Immigration and Social Security Coordination (EU Withdrawal) Bill (Seventh sitting)

Afzal Khan Excerpts

Thursday 28th February 2019 Public Bill Committees

[Kate Green]

I am grateful for the hon. Gentleman’s support, and I agree with him about the huge significance for individuals and families of the way in which social security co-ordination regulations are adopted and adapted in future. It is about how much money people have to live on, to support their families or in their retirement. They have every expectation of a right to the support, because they have paid in and contributed to social insurance systems, and it would be frankly unethical of any Government to damage those legitimate expectations.

In conclusion, through my amendment I seek to curtail Ministers’ delegated powers in relation to social security co-ordination. The Government have stated that the anticipated policy changes, both in a no-deal scenario and in certain deal scenarios, could not otherwise be delivered by existing powers such as the European Union withdrawal agreement powers. However, in my view, such policy changes, or at least the principles of the policy, should be set out in primary legislation. That will be the case in a deal scenario, as the withdrawal agreement and its implementing primary legislation will address future policy on social security co-ordination. In a no-deal scenario, the European Union (Withdrawal) Act 2018 provides sufficient powers to make regulations—indeed, the Government have already drafted them—to maintain the status quo as far as possible until an agreement on social security co-ordination is reached with the EU for the future, at which point further primary legislation will be needed.

It is for those reasons that I commend my amendment to the Committee. It is important that we have parliamentary oversight and parliamentary scrutiny of Ministers’ powers in the area of any future decisions that will have an impact on social security entitlements.

[Afzal Khan (Manchester, Gorton) (Lab)]

Once again, it is a pleasure to serve under your chairmanship, Mr Stringer. I start by thanking my hon. Friend the Member for Stretford and Urmston for laying out this amendment.

The Henry VIII powers would allow the Government to remove rights to aggregate pensions and disability entitlements that EU citizens in the UK and UK citizens in the EU have built their lives around. It is vital that the Government do not make regulations that might remove the ability of British citizens and European economic area nationals to aggregate pension rights and social security benefits without proper scrutiny by Parliament, so we support this amendment. These social security rights are vital for EU citizens in the UK as well as UK citizens in the EU.

People will have moved back and forth between the UK and the EU on the assumption that they will be able to bring their pension entitlements with them. For example, a German national might move to the UK midway through their career, work here for 10 years, and then go back to Germany to retire. The current EU regulations allow them to receive a pension based on their contributions both in Germany and in the UK. The same is true for a UK national who moves to work in Germany.

If we have a withdrawal agreement, those rights will be guaranteed, but if we do not have a withdrawal agreement we do not know what will happen. Perhaps the Minister can help us with that.

In an evidence session, it was pointed out by British in Europe witnesses that 80% of the British people living in Europe are of working age or below, and more than 1 million people are affected by social security implications. Removing the ability to aggregate social security benefits will deter EU citizens from coming to work in the UK, because they will not be able to export social security from the UK, despite having paid into the system. The same would apply for UK citizens moving into the EU.

There is a particular concern among UK citizens living in the EU about the uprating of pensions. The percentage increases can accumulate to be very significant for pensioners living in the EU, particularly in the context of the declining value of the pound.

The UK state pension is already the lowest in all the OECD countries, and a refusal to uprate would cause significant hardship for many UK citizens. At the moment, the Government have committed to continue the uprating of pensions until April 2020, but not beyond. Can the Minister provide some much-needed clarity for the UK citizens living in the EU about the position of pensions beyond 2020?

If the UK introduces restrictions on social security, it is to be expected that the EU will respond in kind. We heard during our evidence session from the TUC that it is

“very worried about the increasing social insecurity and the welfare repercussions for British people abroad.”––[Official Report, Immigration and Social Security Co-ordination (EU Withdrawal) Public Bill Committee, 12 February 2019; c.38, Q109.]

We heard from the British in Europe witnesses during our evidence session that the Bill has had a negative effect on discussions with EU Governments. Kalba Meadows was clear that

“national Governments across the EU27 are reticent in coming forward with their own legislation, because they are concerned that the rights of their nationals living in the UK will not be equally protected.”––[Official Report, Immigration and Social Security Co-ordination (EU Withdrawal) Public Bill Committee, 14 February 2019; c. 146, Q364.]

[The Minister for Employment (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship today, Mr Stringer. I start by thanking the hon. Member for Stretford and Urmston for her amendment to clause 5. She made a wide-ranging speech, which covered many of the points that might be raised when we consider clause 5 stand part, and I will try to address some of the points that she made. I put it on record that whatever our political differences, I have always thought of the hon. Lady as one of the most courteous and considered Members in the House, and for that we should all be grateful.

The hon. Member for Manchester, Gorton made some interesting remarks. Before I discuss amendment 26, I say generally that if colleagues want to give citizens certainty, the best way of doing so is to support the withdrawal agreement and the deal that will be returning to the House. Many sincere views are expressed, and people are concerned for citizens—I completely get that—but the best way of providing certainty is to support the deal.

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[Alok Sharma]

Clause 5 provides an essential legislative framework to ensure that the Government can reflect their preferred social security co-ordination policy outcomes after the UK has left the European Union, responding to the outcome of negotiations. It will enable the Government to deliver policy changes post exit both in the event of no agreement being reached on future social security co-ordination matters and to support deal scenarios in which a UK-EU agreement differs from current social security co-ordination measures.

The clause provides a power for the Secretary of State or Her Majesty’s Treasury to modify the current social security co-ordination regulations. The regulations provide for social security co-ordination across the EEA and will be incorporated into domestic law by the European Union (Withdrawal) Act when the UK leaves the EU. Clause 5(3) sets out some examples of the manner in which the power may be used. One such example is that regulations may make different provision for different cohorts, and some reference points for differentiation are suggested. This is particularly relevant in a no-deal scenario, as the regulations could, for example, provide protection to those who would otherwise have been in the scope of the withdrawal agreement in line with a unilateral offer. Very importantly, regulations made using powers in this clause will be subject to the affirmative procedure, so they will be scrutinised and must obtain the approval of both Houses.

In subsection (4), the clause also gives the Government the ability to make consequential changes to other primary legislation and other retained EU law to ensure that the changes to which the main power gives effect can be appropriately reflected. It may, for example, be used to address technical matters, inoperabilities and inconsistencies.

In subsections (5) and (6), the clause makes it clear that any directly affected rights that will have been saved by the European Union (Withdrawal) Act shall cease to be recognised to the extent that they are inconsistent or capable of affecting the changes made using the powers in the clause. This is necessary to address inoperabilities and conflicts of law that might arise as a result of regulations made under this clause. It will ensure that any policy changes are able to be delivered effectively.

It is vital that, across all EU exit legislation, the UK Government continue to honour any commitments that they have made in the devolution settlements. Therefore, subsections (1) and (7) of the clause confer powers on the devolved Administrations to legislate in areas for which they have competence. Officials in the UK Government and devolved Administrations have worked together on the correct approach for this clause, and legislative consent motions will be sought from the devolved legislatures in relation to this approach. Subsection (7) defines an appropriate authority, clarifying that the power is exercisable by the Secretary of State or the Treasury, a devolved authority, or jointly.

It is reasonable to assume that, in a deal scenario, if a withdrawal agreement is reached, the implementing vehicle for the withdrawal agreement will provide the necessary protections for those who fall within its scope, and Parliament has the power to ensure that that is the case. I want to reassure colleagues that the power in this clause will not be exercised to remove or reduce commitments made in relation to those individuals within the scope of the withdrawal agreement. The exercise of any powers within this clause will also be subject to the outcome of further negotiations with the EU on a future agreement. In a deal scenario, the clause will be necessary to deliver policy changes to the retained regime that will cover individuals who fall outside the scope of the deal, to reflect the reality of our new relationship with the EU.

In addition, this clause is essential to ensure that the UK Government are able to provide appropriate protections and make appropriate policy changes in a no-deal scenario. Without the clause, the Government have only the power contained in the European Union (Withdrawal) Act to fix deficiencies within the retained system of social security co-ordination. The current social security co-ordination regime operates on the basis of reciprocity. The European Union (Withdrawal) Act power allows us to ensure that the regime will operate on day one of exit, but does not enable us to deliver policy changes, including those that would help us to deliver effective support for UK nationals in the EU. This clause allows us to amend the rules in an appropriate and manageable way if the Government need to operate the system unilaterally, and to deliver changes to the retained regime.

As a responsible Government, we are preparing for all eventualities, and the power in this clause is necessary to provide the Government with the flexibility required to respond to a range of scenarios.

The aim of schedule 2 is straightforward. It sets out the power of the devolved authorities under the social security co-ordination clause—clause 5. The clause confers new powers on Scottish Ministers and, indeed, the Northern Ireland department, to amend the limited elements of the social security co-ordination regulations that fall within devolved competence. We are thus providing the devolved Administrations with the powers that they need to amend aspects of the regulations in areas of social security that are devolved—in the same way as, rightly, the UK Government have powers with respect to laws affecting the UK as a whole.

It is important that the powers in the Bill should not be so narrow as to hamper the devolved Administrations’ ability to amend the elements of the regulations that are within their competence. It is also important to set out, as the schedule does, the parameters for the powers. They should not be wider than is necessary to achieve their purpose. For example, the schedule ensures that the same rules on consent and consultation that the devolved authorities must follow when making provisions in their own legislation apply for regulations made under clause 5. We sought that balance by focusing on the specific aims and applying safeguards to ensure, for instance, that the powers will not be used in ways that might be outside devolved competence.

Schedule 3 simply gives further detail about the making of regulations under the social security co-ordination clause. It provides further detail about the form that regulations will take under the clause, whether they are statutory instruments, Northern Ireland statutory rules or Scottish statutory instruments. The schedule also provides that the use of the power is subject to full parliamentary scrutiny. Its exercise will be subject to the affirmative procedure, which means that regulations made using the power must obtain the approval of each House. It also gives clarity to the procedures that the devolved authorities will need to follow.

Paragraph 4 provides that where the UK Government and a devolved authority exercise the powers under clause 5 jointly, the affirmative procedure applies in both the UK Parliament and the devolved Parliaments or Assemblies. Paragraph 5 permits other regulations, subject to the negative procedure, to be included in an instrument made under clause 5. That means that even where a regulation would be subject to a lower level of scrutiny, if it is combined with regulations under clause 5 a higher level of scrutiny—the affirmative procedure—will apply.

[Afzal Khan]

Labour believes that if the Government want to make far-reaching changes to social security, they should be subject to scrutiny, in primary legislation. As we discussed in the clause 4 debate, secondary legislation does not provide Parliament with an opportunity for adequate scrutiny and oversight of major policy changes. The rights in question were brought in by primary legislation, and it is only right that their removal should be possible only with the same level of scrutiny.

The powers in the clause are not necessary. If the Government really want to tidy up the statute book or make other, minor, changes to legislation, section 8 of the European Union (Withdrawal) Act 2018 already gives them the power to remove the co-ordination regulations and replace them. In fact, they have already laid four regulations under the Act. We feel that the power in the clause would enable the Government to set out global changes to social security, which should rightly be done through primary, not secondary, legislation.

That position was set out by Justice during our evidence sittings. It was concerned about

“the extraordinary breadth of power that it creates”.––[Official Report, Immigration and Social Security Co-ordination (EU Withdrawal) Public Bill Committee, 12 February 2019; c. 59, Q157.]

The witness set out clearly:

“It is simply not appropriate to leave that to a policy change by way of delegated power, but it seems to us, from their memorandum, that Government are expressly intending to do that to get around the limitations in section 8.”––[Official Report, Immigration and Social Security Co-ordination (EU Withdrawal) Public Bill Committee, 12 February 2019; c. 60, Q158.]

Similarly, Professor Steve Peers was clear that

“the Government should not have unlimited powers and some constraints should be set by primary legislation.”––[Official Report, Immigration and Social Security Co-ordination (EU Withdrawal) Public Bill Committee, 14 February 2019; c. 123, Q308.]

Urgent, widespread changes to social security co-ordination are not needed in a rush. Thanks to the 2018 Act, there is law in place. The statutory instrument amendments are in place and there is no urgent need for an overhaul of social security co-ordination that would justify such a lack of scrutiny.

The House of Lords Delegated Powers and Regulatory Reform Committee is clear that the Government have provided an inadequate justification for the transfer of power from Parliament to the Government in the clause. It recommended the removal of clause 5 in its entirety. It refers to a requirement to provide an “exceptional justification” for a skeleton Bill, which has not happened in this case. As the Committee puts it,

“Parliament is being asked to scrutinise a clause so lacking in any substance whatsoever that it cannot even be described as a skeleton.”

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Those are the two options I put before the Committee for debate today, and I look forward to hearing the Minister’s response.

[Afzal Khan]

As demonstrated by our voting on both Second Reading and the clauses that have been voted on so far, we do not agree with what the Government are doing in this Bill. However, we do not support the view that there should be a different immigration system for different parts of the country. We need a flexible immigration system that will allow businesses and public services to access the workers they need, but one that applies to the whole of the UK, not just Scotland.

I understand that there are issues with regional variation in salary levels, and that different areas of the UK have different needs in terms of migration. However, that is not an issue that affects only Scotland. My own region, and yours too, Chairman, the north-west, has very different salary levels and economic needs from London and the south-east, so it will have different migration needs.

Without a border between Scotland and the rest of the UK, we do not see how a different immigration system could work. How could we ensure that someone with the right to work in Scotland was not working in England or Wales? We fear that that might lead to a further reliance on the hostile environment, as we would be relying on employers and landlords to enforce the border between Scotland and the rest of the UK. In view of that, we do not support the amendment.

[Caroline Nokes]

I thank the hon. Members for Cumbernauld, Kilsyth and Kirkintilloch East and for Paisley and Renfrewshire North for tabling these amendments. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East said when he started to speak that he looked forward to a sensible and civilised conversation on this matter; across the whole of this Bill Committee, I think we are not doing badly on that front and I certainly hope we can continue in that vein.

These amendments cover topics that I have discussed with the hon. Members and their colleagues on a number of occasions. I fear they might find my response to be fairly predictable, but I make no apology for that. I remain to be convinced that introducing geographical variation into the immigration system is either practical or desirable.

Amendments 34 and 35 seek to change the extent of the Bill so that it does not apply to Scotland. However, the whole of the United Kingdom is leaving the European Union: England, Wales, Scotland and Northern Ireland are leaving the EU. I believe it is our duty as a responsible Government to fully deliver on the result of the EU referendum and to end free movement. It is also important to remind the Committee that this Bill legislates for the end of free movement from the EU. It provides the legislative framework to simplify the UK immigration system by bringing EEA nationals and non-EEA nationals under one system.

Meanwhile, proposed new clause 55 would commit the Secretary of State to reviewing whether or not Scotland should have its own immigration system and its own Scottish visas, but only for EEA nationals. I am not sure how such a proposal, limited to EEA nationals, would be justified on equality grounds. Such a review would not be the first time that the question of whether or not Scotland should have more independence from the UK has been considered, including decisively in a referendum in 2014. With particular reference to immigration, we are not reopening the work of the Smith commission. Immigration needs to be a reserved matter.

I remind the Committee that, in designing the new system, we commissioned the Migration Advisory Committee to consider the best immigration policies for the UK. MAC undertook a comprehensive engagement and evidence-gathering exercise across the whole of the country over a 12-month period and produced an authoritative report that gives the Government a clear direction of travel for the UK’s future skills-based immigration system.

As part of that exercise, MAC considered whether there was an economic need for regional differentiation in the immigration system, and not for the first time concluded that there was no case for it. To quote from its final report:

“Overall, we were not of the view that Scotland's economic situation is sufficiently different from that of the rest of the UK to justify a very different migration policy.”

MAC went on to note that Scotland already has a separate shortage occupation list. The Committee will note that the composition of that list, as well as the UK-wide one—

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[Stuart C. McDonald]

I am hugely disappointed by the response from both Front-Bench spokespeople, and their degree of engagement on this will be a disappointment to their party colleagues in the Scottish Parliament. There has been no recognition or engagement with the challenges that Scotland faces. This issue is absolutely pivotal to our economy, tax base and public finances, and their not even recognising that as a problem, never mind offering a single solution, is hugely frustrating.

I recognise that the MAC report was not exactly wonderful for my argument, but it did not say that there should not be a differentiated policy for Scotland; it said that that would be a political decision. I acknowledge that other parts of the United Kingdom also have economic challenges, but my answer to that is to explore options to help them. I pointed to the Tech Nation visa, which has slightly different rules for one or two cities in England, so it is not as if the UK Government do not differentiate for certain parts of England.

The difference is that Scotland already has institutions that could help to operate such a policy, such as a Government and a Parliament, none of which exist in England. I will be happy to table amendments on Report that include Northern Ireland and Wales, if Members wish.

As the Minister said, the Smith commission looked at the issue, but that was long before there were any proposals to end free movement and implement the drastic new system, which has pretty much united Scotland’s businesses, trade unions and third sector organisations in opposition. She must be aware that if she does not think again about the proposals, the already increasing demand for some sort of differentiation will only grow. We have not even started to look at how things work in Canada, Australia or other places, but this does not need to be difficult; it could be simply a small additional means for Scotland to support its population and its economy.

I repeat that I am hugely frustrated by the response that we have been given this morning. I hope that we can get something better on Report, but in the meantime, there is no point in my dividing the Committee. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Afzal Khan]

I beg to move amendment 14, in clause 7, page 5, line 32, at end insert—

“(5A) This Act cannot come into force until the House of Commons has passed a motion in the form set out in subsection (5B).

(5B) The form of the motion for the purposes of subsection (5A) is—

‘That the Immigration and Social Security Co-Ordination (EU Withdrawal Act) come into force’.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 36, in clause 7, page 5, line 32, at end insert—

“(5A) Section 1 must not be brought into force before 30 June 2021.”

This amendment would prevent the repeal of free movement until after the 30 June 2021.

Amendment 15, in clause 7, page 5, line 33, leave out from “which” to end of line 34, and insert

“the House of Commons has passed a motion in the form set out in subsection (5B) above.”

This amendment is consequential on Amendment 14.

[Afzal Khan]

The Bill is not explicit about when clause 1, on the repeal of free movement, will come into force. Under Clause 7(8), it may

“come into force on such day as the Secretary of State may by regulations made by statutory instrument appoint.”

For reasons outlined in our debates on clause 1, ending free movement prematurely will have the effect of plunging millions of EU citizens in this country into legal limbo and may mean that they are here illegally. If we end free movement too soon, it will be impossible to distinguish those EU citizens who have just arrived in the UK from those who have lived here for decades but not yet registered for settled status. There is therefore a risk that people will be denied their rights to work, rent, use the NHS and so on because they are unable to prove that they have those rights.

If there is a withdrawal agreement, free movement will be repealed at the end of the transition period. Our amendments would ensure that if there is no deal, and therefore no transition period, the Secretary of State will not be able to repeal free movement until EU citizens have been given sufficient time to register for settled status. They would offer safeguards, protect citizens’ rights and secure their status.

[Stuart C. McDonald]

I am pleased to be back on the same side as the hon. Member for Manchester, Gorton; I need not say much more than he did. The amendments would address the problems that will arise in a no-deal situation if the Government introduce their proposals. For example, how will employers and landlords go about distinguishing those who arrive before and after Brexit day? The Minister reassures us that employers need make no checks on prospective employees except whether they are EEA nationals, but the problem is that they will want to know how long those people can work for them; will they be entitled to stay in the UK for three years, or will they end up being entitled to settled status? Likewise, landlords will want to know how long tenancies can last.

Some EU nationals may have the right to be in the UK indefinitely through the settled status scheme, while others may be restricted to three years. This is not the Minister’s fault, but there is no indication how the three-year visa will feed into the future immigration system. There is a huge danger that there will be discrimination, and that the system just will not work. The very simple answer in amendment 36, proposed by the3million, is not to end free movement, either in a deal or no-deal situation, until after the settled status scheme has run its course. Only then can we be absolutely sure that different categories of EEA nationals can be distinguished.

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[Caroline Nokes]

As the hon. Gentleman will be aware, the Government are working hard to secure a deal, but there will need to be a reasonable transition period in the event of deal or no deal. Indeed, in no deal we will have to have an element of control and transition, and there will be no case where we shall be able to implement a new system and switch off the old system overnight. Transition is important, and it is important that we retain the tools that enable us to do that.

We have been clear that we aim for the future skills-based immigration system to be in place from January 2021. This amendment would prevent us from doing that, as it would effectively extend the implementation period for a further six months. That would leave us unable to deliver on our commitments to end free movement and to introduce the new system on time. We received a clear message in the referendum that free movement should end. Delaying it further beyond the agreed implementation period would clearly be ignoring that message.

Even in a no-deal scenario, there will need to be a transition period before the future skills-based immigration system begins. That period should reassure Members that there will be no cliff-edge. The Government announced their proposals for ending free movement in a no-deal scenario in the policy paper published on 28 January 2019. This Bill, not least the measures in part 1, is needed now to enable us to deliver the result of the referendum.

We have also been clear that we will ensure the immigration status of the resident population is protected before the deadline for the EU settlement scheme, through appropriate savings made under clause 4. That will ensure that their rights remain unchanged immediately after exit, avoiding any cliff-edge. That means it is not necessary to delay the repeal of the free movement law in the way proposed to protect the resident population.

By delaying the end of free movement in a no-deal scenario, the amendment creates a group of EU nationals who arrive under free movement, after EU exit but before the end of the implementation period, who will face uncertainty in June 2021, when those free-movement rights end. They are not eligible to apply under the EU settlement scheme and would be in the UK unlawfully, unless they obtain leave under the immigration rules. The Government’s planned transition of a dedicated EU leave to remain route, to bridge the transition from the end of free movement to the introduction of the future system, is both pragmatic and fair, and avoids the cliff-edge I have described. I believe it is preferable to amendment 36, which seeks to prolong free movement unilaterally.

Amendments 14 and 15 seek to prevent the Bill, once enacted, from coming into force until after a motion in a specific form is passed by the House of Commons. While I recognise the importance of facilitating extensive debate on this Bill, I am of the view that legislating for a further motion after enactment is neither an effective nor appropriate use of parliamentary time. There is ample opportunity for Members on both sides of the House to have their views heard and to subject the Bill to scrutiny as it progresses through Parliament. We have already heard valuable and thought-provoking views from both sides of the Committee, and Members will continue to debate and vote on the Bill on Report and Third Reading, before it passes to the other place for further scrutiny.

Furthermore, when the Bill receives Royal Assent, Parliament will clearly have made the decision that it should become law and that free movement should end. The Government have been clear, both publicly and in the House, when they plan to commence the provisions in the Bill. There is no good reason to continue free movement unilaterally in a no-deal scenario, and these amendments, which seek to do so, seek to deny the result of the referendum. That is not acceptable. I therefore ask the hon. Members for Manchester, Gorton and for Cumbernauld, Kilsyth and Kirkintilloch East to withdraw their amendments.

[Afzal Khan]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 36, in clause 7, page 5, line 32, at end insert—

“(5A) Section 1 must not be brought into force before 30 June 2021.”—(Stuart C. McDonald.)

This amendment would prevent the repeal of free movement until after the 30 June 2021.

Question put, That the amendment be made.