How David Cameron could win – and lose – on EU migrant benefits

Will Cameron succeed on his ‘four year’ demand for migrants’ benefits? He is already closer than he lets on – but will fail to deliver what he wants for benefits targeted at children

Last night David Cameron claimed talks over his demands for EU reform had taken ‘a big step forward’. A key part of the discussion focuses on the demand to restrict EU migrants’ benefits such that they could only claim after having been in the UK for four years. He suggested last night that his ‘four year’ proposal was the only one on the table, with no alternatives being discussed.

If Mr Cameron achieves this goal it is likely to be popular with voters: a recent poll found overwhelming support for the idea. It may make less economic sense, since EU citizens pay a third more in taxes than they take out in benefits and services. And when asked previously to substantiate their claim that Britain’s welfare system acts as a ‘draw’ for EU migrants, the Government responded only that the question placed ‘too much emphasis on quantitative evidence’. Nevertheless, Cameron has now made his promise and so needs to be seen to achieve his goal in order to back the ‘In’ campaign.

The European Commission has called Cameron’s plan “highly problematic”, claiming that it “touch[es] upon the fundamental freedoms of the internal market”. Direct discrimination between EU citizens would not, argued the Commission, be tolerated. Francois Hollande has also emphasised that EU principles must be respected.

But Cameron has declared himself ‘open to different ways’ of achieving his goal. And there are ways in which his goal of restricting access can be done without contravening key EU principles – for some types of claimant, at least.

Many benefits for out-of-work migrants have already been restricted

Restricting access to out-of-work benefits for migrants appears achievable. In fact much of Cameron’s work has been done already – in particular, two recent rulings by the ECJ could help his cause.

The first decided that exclusion from social assistance benefits is lawful if an EU national goes to another Member State with no intention of finding employment there, creating a basis for the differential treatment of nationals of a particular state from other EU citizens.

The second ruling went even further, stating that certain non-contributory benefits could be denied to non-national EU citizens, even if they had previously worked in that member state. Furthermore, a senior ECJ legal advisor has suggested that legal action against the UK over ‘right to reside’ tests for benefits will be thrown out. These examples all suggest there is scope for negotiation on the issue of differential treatment of EU migrants for social security, and could be used politically by Cameron to demonstrate he has made progress.

Cameron may try to introduce residency or contributory requirements to restrict benefits for those in work but with no children

However, these rulings primarily concern social security for migrants searching for work, and Cameron’s goal is also to target social security for those already in work. This could be more difficult to achieve. But there are options for reforming the UK’s social security system itself that would allow him to make the case that he has achieved his goal, and still not contravene the principles of freedom of movement and of equal treatment of EU citizens.

Cameron wants to prevent EU migrants from claiming tax credits until they have been in the UK, in work, and contributing to the UK tax system, for 4 years. In itself, this directly discriminates between UK and other EU citizens. But looked at more broadly, this proposed requirement for EU migrants isn’t so very different from the eligibility condition for UK citizens of being 25 or over to claim tax credits.

One option Cameron may try to take to bypass the EU’s equal treatment rules would be to introduce a requirement for a 4 year residency record that applied to all EU citizens, including those of the UK. For young UK citizens this wouldn’t be so very different to the current age restriction for tax credits. Instead of an age requirement, UK citizens could be obliged to give proof of residency for the four preceding years.

The options for Cameron on Housing Benefit are a little more difficult. The 2015 Summer Budget announced that, from April 2017, Housing Benefit will be restricted for those aged 21 or under, although young people are entitled to claim after 6 months of working. Introducing a 4 year residency requirement here would be more difficult as it would impact on young in-work UK citizens. Given recent welfare reforms, however, it is not inconceivable that Cameron might propose it.

But Cameron will struggle to restrict in-work benefits targeted at families with children

However, if we consider in-work benefits targeted at families with children the situation becomes much more complicated. There are no age restrictions on adult UK citizens with children claiming tax credits. Cameron would therefore face two choices: to restrict tax credits for UK families with children until a four year residency condition had been met; or introduce separate tax credit rules for UK citizens and other EU nationals. The first choice would result in tax credits being withdrawn from young, low income, UK-born families, and would surely be politically disastrous in the context of the recent U-turn over tax credit cuts. The second would almost as certainly violate the EU principle of non-discrimination of nationals from different member states, by introducing different rules for in-work EU migrants.

In some ways, therefore, Cameron is closer to his goal of restricting migrants’ access to benefits than he lets on. For job-seeking migrants many of the restrictions are already in place, such as the ban on EU migrants claiming housing benefit. Perhaps Cameron is keeping these completed reforms up his sleeve to make his renegotiation announcement have more impact. And for childless in-work migrants his goals are achievable by simply replacing age-related conditions with a residency or contributory requirement that applies to UK and EU citizens alike.

In other ways, however, Cameron is a long way from achieving his goal. For families with children it is difficult to see further than a choice between two impossible options: to cut tax credits and benefits for young UK families; and reforming the fundamental EU principles of freedom of movement and non-discrimination.


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