Considered in Grand Committee
That the Grand Committee do consider the Architects Act 1997 (Amendment) (EU Exit) Regulations 2019.
My Lords, these regulations were laid before both Houses on 18 February 2019. They are part of the Government’s programme of legislation to ensure that if the UK leaves the EU without a deal and an implementation period, there continues to be a functioning legislative and regulatory regime.
Leaving the EU with a deal remains the Government’s top priority. This has not changed but the responsible thing to do is to accelerate no-deal preparations to ensure that the country is prepared for every eventuality. These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal deficiencies in retained EU law to reflect that the UK will no longer be an EU member state after exit day. Our architectural sector is a global leader and plays a significant role in the British economy, with an export surplus of £437 million in 2015 and involvement in key global projects such as the Neues Museum in Berlin and the Smithsonian National Museum of African American History & Culture in Washington DC.
I trust that noble Lords will allow me to provide a brief overview of how the system works at present. The mutual recognition of professional qualifications directive enables EEA nationals to have certain qualifications recognised in another member state. This includes the recognition of suitably qualified architects. This is a reciprocal arrangement, allowing UK and other EEA nationals the opportunity easily to register to practice across Europe and UK practices to recruit the best European talent. The Architects Act 1997 sets out the specific procedures for registering architects in the United Kingdom. The recognition of qualifications of EEA applicants is carried out by the competent authority, the Architects Registration Board, an arm’s-length body of my department.
There are currently three routes to recognition for an EEA architect wishing to register in the United Kingdom. The main route to recognition in the United Kingdom for an EEA-national architect is through an automatic recognition system. To qualify for automatic recognition, an EEA national needs to meet three criteria. They must have an approved qualification—that is, one listed in Annexe V of the EU’s mutual recognition of professional qualifications directive—access to the profession of architect in an EEA member state and a statement from their home competent authority confirming that they are fit to practice.
A second route, known as general systems, provides recognition for EEA nationals who do not have an approved qualification. General systems allows EEAs national to map their qualification and experience against UK standards with the Architects Registration Board. An applicant is offered compensation measures, that is, the opportunity to undertake additional training to make up any differences in qualification. This is a long and costly process, which on average only four people pursue annually.
The third route facilitates the temporary or occasional provision of service. This allows EEA professionals to work in the United Kingdom in a regulated profession on a temporary basis while remaining established in their home state. Typically, fewer than 20 EEA architects pursue this option at any one time.
If the UK leaves the EU without a deal, the mutual recognition of professional qualifications directive will no longer apply in the United Kingdom. This statutory instrument ensures that UK architect practices can continue to recruit the best European talent and maintain their global reputation as world leaders in the field of architecture.
The policy intention is to provide the sector with confidence that almost all applicants can register in the same way after exit day as they do currently. This is the approach favoured by the sector, which recognises the skills brought by EEA architects as contributing positively to the UK’s reputation as a world leader. The instrument also allows applications made before exit day to be concluded under the current system as far as possible. For future applications after EU exit in a no-deal scenario, an individual holding an approved qualification will be able to join the UK register of architects if they have access to the profession of architect in their home state. The instrument will achieve this by freezing the current list of approved qualifications in the EU’s mutual recognition of professional qualifications directive. This approach will preserve access for UK practices to EEA-qualified architects. This process will be open to anyone with an EEA qualification and access to the profession in the corresponding EEA state, regardless of citizenship. Although temporary, this approach will provide continuity to the sector in the immediate period after we leave the EU with no deal and will be reviewed after exit.
We will remove general systems as a route to registration—noble Lords will recall that this is the currently the second route for qualification, but only four or five people pursue it in any one year—as it is a long and costly process which is not utilised often. It places a significant unnecessary burden on individuals and the Architects Registration Board. Therefore applicants without an approved qualification, including applicants who would have previously qualified for acquired rights, will now be able to pursue the prescribed exam route and undertake further examinations and periods of study to allow registration. This is the route currently utilised by third-country nationals.
We will encourage the regulator, the Architects Registration Board, to maintain its existing effective relationships with other EEA competent authorities. The instrument provides a legal basis for the ARB to continue communicating with other EEA competent authorities to facilitate recognition decisions, ensuring that it can verify that the applicant meets the UK’s high standard of competence.
This instrument places a requirement on the applicant to obtain the relevant information from their home competent authority, should the Architects Registration Board not be able to secure it. This is because currently the Architects Registration Board facilitates information sharing through the EU internal market information system. Without a deal we cannot be confident that the Architects Registration Board will continue to have access to this important information-sharing system. The instrument will remove the right of temporary and occasional provision of services as without guaranteed access to information systems and an agreed process for reciprocation, this route becomes unwieldy and of less value. This will have minimal impact on the sector as only 12 people are currently practising on that basis. Historically, fewer than 20 people have practised as an architect in the UK on a temporary and occasional basis at any one time.
Our overall approach to these amendments is in line with the policy and legal intent of the withdrawal Act and enacts the policy that the Government set out in a guidance document in January 2019. These regulations serve a very specific purpose: to prioritise stability and certainty if the United Kingdom leaves the EU without a deal or an implementation period. The regulations will ensure that the UK continues to have access to top European talent after we have left the EU, thereby helping to maintain the UK’s reputation as a global leader in architectural services. Thereafter, they provide a stable basis for Parliament to change the law where it is in the UK’s best interests to do so.
This instrument is necessary to ensure that the Architects Act continues to function appropriately if the UK leaves the EU without a deal and an implementation period. I hope that noble Lords will join me in supporting the draft regulations. I beg to move.
My Lords, I thank the Minister for his explanation. At present, one in six architects in the UK IS from the EU 27. Indeed, the Royal Institute of British Architects estimates that in London and the south-east the proportion is as high as a quarter. Many are employed by large firms with international portfolios of work, particularly on big infrastructure and construction projects such as airports. The contribution of EU 27 architects is not just numerical; it also relates to cultural, language and specialist skills, such as interior design or acoustics, which give high added value to the UK’s capacity to export its architectural services worldwide. Retaining access to EU 27 architects will therefore be very important to the continued prosperity of the architectural services export sector, which depends on having cosmopolitan skills available to deploy in designing schemes that will be built right across the world. One estimate is that this generates around £2 billion of export earnings a year. In addition, there are EU 27 architects resident abroad who are employed on UK building projects. Without them, work would be delayed and the industry’s capacity severely reduced.
This statutory instrument at least recognises that there is a looming problem. It could be said to be making the best of a bad job by attempting to continue ready access for qualified architects from the rest of Europe to the UK. However, paragraph 2.10 of the Explanatory Memorandum relates to individuals’ ability to come to the UK because they will be subject to Her Majesty’s Government’s immigration policy. In other words, first, there will be an income limit; secondly, there will be access only via an employer’s application and payment of an annual fee; and, thirdly, there will be no right to move from job to job. That last point is particularly relevant in this sector, where particular expertise may be needed only for a short time on any one project and it would be routine to move on to another firm with a similar project at the right stage for the exercise of a specialism. There is serious concern within the construction industry that the Government do not acknowledge the importance of the sector in delivering every other policy objective of homes, capital investment in the NHS and capital investment in education, nor do they seem to understand the key role that migrants at every skill level of the industry play in delivering the key outcomes that the Government want.
I have three questions for the Minister. First, does he recognise that no deal puts at risk not just the delivery of key government policy objectives in many fields but will undermine the export potential of a flourishing architectural services sector? Secondly, what assessment have the Government made of the median salary paid to EU 27 architects in the UK, and what is his department’s estimate of the reduction in numbers of architects coming to the UK as a consequence of this imposition of the universal immigration salary cap on this group?
Thirdly, will he look again at why the Government have decided to end the right to an individualised skills assessment for those coming from the EU 27 who may not have fully completed their accreditation? That is known as general systems, as set out in paragraph 2.12 of the Explanatory Memorandum. This has the appearance of pettiness, cutting out a route for a minority of potential employees for no good reason and simply souring the atmosphere further. I hope the Government understand that what may appear to be a short and simple statutory instrument in relation to architects could actually have profound implications for the international status and competitiveness of the architectural industry.
My Lords, I declare an interest as an honorary fellow of the RIBA.
I agree very much with what has just been said. Obviously my noble friend is presenting this as a necessary statutory instrument were we to leave the European Union without a deal, and in that sense no doubt we will have to pass it. However, we have also to say that it is an interesting example of the Government’s amazing ability to recognise that there is a need and produce a way of making sure that everyone who is an architect can come here, so we are not going to shoot ourselves in the foot, without saying the key thing, which is that our architects cannot go there. We are becoming an island that wants all the advantages but wants to carry none of the responsibility.
I know my noble friend will not like this, but I say to him that I am sorry that he, of all people, should be asked to present a measure that is another indication of the sense of decline that this nation now has. Instead of recognising that in so many things co-operation, common views, common standards and common deals are necessary, we are busy trying to pretend that there is an alternative route—a kind of 19th-century protectionist route—keeping the opportunity to gain advantages from other people but not expecting to play our part in common standards and the like. I am sorry he has to do it—I am sure that he finds it as difficult as I would were I in his position—but I remind noble Lords of the seriousness of what this actually means. It means becoming a different kind of country, one which is much less worthy than the country that first entered the European Union.
It is, of course, very disadvantageous, because architects are not able to move from one company to another. The point that the noble Lord has just made is very important, and I am surprised that the Government, in their so-called consultation, spoke only to the register itself, the technical organisation that deals with these things. They do not appear to have spoken to the RIBA. Of course, we have a rather curious system in Britain, whereby our professional body is not the regulator. That is all to do with some ridiculous concept that somehow or other, because there is a tiny number of architects who are not members of the RIBA, we have to have a separate organisation to deal with this. Normally, both are consulted, and I am surprised that the RIBA was not consulted.
Well, if it were consulted, why is it not listed in the Explanatory Memorandum, as far as I can see? Perhaps I have misread it—I apologise to my noble friend if I have—but I think it says that the ARB was consulted, or that officials
“have been in regular contact with ARB”.
The ARB is constantly referred to, not the RIBA. I have declared my interest, but it happens to be true that the RIBA is the body to which most architects would look for advice and to which they have given their concerns.
As this is not going to be a both-ways arrangement and because the Government do not want a no-deal exit from the European Union—although what the blazes they do want is increasingly difficult to understand, and I suspect that the negotiations would have gone much better if people had known in the first place what they wanted, because clearly not until very recently did anybody know anything about what we wanted—can the Minister give me an assurance that one of the things we will be seeking immediately in negotiations for some sort of reasonable exit—which of course would leave us in a worse position than we are in at the moment—but even if that was so, would be to make this a reciprocal arrangement and that that reciprocity would be at least as good as the present reciprocity?
That leads me to my last point, which is on the Immigration Rules. The architectural profession is remarkably badly paid. If you look at the average wage of an architect, it is remarkably low for a member of a professional body. So I am concerned, as was the noble Lord, Lord Shipley, that we should not allow the Immigration Rules to interfere with our ability to recruit from the rest of Europe. It seems to me that this is a serious double jeopardy system. Why do we have to have these rules? Surely we could have had, in these regulations, a very simple system which said that if you got a job with a British architect registered with the ARB you would be able to have that job. Why do we have to double-do it? Is there not a much more sensible way, which is merely to do exactly what we do at the moment and say publicly that we would like this to continue to be reciprocal, although we do not have the ability to make it reciprocal ourselves?
I remind my noble friend of the figures that have been quoted: it is likely that one in four of architects in the London area come from the rest of Europe, so this is no minor matter. Therefore, I hope that we can have assurances that the Government will seek, under any agreement, to have reciprocity and, secondly, that the Minister will look again at the idea that we have to insist upon going through our immigration arrangements, when we could have a perfectly simple system, like the one we have at the moment. We should look very carefully at any income limit in any case because it is likely to affect newly-qualified architects from the rest of Europe in a way that would do our profession no good. It would interfere with, and indeed endanger, the very large amount of money that Britain earns through the primacy of our architectural profession. When you are talking about what may be £2 billion, you are talking about a very serious amount of money. If we cannot recruit newly-qualified experts from the rest of Europe to a shockingly underpaid profession, that would do us a great deal of harm.
My Lords, not for the first time, Newcastle is united in this Grand Committee. I think we would both welcome the noble Lord, who has characteristically analysed the Government’s proposals in a very effective way.
This instrument will freeze the list of architectural qualifications that are recognised immediately before exit day in the event of a no-deal Brexit. As a result, an individual holding one of those qualifications will be eligible to join the UK register of architects if they have access to the profession of architect in their home state. This will allow access to the workforce of EU-qualified and EEA-qualified architects. The register of qualified architects of the UK held by the Architects Registration Board currently includes 40,650 members, 17% of whom were admitted under EU directive procedures. Given that significant number, it is astonishing that no impact assessment appears to have been prepared for this SI. The UK must of course continue to attract the best talent after Brexit and have an immigration system that responds to the needs of industry, especially in the context of the architectural sector. The London’s Architectural Sector report states that the city’s architecture industry is worth £1.7 billion and is growing at 7% every year. That figure is set against the industry’s total value nationally of £4.8 billion, a significant contribution to the economy nationally.
The SI makes little attempt to make up for the damage that the industry has faced since the referendum, which has caused an alarming amount of uncertainty for businesses in the last two and half years. Since the referendum, projects up and down the country have been postponed as this period of chaos has badly damaged the investment market. An article on Consultancy.uk referred to Global by Design, published in 2018 by the RIBA, which said that 68% of architects have already seen Brexit impact their revenue stream as they have had projects put on hold and moreover, crucially, that 74% of architects regard access to the EU single market as necessary if the industry’s international workload is to grow. Already 40% of practices have had projects in the EU cancelled since the referendum.
The regulations fail to protect the recognition of UK-qualified architects’ qualifications in the EEA in the event of a no-deal Brexit. Those architects will have to rely on the individual registration policies of the 27 member states. The Government must look to establish a new mutual recognition agreement with the EU as soon as possible in order to provide reciprocity, and a date for that would be very welcome. I will be interested to hear the Minister’s response on that issue.
The Explanatory Memorandum states:
“The applicant’s ability to establish in the UK will be dependent on Government immigration policies”.
However, the Government’s immigration Bill has stalled and a £30,000 salary requirement for skilled migrants has been suggested. How many architects from EU or EEA countries living in the UK earn more than £30,000 now? How many architects have already registered with the Government’s settled-status scheme? Being a tier 2 sponsor for those earning more than £30,000 is difficult for many architecture firms because the process is lengthy and expensive. Have the Government done any work with the sector and the RIBA to assess exactly how much it will cost and whether the sector can bear the cost? According to the RIBA, the number of EU architects registering to practise in the UK has dropped by 42% since 2016, and 60% of them here at the moment say that they would consider leaving. That would damage architecture as a service both in this country and abroad; it would clearly suffer.
Architectural qualification requirements are frozen during the review period. How long does the Minister expect that period to last? How will architects come and work in the UK with new qualifications during this period? Paragraph 2.14 of the Explanatory Memorandum states:
“After EU exit, the ARB may lose access to the Internal Market Information (IMI) system. This facilitates communication between competent authorities. As a result, this instrument places the requirement to provide written verification from their home competent authority on the applicant should ARB be unable to secure it directly from the relevant competent authority”.
What assessment have the Government carried out to determine the ease of getting this written verification? Does it differ between authorities? Paragraph 2.12 states:
“This instrument removes the registration route of General Systems, which enables EU and EEA applicants who do not meet the automatic recognition criteria to work with the ARB to map what experience they do have against the UK criteria, and gain the experience necessary”.
Will the ARB offer any additional help to get candidates to work in the UK?
Finally, what estimate have the Government made of Brexit’s impact on UK practices and individuals currently, or potentially, working in Europe? What steps, if any, are they taking to create a new system including a reciprocal system of accepted professional qualifications?
My Lords, I thank all noble Lords who responded to the SI. I will seek to deal with the various points they have made.
First, the noble Lord, Lord Shipley, rightly emphasised the importance of qualified architects from the EU 27. Of course, this measure goes a bit beyond that because it covers EEA-qualified architects from Liechtenstein, Norway and Iceland too. Switzerland is in a similar position but the EU 27 countries make up the most significant part of the regulations. I do not deny that the regulations are important for the United Kingdom—indeed, I would affirm it—because of the impact they would otherwise have on individuals practising here or seeking to do so in future, and because of the importance of this sector to the UK economy. The regulations are therefore important for those positions.
Like other noble Lords, the noble Lord referred to the general immigration position, rather than anything specific to architects as such. Reference has been made to the £30,000 threshold. I should say that as things stand, it is not the defined and final position of the Home Office. Rather, it is a recommendation of the Migration Advisory Committee so we will feed in information regarding different sectors. We are working with our professional business service colleagues in BEIS to collect information from architecture firms around the country on what the threshold should be. I agree with my noble friend about the position of architects as a profession: on the whole—with exceptions, of course—their earnings tend to be on the low side. That will certainly be a relevant factor and one we would wish to pursue.
The noble Lord went on to discuss the recognition of the general systems in a no-deal scenario. He could not understand why we were not pursuing that. I am not sure whether this was grasped, and it may be my fault, but I emphasise that we are seeking to freeze the qualifications that are recognised. This does not mean that those who go on to get those qualifications later on cannot then practise in this country. They can while this remains the legal position, so after this is passed it would not debar anyone with these qualifications from practising in the UK. Indeed, while this remains the law it seeks to facilitate that. It is not those people who already have the qualifications; it is recognising those qualifications. Anyone getting that qualification later on will certainly be able to practise in the United Kingdom. I remind noble Lords that the number of people using the general systems qualification is four or five a year. Of those who make inquiries about it, 96% do not pursue this route because it is very cumbersome and difficult, so it is viewed as better that they qualify in the way we are setting out.
I was automatically suspicious when my noble friend Lord Deben referred to the Government’s “amazing ability”. I knew there was going to be a sting in the tail and sure enough there was, but my noble friend made very fair points, as he always does, and he will not be surprised to know that I agree with him that a no-deal scenario is far from desirable. This is being put in in case that is the situation we are in; it is certainly not something I or the Government want. He also talked about the legal position in relation to income, which I think I have already dealt with.
My noble friend then went on to deal with some other aspects. He asked if I could guarantee that the Government are seeking reciprocity of standards; I certainly can. We already have a significant undertaking from Ireland—of course, it is not the only significant state but it most certainly is significant—that it will continue to recognise British qualifications for those who started their qualification before the referendum in June 2016, so that position is already guaranteed. With the ARB we are talking to all other member states with a view to ensuring that there is reciprocity. That is certainly the desired position, and from the discussions we are having there are indications that that will be fruitful. We have not concluded those discussions yet, but there is good progress on them. My noble friend also referred to architects being badly paid, which I have dealt with.
The noble Lord, Lord Beecham, made a point about the internal information system to which we will not have access if we come out with no deal. I dealt with that in the course of the presentation, saying that we would require verification from member state bodies in relation to individuals who are qualified through the EU 27 or the EEA—the other three countries—because we will not have automatic access to the internal information system. It is something we would seek to agree. If we come out with a deal, we would certainly seek to agree it in an implementation period. Coming out without a deal, it would be in jeopardy; I fully accept that.
A question was raised by my noble friend and others about the consultations we have had. I apologise if this is misleading in the documentation, but we have spoken with the ARB, the Royal Institute of British Architects and some practices such as Foster and Partners, Allies and Morrison, David Chipperfield and others. We have had quite a bit of consultation, and I apologise if that is not clear in the documentation.
The noble Lord, Lord Beecham, talked about the absence of an impact assessment. This is totally in line with the general requirement in relation to impact assessments, which are not needed if the impact is less than £5 million a year. The indication we have had—and this has been verified within the department—is that it is significantly less. It is probably running at about £500,000 a year for the extra staff needed to deal with the qualification process that will now not be centralised in the way it was previously. Publicity runs at about £17,000 a year and, with a drop in the income from fees, is calculated at some £519,000. In total, this is in line with the position on the better regulation framework. Regulation 2 sets out the limit.
I hope that this deals with the points which have been raised. I understand noble Lords’ concerns, but this is necessary in case of a no-deal scenario. I agree that we do not want no deal. This is, therefore, very much second best. There is work to be done on reciprocity which is what we are seeking to do at the moment. We are speaking to the ARB and, with them, to other member states to seek to ensure that this is the position. If there is anything I have missed, I will happily cover it in a letter to noble Lords, perhaps restating some of the points which I have made. With that, I commend the regulations.