“(1) The British Nationality Act 1981 is amended as follows.

(2) After subsection 1(3A) insert—

‘(3B)(a) A person born in the United Kingdom after commencement who is not a British citizen is entitled, on application, to register as a British citizen if the person’s father or mother would have been settled in the United Kingdom at the time of the person’s birth, if Assumption A had applied.

(b) Assumption A is that, in assessing whether the person’s father or mother met a requirement to have held comprehensive sickness insurance, this is to be regarded as having been satisfied whenever they—

(i) had access to the NHS in practice; or

(ii) held a comprehensive sickness insurance policy.

(c) Registration under this subsection shall be free of charge.’

(3) After section 50A insert—

Notwithstanding any provision of section 50A, for the purposes of an application for naturalisation or registration made under this Act, a person—

(a) is not to be treated as having been in the United Kingdom in breach of the immigration laws during a period of time that has been counted as part of a continuous qualifying period in a grant of leave to that person under Appendix EU of the Immigration Rules, and

(b) is not to be treated as not being of good character on account of a failure to hold comprehensive sickness insurance during some period of residence in the UK.’

(4) The European Union (Withdrawal Agreement) Act 2020 is amended as follows.

(5) After section 15, insert—

(1) For the purposes of any decision taken by a public authority under this Part after commencement of this section, a person is to be treated as having met a requirement to have held comprehensive sickness insurance, whenever they—

(a) had access to the NHS in practice; or

(b) held a comprehensive sickness insurance policy.

(2) This section shall in particular apply to any decisions taken under residence scheme immigration rules.’”

This new clause rectifies an anomaly requiring a person seeking to acquire permanent residence documents, naturalisation or citizenship to have had comprehensive sickness insurance prior to applying for citizenship when EEA and Swiss citizens did not need comprehensive sickness insurance because they had free access to the NHS.

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

We believe that new clause 3 is necessary because of an issue relating to comprehensive sickness insurance, which has been affecting EU citizens and babies born in the UK to EU parents. The issue is preventing naturalisation or automatic access to the right to be registered as British born. We believe that that is unfair and incorrect. Historically, access to the NHS for European economic area and Swiss citizens was free at the point of use, on the same terms as residents who are British citizens, without the need for any further insurance.

The Immigration (European Economic Area) Regulations 2016 included a requirement for comprehensive sickness insurance, but this requirement was not routinely communicated to EEA and Swiss citizens, and was only required at the point of applying to the Home Office. This has led to a situation where individuals have been refused permanent residence documents, naturalisation applications and citizenship at birth, and have lost family reunion rights under the separation agreements following a discretionary grant of naturalisation. Not only was the requirement for comprehensive sickness insurance not made clear prior to applying to the Home Office, but CSI might not have been relevant to EEA or Swiss citizens, such as during periods of study or self-sufficiency.

I will set the issue in a wider context. The UK has set up the EU settlement scheme, which allows EU citizens to acquire settled status, but many want to become British. They want the right to vote and the security of the nationality of their adopted home, the United Kingdom. However, the requirement to have an obscure health insurance policy is putting applications at risk of refusal and is discouraging many from applying. The British Nationality Act 1981 requires applicants to have not been in breach of immigration laws for any period relied on in the application. While a lot of EU citizens need only to have been living in the UK, students and those who are self-sufficient must also be in possession of comprehensive sickness insurance. However, the possession of CSI has never been a requirement for EU citizens to live in the UK or use the NHS, so most people do not and never have had it.

More concerning is the fact that the Home Office never communicated clearly to EU students and self-sufficient people that they would need to have CSI to become British. The Home Office, which is in charge of decisions relating to applications for citizenship, has maintained the policy despite questions from various organisations, including the3million. In May 2020, updated guidance to caseworkers confirmed the policy, changing the application process to ask for CSI and directing caseworkers to check for it. The guidance introduced a vague power of discretion, but no details were provided as to how that discretion should be applied.

In the Opposition’s view, it is clearly unfair that this anomaly relating to CSI has led to historical and ongoing injustices. It is not fair that what appears to be an additional random requirement for one group of citizens—not communicated prior to application—has, in effect, defined people’s ability to naturalise or claim citizenship.

We therefore believe that the new clause is needed to make the law fair. The historical requirement demanding that individuals hold CSI should also be satisfied by them having had free access to the NHS at the point of use without further insurance. The addition of historical access to the NHS as a satisfying condition would be much fairer. I will give some examples to further illustrate the need for this.

Roberto is Portuguese and arrived in the UK in 2006. He did an undergraduate degree in the UK, where he met his wife. During their university years, they studied full time and did not have CSI as they were never made aware of that requirement for full-time EU students in the UK. They had a son in the UK in 2011 and applied for his British passport, believing that he would automatically be born British.

However, when Roberto and his wife contacted the Home Office for information about the passport application, they were told that as they had not had CSI in the five years preceding the birth, he was not considered to be British. This new clause would address this problem, as the parents’ CSI requirement would have been met by their having had access to the NHS. Consequently, the fact that the child should have been born British can now be addressed by registering for British citizenship at no charge.

I would like the Committee to consider another example illustrating the need for this new clause. Lara is a Brazilian-Italian citizen who has been living in the UK since 2014. Between 2014 and 2017, Lara was in work, but she started a full-time degree at the University of Cambridge in September 2017. In July 2019, Lara was granted settled status under the EU settlement scheme and was looking forward to applying for naturalisation as a British citizen in 2020 after holding settled status for a year. Lara has since started working again, and has been made aware that she should have held CSI while she was at university—a requirement she was never made aware of by either her university or her GP.

If Lara applies for naturalisation, she may fail the lawful residence requirements due to the absence of CSI and may have her application refused. Since late 2020, caseworkers have had the discretion to grant citizenship when there are compelling grounds, although those are not clearly defined in any Home Office guidance. Therefore, like many other EU citizens, Lara is afraid of taking the risk of paying the £1,330 naturalisation fee and not obtaining a positive outcome.

Our new clause would mean that the period of residence that led to the grant of settled status would be considered to be lawful residence, and that the good character requirement could not be failed for a lack of CSI. That would give EU citizens like Lara the confidence to apply for naturalisation, knowing that they would meet all the criteria.

It is important to note that if Lara applies for citizenship and is granted it through caseworker discretion, the CSI issue is likely to still affect her in the future. If she then wished to be joined by a family member in the UK, the complex appendix EU immigration rules, which define the EU settlement scheme, mean that she would fall outside the definition of “qualifying British citizen” due to her historical lack of CSI, and therefore lose the scheme’s right to family reunion. If Lara does not become a British citizen, she would have that right through having settled status.

The new clause would mean that for future decisions taken under the immigration rules, the CSI requirement would be met by access to the NHS, meaning that EU citizens like Lara would not unexpectedly lose the rights they had before naturalising. We believe that this new clause is needed to address this unfair anomaly around CSI.

I thank the hon. Members for tabling the new clause, which relates to the requirement, in certain circumstances, for EEA nationals to have had comprehensive sickness insurance to have been residing lawfully in the UK. Regulations set out the requirements that EEA nationals needed to follow if they wished to reside here lawfully on the basis of free movement. In the case of students or the self-sufficient, but not those who were working here, the possession of CSI has always been a requirement.

The first part of the new clause would create an entitlement for a child to register as a British citizen if their parent would have been settled but for the fact that they did not have CSI. It also suggests that such an application should be free of charge. The position of children born in the UK when their parents were not settled is not unique to EEA nationals. There will be families who were not settled in the UK at the time of their child’s birth for a variety of reasons, and it would not be right to single out the children of non-settled EEA nationals without CSI for a specific and free route.

There are already routes for children who do not become British automatically. For example, parents who did not qualify for permanent residence could still apply for settled status under the EU settlement scheme, and they did not need CSI to do so. Once they were settled in the UK, they could apply to register their child who was born in the UK before 1 July 2021 as a British citizen.

We have some sympathy for EEA nationals who claim they did not realise that they needed to have CSI to live lawfully in the UK, which is why we introduced guidance for naturalisation caseworkers to explain that discretion can be exercised over the lawful residence requirements if a person did not meet an additional or implicit condition of stay—as opposed to an explicit condition such as illegal entry or overstaying—under EEA free movement regulations. I am not aware of any application for British citizenship being declined purely because of the CSI requirement under EEA free movement regulations.

It is useful that guidance exists, but does the Minister appreciate that if somebody is considering spending more than £1,000 to make an application and there is no clarity—nothing stronger—they almost certainly will not take the risk? Is it not possible to put something firmer into the guidance for caseworkers to say that, in the overwhelming majority of cases, the lack of CSI should be ignored?

The hon. Gentleman will appreciate that this matter falls within the portfolio of the Minister for Future Borders and Immigration, so if the hon. Gentleman does not mind, I shall take away that suggestion and ask the Minister to consider it. If the hon. Gentleman wants to follow up in writing with the Minister, I am sure my hon. Friend would consider that and come back to him. I will certainly make sure that he is aware of the suggestion the hon. Gentleman raises.

The new clause would amend the naturalisation requirements for EEA nationals who did not have CSI and so had not been in the UK lawfully before they acquired settled status. We cannot accept that, as all applicants are required to meet the same requirements for naturalisation in terms of lawful residence and it would not be right to treat certain nationalities differently.

The third part of the new clause would amend the European Union (Withdrawal Agreement) Act 2020 such that a person is treated as having had CSI if they had access to the NHS in practice or held a CSI policy. However, there is no mention of CSI in the rest of that Act, nor is there any mention of CSI in residence scheme immigration rules. The EU settlement scheme does not test for CSI and there is no need to have held it in the past, or to hold it now, in order for EEA nationals to obtain settled or pre-settled status. As such, that part of the new clause would have no practical effect. I therefore ask the hon. Members to withdraw their new clause.

I will press the new clause to a Division.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.