9 Co-ordination of social security
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11630/10
COM(10) 333
| Draft Council Decision on the position to be adopted by the EU in the Joint Committee established by the Agreement between the EU and Switzerland on the free movement of persons as regards the replacement of Annex II on the co-ordination of social security schemes
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| Legal base | —
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| Document originated | 28 June 2010
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| Deposited in Parliament | 1 July 2010
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| Department | Work and Pensions
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| Basis of consideration | Minister's letter of 19 October 2010
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| Previous Committee Report | HC 428-ii (2010-11), chapter 6 (15 September 2010)
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| To be discussed in Council | Not applicable
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| Committee's assessment | Legally important
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| Committee's decision | Cleared; further information requested
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Background
9.1 In 1999, the European Community and its Member States
entered into an Agreement with Switzerland on the free movement
of persons to enable EU or Swiss nationals to live and work in
each others' territories. The Agreement entered into force on
1 June 2002 and includes provision for the co-ordination of social
security systems. The details are contained in an Annex which
sets out the relevant EU instruments on the co-ordination of social
security systems which EU Member States and Switzerland are required
to apply, as well as any necessary modifications to take account
of Swiss social security legislation.
0.2 On 1 May 2010, new EU Regulations on the co-ordination
of national social security schemes came into effect. The purpose
of the draft Council Decision is to authorise the updating of
the Annex to include the new Regulations, thereby extending to
Swiss nationals the arrangements for social security co-ordination
already applicable since 1 May 2010 to EU nationals. As the arrangements
are reciprocal, the changes would also apply to EU nationals living
and working in Switzerland.
Previous scrutiny of the draft Council Decision
9.3 We considered the draft Council Decision
at our meeting on 15 September and noted that it did not cite
the provisions of the Treaty on the Functioning of the European
Union (TFEU) on which it was based. The Minister for Employment
at the Department for Work and Pensions (Chris Grayling) explained
that this was because there was some uncertainty as to the correct
legal base. He said that the Government agreed with the Council
Legal Services that Article 79(2)(b) TFEU was the appropriate
legal base. This Article provides for the adoption of EU measures
on the rights of legally resident third country nationals and
the conditions governing their freedom of movement and residence
in other Member States. As the UK opt-in applies to this Article,
the Minister indicated that the Government would have to decide
whether or not it wished to opt in by 29 September, three months
from the date on which the draft Decision was formally presented
to the Council.
9.4 The Minister explained that the main consequence
of opting in would be to increase by a small number the individuals
covered by the arrangements for social security co-ordination
as the new EU Regulations included provision for "non-active
citizens" — those who have never worked (for example,
because a lone parent has been caring for children).
9.5 If the UK decided against opting into the
draft Council Decision, the Minister said that benefit expenditure
would remain at its current level and the UK would still be bound
by EU rules on social security co-ordination in force up until
1 May 2010.
9.6 We asked the Minister to explain why he considered
that the Government had to notify its opt-in decision by 29 September
when there was continuing uncertainty as to the choice of legal
base. We noted that Article 3 of the UK's opt-in Protocol provides
that the UK may notify the President of the Council in writing
that it wishes to take part in the adoption of a proposed measure
"within three months after a proposal or initiative has been
presented to the Council pursuant to Title V of Part Three of
the Treaty on the Functioning of the European Union".[18]
The absence of a legal base in the draft Council Decision suggested
to us that the requirements of Article 3 of the Protocol had not
been met in this case as the proposal had not been presented "pursuant
to Title V of Part Three" of the TFEU. Pending the Minister's
reply, we decided to retain the draft Council Decision under scrutiny.
9.7 The Minister wrote on 29 September to inform
us that the UK had decided against opting in to the draft Decision
because "at a time when we are considering measures to control
public expenditure, we feel that, as a matter of principle, any
extension of social security rights is unacceptable".
The Minister's letter of 19 October 2010
9.8 The Minister's letter sets out the Government's
reasons for considering that it had to reach a decision on whether
or not to opt into the draft Decision by 29 September, notwithstanding
the absence of a Title V legal base in the Commission's draft
proposal. He says:
"The Government's view is that if the subject
matter of a proposal falls within the scope of Title V then, notwithstanding
the lack of an express Title V legal base, the Protocol and the
choice of whether to opt into the measure, including the provisions
of Article 3, apply from the date of presentation of the proposal.
"It is my view that such an approach is consistent
with the Protocol and necessary in safeguarding the UK's national
interests. To interpret the Protocol so as to make the application
of the UK's opt-in conditional on the citation of a Title V legal
base would be undesirable. It would shift the focus from whether
the measure falls within the scope of Title V by virtue of its
aim and content, to the formalistic consideration of whether a
substantive Title V legal base is cited from the outset. The Government
will of course always seek to secure an express Title V legal
base through negotiation, but this may not always be possible
and the Government would not want to rely solely on the existence
of such an express legal base in order to protect the UK's position
under the Treaty.
"This is the basis on which I informed you that
a decision needed to be taken by 29 September and I believe it
was the correct approach."
9.9 The Minister refers also to a letter sent
to us by the Minster for Employment Relations, Consumer and Postal
Affairs (Mr Edward Vaizey) on 11 October which expresses a similar
position.
Conclusion
9.10 We thank the Minister for his explanation
of the Government's position on the UK's opt-in. We understand
that the Government has an interest in asserting that an opt-in
decision is required whenever it considers that an EU proposal
falls within the scope of Title V of Part Three of the TFEU. The
difficulty is in squaring this interest with the actual wording
in Article 3 of the opt-in Protocol which states clearly that
the three month period for notifying the UK's opt-in decision
runs from the date on which "a proposal or initiative has
been presented to the Council pursuant to Title V of Part Three
of the TFEU". The inclusion of a Title V legal base would
seem to be the essential trigger for the notification procedure
specified in Article 3 of the Protocol.
9.11 Moreover, the choice of legal base is
not a matter of subjective judgment. The Court of Justice has
consistently ruled that the choice of legal base for an EU measure
must be based on objective factors which are amenable to judicial
review. These factors include, in particular, the aim and content
of the measure. The choice of legal base for draft EU legislation
is therefore central to determining its legality and is not merely
a formalistic consideration. As the Minister indicates, where
a Title V legal base is not cited at the outset, the best course
will generally be to seek agreement on the inclusion of an express
Title V legal base during negotiations, at which point the three
month notification period provided in Article 3 of the Protocol
would start to run. The UK would, of course, have recourse to
the Court of Justice if it considered that the Council, in adopting
a legal act without citing a Title V legal base, exceeded the
powers conferred on it by the Treaty.
9.12 In light of the Government's decision
not to opt into the draft Council Decision, we are content to
clear it from scrutiny. In so doing, we should be grateful if
the Minister would inform us of the outcome of further deliberations
on the choice of legal base and the consequences for the UK if
a Title V legal base is not included.
18 Article 3(1) of the Protocol on the position of
the UK and Ireland in respect of the area of freedom, security
and justice, annexed to the TFEU and TEU. Back
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