Why David Cameron’s four year benefits cut for EU migrants won't work

There are other ways the Prime Minister could achieve his aims

Marley Morris@marleyamorris
Tuesday 10 November 2015 18:40
David Cameron delivers a speech on EU reform and the UKís renegotiation, at Chatham House in London
David Cameron delivers a speech on EU reform and the UKís renegotiation, at Chatham House in London

The Prime Minister is cornered. After weeks of speculation, today David Cameron signalled the beginning of the ‘formal’ renegotiation process with a letter outlining his demands to European Council President Donald Tusk and other EU leaders. While most of the demands have been aired before, by far the trickiest of the bunch is the proposal to restrict in work benefits and social housing for EU migrants until they have lived and contributed to the UK for four years.

This has been greeted with a large dose of scepticism from his counterparts across Europe. The view from the continent is that the reform would directly discriminate against EU migrant workers on the basis of their nationality, and that this is opposed to one of the fundamental tenets of freedom of movement, enshrined in the treaties – the principle of equal treatment of EU workers. And they are right: EU migrants who are working and paying taxes are contributing to this country, so it is only fair that they have the same access to the welfare system as UK nationals.

So while Cameron stuck to the script today and repeated his demands – the only thing he could do given it would look disastrous to back down before beginning the proper negotiations – he seemed to realise he was in trouble. In particular, he said that he was “open to different ways of dealing with this issue” of EU migration and welfare.

So how could Cameron unstick himself from this mess? One alternative option that has been touted is to restrict benefits for four years on the basis of residency, rather than nationality. This might avoid the direct discrimination charge. But there are three reasons to think it would still be a headache for the government.

First, the proposal could still be considered indirectly discriminatory, since it might have a greater effect on EU migrants than UK nationals. This could mean that the European Court of Justice overturns the reforms down the line.

Second, it is possible that a residency requirement would both affect returning UK nationals and 18-22 year olds along with EU migrants, because the proposal would only be able to distinguish between people on the basis of their residency. While this might not be too problematic given the government’s broader plan to bring down the welfare bill, it risks a considerable public backlash.

Third, if it’s assumed that a residency requirement would not be considered indirectly discriminatory, then there is no need to renegotiate with our EU partners in order to secure such a change. Instead it could simply be done through changing domestic law, as it would amount to a blanket change in the way in-work benefits work for everyone in the UK, not just EU migrants. A residency option would therefore most likely be perceived as a sign of the government’s failure to negotiate any changes on welfare and free movement whatsoever with the rest of the EU.

So what’s the alternative? Cameron has committed to addressing the issue of welfare for migrants as part of the renegotiation, so he could hardly now come back from Brussels empty-handed. And public concerns about EU migration and welfare are live. Even if there is little evidence of benefit tourism on a significant scale and EU migrants tend to pay into the system more than they take out in terms of welfare, there is widespread support for the principle that EU migrants contribute before they claim benefits.

The sensible and pragmatic alternative should be to focus on reforming access to benefits for EU migrants who are out of work. Here there is more scope to act, since EU law allows for some differential treatment of unemployed EU citizens already.

Today we outline two main ways the Prime Minister could seek reform. First, the rules could be changed to ensure that only EU migrants who have previously worked in the UK can get access to income-based jobseeker’s allowance. This could be balanced by increasing the exportability of unemployment benefits, so EU migrants can get more access to unemployment benefits from their former country of work instead of the UK. Second, Cameron could also negotiate changes to ensure that only EU migrants who have worked in the UK for three years have full access to benefits such as income-based jobseeker’s allowance and housing benefit. Those who have worked for less than three years would get a maximum of three months’ access to these benefits if they became involuntarily unemployed.

These two changes would still be challenging from both a legal and political perspective, and would require the Prime Minister to drive a hard bargain at the December summit of the European Council. But they would be far more feasible than the current plans, because they would focus on changing benefit rules for those who are not in work. At the same time, they would help to address concerns about migrants’ access to welfare shared by much of the public – particularly given that in general concerns about welfare tend to focus on unemployment benefits and not in-work benefits such as tax credits. Moreover, they would be a great deal fairer to EU migrants, because they would protect in-work benefits for those who are in work and contributing, as well as out-of-work benefits for those who have contributed to the UK for at least three years. There’s no doubt Cameron’s in a tough spot – but if he plays his cards right, he can achieve a package of reforms that are fair, balanced and capable of winning public support.

Marley Morris is a Research Fellow at IPPR specialising in migration, integration and communities. He tweets at @MarleyAMorris

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