Published:  22nd October 2019

Speaking for the Government in yesterday’s debate on the Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019, Business Minister Nadhim Zahawi gave reassurances that the changes proposed will not impact on EU citizens’ rights and will not impose additional restrictions on EU nationals.

He said:

“First, with respect to the practical impact of the regulations, they do not impose any additional restrictions on EU nationals or EU-based businesses, or on the nationals and businesses of the countries with associated agreements, at the point at which we exit the EU.”

“[T]he rights disapplied by the regulations should not be confused with the citizens’ rights of EU citizens currently resident in the UK, which are being protected separately. The UK’s guarantee to EU citizens is that those who are resident in the UK by exit day will still be able to work, study and access benefits and services, whatever the scenario. This is separate to, unrelated to and unaffected by these regulations.”

“Thirdly, with regard to immigration, these regulations will not in themselves have any impact on the immigration regime applying to EEA, Turkish and Swiss nationals in the UK. The Government have announced that free movement as it stands under EU law will end on 31 October if we leave the EU without a deal. A new points-based immigration system will be introduced from January 2021. Until then, much of the free movement migration framework will remain until the UK Parliament passes legislation to repeal the Immigration (European Economic Area) Regulations 2016.”

Minister Zahawi also emphasised the Government’s position that the regulations which disapply certain treaty rights “do not represent a significant policy change”.

He said:

“The regulations do not impose any new restrictions on EU, EEA, EFTA, Swiss or Turkish nationals or on EU, EEA, EFTA, Swiss or Turkish-based businesses at the point at which we exit the EU, and we do not expect disapplying these rights to have a direct impact on the ability of EU, EEA, EFTA, Swiss or Turkish nationals to establish or provide services.”

Several important questions and concerns remain.

Despite these assurances, the underlying legal basis for the Government’s contention that the regulations do not represent either a significant change in policy or a change to rights remains unclear.

As PLP has pointed out, changes to the law of this nature should be made by primary legislation and be subject to full parliamentary scrutiny, rather than by delegated legislation.

During the passage of the Withdrawal Act through Parliament, the Government was clear that it was not its intention to use the Henry VIII power in section 8 as “a vehicle for policy changes”. For example, in introducing the relevant White Paper to Parliament, the then Secretary of State for Exiting the European Union said that it “almost goes without saying” that “no change should be made to rights through delegated legislation”.

However, Minister Zahawi himself acknowledged, in opening the debate, that the Regulations disapply directly effective rights contained in Articles 49, 56 and 57 of the Treaty on the Functioning of the European Union (TFEU) as well as associated provisions relating to EEA, Swiss and Turkish nationals, thus removing the right of self-employed EU, EEA, Swiss and Turkish citizens and business owners to equal treatment on the grounds of nationality, and their ability to enforce their right not to be discriminated against in the delivery of services or in owning or managing businesses.  We consider this to amount to a significant reduction in rights and policy change.

Whilst the Minister sought to reassure the Committee that “these regulations will not in themselves have any impact on the immigration regime applying to EEA, Turkish and Swiss nationals in the UK”, PLP remains concerned that these regulations may affect the underlying basis of this group’s lawful residence, which depends on their exercise of rights to freedom of establishment and to provide services. In particular, Regulation 4(1) of the Immigration (EEA) Regulations 2016 defines a ‘self-employed person’ as “a person who is established in the United Kingdom in order to pursue activity as a self-employed person in accordance with Article 49 of the Treaty on the Functioning of the European Union”.

The Government still needs to explain how a self-employed person will be able to rely on the rights in the 2016 Regulations if Article 49 has been disapplied. 

PLP’s chief concerns remain that:

  • Secondary, rather than primary, legislation is being used to make significant policy changes and to disapply important rights
  • The changes may impact on immigration rights where these depend on the exercise of the rights being repealed, and so ought to be included in the Immigration Bill
  • The regulations go beyond the powers conferred on Ministers by the Henry VIII power in section 8 of the Withdrawal Act because it remains unclear that there would be any deficiency or failure to operate effectively in retained EU law without these Regulations, and
  • There has been no impact assessment before laying the Regulations despite the obvious impact on businesses and individuals.

We urge the Government to publish the full legal basis upon which it contends that the Regulations will have no practical impact and do not represent a significant policy change.