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Draft Recognition of Professional Qualifications (Amendment Etc.) (EU Exit) Regulations 2018
04 February 2019

The Committee consisted of the following Members:

Chair: Sir Gary Streeter

† Afriyie, Adam (Windsor) (Con)

† Clarke, Mr Simon (Middlesbrough South and East Cleveland) (Con)

† Drax, Richard (South Dorset) (Con)

† Flint, Caroline (Don Valley) (Lab)

† Harrington, Richard (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

† Harris, Rebecca (Lord Commissioner of Her Majesty's Treasury)

Jones, Graham P. (Hyndburn) (Lab)

† McCarthy, Kerry (Bristol East) (Lab)

† Mills, Nigel (Amber Valley) (Con)

Morris, Grahame (Easington) (Lab)

† O'Brien, Neil (Harborough) (Con)

† Onwurah, Chi (Newcastle upon Tyne Central) (Lab)

† Smith, Nick (Blaenau Gwent) (Lab)

† Tracey, Craig (North Warwickshire) (Con)

Twist, Liz (Blaydon) (Lab)

† Villiers, Theresa (Chipping Barnet) (Con)

† Whitford, Dr Philippa (Central Ayrshire) (SNP)

Sarah Rees, Committee Clerk

† attended the Committee

Sixth Delegated Legislation Committee

Monday 4 February 2019

[Sir Gary Streeter in the Chair]

Draft Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018

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I beg to move,

That the Committee has considered the draft Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018.

Before your elevation, Sir Gary, I used to say that it was an honour to serve under your chairmanship; now, I can say that it is an extreme honour.

The purpose of the regulations is to ensure that, in the event of the UK exiting the European Union without a withdrawal agreement, the system for the recognition of European economic area and Swiss professional qualifications in the UK, for the purpose of access to regulated professions, continues to function effectively, and that existing recognition decisions for EEA and Swiss professionals remain valid.

The effect is to create a system that retains the best aspects of the current system while providing regulators with more freedom to rigorously check the standard of qualifications prior to granting access to a profession. The regulations will provide certainty to individuals with recognised EU professional qualifications already working in the UK, and the businesses and public sector organisations employing them. For example, that includes approximately 32,000 secondary school teachers who have had their qualification recognised in the UK in the 10 years from 2008 to the end of 2017. Furthermore, this statutory instrument will ensure that the future supply of professionals into the UK in certain key sectors can be maintained. It makes changes to existing regulations using the powers conferred by section 8 of the European Union (Withdrawal) Act 2018.

Before I turn to the detail, I shall provide hon. Members with some relevant background on the 2005 EU directive, which sets out a reciprocal framework of rules for the recognition of professional qualifications across borders. It applies to EU member states, EEA and European Free Trade Association states, and Switzerland by virtue of being annexed to the EEA agreement and Swiss free movement of persons agreement.

The directive provides several routes for recognition of qualifications, including automatic and general systems for the purposes of establishment, and a mechanism for those who want to work on a temporary or occasional basis. The directive covers a large number and wide range of regulated professions, including teachers, lawyers, engineers, underwriters, analytical chemists and a plethora of others. It does not include, I believe, Members of Parliament, as that is not a recognised professional status—perfectly understandably, I might add.

The directive is implemented into UK law by a number of pieces of legislation including the European Union (Recognition of Professional Qualifications) Regulations 2015, the earlier European Communities (Recognition of Professional Qualifications) Regulations 2007 in respect of Switzerland, and a number of pieces of sector-specific legislation for certain professions.

Following our withdrawal from the EU, the directive will no longer apply to the UK and the domestic legislation implementing it would not operate effectively because it would place obligations on UK regulators that they would be unable to fulfil outside the EU, for example, the obligation on regulators under the directive to use the internal market information system—IMI—to process applications and exchange information. As the IMI is a European Commission service, the UK will no longer have access to it after leaving the EU and will not be able to process applications, even unilaterally, using the service. The regulations are therefore necessary to ensure that the domestic legislation underpinning the recognition system operates properly.

Let me set out the effect of the draft regulations in more detail. First, they will protect recognition decisions made before EU exit and will allow applications for recognition made before exit to be concluded after exit under the pre-exit rules, as far as possible. Secondly, they will enable professionals who have started offering services on a temporary or occasional basis before EU exit to complete this service provision. Thirdly, they will enable qualifications to be recognised in the future. The changes that we are making will allow us to retain a version of the general system for recognition, under which UK regulators will be required to recognise EEA and Swiss qualifications of an equivalent standard to UK qualifications in scope, content and level. They will provide certainty to professionals who are already working and living here and will ensure continuity and stability for UK businesses and public services.

Some things will change under the draft regulations, however. First, we are amending the scope of the existing regulations so that the basis of recognition will be determined not by the nationality of the applicant but by where the qualification was obtained, since it will no longer be appropriate to give preferential treatment to EEA and Swiss nationals once the UK is no longer part of the European Union. Secondly, our regulators will not be obliged to offer compensation measures and partial access to professions in circumstances in which EEA and Swiss qualifications are not deemed equivalent to UK qualifications. Thirdly, we are removing the obligation for UK regulators to offer EEA and Swiss professionals a mechanism for providing services on a temporary or occasional basis.

Finally, farriers and certain healthcare professionals, such as physiotherapists, will no longer be in the scope of the amended 2015 regulations; they will be covered instead by related sector-specific legislation. The draft regulations and the amended 2015 regulations do not apply to nurses, midwives, doctors, dentists, pharmacists, architects and veterinary surgeons, who are entitled to automatic recognition on the basis that their qualification meets the EU’s minimum training conditions. The system for the recognition of qualifications in those professions is currently governed by legislation for which other Departments are responsible, and the relevant Ministers are laying their own no-deal statutory instruments to amend legislation accordingly. The European Qualifications (Health and Social Care Professions) (Amendment etc.) (EU Exit) Regulations 2018 were considered in a Delegated Legislation Committee last week, for example.

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I should declare that I am a qualified chartered accountant and my wife is a pharmacist, so we may both be within the regulated professions.

How reciprocal a process does the Minister envisage? He mentioned that in some professions the UK regulator will have to accept that an overseas qualification is equivalent to a UK qualification. Is it possible that a perverse situation could arise in which we think a Cypriot qualification is okay for practising in the UK, but Cyprus does not agree that a UK qualification is sufficient for practising in Cyprus? Will he therefore encourage regulators to look at whether it works both ways? If we do not get reciprocal access to other markets, perhaps we should not be quite so generous in recognising their qualifications.

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If the Minister would prefer to reserve his answers to hon. Members’ questions until after the Opposition spokesperson’s speech, he is free to do so, but it is entirely up to him.

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I am happy to do that, Sir Gary; I think it is probably best.

The draft regulations are vital to maintaining the operability of the framework for recognition of professional qualifications and providing certainty to businesses and professionals. I am pleased that my hon. Friend the Member for Amber Valley is a chartered accountant, not a farrier or a member of any of the other professions outwith the regulations’ scope.

The impact of the draft regulations on businesses and the public sector will be minimal. To answer my hon. Friend’s question, at least in broad terms, we seek to ensure continuity where it makes sense to do so, in order that those who hold European qualifications can continue to come to the UK when they meet our standards and vice versa. Regulators will not need to make significant changes to their current systems. If they wish to do so and have the appropriate powers, they can choose to continue to offer mechanisms for compensation measures, partial access and temporary and occasional service provision; we are merely removing the obligation for them to do so.

I very much look forward to hearing what hon. Members have to say about the proposed changes.

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It is a pleasure to serve under your chairmanship, Sir Gary. I will not attempt to out-do the Minister, who is famous throughout the House for his courtesy and compliments, but it is a real honour to be in this Committee.

I am less happy about the fact that we are discussing a statutory instrument that would make provision for the regulatory framework after Brexit in the event that we crash out without a deal. On the many occasions that we have had these discussions so far, my Labour colleagues and I have spelled out our objections to this Government’s approach to secondary legislation. Many of my shadow ministerial colleagues have made clear that the volume and flow of European Union exit secondary legislation is deeply concerning for accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken. However, establishing a regulatory framework, for example, inevitably involves matters of judgment and raises questions about resourcing and capacity.

Secondary legislation ought to be used purely for technical, non-partisan, non-controversial changes, because of the limited accountability it allows. Instead, this Government continue to push through contentious legislation with high policy content via this vehicle. As legislators, we have to get it right. These draft regulations could represent real and substantive changes to the statute book. As such, they need proper, in-depth scrutiny. In that light, the Opposition put on record our deepest concerns that the process regarding these draft regulations is not as accessible, transparent or well-scrutinised as it should be.

This statutory instrument deals with what would happen in the event of a no-deal Brexit. Labour believes a no-deal Brexit would risk huge damage to our economy, jobs and living standards. The vote last week shows that a majority in Parliament agree. Labour has called on the Government to take no deal off the table. I welcome the regulations’ transitional provisions to ensure certainty for individuals who have already had their qualifications recognised and for those who have already submitted an application. The General Medical Council said:

“this SI provides us with the necessary transitional arrangements to avoid any legal vacuum for applications made or actions begun but not yet completed by 29 March 2019, thus providing legal certainty for both regulators and professionals during this time.”

As the Minister set out, the regulations amend the European Union (Recognition of Professional Qualifications) Regulations 2015, which currently apply only to EEA and Swiss nationals. After the UK leaves the EU, it will no longer be appropriate to retain preferential treatment for EEA and Swiss nationals, so the SI means that individuals from third countries will be treated the same as those from the EEA and Switzerland when recognising professional qualifications. It also makes the primary consideration the country where the qualification was obtained, not nationality; the amended regulations will apply to anyone who holds an EEA or Swiss qualification and will no longer apply to third-country qualifications held by EEA or Swiss nationals.

The 2005 directive, which the Minister referred to, is a central component of freedom of movement as it allows EEA and Swiss nationals to have their professional qualifications recognised in other EEA states and Switzerland, allowing professionals to work abroad. Qualifications including chartered certified accountant, chartered engineer, and chartered surveyor are all subject to a system that requires regulators to recognise qualifications if they are considered equivalent to the same or similar UK qualifications. If they are not, the regulator must offer compensation measures or partial access if feasible. The draft regulations remove those obligations, allowing regulators to decide for themselves the application process, whether to grant access for equivalent qualifications and whether to put in place any compensation measures.

I have been in contact with various professional associations, including the General Medical Council, the Law Society, the Institute of Chartered Accountants in England and Wales and the Engineering Council. I am pleased to report that the Government have been in consultation with them, too. The Engineering Council welcomed the draft regulations and said that

“taken as a whole, these provisions would allow the UK to maintain the flow of competent engineering professionals who wish to be recognised in the UK while providing realistic safeguards.”

Those associations broadly support these changes, although some flagged potential issues, which I will turn to in a moment.

First, I will make what may be a declaration of interest. Before I came to the House, I was a professional. I have a professional qualification as a chartered electrical engineer. In that capacity, I worked all over the world, including in the European Union but also in the United States, Nigeria and other countries. Engineers, as well as chemists, accountants, lawyers and other professionals, are often highly mobile. Being able to work abroad not only allows them to develop their careers and have exciting opportunities but benefits the UK when they return, bringing back skills, knowledge and networks. There are many British professionals—lawyers who advise clients in Brussels on European Union law or work on global investigations, for example—whose job involves criss-crossing the channel.

Although what regulators in other countries decide to do is beyond the scope of the draft regulations, giving regulators freedom to choose the regulation process and which qualifications are equivalent may lead to accusations of unfairness or to European regulators refusing to recognise British professional qualifications in retaliation. The Institute of Chartered Accountants in England and Wales warned me:

“Elements of the SI are open to interpretation. A UK regulator could refuse an EEA applicant by saying the EEA qualification is not equivalent in some way. There is a chance that EU members states will notice this and potentially do the same in their provisions for considering UK nationals/UK qualification holders.”

What discussions has the Minister had with EEA and Swiss regulators about the recognition of UK professional qualifications?

The UK benefits from having access to a wide pool of professionals from Europe and beyond, so I welcome the fact that the draft regulations would open up access to third-country professionals. Several British industries rely on access to professionals from Europe and across the world, and we must avoid having a shortage after we leave the European Union. The draft regulations give individual regulators the power to introduce their own application processes. It is vital that those processes do not become too difficult or expensive and leave us with a deficit of highly skilled workers.

If regulators are unable to secure co-operation with EEA and Swiss regulators, responsibility for obtaining relevant documents may fall to applicants. That would put an additional burden on applicants and may prolong and complicate the application process, potentially dissuading talented individuals with the skills we need from coming to work in the UK. What discussions has the Minister had with regulators about the ease of future recognition processes for applicants and the protection of certain professions, such as engineer, that currently are not protected in EU law but are protected in certain European countries? I do not advocate that; I just wonder whether he has considered it.

As the Minister mentioned, once we leave the EU we will lose access to the internal market information system—the IMI—and the alert mechanism, which enables regulators to exchange information about applications and qualifications, and notify other states of professional or criminal sanctions and of professionals whose activities have been restricted or prohibited. This statutory instrument encourages regulators to communicate voluntarily with EEA and Swiss regulators. Regulators will have to request documents confirming the applicant’s fitness to practise and professional standing. It is vital that good co-operation is secured among regulators so UK regulators have full access to all the information they need to determine whether a person is allowed to work in sensitive positions—for example, as a solicitor or accountant.

What discussions has the Minister had with EEA and Swiss regulators about their willingness to co-operate with UK regulators on the sharing of information and documents? Finally, what discussions has he had with EEA and Swiss regulators about their willingness to co-operate with UK regulators to notify them of an individual’s professional or criminal sanctions?

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I declare an interest: I am a breast cancer surgeon and my husband is a GP. Although this statutory instrument is not focused on health and health-related professions, a lot of the issues are similar. The benefits that we are talking about all evolved to allow freedom of movement. The problem is that trying to hang on to some of them as we—sadly—celebrate the loss of freedom of movement is quite difficult.

The hon. Gentleman opposite—I apologise; I do not know his constituency, and I have lost my glasses so I cannot even look it up—talked about reciprocity. That is what we have had; people have been able to move to the EU, whether they are in the medical profession or one of the other professions, and EU citizens have similarly been able to come here.

In fact, we have a great need for people to come here. We have workforce shortages in many professions, including medicine, engineering and other STEM areas. We therefore do not want barriers. The burden may fall on individuals, because regulators will find it harder to recognise qualifications, to prove fitness to practise and to prove that someone has no sanction outstanding. The danger is that people who are mobile in their profession will simply choose to go somewhere else, because the workforce shortages are Europe-wide.

I welcome the fact that those who are already here will not face any loss of their qualification, that for those who have already applied, the process will go on to complete, and that those who come here on a transitory or occasional basis have a year in which they can still continue, but what will we do afterwards? In many professions and industries, people come for quite short periods of time to work in the UK, and vice versa. The danger is that we will make it difficult for people at the top end of the medical profession, the oil industry and the construction industry.

My biggest concern is about the loss of the IMI, which will make the processing more difficult, and of the alert mechanism. From a medical point of view, the alert mechanism has been critical, but there are other professions in which it is important to know that someone has sanctions against them before they are recognised. We are losing those benefits of being in Europe. I echo the comments of the hon. Member for Newcastle upon Tyne Central: we are having to rush this because of the threat of leaving the EU without any kind of deal. I abhor that. That is not how it should be done, and the Government should take it off the table.

In Scotland, we need people in general, and we certainly need people from the professions. Anything that makes it harder for our industries or public services to recruit and retain people will make life more difficult.

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I have a few questions for the Minister on some of the practicalities. I welcome the statutory instrument and think it eminently sensible, but even those of us who have more concerns about free movement than the hon. Member for Central Ayrshire accept that we need skilled people to come here, and if they can meet whatever immigration rules we put in place we should enable that and not try to make it harder. We want it to be reciprocal, so that people who have trained here and have good qualifications have the chance to work abroad if that is their desire.

My first question is: if we end up with a clean Brexit at the end of March—I know the Minister is not totally keen on that as an idea—what happens to some of those qualifications and their recognition at that point? Do we expect regulators to have gone through their assessment and published which EEA qualifications meet the requirements in the UK by 29 March, or will there be a period during which we can assume that whatever has been happening until that point will continue, so that if someone wants to come here on 30 March but has not already made an application their qualification will still be recognised, at least for a run-on period? In previous Delegated Legislation Committees we have been told that we will effectively honour the two-year transition period. Is that the case here as well?

My second questions is: what happens when we have different bodies doing the regulatory function in different parts of the UK? I mentioned that I am a chartered accountant. The Institute of Chartered Accountants in England and Wales does England and Wales and there is a Scottish institute that does Scotland. Might we get a perverse position in which we would recognise a Maltese accounting qualification in Scotland and not in England and Wales? Could someone go and work in Edinburgh but not come to work in London? That does not seem to be a sensible situation. Will there be a requirement for the regulators to work together and have a joint approach?

My third question is, are there separate provisions for Irish qualifications? Irish nationals will still have much more generous rights to come and work in the UK, without a visa or permission, so will we have a more blanket recognition of Irish qualifications, which are generally quite similar to ours, or will they be treated in the same way as any other EEA qualification?

Finally, are we still allowed to impose language requirements for certain sensitive professions? I know we are not dealing with medical ones here. Regulation 41 seems to suggest that, so can the Minister confirm that if someone is adequately qualified but does not have adequate English we perhaps do not have to let them come here and start working straightaway?

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There is quite a bit to be going on with; I shall do my best.

First, I must politely not accept the shadow Minister’s view that this is the wrong vehicle for the process. I perceive it as necessary; there are many SIs like it. I accept the hon. Lady’s fundamental point, but on other Committees we have discussed the subject and deem this to be the only available vehicle to achieve our objective which, as she and other speakers mentioned, is to have as much continuity as possible, given that we are leaving the European Union.

I agree entirely with what the shadow Minister said about a hard Brexit—crashing out—causing huge damage to the economy and to living standards, and I hope that she and her colleagues will consider that and vote for the Prime Minister’s deal when it comes back to the House, because most of it is in the areas that she, I and others have talked about. I do not accept the view of my hon. Friend the Member for Amber Valley that that would be a clean Brexit. I think it would be the dirtiest of Brexits. I am in favour of a clean one: a sensible transition period and then a sensible arrangement, so that for most of the business we do it is business as usual. That is what I call a clean Brexit. On the valid point my hon. Friend made about reciprocal rights, we are unilaterally recognising EEA and Swiss qualifications to mitigate the immediate impact of a no-deal exit, because it ensures the very continuity that anyone would want.

The shadow Minister made some good points about how much this country has benefited from people coming not just from the European Union but from all over the world, and vice versa—many people go to Switzerland and other countries to work, in the way that they should. What we have suggested at least means that we will have a system in place on exit day that recognises professional qualifications and that retains the essential parts of the current situation.

On meetings with the regulators about future recognition processes, I have not met the regulators—I do not want to give the impression that I have—but my officials have met them regularly. We reached the conclusion, as the hon. Member for Newcastle upon Tyne Central said, that on the whole, they support the changes. None of them anticipate extensive future burdens on applicants, which would be a very bad part of the system if they were to happen.

That also applies to our engagement with the devolved Administrations through regular meetings. The Department has had technical discussions about the proposed amendments to the regulations and how the policy approach and proposed amendments could have an impact on service provision in the devolved nations. I would not like any Committee member to think that that had been forgotten about or that we were just telling Edinburgh, or anywhere else for that matter, “This is what we are doing.” I hope that that has been fed back to the hon. Member for Central Ayrshire, who has excellent connections with the Scottish Government. We have not picked up anything adverse and I am sure she would be the first to bring something to our attention.

On the point about our professionals not automatically being able to work in the EU or EEA afterwards, because obviously we are giving unilateral rights, the European Commission has previously published guidance on that. Decisions made by another EU member state before exit day about the recognition of our professionals will not be affected by our withdrawal from the EU, but the Commission has advised holders of UK qualifications living in the EU to obtain recognition in an EU27 member state before exit. The Commission will ask member states to consider pending applications made by UK nationals before exit day as if we were still a member state.

In a no-deal scenario, the recognition of qualifications will be assessed under host member state rules. In that scenario, after exit day, our nationals will not be able to provide temporary and occasional professional services as they previously could under the directive, but that will be subject to their host members state’s laws and regulatory frameworks.

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Just to clarify, given that British citizens living in the European Union will be required to regularise their professional qualifications, does the Minister envisage that there could be circumstances in which they would not be able to continue working without doing so?

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I envisage that there could be those circumstances, depending on the individual EU member state, as I explained, but I have every reason to believe that there will not be. The only way that that could not happen is for there to be no crashing out and for there to be a proper arrangement, which I am sure everybody wants to be the case. The hon. Lady has made valid point; I would not say it was a ridiculous point.

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Have British citizens been given the advice that they should apply to have their UK qualification recognised before the end of March to ensure that they do not run into trouble?

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I am not sure of the answer to that, so I will drop the hon. Lady a note about it tomorrow, if that is acceptable. If she wishes to discuss it further, I would be happy to do so.

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It would be desirable if the Minister could ask his officials to look at the potential for those circumstances and the two or three areas that would need to follow, which would be to identify where UK citizens working in the European Union might be and to alert them to that potential, and to do some kind of impact assessment—or at least to write to me to say whether he considers that that needs to be done.

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An off-the-cuff response—I know one should not give off-the-cuff responses—would be that given the current European Union regulations, and given that there is not a registration procedure at the moment, I do not know how we would know which UK nationals were working abroad. However, that is just an off-the-cuff answer, and the hon. Lady is probably going to tell me that I am completely wrong.

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I would never put it quite like that. What I would say is that my concern is not to identify the particular individuals, but the professions and the circumstances in which this situation might occur.

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I apologise for my misunderstanding. I understand exactly what the hon. Lady is saying, and I will happily clarify that issue for her in the next day or so, if that is acceptable.

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I totally understand that the whole point of freedom of movement is that we have no idea who is here and who is in Europe, but I suggest that when taking this issue forward, the Minister might consider publicity, whether through social media or alerting British consulates and embassies in the host countries. With so little time to go, it is really important that people are given warning.

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That is a sensible suggestion. However, all of this information was in the technical notices that were distributed, I think, in October last year, although one might say that people do not read them. There was a lot of information in those notices, but I will look into how we can make sure that there is an easily acceptable and consumer-friendly way of getting that information. I accept that technical notices are somewhat technical, and might be quite dry.

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Will the Minister give way?

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Yes; this is very unusual, but I would be delighted.

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Does the Minister know, through the various professional organisations that his officials may have been in touch with, how many UK citizens are working as professionals in the European Union at the moment whose role may be affected if we crash out of the EU?

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I do not know whether my officials have that information, but I will communicate with the hon. Gentleman directly. I must say that he and I are probably quite unique on this Committee in not explaining that we ourselves have professional qualifications. I am certainly in that position, and I might be doing the shadow Whip a disservice, but I think he is in the same boat as me. I have learned a lot about professional services in the course of this SI and others, but I cannot answer the hon. Gentleman’s question. I will make sure that it is answered in the next couple of days.

I have done my best to answer the questions I can, and hon. Members know that I will be very approachable afterwards if they wish to take up some of these issues. With that in mind, I beg the Committee to accept this SI.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018.

Committee rose.