Plans to make migrant workers live off their home country's benefits 'could encourage more immigration to Britain'

Move explicitly designed to 'promote labour mobility', but would allow David Cameron to claim he was tackling 'benefit tourism'

Tom McTague
Political Editor
Sunday 20 December 2015 00:08 GMT
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A man looks for job opportunities on newspapers in a downtown Naples shop in 2012
A man looks for job opportunities on newspapers in a downtown Naples shop in 2012

A controversial plan to make migrant workers live off their home country’s benefits for up to a year after arriving in the UK could encourage more workers from the mainland of Europe to move to Britain, a former No 10 economist has said.

Under proposals being considered by the European Commission – and set to be unveiled in March after February’s European summit – member states will have to pay unemployment benefits to their citizens for a set period, even when they move to another country to find work.

The move is explicitly designed to “promote labour mobility”, but would allow David Cameron to claim he was tackling “benefit tourism”. It would also mean migrants could be deported from the UK without costing the Government a penny in unemployment benefits, because ministers have already introduced rules which allow migrants to be sent home if they have not found work after six months.

The former No 10 economics adviser Jonathan Portes told The IoS that the proposal was likely to increase immigration into the UK – because foreign jobseekers would no longer fear losing their welfare entitlement when considering moving abroad for work.

Brussels insiders have also warned it could lead to concentrations of unemployed Brits on the Continent – dubbed “Costa del Dole” – who continue to receive Jobseeker’s Allowance while working cash-in-hand in cheap areas of Eastern Europe and the Mediterranean.

The revelation comes after Mr Cameron effectively fired the starting gun in the EU referendum campaign after returning from Brussels on Friday insisting a deal on Britain’s renegotiated status within the European Union would be struck early next year before an expected vote in June or July.

While European leaders unanimously rejected the Prime Minister’s proposed four-year ban on migrant workers receiving tax credits, No 10 sources insisted there was now a commitment to finding a “solution” to the UK’s demand for measures to reduce the flow of immigration into Britain.

Mr Cameron now faces a battle to keep the Conservative Party united before he unveils the full package of reforms in February. He is also under increasing pressure to suspend collective government responsibility in order to allow ministers to campaign to leave.

A senior cabinet minister, who is strongly inclined to campaign to stay in the EU, told The IoS: “I think for the sake of party unity he has to.”

Another pro-EU minister said Mr Cameron would be forced to offer a free vote because up to half the Tory party are already minded to leave.

The minister said: “I would love him to be able to hold the Government together and campaign for us to stay in the EU, but I just don’t think it’s viable. There are too many ministers, including a number around the cabinet table, who would immediately quit. It would look really bad.”

One leading eurosceptic backbencher said the Government had “nothing to gain” from forcing ministers to campaign for an “in” vote because it would highlight the division within the party.

However, Mr Cameron is understood to be increasingly concerned that Britain will vote to leave, with polls narrowing dramatically in recent weeks.

The Prime Minister has confided to friends that the polls “are not where I’d like them to be”, while cabinet ministers have privately admitted that No 10 is in a “panic”.

One senior member of the Cabinet said pro-European Tories are growing frustrated at the lack of progress and are “champing at the bit” to start the campaign to keep Britain in Europe.

The proposal to allow migrant workers to keep home welfare payments (in effect restricting their access to UK benefits) for up to a year after moving to the UK is being developed by Belgium’s EU labour mobility commissioner, Marianne Thyssen. It was due to be published this month but has been held back until the new year, amid claims that it will not be published until after Mr Cameron’s renegotiation is agreed.

In a speech in Dublin last month, Ms Thyssen said her aim was to “promote labour mobility so that our Union can continue to benefit from its many positive effects”.

Ms Thyssen said many of the concerns people had about benefits were “based on misunderstandings” but warned that “Europe cannot afford to lose the people’s support for free movement”. She added that the right for jobseekers to move abroad for work “needs to be upheld” – citing high unemployment in Europe. But “not at the expense of the host country’s social security system”.

“With this in mind,” she said, “we want to make it possible for someone who becomes unemployed to take his unemployment benefits to another country where he may have a better chance of finding a job. This is already possible today for a period of three months – we want to prolong it to six months.” However, senior sources in Brussels said this could be extended up to a year.

Mr Portes maintained: “In principle, this could make it easier for people to come here. I’d be surprised if it had a huge impact, but if anything it’s likely to be the opposite of what the Government wants.”

Robert Oxley, of the Vote Leave campaign, added: “In every crisis Brussels finds an opportunity to increase its power. Supposed victories will either be more spin than substance or, as is so often the case with the Commission, there will be a sting in the tail. The only safe option is to vote Leave.”

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