Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019

Baroness Buscombe Excerpts

Tuesday 5th March 2019 Lords Chamber

Moved by

[Baroness Buscombe]

That the draft Regulations laid before the House on 30 January be approved.

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

My Lords, I thank all noble Lords who have supported the presentation of these four statutory instruments, and I will also speak to the remaining three.

These regulations were laid before both Houses on 30 January. They enable the Government to address deficiencies in retained EU law caused by the United Kingdom withdrawing from the EU, which would impact the operation of the retained social security co-ordination regulations in a no-deal scenario. The whole system of social security co-ordination across the EU relies on co-operation and reciprocity. The legal framework for this will cease in a no-deal scenario. The UK will have no means of enforcing reciprocal obligations on EU member states and cannot therefore legislate for this when correcting deficiencies in the co-ordination regulations.

These instruments aim to maintain the status quo on a unilateral basis, ensuring that citizens’ rights are protected as far as possible in a no-deal scenario in relation to social security. They are intended to ensure a functioning statute book in the event of no deal, by fixing deficiencies in retained EU law, in line with the power provided by Section 8 of the EU withdrawal Act.

The list of specific legislation that these regulations amend is lengthy but can broadly be split into three categories. The first is data and information sharing. The co-ordination regulations require EU member states to exchange information through specific administrative procedures laid down in the regulations. Data shared is used, for example, to establish which member state is responsible for payment of benefits to avoid overlapping benefits being paid in different member states. These instruments will enable us to ask claimants to provide, within reasonable time, the relevant information to determine competence in cases where the relevant member state does not do so when asked. They also include provisions to ensure that the UK can continue to share data with member states when they are applying the co-ordination regulations.

These SIs also remove provisions within the retained co-ordination regulations that will be inoperable if the UK leaves the European Union without a deal. For example, the co-ordination regulations make provision for a number of bodies at EU level to deal with administrative and technical issues or disputes arising from the application of the social security co-ordination regulations—the administrative commission being the main one. These instruments remove references to these bodies on the basis that they will be inoperable when the UK withdraws from the EU in a no-deal scenario.

Finally, they deal with applicable legislation. The co-ordination regulations state that an individual shall be subject to only one EU member state’s legislation at a time. These arrangements rely on co-ordination between member states in order to operate effectively. These instruments amend the co-ordination regulations to maintain the status quo for when UK legislation does, and does not, apply. These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal inoperabilities and other deficiencies that will arise on exit in retained EU law, so that the converted law continues to operate effectively post exit, and to make consequential provision.

The legal powers used are those provided for under the EU withdrawal Act, and the amendments made are completely in line with both the policy and legal intent of that Act. The use of secondary legislation to amend primary legislation—the so-called Henry VIII powers—was debated at length during the passage of the Act.

These statutory instruments are part of a wider legislative package that my department is laying. We have already laid SIs relating to private pensions, the European job mobility portal regime—more commonly known as EURES—and consequential powers. My officials will be happy to provide noble Lords with more information on the department’s legislative programme following the debate.

No formal consultation on the regulations has been carried out by the Department for Work and Pensions as the instruments address deficiencies in retained EU law and there is no significant impact as a result. My officials, nevertheless, had informal discussions with the Social Security Advisory Committee on these instruments; these focused on technical issues and policy considerations. Similarly, we expect the regulations to have no impact on business, charities, voluntary bodies or the public sector.

In my view, the provisions in these statutory instruments are compatible with the European Convention on Human Rights. The Minister of State for Employment has also made the same statement.

All noble Lords will know that the EU withdrawal Act is a crucial piece of legislation that will ensure that whatever the outcome of negotiations, we have a functioning statute book on exit day, providing certainty to people and business across the UK. The Act enables this by providing a power for Ministers in the UK Government and devolved Administrations to deal with deficiencies in the law arising as a result of our exit from the EU.

These regulations are an essential part of the legislative programme that my department is laying in preparation for a no-deal scenario. They are needed to correct deficiencies so that the system can function, albeit unilaterally, and to retain the department’s ability to make payments to claimants and to determine claims. Not proceeding with this legislation would result in a statute book that does not function correctly and would fail to protect citizens’ rights. Passing these SIs will ensure that we are ready for all eventualities.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for introducing these regulations. As we have heard, they seek to address deficiencies in retained law caused by the UK withdrawing from the EU. They amend the retained EU regulations comprising the co-ordination regulations, which currently co-ordinate social security systems throughout the EU.

Given that the changes these regulations cover potentially create new imposts and a move away from the status quo, it seems to us that there is a case for an impact assessment and some consultation. Change is necessary, as we have heard, because the current system relies on co-operation and reciprocity from other member states and that cannot be guaranteed when we withdraw in all respects. It will not be possible, for example, to impose reciprocal obligations on member states when correcting deficiencies, or say when co-ordinating rules relate to individuals moving to or from the UK. We understand and accept that.

The regulations will amend retained co-ordination regulations covering provisions that will not apply to the UK, confer functions on EU entities that will no longer have functions in relation to the UK, and make provision for reciprocal arrangements between the UK and other European Union member states. According to the Explanatory Memorandum:

“The instruments aim to ensure that citizens’ rights are protected as far as possible in a no-deal scenario”.


How? It is asserted that this is about maintaining the status quo, but will the Minister say to what extent the instrument varies from the maintenance of the status quo in practice? How does she characterise this?

The legal framework, as we have heard, for co-operation and enforcing reciprocal obligations in a no-deal scenario will cease. The Explanatory Memorandum states that:

“These instruments aim to maintain the status quo on a unilateral basis”,


but there will be arrangements which are inoperable. These include the denial of membership of such bodies as the administrative commission, the advisory body and the audit board. Will the Minister say in more detail what the implications of this are? It is noted that the ability to make provisional payments in the event of an unresolved dispute will no longer exist, although it is understood that these are in fact little used.

The approach to amending the co-ordination regulations is to focus on circumstances where the UK legislation does apply. Will the Minister please expand on that assertion? The Explanatory Memorandum identifies that the change,

“may give rise to occasions where an individual becomes subject to the legislation of more than one state at a time”,

and possibly to the legislation of two or more states. This is noted as being an unavoidable consequence of a no-deal exit which cannot be managed using powers in the withdrawal Act, but has any assessment been undertaken of the consequences? On what basis does the Minister conclude that the changes,

“do not give rise to any new costs or any financial or economic impact”?

Further, it is understood that fixes for deficiencies relating to healthcare are not provided for in these SIs. How and where are they to be provided for? We know that, by virtue of the EEA agreement and the Swiss free movement of people agreement, the co-ordination regulations also apply in the EEA. Will she outline the full consequences of that for us tonight? I am conscious that there were one or two technical questions there, but this is a technical document and we are entitled to ask them, although I do not believe that we will have undue problems in supporting the regulations.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this excellent debate and for the searching questions, if I may say so. I am particularly grateful to the noble Baroness, Lady Sherlock, for giving me early notice of some of the very technical questions. I have to say, I am certainly not an expert in Brexit and I am not quite sure who is. We all hope very much that we will have a deal and we wish it was already in place. Let me do my best to respond to noble Lords’ questions.

As regards an impact assessment, I shall be absolutely straight. An impact assessment has not been prepared for these instruments as they make only technical changes to retained EU law and, as such, do not give rise to any new costs or financial or economic impact beyond the status quo. There is no, or no significant, impact on businesses, charities or voluntary bodies as a result of the instruments and there is no, or no significant, impact on the public sector. That said, as I referenced in my opening remarks on the statutory instruments, we take the role of the Social Security Advisory Committee very seriously. In response to the question of the noble Lord, Lord McKenzie, on consultation, the SSAC provides impartial advice on social security and related matters. It scrutinises most of the complex secondary legislation that underpins the social security system. The committee had the opportunity to review these regulations and a meeting was held on 7 March last year for it to share and discuss the initial drafts. The committee was content with the approach being taken.

Noble Lords asked a number of questions about future policy for social security and how these SIs fit with the immigration and social security Bill currently going through Parliament. These statutory instruments provide for a functioning statute book immediately after exit day, and the immigration and social security Bill ensures that there is the legislative framework required to deliver future policy at the appropriate time. Future policy changes will be set out in regulations made under that Bill and will be subject to the affirmative procedure.

The noble Baroness, Lady Janke, and the noble Lord, Lord McKenzie, referred to healthcare entitlement. I assure noble Lords that these statutory instruments do not make changes to healthcare policy. Any such changes will be brought forward by the Department of Health and Social Care via the Healthcare (International Arrangements) Bill and its statutory instruments. The Department of Health and Social Care is bringing forward the healthcare Bill to enable the UK to implement any future relationship with the EU on reciprocal healthcare as necessary and to ensure that the UK is prepared for any outcome if there is a no-deal exit. The healthcare Bill contains a power to amend, repeal or revoke retained EU law, so we do not anticipate the Department of Health and Social Care using this power.

The noble Lord, Lord McKenzie, asked how the regulations vary from the status quo. The amendments retain the status quo for UK obligations to individuals. They include provision to allow information to be provided by the claimant where we now receive it from the member state. The noble Lord, Lord McKenzie, also asked why provisional payments have been removed. The current provisional payment system operates where there is a dispute between member states of the European Union, disputes being an issue raised by all noble Lords. These disputes are resolved following a decision made by a mediation body, the administrative commission of the European Union. In a no-deal scenario, the UK will no longer be a member state or part of this body. That is why this provision has been removed. We will continue to use the same rules as now to determine whether the UK is competent. Any challenges will instead be resolved through domestic routes.

The noble Baroness, Lady Lister, asked about the terminology “as far as possible”. Perhaps it is the lawyer in me, but the reality from a legal standpoint is that it is sensible to use the terminology “as far as possible” rather than providing guarantees and raising an expectation, when something could happen where we would then fail to deliver. We are extremely keen to avoid that, particularly on such an important issue as social security. The noble Baroness, Lady Lister, also asked why this legislation only maintains the status quo and whether it is the Government’s plan not to change anything relating to social security. This legislation is about maintaining a functioning statute book. Of course, future policy is a matter for negotiations and, as such, cannot be discussed or raised today. I cannot say more than that today, but we are considering future policy with care. The Government are planning an ambitious deal with the EU in many areas, and this legislation is not about future policy but technical amendments to retained EU law.

The Government are confident that a deal will be reached. However, as a responsible Government, we are planning for all eventualities, including a no-deal scenario. Announcements relating to social security will therefore be made when it is appropriate to do so.

The noble Baroness, Lady Lister, also asked about social security co-ordination and how these statutory instruments fit with the immigration Bill. As I have said, this will be set out in regulations under that Bill.

There was a question about the ESIC referring to changes to retained EU regulations ensuring that any bilateral agreements between the UK and an EU country take precedence over the retained regulations and what impact this will have. Changes made through these fixing SIs are intended to deliver a functioning statute book on day one of exit to ensure a smooth and orderly exit. However, the UK will operate these retained regulations on a unilateral basis. As the Government negotiate future agreements with EU countries that provide for reciprocal social security co-ordination or agree to revive an existing reciprocal arrangement, retained EU law that delivers a unilateral system will no longer be appropriate.

Noble Lords may be interested to know that we have 17 reciprocal social security arrangements within the EU—with Austria, Belgium, Croatia, Cyprus, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain and Sweden. We have reciprocal arrangements with two EEA countries, Iceland and Norway, and with Switzerland. However, there are apparently no reciprocal agreements with Bulgaria, the Czech Republic, Estonia, Greece, Hungary, Latvia, Liechtenstein, Lithuania, Poland, Romania and Slovakia.

There was question about people being affected by double contributions. The latest published figures from the EU show that in 2017 around 50,000 UK workers went to work in the EU and around 60,000 EU workers went to work in the UK under the co-ordinated regulations, which work to avoid duplication.

The noble Baroness, Lady Janke, referenced data sharing. We will continue to work closely with the EU 27 so that the first port of call for all contribution queries will be the appropriate administration in a member state. We would expect the claimant to provide wage slips or proof of contributions made. The Government will provide support to claimants where any additional information is required from them. The instruments include provisions to ensure that the UK can continue to share data with the EU member states when they are applying the co-ordinated regulations.

The noble Baroness, Lady Janke, asked what evidence an individual will have to produce to confirm contributions in the EU. The UK will consider evidence on a case-by-case basis. We would expect the claimant to provide wage slips or proof of contributions made. The Government will provide support to claimants where any additional information is required from them.

The noble Lord, Lord McKenzie, asked about healthcare. As I have said, the Department for Health and Social Care is bringing forward a healthcare Bill.

The noble Baroness, Lady Lister, asked what scenario is envisaged where rights would not be protected. We are not able to protect the rights of citizens to the extent that they are provided by member states. We have sought assurances, and will continue to do so, from member states that they will respect the rights of UK nationals.

The noble Baroness, Lady Sherlock, asked about bilateral agreements. In the event that the UK leaves without a withdrawal agreement, we will keep pre-existing reciprocal agreements with individual member states under review. Whether these come back into force will be subject to discussion and agreement between the UK and the relevant EU member state.

Will returnees have access to benefits? Returning UK nationals have the same rights to access benefits as other UK citizens or UK residents. For some benefits, in addition to meeting the entitlement conditions, certain residence criteria must be satisfied. For income-related means-tested benefits, such as universal credit and pension credit, claimants must be habitually resident in the UK. In general, this means that they will need to show that they have made the UK their home and plan to stay here. Those returning to the UK after a period spent abroad may be considered to be habitually resident on arrival if it can be established that they were previously habitually resident in the UK and are returning to resume their residence.

For some disability and carers’ benefits, such as personal independence payment and carer’s allowance, claimants must be habitually resident in the UK. They must also have been present in the UK for a specified period before the claim but this requirement may be satisfied if they have links with the UK—for example, if they have worked and paid national insurance contributions in the UK in the past.

The noble Baroness referred to the terminology “deficiencies”. The word “deficiencies”, from a legal standpoint, contains anything with no practical application to the UK rather than this being a political deficiency on the part of government. I want to make that clear.

I hope noble Lords will bear with me. The noble Baroness asked a number of technical questions, and I will do my best to answer them as efficiently and speedily as possible. First, it is correct that the UK has reciprocal social security agreements with 17 EU member states, as I have already referenced. These arrangements are generally superseded by EU social security regulations in the UK but are still in use by the Crown dependencies, where EU social security regulations do not apply.