Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019

Lord Greaves Excerpts

Wednesday 23rd October 2019 Lords Chamber

[Lord Anderson of Ipswich (CB)]

My Lords, the main issue from a legal perspective is how the use of delegated legislation can be justified, contrary to past undertakings, for a significant policy change that reduces, or appears to reduce, acquired rights. I agree with everything that the noble Lord, Lord Stevenson of Balmacara, and my noble friend Lord Pannick have said about that, and I need not weary your Lordships with any more, but I shall address two other points. The first relates to the practical effect of what the Minister in the Commons accepted on Monday is the potential disapplication of rights. The Government must accept that those rights have some value, as my noble friend Lord Pannick said, because of the position that to maintain these rights in favour of EU-plus nationals might violate the most favoured nation principle of the WTO. Indeed, the Secondary Legislation Scrutiny Committee records BEIS as saying that those rights afford a guarantee against,

“additional restrictions or barriers that may apply to nationals and businesses from other countries”.

I am puzzled by the suggestion that the removal of these directly effective rights, in particular the right not to be discriminated against in the delivery of services or in owning or managing businesses, will have limited or no practical impact.

The Minister has said, no doubt rightly, that our law will be in accordance with EU law on exit day, but because the rights have direct effect they afford protection, by definition, over and above that contained in domestic law. Without these rights, where are the equivalent entitlements and remedies not to be discriminated against to be found in our law? Nor am I entirely clear whether the right of all EU nationals to apply for settled or pre-settled status, even if that right is successfully exercised by the end of 2020, is a full substitute for the right of residence derived from the directly effective right of establishment under the Immigration (European Economic Area) Regulations 2016. Will he explain further whether it is the case—and if so, why—that the removal of these important rights, leaving aside the special issue of satellite decoders, will have only de minimis impact in the respect I have identified?

My last point relates to the specific power under which these regulations are made, Section 8 of the European Union (Withdrawal) Act 2018, which is available only where there is a failure of retained law to operate effectively, or some other deficiency in retained EU law, as was said by the noble Lord, Lord Stevenson. I make another point in relation to that: deficiencies in retained EU law are exhaustively defined in Section 8(2) and (3) of the Act, but I cannot find any definition there that fits the present case. There is some suggestion in the Explanatory Memorandum that the deficiency consists of lack of reciprocity, but it is not clear, certainly to me, how a deficiency could arise from the possibility that others might choose to withhold equivalent rights in their own law. If that were the case, then the scope of Section 8 would be very broad indeed. Can the Minister say any more about which provision of Section 8 is relied upon as a sufficient basis for these regulations and, if so, how?

[Lord Greaves (LD)]

My Lords, I have been listening with great admiration to the knowledge and expert understanding of all this of noble Lords who have spoken. I thank the noble Lord, Lord Stevenson, for tabling his amendment and my noble friend Lord Oates for explaining it all, so that I understand it a bit more.

The right reverend Prelate and other noble Lords referred to UK citizens living in other EU countries and the effect that the whole Brexit thing is having on them. We have friends who live in the south of France and operate a small business there, and they have just held up their hands and applied for and obtained French citizenship as the only way they thought they could secure their position and their business there. There is a clear understanding among a lot of British citizens in other EU countries that in the negotiations so far, the Government have not taken their interests fully into account.

On this regulation, when we were discussing settled status during Question Time this afternoon, the noble Lord on the Opposition Front Bench declared a personal interest, so I suppose I ought to declare a personal interest in that my daughter’s husband is a European Union citizen and they live in this country. They work from home; I must confess that I do not know whether they are technically self-employed, have a zero-hours contract or both, but they certainly have a highly technical, successful operation, which is inherently insecure as it depends on the organisation that provides them with work. Sometimes there is none and at other times there is a lot. They are very concerned, not only about these regulations but about their position, so they asked me to take a look at this.

I looked at it and read the Explanatory Memorandum, knowing that this is where I would find the truth, the whole truth and nothing but the truth from the Government. It asks:

“Why is it being changed?”


As noble Lords have said, it says that Section 4 of the European Union (Withdrawal) Act provides the rights in domestic law, and so on. It then says in paragraph 2.11:

“To address any inoperability and to ensure UK law continues to function effectively, with legal clarity, and that the UK is compliant with its World Trade Organization … obligations, including the General Agreement on Trade in Services, these rights need to be disapplied”.


I have read it again and again and I do not understand why, and I have heard noble Lords speak today and I still do not understand why. However, what concerns me is not that I do not understand this—what inoperability there may be or what conflicts there may be with the rules of the WTO—but that the Government do not seem to know either. The Explanatory Memorandum talks about “any inoperability”; is there any or is there not? I presume that the Government have taken legal advice on this and have a belief as to whether there is or is not. Because they think this legislation is necessary, I assume that they think there is, but they do not want to tell us exactly what it is.

Later, paragraph 2.12 says:

“These directly effective rights of establishment and free movement of services would appear to have limited practical effect, post-exit in a no deal scenario”,


but the Minister is telling us that the Government do not think that it will have any effect in practice. Will it have a limited effect or not really any effect? If it will have a limited effect, can the Minister tell us exactly what that limited effect is, in words that I, as a non-lawyer and a non-expert in these WTO matters, might understand? The Minister himself used the word “could” about three times—“It could have an effect”. But will it or will it not? What is the legal advice, or is it all very vague and nobody knows?

However, the Explanatory Memorandum reassures the individuals and businesses concerned:

“Individuals and businesses will be able to check published no deal planning guidance on gov.uk”.


If I were to look at GOV.UK this afternoon, would I find advice on whether there is inoperability and limited practical effect, or would it tell me not to bother because there is not? If it tells me not to bother because there is not, why is this all coming here anyway?

[The Earl of Clancarty (CB)]

My Lords, at the beginning of this debate, the noble Lord, Lord Stevenson, said that parliamentarians are talking about this issue. The noble Lord, Lord Oates, and others, said that EU citizens are talking about this issue, and indeed, the British living and working in Europe are doing so too. They are all very worried. There is something about this issue to which the noble Lord, Lord Greaves, referred. It is a confidence issue, a trust issue and a perception issue. That is very important. There is a sense that a safety net is being removed in preparation for worse to come, despite the Minister’s assurances.

I would be appalled by any legislation that attempted to reduce the rights of EU citizens to run businesses or be self-employed in this country under a no-deal scenario. Such legislation should surely be in an immigration Bill, not presented to the House in this form as a fait accompli. As the noble Lord, Lord Stevenson, noted, we are talking about a wide variety of industries being affected. The so-called gig economy, the NHS, IT and the creative industries would be hit hard if EU citizens felt forced out, and we would be culturally impoverished as a result. However, as the noble Lord pointed out, it is not only the livelihoods of EU citizens that will be at risk, but the livelihoods of British citizens living in Europe.

It is a widely held view, but a misconception, that most British abroad are retirees. Of the 1.24 million UK citizens in Europe, Britain in Europe estimates that only 20% do not work. Many of those in work are self-employed, in as wide a variety of service industries as in the UK. It feels, however, as though the Government do not care enough about the British living in Europe, or about their livelihoods, which will without a doubt be threatened through any reciprocal effect. A number of us in this House have repeatedly asked the Government to protect the rights of the British working in Europe. This is not the right way to go about it, and that is apart from the message being sent through this legislation to EU citizens who run businesses or are self-employed in this country.

--- Later in debate ---

[Lord Duncan of Springbank]

It is quite clear that we have not succeeded in convincing the noble Lord that the reality is that the retained EU law, which this House fought so carefully over and which was enshrined in the withdrawal agreement, sets out the rights of individual EU nationals in this country with regard to their ability to be employed or self-employed, to offer services and so on. That is contained in retained EU law and will become operational and functional at that point in the future.

Here we are talking about making adjustments to that retained EU law for certain rights to invoke the previous entity of the EU as a means of engaging directly with the Government as a challenge. It is that part we are talking about today.

[Lord Greaves]

My Lords—

[Lord Purvis of Tweed]

Would the Minister give way?

--- Later in debate ---

[Lord Greaves]

At a less erudite level, what advice is currently given to these people on GOV.UK?

[Lord Duncan of Springbank]

GOV.UK is a resource which I hope helps people address their questions. Part of the difficulty with GOV.UK is that it is very hard to anticipate questions that have not been set out in government legislation. We did not anticipate that individuals who have written would be fearful of what had been done. That is why I say again that we must be better at how we explain this in all our communications, whether online or on paper, and in the Explanatory Memorandum. The important thing for individuals to take from this debate is that the impact on them is not what has been explored or explained by others but rather a restricted aspect of future issues that concern future government policy or the ability of the WTO and the UK going forward to agree on most favoured nations.