My Lords, I completely understand the need for this statutory instrument, given that it has not proved possible to negotiate a formal post-Brexit relationship between the UK and the European University Institute—although it is very welcome that appointments to academic posts at the EUI will remain nationality blind. I also understand that this SI is unamendable, which is regrettable because I would like to flag up one specific concern and ask the Minister whether there is any way in which she is able and willing to follow it up.
The problem arises that academic staff are generally employed at the EUI on one or other form of rolling contract. As the SI is currently phrased, the staff concerned would lose the exemption from UK tax liability as and when they renew their employment contracts. In other words, it is a serious change to their terms and conditions. This would also produce some inequities between academic staff. Some of them would lose the exemption at the end of this calendar year, whereas others on renewed or extended contracts in different circumstances would enjoy that exemption for up to five years.
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In view of this, Regulation 7 of the SI could easily have been amended to replace the term “does not include” renewals and extensions with saying that it includes them. It would mean that employees could continue to benefit from the tax situation for whatever their period of employment at the EUI is, and it would still only be available to those employed there before the regulations came into force. Moreover, all academic contracts at the EUI are finite, so this would not have given rise to an indefinite commitment on the part of the UK. Overall, this would have made a big difference to a relatively small group of people.
As it stands, the statutory instrument may well have unintended negative consequence for the UK and the UK’s relationship with the EUI. Many UK-linked colleagues spend more than 90 days in the UK and would therefore be liable to UK tax if the tax exemption were to expire. It would not be financially viable, in all cases, for these colleagues to continue to work at the EUI in this situation. They may, therefore, have to choose whether to cut their links with the UK, including their UK universities, or to cut short their employment with the EUI. Either way, it is quite possible that links between the UK and the EUI could be substantially weakened, to the detriment of both the UK and the EUI. So I ask again whether the Minister can find any way at all to iron out what might look like a small wrinkle but would be quite a considerable change to the terms and conditions of a relatively small group of people for a finite period.