Accession of Croatia (Immigration and Worker Authorisation) Regulations 2013

Lord Taylor of Holbeach Excerpts

Tuesday 4th June 2013 Grand Committee

Moved by

[Lord Taylor of Holbeach]

That the Grand Committee do report to the House that it has considered the Accession of Croatia (Immigration and Worker Authorisation) Regulations 2013.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, these regulations will apply transitional labour market restrictions to nationals of Croatia when that country joins the European Union on 1 July. The Government have been clear that they will apply the toughest possible transitional restrictions to any country joining the European Union in the future. We are implementing transitional restrictions because it is sensible to do so.

Free movement rights are a fundamental aspect of membership of the European Union and the internal market. However, the accession treaty makes provision for member states to apply transitional controls on labour market access for up to seven years to ensure an orderly transition to the enjoyment of full free movement rights. The restrictions that these regulations apply are similar to those which the UK already applies to nationals of Bulgaria and Romania.

The Government have not made an estimate of the number of Croatians who may migrate to the United Kingdom. Given the variables, including the economic situation and the decisions of other member states, a reliable forecast is not possible. Croatia is a small country and not traditionally a source of migrants to the United Kingdom. There is little reason to expect a large influx after 1 July. However, in the light of previous experience, it would be rash not to take the precaution of applying restrictions, particularly if other member states do so. Germany and the Netherlands have confirmed that they will apply restrictions to Croatian nationals after 1 July.

The transitional restrictions that these regulations put in place are as restrictive as the terms of Croatia’s accession to the EU permit them to be. Under the accession treaty, we cannot apply restrictions that are more restrictive than those which applied to Croatian nationals under the Immigration Rules in force when the treaty was signed in December 2011.

The effect of the regulations is that Croatian nationals will generally have a right to reside in the UK as workers only if they have obtained permission to work from the Home Office in the form of an accession worker registration certificate. They will have no right to reside by virtue of being a jobseeker. In line with our obligations, there are some exceptions to the requirement to obtain permission to work—for example, those who have worked legally and continuously in the United Kingdom for 12 months, and certain family members, will have free access to the labour market. The regulations also provide for the most highly skilled to be granted free access to the labour market from the outset.

Where permission is required, a Croatian national will need to obtain this before they commence employment. In order to obtain an accession worker registration certificate, a Croatian national will, as now, normally need to be sponsored by an employer who has been licensed by the Home Office under the points-based system arrangements. Points-based system criteria will apply, which means that Croatian nationals will normally obtain permission to work under tier 2 of the points-based system only when they are offered a job that is skilled to National Qualifications Framework level 4, meets minimum salary criteria and for which resident labour is not available.

These controls will not prevent Croatian workers obtaining permission to work where they have skills that are in short supply and will benefit the UK economy. However, they will reduce the risk of uncontrolled flows of workers coming to undertake low-skilled work or to take work for which British workers are available. The regulations do not place an upper limit on numbers but the requirement that a Croatian national must have an offer of employment that meets strict criteria will restrict numbers. To put this in context, only 90 Croatian nationals were admitted to the United Kingdom in 2012 for the purpose of work under the points-based system criteria.

It is necessary that these transitional measures are backed up by proportionate enforcement powers. As with the measures applied to prevent the illegal employment of non-EU nationals, the regulations will make it an offence to employ a Croatian national where the worker requires permission to work but does not have it and will provide the Secretary of State with the option of imposing a civil penalty as an alternative to prosecution. They will also make it an offence for a Croatian national to take employment in breach of the regulations. In such cases, liability to prosecution will be discharged by payment of a penalty.

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[Baroness Smith of Basildon]

My Lords, I am grateful to the Minister for that explanation, which answered a few of my questions, which I know he is always pleased to do. I wish to clarify a couple of points by asking a few questions. The Minister mentioned a seven-year transition period, yet the order refers to a five-year transition period and 2018. I assume he referred to seven years because there is a possibility of extending the transition period for a further two years at another date, but this order is for only five years. In case I have misunderstood, will the Minister clarify that?

I am interested in the enforcement regime regarding those who come from another country and try to work. Is it the same as the regime for other employment visa requirements or will there be something different in place for transitional arrangements? Can the Minister say anything about how this will be monitored? I would be interested to know the details, and if he wants to write to me I would be happy for him to do so.

Obviously, we support transitional arrangements. As the Minister acknowledged in his comments, we brought them in for Bulgaria and Romania. I fully understand why it is not possible to get an accurate assessment of the numbers involved, but the Minister said that this order is being brought forward today because of the fear of uncontrolled flows of workers from Croatia to the UK. He also said that there is no anticipation of large numbers coming to the UK. That seems somewhat contradictory. Has there been any assessment of the numbers involved, or was the assessment that it was not a large number and the order is just to minimise the risk in case that is wrong? It is not quite clear as the Minister’s comments were contradictory. If there has been some assessment, I am interested in the flows in the other direction. How many people from the UK want to go to work in Croatia?

On the more general points, from what has been said today and from comments made by other Ministers in the past, is the Minister able to clarify the Government’s longer-term position on free movement within the EU and say whether there are any plans to change the rules on it? I noted the Minister’s comments about unskilled workers from Croatia or, indeed, any other country when local workers are available. On that point, which is slightly tangential but very relevant to this discussion, how can we ensure that unscrupulous employers do not illegally employ those who are not entitled to work in this country and exploit them by doing so? I am thinking of things such as ensuring that the minimum wage is paid and that health and safety regulations are taken note of because cutting back on those issues is one way that unscrupulous employers exploit foreign workers and therefore undercut and undermine the local workers to whom the Minister referred. Will the Minister give us an assurance that the Government will not weaken those protections, and that when they are not upheld they will take action?

I know that the Government have been very slow in enforcement. There has been a lax approach to the minimum wage legislation. I was very pleased to hear this weekend that HMRC has recently brought a swathe of prosecutions on this, because it had fallen by the wayside. I am pleased that it is picking up now. An assurance from the Minister on those particular issues would be very welcome. I appreciate that that is slightly tangential but it is an important issue. This is the point he is making; we must ensure that people who are not legally allowed to work in this country do not do so.

We are broadly content with the order before us today, but if the Minister is able to address the questions I have raised it would be helpful.

[Lord Taylor of Holbeach]

My Lords, I thank the noble Baroness for her contributions. As usual, she sets me a high standard if I am to avoid writing in detail, although I certainly would not hesitate to do so if I felt I was not able to answer satisfactorily.

I should like to reiterate that these regulations implement the commitment contained in the Government’s programme for government to apply the toughest possible transitional restrictions to any future member state in the EU. That is why we are presenting them. We do not expect levels of migration from Croatia to be significant, however. I made that clear in introducing these regulations.

It was interesting that the Baroness said that she was concerned that we had not given an actual estimate of these figures. We know there could have been considerable numbers from other countries if we had not set these restrictions in place in the past, so we feel that the policy that we arrived at in the coalition agreement was the right one.

I will first explain the business of the five years. I did so in introducing the speech when I explained that these regulations go up to June 2018 but provide for a further extension of two years; they can go up to 2020. They put in place the mechanism whereby the Government can indeed have a seven-year transitional regime.

The noble Baroness asks, “Why apply transitional regimes?” and, “Is it contradictory?”. I hope the noble Baroness supports that.

[Baroness Smith of Basildon]

I thought I made it clear that I did support transitional regimes. I never asked, “Why transitional arrangements?”. My query is about the Minister’s contradictory comments. I recognise that it is difficult to make an accurate assessment of the numbers involved, but the Minister used the term “uncontrolled flows” when he was talking about the need for this and then said he did not expect large numbers. That was the point I was making. The two comments seemed contradictory. I was trying to square the circle on that. I hope I was clear that we support transitional arrangements—indeed, we brought them in previously for Romania and Bulgaria. So that was not the point I was making. I want to be clear on that.

[Lord Taylor of Holbeach]

I am grateful for that explanation. As a result, I now understand the position of the noble Baroness. Thank you.

She asked me about the details of how these figures would be monitored. Obviously, where transitional permits are actually applied for, we know how many people are coming from Croatia to this country. As to how they will be enforced, the noble Baroness will know that we now have within the Home Office an immigration enforcement unit that ensures that illegal workers—and, indeed, illegal employers—can be prosecuted. These matters can be dealt with much more forcefully than before.

I am pleased that the noble Baroness noted HMRC’s assault on minimum wages. There has been a lot of cross-departmental working on these issues as the Department for Work and Pensions has an interest in them as well as the Home Office and HMRC. The rather amusingly entitled Operation Pheasant was designed to seek out exactly this problem in the part of the world in which I live, and successfully identified weaknesses that we do not want to see. After all, an exploiting employer is also an unfair employer who presents unfair competition to those who respect the law. The enforcement of the law is an important aspect of making sure that business in this country is conducted on a level playing field.

The noble Baroness also asked whether we would seek to reopen the free movement directive and what our approach to that was. We are examining the scope and consequence of the free movement of people across the EU as part of the general balance of competences review. We monitor enforcement issues and publish the outcomes on the Home Office website. All details of instances where employers have been discovered to be illegally employing individuals are published on that website. I hope that that satisfies the noble Baroness and that she will approve the regulations.

Motion agreed.