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

Kate Green Excerpts

Thursday 28th February 2019 Public Bill Committees

[The Chair]

We have had a full debate on clause 4 through the various amendments on Tuesday, so I am not minded to allow a separate stand part debate.

Clause 4 ordered to stand part of the Bill.

Clause 5

Power to modify retained direct EU legislation relating to social security co-ordination

[Kate Green (Stretford and Urmston) (Lab)]

I beg to move amendment 26, in clause 5, page 4, line 21, at end insert—

“(11) The power to make regulations under subsection (1) may not be used to make regulations removing Title I, Title II or Chapter 1 of Title III of Regulation (EC) No 883/2004.”

This amendment would prevent the Secretary of State from making regulations which might remove the ability of British citizens and EEA nationals to aggregate pension rights and social security benefits.

Good morning, Mr Stringer. It is a pleasure to see you in the Chair again.

The amendment is intended to limit the extent to which the Government can make changes to social security provision by delegated legislation after Brexit. I place on the record my thanks to the Immigration Law Practitioners’ Association, to British in Europe and to Justice, whose evidence I drew on heavily for this amendment.

By virtue of the European Union (Withdrawal) Act 2018, EU regulations relating to social security co-ordination —the so-called co-ordination regulations—will be converted into domestic law on exit day. The co-ordination regulations provide a reciprocal framework to protect the social security rights of people moving between European economic area states.

The co-ordination regulations do not create a single, harmonised system of social security benefits, nor do they guarantee a general right to such benefits. Instead, they ensure that individuals who move to another EEA state are covered by the social security legislation of only one country at a time and are therefore liable to make contributions only in one country; that a person will have the same rights and obligations of the member state in which they are covered, under the equality principle in social security co-ordination; that periods of insurance, employment or residence in other member states can be taken into account when determining a person’s eligibility for benefits, under the concept of aggregation; and that a person can receive benefits to which they are entitled from one member state even if they are resident in another. Those features are important for labour mobility and as a simple matter of equity, because people who have worked and contributed have a reasonable expectation of entitlement to the social security benefits that they have paid in for. I am concerned that clause 5 could be used to undermine those legitimate expectations.

The co-ordination regulations cover only social security benefits that provide cover against certain categories of social risk, such as sickness, maternity, paternity, unemployment and old age. Some non-contributory benefits fall within the regulations, but cannot be exported. Benefits that are categorised as social and medical assistance are not covered at all; my understanding is that they include universal credit, even though universal credit contains some contributory elements, so I ask the Minister in passing whether he might like to use clause 5 to address that apparent injustice.

The co-ordination regulations also confer on those who have a European health insurance card a right to access medically necessary state-provided healthcare during a temporary stay in any other EEA state. The home member state is normally required to reimburse the host country for the cost of the treatment. Will the Minister place on the record the Government’s intentions in relation to the European health insurance card, both in the event of no deal and in the post-transition period if a Brexit deal is negotiated?

[Nick Thomas-Symonds (Torfaen) (Lab)]

The issue of European health insurance is one that many people have raised concerns about. Does my hon. Friend agree that it would be good to hear something very definitive from the Minister today to put those concerns about uncertainty at rest?

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[Kate Green]

It absolutely would. People will be planning their summer holidays now, and there is every possibility that they will be making those trips without the security of the European health insurance card that they have enjoyed for many decades. I ask the Minister to be crystal clear, if he can, about the coverage that will or will not be available to those families after Brexit day. I also ask him to say a little about how the Government intend to communicate any changes to the public. This is one of the mainstream consumer consequences of Brexit, not simply an esoteric technical point that affects only a minority of expert specialists.

Clause 5(1) provides for an “appropriate authority” to modify the co-ordination regulations by secondary legislation. I have to say that I find that power incredibly broad, because it provides absolutely no limit to the modifications that appropriate authorities can make. In addition, subsection (3) explicitly states that that power

“includes power…to make different provision for different categories of person to whom they apply”.

We took oral evidence on the point a couple of weeks ago, but I wonder whether the Minister will say a little more about what the Government have in mind. Subsection (3) also provides for the Government

“otherwise to make different provision for different purposes…to make supplementary, incidental, consequential, transitional, transitory or saving provision…to provide for a person to exercise a discretion in dealing with any matter.”

The power is further extended by subsection (4), which provides for the ability to amend or repeal primary legislation and

“retained direct EU legislation which is not mentioned in subsection (2).”

I understand that the Government need to be able to amend the co-ordination regulations to remedy deficiencies resulting from the UK’s exit from the European Union. I also appreciate that difficulties arise as a result of the reciprocal nature of the retained co-ordination regulations and the fact that after exit day, in a no-deal scenario, the UK cannot unilaterally impose reciprocal obligations on the European Union.

However, the power to make such amendments is already provided for under section 8 of the European Union (Withdrawal) Act 2018. Indeed, the Government have already laid four draft statutory instruments that relate to social security co-ordination pursuant to that section. The explanatory memorandum for those regulations states that they aim to

“address deficiencies in retained law caused by the UK withdrawing from the EU, which would impact the operation of the retained Coordination Regulations in a no-deal scenario”

and

“ensure that citizens’ rights are protected as far as possible in a no-deal scenario. As per the intent of the EU (Withdrawal) Act 2018, these instruments aim to maintain the status quo.”

Concerns have already been expressed about the regulations, however, which have a fairly drastic effect on individuals when the evidence of their contribution in another member state cannot be obtained in the United Kingdom. Could the powers in clause 5 be used to extend the provisions set out in those statutory instruments or, for that matter, constrain them? Are there any circumstances in which those regulations could apply in the event that a deal is agreed, or are they limited to covering a no-deal scenario? Since the regulations suggest that the Government are taking a hard-line view of evidence of entitlement, should people continue to obtain A1 forms post Brexit, if they will have a future connection with more than one EU country through their employment or self-employment?

To turn to the provisions of clause 5 in more detail, the Government are explicit in their desire to use the power in clause 5 to implement policy changes to the social security co-ordination rules that will have been retained in domestic law, which I accept that they could not do with delegated legislation under the 2018 Act. In the delegated powers memorandum to the Bill, the Government state:

“This power will provide the appropriate authorities with the ability to deliver a range of policy options from exit day in any or all of these areas”,

which include,

“what access EU nationals will have in the future to certain UK benefits and pensions; the extent to which UK nationals can export certain benefits and pensions if they move to an EU Member State; and the administration and rules which govern entitlement and obligations when people live and work in more than one country”.

Social security co-ordination is vital to protect the rights of EEA nationals who come to live in the UK, and UK nationals who go to live in EEA member states. Policy in the area could have a great impact on the lives of millions of people and affect their ability to receive the benefits that they are entitled to through national insurance contributions or periods of residency.

Do the Government’s stated policy objectives for clause 5 fundamentally seek to achieve the same effect stated for the draft statutory instruments tabled under the 2018 Act? Alternatively, is the Government’s intention to use the provisions in clause 5 to mirror the EU’s draft contingency regulations, COM(2019) 53, which limit the ability of individuals to aggregate contribution periods and contributions made in multiple jurisdictions after Brexit?

As we heard in the oral evidence sessions from British in Europe, if people can no longer aggregate their contributions, they may have no choice but to return to the UK. Has the Minister made any assessment of the potential impact, scale and cost to the public purse of that happening, as a result of possible demands on UK public services, such as the NHS and social care services? Can he say whether people coming back to the UK in such circumstances, who might struggle to demonstrate that they are ordinarily resident in the UK, will have access to means-tested benefits?

My understanding is that the Government have committed to continuing to uprate pensions until 2020 for UK nationals living in other EU countries, but can the Minister confirm that that will be the case whether or not a deal is agreed, and will he now commit to maintaining pensions uprating for UK nationals living in the EU post 2020? Finally, can he reassure the Committee that he does not intend to use clause 5 to curtail protection for posted and frontier workers, or those who regularly transit across borders, especially as UK nationals will lose their right to intra-EU freedom of movement in the event of no deal or post the end of the transition period.

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[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

That is an important point: this is too important an area to rely on secondary legislation. Incidentally, the hon. Lady is making a fantastic speech; the detail she is giving makes any speech that I might make thereafter totally redundant, but I reassure the Committee that the Scottish National party stands in support of this amendment. More power to her elbow.

[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.

[Kate Green]

I am grateful to the Minister for giving way, and I particularly thank him for his remarks a few moments ago. There would be certainty during the transition period, but that would not really give certainty beyond 2020, would it? As I have already pointed out, for example, we do not know the Government’s intentions in relation to pensions uprating, whether or not there is a deal after 2020.

[Alok Sharma]

Let me come on to those points. I am sure that we will have a chance to discuss them further.

On amendment 26, I note the hon. Lady’s assertion that the provisions in clause 5 could be used to remove the ability of UK and EU nationals to aggregate periods of work, insurance or residence in other member states, in order to meet domestic entitlements for contributory benefits and pensions. I reassure her that although future policy on social security co-ordination is subject to further consideration, the Government are committed to exploring options to protect past social security contributions made in the EU and the UK as part of our ongoing discussions with the EU and member states.

The Government have always been clear that protecting the rights of citizens is a priority. It is important that UK and EEA nationals in the EU who are currently receiving aggregated pensions and benefits have those payments protected. I therefore make it clear that the Government will not retrospectively remove the entitlements of UK and EU nationals living in the UK to UK contributory benefits.

I further reassure the hon. Lady that, in a deal scenario, the power in clause 5 will not be exercised to remove or reduce commitments made in relation to the individuals within the scope of the withdrawal agreement. The withdrawal agreement protects rights and entitlements, including aggregation and uprating, in accordance with EU legislation for those EU and UK nationals covered by the withdrawal agreement. The exercise of the power will be subject to further discussion with the EU—for example, in relation to a future agreement. However, it is important that the Government have the provisions in the clause to reflect the UK’s new relationship with the European Union, either if we are in a no-deal scenario or if we do not have a future agreement.

As the hon. Lady acknowledged in her remarks, the nature of the current social security co-ordination framework means that a multilateral partnership must be in place in order for it to function effectively. Aspects of the current system, including aggregation, rely on reciprocity from the EU27 and are underpinned by data sharing between the member states. I fully understand her position, which is that it would be preferable for a system of aggregation of contributions to continue. Indeed, in the UK Government’s publication on our proposal for the future relationship between the UK and the European Union, we set out exactly that ambition. We explained that we will seek reciprocal arrangements around some defined elements of social security co-ordination. That could cover aggregation rules.

However, without reciprocity, there are limits to what the UK Government can do by ourselves. Although the UK has powers in domestic legislation to pay state pensions and benefits, if the UK leaves the European Union without a deal, we could not bind other member states to recognise contributions made in the UK. Accepting this amendment could prevent the UK Government from responding effectively to certain scenarios following our exit from the European Union.

[Kate Green]

I accept what the Minister says about the nature of reciprocity, but it is within the Government’s power to make a unilateral commitment to the ongoing uprating of pensions beyond 2020. That has been clear since at least 1996, in relation to a memorandum issued by the then Department of Social Security.

[Alok Sharma]

I thank the hon. Lady for her comments, and I will come on to the point about pensions shortly.

The titles of regulation 883 cited in amendment 26 cover a broader range of issues than just aggregation rights. They cover a wide range of social security co-ordination provisions, ranging from definitions of key concepts, the scope of the regime, prohibition of residence requirements for certain benefits and the export of cash sickness benefits. Accepting an amendment that prevented the Government from removing those provisions would go much further than the hon. Lady’s stated intention of preventing the Government from making changes to aggregation policy. Doing so could remove the Government’s ability to reflect our future relationship with the EU on a wide range of policy issues. Furthermore, the amendment would prevent the removal of the listed titles, but it would not prevent their modification or amendment. With respect, therefore, it does not achieve its purported objective.

Let me address some of the issues that the hon. Lady raised, which were all perfectly valid. She made a point about the inclusion of universal credit in the social security co-ordination system, and she said that it was not currently part of that system. She will know that that is because universal credit is treated as social assistance, and therefore will not be affected by the clause.

The hon. Lady made a point about healthcare. It is not our intention to use this clause to make changes to healthcare policy. Any such changes are a matter for the Department of Health and Social Care, and they will be dealt with in the Healthcare (International Arrangements) Bill.

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Finally, the hon. Lady mentioned the Commission’s proposed no-deal regulation, which is actually more limited in scope than the UK Government’s proposal. The Government have expressed to the EU our concern that the coverage of its regulation is minimal, and we are doing what we can in that space to persuade the EU. In the light of the points that I have made, I respectfully ask her to withdraw the amendment.

[Kate Green]

I appreciate the Minister’s careful response and the positive words that he offered. However, I am still not clear why my amendment, which would curtail powers that Ministers do not need—because they can make use of the EU withdrawal Act, as they are doing already, or because they will bring forward primary legislation relating to a withdrawal agreement—is a problem. I do not think that we can simply rely on the good will of the Minister, although it is greatly appreciated; changes of this magnitude should be made in primary legislation.

Question put, That the amendment be made.