Social Security Co-ordination (Revocation of Retained Direct EU Legislation and Related Amendments) (EU Exit) Regulations 2020

Debate between Lord Duncan of Springbank and Baroness Stedman-Scott

Tuesday 8th December 2020 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, these regulations, which concern policy areas of my department and Her Majesty’s Treasury, and apply UK-wide, were laid before both Houses on 16 November. They are required to clear the way for the legislation which will implement our new system of social security co-ordination with the EU, EEA states and Switzerland.

The current EU social security co-ordination regulations—I will refer to these as the SSC regulations—operate to facilitate the EU’s free movement rules. They ensure that individuals pay social security contributions in only one member state at a time; they set out which member state is responsible for the payment of social security benefits; they require the export of some benefits to claimants resident in the EU; and they provide for the aggregation of social security contributions when claiming certain benefits and the state pension. These rules require equal treatment for citizens across the EU, overriding any domestic legislation. They have continued to apply to the UK throughout the transition period.

As the Committee will be aware, the Immigration and Social Security Co-ordination (EU Withdrawal) Act came into force on 11 November 2020, Section 6 of which provides a power to modify these SSC regulations, which have been retained in UK law. Before I go into the detail of the draft regulations, I will provide the Committee further details on the context in which they are being made. I hope noble Lords will forgive the lack of originality in what I am about to say, which is very similar to the update provided by the Minister in the other place yesterday.

As I have stressed to your Lordships on a number of occasions, citizens covered by the withdrawal agreement and related agreements with the EEA and Switzerland will be unaffected by these regulations as long as they remain covered by those agreements. Arrangements in this area for UK and Irish nationals moving between the UK and Ireland will also continue unchanged under a recent reciprocal agreement with Ireland.

The Government are negotiating future arrangements with the EU, similar in kind to the social security relationships the UK has with nations outside the EU. This means that there will be changes in social security co-ordination policy with the EU from the end of the transition period, regardless of the outcome of negotiations. The Government have been clear about this, including as the ISSC Bill passed through Parliament and in public communications.

As the Committee will be aware, negotiations with the EU are at a very advanced stage. It is the Government’s position that new rules, whether or not there is a future agreement, should take effect from the end of the transition period. These regulations are a core part of our legislative preparation and will stand whatever the outcome. We are also in discussions on future social security co-ordination rules with a number of EEA states and Switzerland.

I will now summarise the regulations we are debating today. Part 1 sets out that the regulations come into force at the end of the transition period, with the exception of some amendments being remade in Part 4. These amendments will come into force on the day after the day on which the regulations are made.

Part 2 revokes the EU SSC regulations retained under Section 3 of the European Union (Withdrawal) Act 2018 and the unilateral fixing statutory instruments made under Section 8 of that Act. The fixing SIs were brought forward to prepare for a scenario in which the UK did not leave the EU with a withdrawal agreement and would have enabled the UK to operate some of the retained SSC regulations unilaterally, so far as possible. This revocation is in line with the approach the Government set out in the draft illustrative regulations shared with the House during the passage of the ISSC Bill.

This means that the rules for those individuals who are not covered by the withdrawal agreement and move between the UK and the EU, EEA states and Switzerland after the end of the transition period will be determined by any new international agreements in place or, in the absence of an international agreement, the respective domestic law in each country. For UK benefits this means, for example, that the UK will no longer export child benefit to children living in the EU, with the exception of Ireland, delivering on the manifesto commitment. For national insurance contributions this means that, where no reciprocal agreement applies, the rules on payment of national insurance contributions for individuals moving between the UK and the EU, the EEA and Switzerland will be the same as the rules for the rest of the world.

These regulations make four limited savings from the general revocation of the retained SSC regulations in Part 3. First, they save the retained SSC regulations on the co-ordination of benefits in kind; namely, health- care, which is a policy competence of the Department of Health and Social Care. DHSC has made separate secondary legislation in respect of the reciprocal healthcare aspects of the retained SSC regulations.

Secondly, they save the existing debt recovery provisions which will enable the UK to collect overpaid HMRC benefits and social security contributions on behalf of a foreign social security authority where the individual or employer is present in the UK, as part of a reciprocal agreement on social security. Full details of the specifics of these provisions have also been set out in public correspondence.

Thirdly, they save the retained SSC regulations to the extent necessary to provide for continued operation of the agreement on social security between the Governments of the UK and Gibraltar. I can confirm that it is the intention of the UK and Gibraltar Governments to agree a new relationship not based on the EU SSC regulations. Once that has been implemented, this saving will no longer be required and will later be revoked.

Fourthly, they save provisions relating to aggregation and uprating of the state pension in the absence of agreements being in place with the EU, EEA states and Switzerland by the end of the transition period. This saving will provide for continued state pension aggregation and uprating in those countries up to the end of the financial year 2021-22. In the absence of a future agreement with the EU, the UK would seek to put in place reciprocal agreements on social security with individual EU countries instead; even where such negotiations are progressing well, the saving may be needed for a short period beyond March 2022 to finalise and implement bilateral agreements. For this reason, the saving is not time limited. However, it is a strictly interim measure targeted at those who move to the EU, the EEA and Switzerland after the transition period, while future arrangements are put on a reciprocal footing.

Part 4 makes related amendments in other EU exit legislation. This includes bringing forward the day on which amendments will be made to Section 179 of the Social Security Administration Act 1992 and the equivalent Northern Ireland Act. These amendments were previously made by the Social Security (Amendment) (EU Exit) Regulations 2019 and the equivalent Northern Ireland regulations, which are not revoked by this instrument. These amendments were otherwise due to come into effect at the end of the transition period.

While the UK has left the EU, we are not leaving the European Convention on Human Rights; in my view the provisions of the Social Security Co-ordination (Revocation of Retained Direct EU Legislation and Related Amendments) (EU Exit) Regulations 2020 are compatible with the convention.

In summary, these regulations make changes to prepare the statute book for the end of the transition period, particularly in relation to preventing the unilateral export of benefits, delivering on the manifesto commitment to prevent people claiming child benefit for children living outside the UK. They also ensure that the Government have the option to make a future social security co-ordination agreement with the EU through an Order in Council before the end of the transition period, should this be needed. I beg to move.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, for the information of those on remote calls, the first 90 seconds of the Minister’s speech were lost, but I think the gist of the speech was contained. If there are any particular issues that noble Lords wish to tease out during the questioning, I am sure the Minister will be happy to respond in her summing up. I call the first speaker, the noble Baroness, Lady Ludford. I understand she is having technical difficulties, so we will come back to her. We move on to the noble Lord, Lord Bhatia.