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

Lord Stevenson of Balmacara Excerpts

Wednesday 23rd October 2019 Lords Chamber

Moved by

[Lord Stevenson of Balmacara]

At end insert “but that this House regrets that the draft Regulations will remove certain rights for European Union, European Economic Area, Swiss and Turkish nationals, namely to be self-employed, own and manage a company and provide services in the United Kingdom without facing additional restrictions; further regrets the impact this may have for many long-residing individuals and families, as well as the wider consequences for the United Kingdom economy and employment; expresses concern that this change may result in the loss of rights for United Kingdom citizens resident elsewhere in the European Union, European Economic Area, Switzerland or Turkey; and calls on Her Majesty’s Government to immediately and unilaterally guarantee the continuation of the relevant rights of European Union, European Economic Area, Swiss and Turkish nationals in the United Kingdom beyond exit day.”

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister both for our meeting earlier today and for his introduction to the regulations. I belatedly welcome him to the Front Bench; although we have crossed swords at Questions, this, I think, is the first time that he has dealt with me on a substantive issue. I look forward to more of those.

These regulations will come into force only in the event of a no-deal Brexit, which now seems extremely unlikely to happen, but they are also contingent on the becalmed immigration Bill; that separation is continuing, is causing concern and is troublesome. However, were they to come into force, they would significantly impact on the rights of EU, EEA, Swiss and Turkish nationals. Specifically, they disapply the basis under which these nationals enjoy their rights to be self-employed, own or manage companies, or provide services to the UK on the same basis as UK nationals, and their right to bring nationality discrimination claims in relation to these rights.

As the Minister said, these regulations were drawn to the special attention of your Lordships’ House by the Secondary Legislation Scrutiny Committee because they remove EU treaty rights and make significant policy changes. As he said, they were debated in the Third Delegated Legislation Committee of the House of Commons on Monday and have just been subject to a vote in the Commons, so they are drawing quite a lot of attention.

It surely makes no sense to decide immigration rights for those who are self-employed or are running businesses, separately from determining the immigration rights of other people, but that is what these regulations do. As recent correspondence has amply demonstrated, thousands of self-employed, business-owning or business-managing providers of services—including many who are contributing to our social and cultural life, the health service and our prosperity as a nation—need assurances that they will not be disadvantaged and that their right to stay will not be questioned or removed as we move forward. Does the Minister agree that the department could do more to explain what is happening to those affected by this measure, perhaps by writing to them once we know which way we are going?

In essence, I have three main concerns. First, the draft regulations are being made under Section 8 of the withdrawal Act, which gives the Government power to amend retained EU law in order to correct or mitigate “deficiencies” or,

“a failure of retained EU law”,

to operate effectively after Brexit. But are these really deficiencies? In what sense has there been a “failure” of retained EU Law? Is it appropriate for the Government to use Henry VIII powers in Section 8 as a vehicle for policy changes? That Act was never intended to address how, whether or how quickly we could meet our obligations under the WTO.

Secondly, the regulations disapply the rights of EU, EEA, Swiss and Turkish nationals who are presently self-employed, owning and managing companies or providing services in the UK, and precludes them from bringing nationality discrimination claims in respect of those rights. In drawing the regulations to the special attention of the House on public policy grounds, the SLSC has described them as appearing,

“to be a significant reduction of rights”.

The Minister said that the SI has had a wide review but, because there is no impact assessment, we do not know how many people will be affected; nor have they —or anyone—been consulted. In a previous debate, on a no-deal Brexit SI on metrology on 7 October, the Minister said on the question of stakeholder involvement in that SI:

“We did this the wrong way round—there should have been greater engagement in advance of such a complex and dense series of materials, to ensure that we had captured all the elements the first time. We did not do that, and … I acknowledge that this is the wrong way round, and I have said that on the record”.—[Official Report, 7/10/19; col. 1913.]


It is a pity that, in his short time in the department, he has not been able to change its view on how it deals with SIs such as this one.

Thirdly, if the House accepts that a change of policy of such profound character should not be made by way of secondary legislation, the question then becomes: why is this issue not included in primary legislation such as the immigration Bill, which, as I said, is becalmed but is still around? In particular, how does this square with the fact that, on 5 September 2019, the Home Secretary released a policy paper in which she stated that free movement would be ended after exit day by way of primary legislation—a commitment from a Cabinet member?

In his opening remarks, the Minister said that, as well as protecting our WTO most favoured nation status, the Government were progressing on the basis that there was no guarantee that the EU would offer reciprocity on this matter. However, it is not so long ago that the Government chose to allow EU and EEA firms the right to continue to have full access after Brexit to electronic data held in the UK, with absolutely no guarantee that our firms would be offered those rights in return. Reciprocity was not a barrier for BEIS on that occasion, but it seems to be here—really?

Despite the Minister’s assurances, which I accept, we have before us an SI which many of those affected think removes the rights to be self-employed, to own and manage companies or to provide services in the UK on the same basis as UK nationals. That, in turn, at face value, may affect the underlying basis of their lawful residence in the UK, because it is dependent on the immigration Bill, which we do not yet know the timetable for. The very strong impression given by the proposed SI is that it is a continuation of the Government’s “hostile” immigration policy.

Given where we are, and where we are likely to be in the not-too-distant future, I believe the regulations should be withdrawn and that, as my amendment says, Her Majesty’s Government should immediately and unilaterally guarantee the continuation of the relevant rights of EU, EEA, Swiss and Turkish nationals in the UK beyond exit day using primary legislation, if that is required. I beg to move.

[Lord Oates (LD)]

My Lords, I support the amendment in the name of the noble Lord, Lord Stevenson. During the referendum campaign, a number of categorical commitments were made to EU citizens resident in the UK by the current Prime Minister and Home Secretary, among others. In June 2016, they said that,

“there will be no change for EU citizens already lawfully resident in the UK. These … citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present”.

I have often repeated that statement to the House, and I make no apology for doing so again; first, because to the shame of the Government that undertaking remains unhonoured to this day; secondly, because it bears significantly on the level of trust that it is prudent to place in any assertions from this Administration; and, thirdly and most importantly, because it bears significantly on the regulations we are discussing today.

As we have heard, these regulations remove certain rights of EU, EEA, Swiss and Turkish citizens in the event of a no-deal Brexit, in relation to self-employment, the establishment and management of businesses, and the provision of services in the UK. They do so despite the fact that, during the passage of the European Union (Withdrawal) Act 2018, the Government pledged that no policy changes would be made via delegated legislation. The then Secretary of State, David Davis, told the House of Commons on 30 March 2017 that this went “without saying”. Nevertheless, MPs were sensible enough to insist that he actually said it, which he subsequently did. He told the House that,

“no change should be made to rights through delegated legislation”,

and added:

“Let me reiterate that the use of delegated legislation will be for technical changes”.—[Official Report, Commons, 30/3/17; col. 431.]


However, the Explanatory Memorandum that accompanies these regulations states that,

“the removal of these rights is not expected to prevent those EU, EEA EFTA, Swiss or Turkish nationals who are operating businesses or providing services immediately before exit day from continuing to be able to do so immediately after exit day (where they retain residence rights)”.

So the Government’s Explanatory Memorandum concedes that rights will be removed, in breach of Mr Davis’s undertaking. Having dispensed with the removal of rights, notwithstanding this undertaking, the best that the Government can tell us about the impact of the removal of these rights is that they do not expect that this will prevent EU-plus nationals from continuing to run their businesses or provide services.

It is deeply troubling that the Government can offer no more assurance than an expectation, because these regulations are causing great anxiety among EU-plus nationals resident in the UK about the impact they will have on their status and their ability to continue with their business or in self-employment. I hope that the Minister will be able to give them some considerably greater reassurance in his reply than that which has been given to date. I would be grateful in particular for the Minister’s response on the following points.

--- Later in debate ---

[Lord Duncan of Springbank]

Sorry about that; that was a big fly—bigger than normal.

[Lord Stevenson of Balmacara]

It was a big fly, not a big lie.

[Lord Duncan of Springbank]

Goodness me, such words. I like a pun at this time.

We seem to be caught in a situation in which a number of noble Lords believe that this is of significance to the extent that it impacts upon 2.3 million people. It does not. However, if individuals affected by future changes in policy wish to confront the Government, they may be able to use elements of the existing corpus to do so, unless we disapply them. It may seem modest—I am sure the courts will be able to address this and many lawyers will make a great deal of money—but the point I am trying to make is that the change should, in the future, not happen. But it might happen. It is a relatively small adjustment we are talking about here, and it has had no impact assessment because the impact is de minimis.

--- Later in debate ---

[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.

[Lord Stevenson of Balmacara]

My Lords, as I have been sitting and enjoying this debate, I have been reflecting on why the other 582—is it?—SIs on a no-deal Brexit did not attract audiences of this size and did not give rise to a debate of such excitement. I have reached no firm conclusions, but it is possibly because we as a House are reaching the end of our patience with the Government in how they use these regulations at a time when it is patently clear that we are moving on to different ground.

Having said that, this has been an extremely good debate, and I thank all noble Lords who have contributed. The right reverend Prelate the Bishop of Salisbury got it right in his contribution: while we are talking about important and possibly quite narrow legislation, this is really about trust—whether we feel we can place our trust in the Government to get this right in the wider context that we have been discussing. Although the Minister made a valiant attempt to persuade us of the correctness of his position, in his arguments, explanations, apologies for not making it more easily available to people outside and apologies for the drafting, he covered all the possible grounds for attack, but did not really answer the two or three main questions.

As the noble Lord, Lord Pannick, said, we are disapplying one set of regulations and relying on what has already been brought in under a different piece of legislation. You cannot have it both ways. Either you are losing the rights that applied under the original position, in which case there is a deficit, or different sets of relationships are being brought in by the new corpus of law, which has drawn on EU and UK national law. There might be no threat in that, but we simply have not had the opportunity to discuss it. At the end of the day, the lasting feeling, I fear, is of people’s frustration. The points that have been raised around the House from reading these documents at very short notice—in some cases, the shortest possible notice—have been significant and substantial, and they deserved a better and wider hearing in front of a greater and more expert group, such as would have been provided by primary legislation.

Therefore, my three main points are as follows. First, were the Government right to use the EU withdrawal Bill? I do not think that we have been persuaded on that: there would have been a better way of doing it through primary legislation. Secondly, will there be a diminution in the rights currently enjoyed by people affected by this SI? The Minister is probably right that there are no direct changes, but it is the fear of those changes and the fear of the possible consequences once the law has changed that is not being addressed properly. As I said, I do not see how we can balance the two things. Thirdly, in our earlier meeting, the Minister’s officials were keen to make it very clear that these regulations deal only with movement under the EU legislative framework; they do not deal with immigration rights that will be coming forward. At the end of the day, this is about the gap between what it is being said will change and what might change under the immigration Bill, of which we have no knowledge because it is not in front of us.

The Government have not been successful in the court of public opinion, and we owe it to that public opinion to test the opinion of the House.