Habitual Residence Test (Hansard, 24 May 1999)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, we have previously explained that our review of the habitual residence test would need to take account of the judgment of the European Court of Justice in the Swaddling case. This was given on 25th February and we have been assessing its implications, not just for Mr. Swaddling, but for those whose circumstances are similar to but do not exactly match his case. We shall bring forward our recommendations for the future soon, certainly no later than the Summer Recess. I shall be delighted to write to the noble Earl when this happens.

§ Earl Russell
My Lords, first perhaps I may have the pleasure of wishing the Minister many happy returns. I also thank her for the promise of jam tomorrow. Is the Minister aware that the concept of habitual residence is so imprecise and uncertain in law that the Government should not be confident, even though I have no doubt that they are, that they will avoid a further such judgment in future? Does she also recall that in opposition her party commented so severely on this test that it is difficult for it to continue it without appearing to be lily-livered?

§ Baroness Hollis of Heigham
My Lords, first I thank the noble Earl very much. However, if he really had had my best interests at heart today of all days he might have postponed his Question until after the European elections. To deal with the first part of the Question, the noble Earl is absolutely right. This is a very complex area. for two reasons. First, unlike most other countries we do not have a written constitution and therefore a clear definition of what a British citizen or national may be. Secondly, given a country with a long imperial past we have at least six different statuses of British national under British immigration law, all with different rights. The noble Earl is correct about that. For that reason, he and I when in opposition joined together and said that there must be a review, and that is what has happened. The Swaddling case went to the European Court in February 1997, just before we came into power, and was determined two years later in February 1999. In the light 630 of that we are seeing to what extent the habitual residence test could and should he thoroughly overhauled.

§ The Lord Bishop of Oxford
: My Lords, acknowledging that there are many grey areas and that this is a difficult matter, can the Minister explain how the habitual residence test bears upon, for example, aid workers who work overseas for a long period of time and members of Asian families who may go to the Asian subcontinent for a long period, perhaps to get married, before returning to this country?

§ Baroness Hollis of Heigham
My Lords, the right reverend Prelate is exactly right in identifying those groups. I read the judgment in Swaddling yesterday. It makes clear that, first, it should help UK nationals who work abroad, like Mr Swaddling and missionaries. When they come back they do not have to live here for an appreciable period of time in order to establish their rights to income-related benefits. Secondly, it will also help UK nationals with overseas links, particularly people from ethnic communities in this country. Thirdly, it will help UK nationals who return, perhaps because of misfortune like a broken marriage or ill-health. Fourthly, the Swaddling judgment should also help those UK nationals who were taken abroad as children to establish right of residence. We expect it to have a substantial effect on people who so far have had a shadowy claim to establishing right of residence here.

§ Earl Russell
My Lords, can the Minister say what the habitual residence test can do that the "actively seeking work" rules cannot do better?

§ Baroness Hollis of Heigham
My Lords, the habitual residence test entitles people to a range of income-related benefits: housing benefit, council tax benefit, income support, some disability benefits and JSA. After six months one is entitled to child benefit as of right. Even if one fails the test it does not prevent one from residing here, finding a job and making national insurance contributions towards contributory benefits. The Swaddling judgment will ensure that anybody with an established connection with the UK does not have to serve a period of time—in Swaddling's case, about eight weeks—before he or she is entitled to income-related benefits. But there are still very many people with fairly nebulous or sketchy connections with the UK who want to come to this country, and we must balance their wishes for financial support against the rights of the taxpayer.

§ Lord Campbell of Alloway
My Lords, is the Minister able to give some form of undertaking that if the law is changed as a result of the Swaddling case it will have no effect on revenue law?

§ Baroness Hollis of Heigham
My Lords, the Swaddling case will reduce the savings that would otherwise come from benefit reductions. Nonetheless, under the habitual residence test at present if people are ineligible for income-related benefits they have rights 631 under the National Assistance Act and the Children Act. The test has not generated many savings. At present savings are about £18 million a year. The Swaddling judgment may reduce the figure to half that sum. However, we wait to see the full read-across implications of Swaddling to the range of people who apply for habitual residence in this country.