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

Lord McKenzie of Luton Excerpts

Tuesday 5th March 2019 Lords Chamber

[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.

[Baroness Lister of Burtersett (Lab)]

My Lords, I also thank the Minister for introducing this rather hefty set of statutory instruments and I echo my noble friend Lord McKenzie in citing paragraph 2.6 in the Explanatory Memorandum—which the Minister also cited:

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


Phrases such as “as far as possible” rather leap out at us when we are looking at these things. What does it mean exactly? Will the Minister tell us what scenarios are envisaged in which it will not be possible to protect existing citizens’ rights?

Noble Lords will be pleased to know that I will be very brief, after my rather lengthy speech earlier, but I am more worried having read the debates in the Public Bill Committee on the Immigration and Social Security Co-ordination (EU Withdrawal) Bill. A number of those giving evidence to the Committee raised serious concerns about Clause 5, which deals with future social security co-ordination and which, in the words of the Delegated Powers and Regulatory Reform Committee is,

“so lacking in any substance whatsoever that it cannot even be described as a skeleton … There is, moreover, no indication at all in the Explanatory Notes or Memorandum that the Government have even begun to devise their policy on the future of social security co-ordination post EU exit”.

Will the Minister explain how the regulations and this thinner-than-a-skeleton clause in the Bill relate to each other? Can she give us some assurance that the Government have begun to devise their policy regarding future social security co-ordination post EU exit, and perhaps some inkling of the lines on which they are thinking?