in the UK for 24 years, has two children and is a photographer and athletics coach. He is an important citizen in this country. There will be no diminution of his rights—not just to study or live, but to be self-employed, to offer services or, indeed, to operate as he currently operates—as a consequence of this statutory instrument. The noble Baroness, Lady Bull, at the end mentioned Turkish people who may feel that they will have their rights to operate a Turkish restaurant in some way curtailed; that is also not true.
The noble Lord, Lord Purvis of Tweed, spoke of 2.3 million EU citizens in this country. A number of noble Lords have asked why, when so many people seem to be affected by this, the impact assessment has not been provided and has therefore not given due consideration to something that will impact 2.3 million people. The important thing to remember here is that the 2.3 million people derive their rights from that element of retained EU law that we have brought across in the previous withdrawal agreement. Each of the elements that enshrine their right to the employment they enjoy is contained not just in our domestic law but in our retained EU law.
The important thing to stress here is that there will be no impact on individuals such as the gentleman raised by the noble Lord, Lord Campbell-Savours. I am fully aware that my department has not been successful in making this clear. It is perfectly obvious that a number of noble Lords have received a number of letters stating these concerns. The very fact that my department has allowed that state to exist is a failing of my department. We need to be better at making sure that not just the legislation but the Explanatory Memorandum is adequate to ensure that people reading it—not just eminent lawyers but others—are able to understand. This is too important a moment to get this wrong.
It is a difficult piece of legislation in one respect only. There are a number of conditional elements contained within it, but they refer to future situations in which something might happen. I was going to say, “If we leave the EU”, but let me put that the other way around and get my tenses right. When we leave the EU, if there is no deal the reciprocity we enjoy today would simply fall away and not be there. Our courts would still be able to draw on the body of law that exists inside the EU, but the actual reciprocity element would not be there. Going forward, because we have retained the EU law into our own corpus of law, the reality would be that certain EU nationals might be able to invoke their existing—previous—rights as a means of confronting the Government as they sought to move future policy forward. Future policy, however, would not be determined on a whim, nor would it use a Henry VIII power. It would be determined by this House and the other place in the traditional way. That is how future policy in this area will happen.
This is the important thing to stress in talking about the impact this will have on WTO rules or the question of reciprocity. As regards WTO rules, the suggestion is that individuals in that situation, without this disapplication within this body of retained EU law, would still be able to draw on those rights in the retained EU law to challenge the UK Government. Some noble Lords may think that that is not a bad thing, but that alone is the reason for the disapplication.
Lord Pannick
I am very grateful to the Minister. I ask him a question out of genuine puzzlement, in the sense of my noble and learned friend Lord Brown of Eaton-under-Heywood. His argument to the House, as I understand it, is that there is no need to worry because the individuals concerned will continue to enjoy the directly effective rights which are being brought across into our domestic law by the 2018 Act. My puzzlement is because Regulations 2(1) and 3(1) both say that any,
“rights, powers, liabilities, obligations, restrictions, remedies and procedures”,
which continue by virtue of Section 4(1) of the 2018 Act,
“cease to be recognised and available in domestic law”.
I am puzzled because I am concerned that the read-across is being disapplied by this very regulation.
Lord Duncan of Springbank
It is quite clear that we have not succeeded in convincing the noble Lord that the reality is that the retained EU law, which this House fought so carefully over and which was enshrined in the withdrawal agreement, sets out the rights of individual EU nationals in this country with regard to their ability to be employed or self-employed, to offer services and so on. That is contained in retained EU law and will become operational and functional at that point in the future.
Here we are talking about making adjustments to that retained EU law for certain rights to invoke the previous entity of the EU as a means of engaging directly with the Government as a challenge. It is that part we are talking about today.
Lord Duncan of Springbank
No, I will make some progress if I may. This is complicated enough, and I fear I have to answer noble Lords’ questions before they ask new ones.
The noble Lord, Lord Oates, was very clear in some of the points he raised. That is why I am trying to be as unambiguous as I possibly can. He sought explicitness, and I am trying to give that. The self-employed will be unaffected if they are EU nationals. Those providing services will be unaffected, and their continued ability to provide those services will go undiminished. Those operating businesses will be able to do so going forward undiminished. The laws that underpin them remain as they are, both in our domestic law and in the retained EU law. There are no new restrictions whatever placed upon these individuals in this. That is why I am trying to point out that the limited impact is just that—a limited impact.
This will have no impact on the settled status of anybody coming in; for those noble Lords who are concerned about migration, this suite of statutory instruments explicitly carves out any issues of migration to ensure that they are considered carefully during the passage of the immigration Bill, which is primary legislation and will afford this House and the other place the full rights and abilities to inquire into that. So again, there is no attempt to pull the wool over anyone’s eyes—quite the reverse. In seeking to move this into primary legislation where it touches upon immigration, we are ensuring that this House has the full panoply of opportunity to explore this, as it will need to do going forward. That is why I refute the point of the noble Lord, Lord Oates, that this is a clear breach. I do not believe that it is.
The noble Lord, Lord Pannick, is quite right when he says that this places upon us no new obligations. There are no new obligations which rest upon EU citizens; they can enjoy the rights that they have been able to do so to date. The question is whether the disapplication materially impacts on, for example, the ability of the gentleman mentioned by the noble Lord, Lord Campbell-Savours, to do his business. It does not. The noble Baroness, Lady Bull, raised the question of the restaurateur who operates a Turkish restaurant and whether it places material changes upon them. No, it does not. It is important to stress that we are not seeking in any way to erode the rights currently enjoyed by these EU citizens. However, I should say that this would be far better addressed through an implementation agreement, and ultimately by that future relationship, whereby we can put to rest any suggestion that this Government are seeking to undermine the rights of EU individuals to undertake their legitimate exercises.
The question of what happens for UK citizens who work abroad is more challenging. Again, we cannot insist upon such reciprocity, since it rests with each individual member state, and we cannot offer guarantees on their behalf.
Baroness McIntosh of Pickering
I did ask my noble friend to put our minds at rest and specify what talks are happening at this time with other member states.
Lord Duncan of Springbank
I wish I could give my noble friend the reassurance she seeks, but these elements remain part of the future relationship negotiations and there has been unwillingness on the part of individual member states to discuss these matters. Much as I would like to be able to give her confidence on that matter, I cannot. That will be part of the future relationship negotiations, and I hope we can move on to that as swiftly as we can.
Lord Bassam of Brighton (Lab)
I have listened very carefully to everything the Minister has said. He seems to be saying that nothing changes. That being the case, why are these regulations required or necessary at all, if they change nothing?
Lord Duncan of Springbank
I did not say that. What I said was that these regulations have no impact upon the ability of EU nationals resident in the UK to operate, full stop. Going forward, they seek to disapply—bugger!
Lord Duncan of Springbank
Sorry about that; that was a big fly—bigger than normal.
Lord Duncan of Springbank
Goodness me, such words. I like a pun at this time.
We seem to be caught in a situation in which a number of noble Lords believe that this is of significance to the extent that it impacts upon 2.3 million people. It does not. However, if individuals affected by future changes in policy wish to confront the Government, they may be able to use elements of the existing corpus to do so, unless we disapply them. It may seem modest—I am sure the courts will be able to address this and many lawyers will make a great deal of money—but the point I am trying to make is that the change should, in the future, not happen. But it might happen. It is a relatively small adjustment we are talking about here, and it has had no impact assessment because the impact is de minimis.
The Earl of Clancarty
I understand that some countries are drawing up legislation to protect the rights of British citizens in those countries. That includes employment rights. Will the Minister comment on that?
Lord Duncan of Springbank
Those countries are, at present, unwilling to open discussions with this country and will not do so until the withdrawal agreement has been accepted and we move on to the future relationship negotiations. I hope that not just individual countries will seek to do this but the EU itself, collectively, to protect the rights of British citizens resident abroad—just as we will do exactly the same. I hope we would do so in the spirit of our withdrawal agreement’s evolution into that future relationship that delivers the very thing that each individual here would wish. However, at present, I cannot offer any guarantees in that regard.
Baroness Bull
To follow up the question of the noble Baroness, Lady McIntosh, we are looking today not at the scenario of a future agreement but at no-deal legislation. Surely reciprocity cannot be dependent, in this legislation, on the future relationship documentation because this is no-deal legislation. I echo the question: where is the conversation about reciprocity, should the unfortunate thing happen and we leave with no deal?
Lord Duncan of Springbank
The noble Baroness will be aware that the Government’s policy is to secure that deal. That is why we are here. The reason this has had to come forward in the manner in which it has is that, although this House and the other place have been clear that they do not wish the UK to leave with no deal—which I wholeheartedly share and endorse—that is not in our gift alone to ensure. The unintended consequences of actions that may unfold over the next few weeks could lead us into a scenario in which a no deal does emerge, and that scenario is the one we are touching on here. If it does not emerge, we will not have any of the risks we are touching on here because we will continue, I hope, to move into an implementation period during which we negotiate that future relationship. That is the point. This instrument is here because, in a scenario in which we end up outside the EU, these elements will be deemed necessary. As I said, the purpose is to ensure that in those small areas this aspect of the law is addressed.
I think I need to write—and am willing to do so—to every noble Lord who has received letters raising these concerns to set out the situation, in language clearer than my department has thus far achieved, to ensure that those individuals have confidence that they will not find themselves in any of the darker scenarios of which they may be fearful. That is critical and I give that commitment here at the Dispatch Box. If noble Lords will contact my office, I will write to every individual to ensure that they fully appreciate exactly what this suite of statutory instruments means and, in particular, what it does not mean. It is critical that that is done.
Lord Pannick
Perhaps I may suggest to the noble Lord that a more sensible approach would be to withdraw these regulations and redraft them so that they say precisely what they are intended to achieve and what rights are preserved.
Lord Duncan of Springbank
I disagree with the noble Lord for one simple reason. This is the moment when we face the question of whether we shall exit the EU with or without a deal. The purpose behind my offer is to reassure those individuals who fear that they will be in some way undermined in their rights in this country. They need to be reassured and I would much rather do that today. I am not sure I can sign all the letters in one go but, over the next few days, I will be keen to write to all those individuals affected. In so doing so, I hope to reassure them that this instrument does not do what they are fearful of. That is the most important aspect: this does not do what they fear it does. It is critical that it is taken from this debate, however it resolves itself, that there will be no impact on the 2.3 million EU citizens residing here; they will be in no way affected. They will be able to do their business, be it in self-employment, the operation and delivery of services or any other aspect. That must be taken from the debate today, irrespective of how we get to that conclusion.
I hope that in so doing I can not only give confidence to the noble Lord, Lord Stevenson of Balmacara, but, more importantly, give the individuals who have approached him and a number of other noble Lords the confidence that they need right now. On that basis, I beg to move.
Lord Anderson of Ipswich
The Minister has addressed a good number of questions but I raised one relating to the legal basis for these regulations, which is said to be a power to prevent, remedy or mitigate deficiencies in retained EU law. Deficiencies are precisely defined in the 2018 Act, but I have not heard from the Minister what provision of Section 8(2) or 8(3) these regulations purport to be made under, and I do not understand at the moment what the deficiency is said to be. There is some reference in the Explanatory Memorandum to the WTO but, as I understood what the Minister said earlier, the Government take no position on whether there is an incompatibility with the WTO.
Lord Duncan of Springbank
I am very grateful to the noble Lord, who has given me the opportunity to find the other pieces of paper that I did not get to in answering his question.
With regard to which provision, it is a deficiency specifically envisaged by Section 8(1)(e) of the European Union (Withdrawal) Act 2018, which covers the reciprocal arrangements that no longer exist on EU exit. That is the specific element that I think the noble Lord is looking for. In extension to that, on why this has a limited impact—on which a number of noble Lords have taken the view that I am wrong and that it has a much bigger impact—I hope we can correct that today, irrespective of how we do it. The important thing is that the practical impact of these regulations is limited because UK legislation is currently compliant. That is the important part. However, should a future Government wish to amend the ability of EU nationals to provide services, that would be debated in this House and in the other place in the normal manner. This suite of statutory instruments is designed to address future Governments making future legislation by the established mechanisms in this place and the other place—not, as I hope we can take from this, the impact on the 3.2 million EU nationals who reside in the UK.
Lord Greaves
At a less erudite level, what advice is currently given to these people on GOV.UK?
Lord Duncan of Springbank
GOV.UK is a resource which I hope helps people address their questions. Part of the difficulty with GOV.UK is that it is very hard to anticipate questions that have not been set out in government legislation. We did not anticipate that individuals who have written would be fearful of what had been done. That is why I say again that we must be better at how we explain this in all our communications, whether online or on paper, and in the Explanatory Memorandum. The important thing for individuals to take from this debate is that the impact on them is not what has been explored or explained by others but rather a restricted aspect of future issues that concern future government policy or the ability of the WTO and the UK going forward to agree on most favoured nations.
Lord Stevenson of Balmacara
My Lords, as I have been sitting and enjoying this debate, I have been reflecting on why the other 582—is it?—SIs on a no-deal Brexit did not attract audiences of this size and did not give rise to a debate of such excitement. I have reached no firm conclusions, but it is possibly because we as a House are reaching the end of our patience with the Government in how they use these regulations at a time when it is patently clear that we are moving on to different ground.
Having said that, this has been an extremely good debate, and I thank all noble Lords who have contributed. The right reverend Prelate the Bishop of Salisbury got it right in his contribution: while we are talking about important and possibly quite narrow legislation, this is really about trust—whether we feel we can place our trust in the Government to get this right in the wider context that we have been discussing. Although the Minister made a valiant attempt to persuade us of the correctness of his position, in his arguments, explanations, apologies for not making it more easily available to people outside and apologies for the drafting, he covered all the possible grounds for attack, but did not really answer the two or three main questions.
As the noble Lord, Lord Pannick, said, we are disapplying one set of regulations and relying on what has already been brought in under a different piece of legislation. You cannot have it both ways. Either you are losing the rights that applied under the original position, in which case there is a deficit, or different sets of relationships are being brought in by the new corpus of law, which has drawn on EU and UK national law. There might be no threat in that, but we simply have not had the opportunity to discuss it. At the end of the day, the lasting feeling, I fear, is of people’s frustration. The points that have been raised around the House from reading these documents at very short notice—in some cases, the shortest possible notice—have been significant and substantial, and they deserved a better and wider hearing in front of a greater and more expert group, such as would have been provided by primary legislation.
Therefore, my three main points are as follows. First, were the Government right to use the EU withdrawal Bill? I do not think that we have been persuaded on that: there would have been a better way of doing it through primary legislation. Secondly, will there be a diminution in the rights currently enjoyed by people affected by this SI? The Minister is probably right that there are no direct changes, but it is the fear of those changes and the fear of the possible consequences once the law has changed that is not being addressed properly. As I said, I do not see how we can balance the two things. Thirdly, in our earlier meeting, the Minister’s officials were keen to make it very clear that these regulations deal only with movement under the EU legislative framework; they do not deal with immigration rights that will be coming forward. At the end of the day, this is about the gap between what it is being said will change and what might change under the immigration Bill, of which we have no knowledge because it is not in front of us.
The Government have not been successful in the court of public opinion, and we owe it to that public opinion to test the opinion of the House.