Motion to Regret
To resolve that this House regrets the lack of detailed information contained in the explanatory memorandum on the Accession (Immigration and Worker Registration) (Revocation, Savings and Consequential Provisions) Regulations 2011 (SI 2011/544).
My Lords, the regulations before the House tonight revoke the Accession (Immigration and Worker Registration) Regulations 2004, which regulate access to the UK labour market by nationals of eight of the states that acceded to the European Union in 2004. This is required because the treaty governing the accession of those states to the EU provided that existing member states may restrict such access to the labour market for up to seven years following accession, and this period expires on 30 April 2011.
The UK signed up to the right to the free movement of people within the EU, as codified in the EU directive 2004/38/EC, which included provision for free movement of workers within the territory of member states and the European Economic Area. Since the expansion of the EU on 1 May 2004, the UK has accepted immigrants from central and eastern Europe, Malta and Cyprus. There are restrictions on the benefits that members of those countries can claim, which are covered by the worker registration scheme. The significance of that is that the consequence of revoking the regulations, as we are doing tonight, is the closure of the worker registration scheme.
The scheme was introduced in the UK as a transitional measure to monitor accession states nationals’ access to the UK labour market. The scheme did not place any restrictions on the access of nationals of accession states to the labour market in terms of numerical ceilings, resident labour market test or a skills test, but it did make employment subject to a requirement that workers register their employment under the scheme within one month of starting work. Workers ceased to be subject to the requirement to register after 12 months of continuous employment in the UK in accordance with the 2004 regulations.
The reason that I have sought a debate on the regulations is to seek from the Government an assessment of their impact. This matter was raised by the Merits Committee in its 26th report. In that report, the committee drew this statutory instrument to the special attention of the House. The Explanatory Memorandum to the SI states:
“The impact on business, charities or voluntary bodies is negligible. The lifting of the registration requirement imposes no additional costs on business, charities or voluntary bodies and means that employers will no longer need to be compliant with the requirement to ensure that an accession State worker requiring registration has registered their employment … The impact on the public sector is that the UK Border Agency will no longer incur the cost of administering the Worker Registration Scheme. This impact is negligible for the public sector because these costs were recovered though the fee charged for applications”.
We are informed in the Explanatory Memorandum that no impact assessment has been prepared.
The Explanatory Memorandum is silent on assessing the impact of the termination of the worker registration scheme on the benefits system. That is what particularly caught the eye of the Merits Committee, to which I pay tribute for the thoroughness of its work and the help that it gives Members of your Lordships' House in understanding what are sometimes the mysteries of statutory instruments. It will be seen from the 26th report that the Merits Committee followed that comment up in correspondence with the Department for Work and Pensions. That response is helpfully published as Appendix 1 to the 26th report, which states that the DWP says that,
“over 11,000 claims from nationals of the eight countries for income-based Job Seeker’s Allowance were refused last year, but which may have succeeded with the end of the WRS and the transitional arrangements under the Accession Treaty”.
The Merits Committee informs us that,
“DWP say they are still working on the potential costs following the end of the WRS … DWP also say that rules are in place to prevent abuse and they have an expert team scrutinising the quality and consistency of decision making on claims from nationals of the eight countries”.
As the Merits Committee comments, it is disappointing that the Department for Work and Pensions is still working on the potential costs following the end of the worker registration scheme.
This debate is an opportunity, first, to encourage the noble Baroness’s department to be more forthcoming in its impact assessments in future. Secondly, I hope that the noble Baroness will update us and the House on whether the DWP has made any further progress in its work in analysing the potential costs following the end of the worker registration scheme. I beg to move.
My Lords, this statutory instrument was drawn to the attention of the House because of the public policy likely to be of interest to it, not because of a defective Explanatory Memorandum. It is not so long ago that we had no Explanatory Memoranda to orders, only Explanatory Notes, which still exist but which are much narrower, technical and often, I must say, opaque. It has only been since 2004, when the Merits Committee was formed, that we have had this type of assistance. I should declare that I am a member of the Merits Committee at present. I should like to take this opportunity to congratulate the committee's advisers, Jane White and Grant Oliver, who pursue with a quiet doggedness issues which arise on too many of the literally thousands of SIs which come before us: things such as lack of reporting on the outcome of consultation, and very often the late presentation of an order so that there is no proper time to investigate before it comes into force.
It should go without saying—although I had better say it—that accountability and access to what the Government do is of the utmost importance. Transparency may be a little overworked as a term, but the concept is not. Information must be available and accessible, not least to avoid any suggestion that what we have—this is not my term, although I wish it was—is not evidence-based policy but policy-based evidence. The Explanatory Memorandum is important, because it is a public document, but I think that this Explanatory Memorandum is clear. It is detailed within its own terms. Perhaps it would be good to have an impact assessment to accompany statutory instruments, but, as things are at the moment, that is not usual.
My greater concern is the usual—the importance of joining up different parts of government. The SI comes from the Home Office; it was announced by the noble Baroness. Her statement dealt with the procedures affecting people coming into the UK from the accession states, not the wider impact. The report notes with disappointment that the DWP has not provided an estimate of associated costs. It had seven years to do so. I cannot resist the basic arithmetic, which tells us when six of those seven years were.
The noble Lord has raised a number of interesting questions, and I will, to an extent, repeat them. Given the time that there has been, why have the Government not sought to develop a more accurate measure of the likely numbers? The noble Lord referred to the 11,000—it may be almost 12,000—claims rejected in the past calendar year which apparently would have succeeded with the ending of the transitional arrangements. How confident are the Government that those figures are close to being accurate? How will they seek to verify them? Newspaper articles use the figure of more than 100,000 migrants. If I were to ask the Minister whether she knows where the newspapers got the figure of 100,000 from, that would probably be an unfair question, because we all know that newspapers are not necessarily the most accurate reporters.
Have the Government worked out the cost of the increased access to benefits? It would be helpful if the Minister would say a little about the Jobcentre Plus team to which the noble Lord referred. Is it dealing with just these accession state nationals? I hope not, as I hope this is all in a wider context. I also hope that it is not just the DWP but, for instance, BIS or Communities that have considered the implications of this change. I am not suggesting that they have not.
The point of the transitional arrangements was to monitor accession state nationals’ access to the UK labour market. We are told that by paragraph 7(2) of the Explanatory Memorandum. What was the result?
The best argument for a full Explanatory Memorandum dealing with the impacts is yesterday’s Daily Express, whose front page screamed, “Migrants Flood Back to Britain”. I know the reluctance to let the facts get in the way of a good story, but perhaps fuller Explanatory Memoranda on this sort of issue would assist in ensuring accuracy rather than raising the temperature so unnecessarily and unpleasantly.
My Lords, I thank the two noble Lords who have spoken. Let me try to explain why the Government limited themselves in the Explanatory Memorandum to the points that it made. It was not out of a desire to deny Parliament legitimate information. It had much more to do with the inherent difficulty of getting reliable figures into the public domain. I will try to explain why we were cautious.
There are two aspects to this. The first is what the future pattern of migration to this country is likely to be and the second is the consequences for the benefits budget. My first point is about migration. Noble Lords will know from experience that making predictions about levels of migration from new member states is a fairly precarious activity. The Benches opposite are abundantly aware that previous efforts to put numbers on expected arrivals after May 2004 were not entirely successful. Indeed, they subsequently chose not to estimate arrivals from Bulgaria and Romania when they joined the EU on 1 January. I have sympathy with that because of the previous experience. We all recall that it was estimated that 13,000 A8 nationals would migrate to the UK in 2004. There is genuine difficulty in this.
However, there are some points that can usefully be made. First, there is the position of A8 nationals who are already here. One effect of the worker registration scheme has been that those entering the UK labour market have generally been prevented from having immediate access to out-of-work benefits if they are seeking work or become unemployed. It is also reasonable to assume that a substantial proportion of those who have arrived since 2004 were already no longer subject to the restrictions because once they have worked here legally for more than 12 months they are no longer subject to the WRS.
The number of A8 workers who have registered under the WRS since May 2004 is approximately 1.1 million. The WRS does not record how many of those who have registered have subsequently left the UK, but statistics from the Labour Force Survey suggest that the number of A8 nationals in employment in the UK in the three months to the end of 2010 was 615,000. It can be assumed that a fraction of that number, but we do not know how many, are A8 workers who have already worked legally and continuously in the UK for more than 12 months and so are not subject to the WRS and therefore the termination makes no difference to their status.
What is more difficult to predict is the extent to which we may experience more or less migration from A8 countries after 30 April 2011. While the Labour Force Survey provides us with some information on the stock of A8 migrants to the UK, it does not tell us about flows over time. The general trend indicated by the International Passenger Survey estimate of long-term migration from A8 countries, which was published by the Office for National Statistics last year, is that immigration levels steadily fell during 2008 and 2009 and then levelled off while numbers of A8 nationals emigrating from the UK rose sharply in 2008 before exits fell off. The result is that net migration from A8 countries appears to have been positive, but not particularly strongly, over the past year.
What is likely to be the position in the future? The position after 30 April may reinforce the trend, but we simply do not know. There are a number of reasons for that. We do not know about perceptions abroad of job prospects in the UK, and we do know that, as has been demonstrated by authorities such as the World Bank, on the whole migrants come here for employment, not for benefits. We do not know about job prospects in the UK or, more importantly, the effect of other countries now having to lift their very restrictive provisions relating to A8 migrants. As we know, they all have to lift them, and some of the countries that had the greatest restrictions are geographically pretty close to A8 countries. I would particularly name Germany. Germany will no longer be able to maintain its restrictions on labour market access, and A8 migrants who might otherwise come to the UK may now chose to go there. That is a material consideration. The changed position may also influence the emigration decisions of those already here. The relative availability of work could be a factor, as could relative exchange rates. If you think through the implications of those things, employment in the German market probably looks quite attractive.
There will be some who have no intention of seeking work, and they may indeed, and this is one of the worries, try to exploit the changed position in terms of access to benefits. It is not on the whole the analysis of why people come here, but it is a danger. That is why we have rules in place to prevent the abuse of the benefits system and to prevent benefits tourism. We are committed to maintaining the security and integrity of the benefits system to ensure that taxpayers’ money is spent appropriately. Claimants can access income-related benefits only if they have a right to reside here and are habitually resident.
How far the lifting of the worker registration scheme will affect the benefits system is a complex question. I want to spell out why it is. This is unashamedly complex so I beg your Lordships’ indulgence in listening carefully. It is difficult to arrive at a reliable estimate. We are unwilling to mislead by supplying estimates that are falsified by outcomes. In order to produce a reliable forecast for the cost to the benefit system after 1 May 2011, the Government would need to have forecasts of migration on which they can rely. I have just pointed out why there are some real difficulties with that.
As to actual costs—this is where it gets complex—the DWP does not generally record the nationality of those to whom benefits are paid. Indeed, there is a data protection limitation on so doing, which arose when HMRC was recording nationality and a number of welfare groups protested about the irrelevance of that criterion for access to benefits. HMRC and DWP accepted that position and nationality is no longer recorded. However, we are not entirely without information about nationality because the way that claims are assessed means that note is taken at the point of application—for clerical purposes only, not for administration and therefore not subsequently recorded—in order to get the claims into the right channel. That channel goes to the office in Wick, which deals with the claims from A8 and A2 countries. It is also partly for the purposes of ensuring that these claims are proper ones. As a result of the numbers being collected in that way, it is possible to have some information regarding nationality.
Figures have also been published by the Home Office in its quarterly Control of Immigration statistics. My noble friend asked whether we could rely on the figure of 11,000 plus. That is a factual figure. It is not an estimate. Let me say straight away that the figure of 100,000 is one we do not recognise and do not know where it has come from. It seems to have been conjured out of the air. We do not believe that it represents anything like the likely outcome, but we have been very cautious about making statements which are going to be falsified about what the future trend is likely to be.
From the number of claims disallowed in the past year, it might be argued that it is possible to produce an estimate of the cost to the benefit system of closing the WRS. If you take that estimate, the additional cost would have been about £30 million, which represents about 0.1 per cent of total expenditure on the benefits concerned. The reason that we are very reluctant to use that figure is that it is a figure that relates to the past. It is a retrospective figure. For the reasons I have tried to set out, relating to our ignorance about the likely flow of migrants and our inability to know exactly how many of those would be claimants, we are very reluctant to base any projection on those figures. It is for those reasons—and not for any unwillingness to inform either House of the likely outcome—that the DWP was so cautious and why the Home Office thought that it was right to be cautious.
My final point is that EEA nationals who are neither in work nor seeking work are generally not entitled to income-related benefits. They have to be self-sufficient while they remain in the UK, and they must have sufficient resources to support themselves and their family members to avoid being a burden on the state. That is another reason why, on the whole, we do not believe that the impact will be all that great. In short, the picture is complex, which means that any assessment of the impact of A8 migration after 30 April is likely to be speculative and could well be unhelpful.
In the light of my explanations, particularly of the difficulty in attempting to quantify uncertain migrant flows and demand for benefits and thus the Government’s unwillingness to mislead the House with information that could appear to be helpful but that could turn out to have a spurious solidity, I hope that the noble Lord will not press the Motion.
My Lords, I am very glad to respond to this short debate tonight.
I think the noble Baroness, Lady Hamwee, is absolutely right about the powerful help that we receive from the publication of Explanatory Memorandums. She will be aware that I was the first chairman of the Merits Select Committee. When we first met, relying simply on Explanatory Notes proved very insufficient, so the publications of EMs for all statutory instruments has been very helpful. I very much agree with her comments about the argument for very full Explanatory Memorandums. I certainly support that, and I certainly endorse her comments about the work of the Merits Select Committee. It is very difficult for Members of this House to scrutinise statutory instruments properly without the kind of help that we receive from the Select Committee. I am very grateful to it for the work that it does, and I sympathise with the noble Baroness for the no doubt weekly delivery of statutory instruments that have to be read.
At the end of her speech, the noble Baroness referred to six out of seven years, the implication being that if the DWP had had seven years I ought to accept responsibility for six-sevenths of the failure to produce the figures. It is, of course, in the final year that one expects most of the work to be done, which falls under different management.
I am grateful to the noble Baroness, Lady Neville-Jones, for explaining the difficulty in achieving reliable budget figures. I understand the particular challenges that face the DWP, particularly in the light of the data protection issues that she mentioned, and I certainly fully accept the complexity of these matters, but I think that the Explanatory Memorandum would have benefited from the kind of explanation that she gave tonight. The problem is that the EM was silent; paragraph 10(2) simply describes the impact on the public sector as negligible. It would have been helpful if reference had been made to the potential cost of the benefits, and it would have been entirely acceptable to have said that it was not possible at this point to quantify that cost for the reasons that the noble Baroness gave.
I hope that this debate has been helpful and that when the Home Office comes with further SIs, as no doubt it will—it always does—it takes that particular point to heart. I am glad to have raised the matters contained in this statutory instrument tonight, and I beg leave to withdraw the Motion.