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

Motion to Approve

That the draft Regulations laid before the House on 11 July be approved.

My Lords, I stress at the outset that a deal with the EU would render the provisions of this instrument unnecessary until the end of any agreed implementation period. The regulations are required only in the event of the UK leaving the EU without a deal, a reality which the UK cannot guarantee unilaterally but for which it must necessarily prepare.

A number of noble Lords have raised concerns with me over whether these regulations will remove the rights of EU nationals to establish a business or provide services in the UK. I am grateful to the noble Lord, Lord Stevenson, for meeting me earlier today to discuss this issue and those that he will raise in moving his amendment. I take this opportunity to put on the record that these regulations do not impose any new restrictions on EU nationals or EU-based businesses, or the nationals or businesses of countries with associated agreements, at the point at which we exit the EU. This is because the UK’s underlying legislative framework is compliant with these rights and, importantly, because EU retained law under the withdrawal Act will also apply.

The regulations do not impact on the immigration regime applying to the EEA or to Turkish and Swiss nationals in the UK. Indeed, they explicitly carve out any potential impact on the immigration rights of Swiss nationals and Turkish nationals to ensure that any changes come into force separately via primary legislation, which will be scrutinised in the normal way.

The regulations do not impact on the rights of EU citizens resident in the UK at the point of exit; those are protected separately. All EU citizens resident in the UK by exit day will still be able to work, study and access benefits and services, whichever scenario plays out.

The instrument addresses the reality, once we leave the EU, of reciprocity and necessary legal certainty affecting EU states and those states with which the EU has association arrangements. It covers the definition of “services”, rights of establishment and the provision of services, free movement of services, and the prohibition of non-discrimination, as set out in the relevant articles of the Treaty on the Functioning of the European Union and similar provisions contained in EU association agreements.

The Treaty on the Functioning of the European Union provides rights for nationals of member states and is founded on the principle of reciprocal rights, including in the areas of services and establishment. If the rights were not disapplied, this would create certain legal issues for the UK. Going forward, the UK could be in breach of the WTO’s General Agreement on the Trade in Services—the most favoured nation principle.

Unilateral provision of the measures could be interpreted as granting EU nationals additional rights to challenge the UK’s laws and decisions in the future, and could restrict the Government’s ability to regulate in the future. It would also create an uneven playing field in which EU nationals benefited and UK nationals in the EU did not.

Moved by

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.”

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?

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.]

First, during consideration of these regulations by the Third Delegated Legislation Committee on Monday, the Parliamentary Under-Secretary for BEIS, Mr Nadhim Zahawi, said:

“The regulations do not impose any new restrictions on”,

EU-plus nationals,

“or on EU, EEA, EFTA, Swiss or Turkish-based businesses at the point at which we exit the EU”.—[Official Report, Commons, Third Delegated Legislation Committee, 21/10/19; col. 15.]

Can the Minister tell us how he reconciles that statement with the assertion in the Explanatory Memorandum that the disapplication of rights will have a “limited” impact? There is a difference between no impact and a limited impact. I hope the Minister will provide some examples of where the potential limited impacts might be. It would, of course, help if we had an impact assessment by which to judge such a serious issue affecting people’s rights, but the Government have declined to provide us with one. In his opening remarks, the Minister stated that EU nationals would still be able to work, study and access benefits. I do not think he said that they will still be able to be self-employed, own and manage businesses or provide services. Can he give that explicit assurance?

Secondly, can the Minister tell us whether these regulations will apply to EU nationals who have settled status, pre-settled status or have been resident in the UK for the qualifying period but have yet to apply for such status? Will they also lose their rights?

Thirdly, how does the Minister reconcile the assertion that these regulations will not affect the underlying immigration rights of self-employed EU nationals in circumstances where these underlying rights arise specifically from Article 49 of the TFEU with the fact that Article 49 is expressly disapplied by these regulations?

Fourthly, can he tell us whether the disapplication of the right to bring nationality discrimination claims in respect of the rights to be self-employed will apply to EU nationals who have settled status, pre-settled status or have been resident in the UK for the qualifying period but have yet to apply?

Finally, can the Minister explain why regulations are being brought before us that explicitly remove people’s existing rights when the Government gave a clear undertaking that this would not happen? Why are they not doing this openly and transparently via the immigration Bill, where we could have proper discussion and scrutiny?

It is very clear that the Government have been extremely careless of the very real impacts of the action they take on people’s lives. They talk of Brexit in the abstract, but they refuse to engage in the reality of the effects it would have on so many people. They use delegated legislation to casually remove rights, failing to give proper consideration or allow proper debate about the implications this will have not only on EU-plus nationals here but potentially on millions of British citizens living in EU 27 states, whom the Government seem to have abandoned without even a cursory consideration of what this might mean for them.