Immigration could be Cameron’s downfall in the EU

HMRC refuses to release figures on the number of migrants claiming benefits



There is some debate about whether the prime minister’s performance at last week’s EU summit was a clever political triumph or a disaster. But from the perspective of immigration, Cameron only seems to have dug himself further into a hole.

He has been arguing for policy change that even if legal, would have little impact on levels of EU migration to the UK.

David Cameron went to Brussels with four demands, as the price for staying in the EU, and ahead of the referendum. These were cuts to red tape, asserting the rights of national parliaments over Brussels, as well as economic protection for non-Eurozone members. He also argued for a four-year ban on in-work benefits for non-British EU citizens employed in the UK. Here he met almost unanimous opposition.

The government has argued that in-work benefits, particularly tax credits are a pull factor, encouraging EU migrants to come to the UK to work. The government’s target of reducing net migration (immigration minus emigration) to the tens of thousands can only be met if this incentive is ended.

But there are many problems with a ban on in-work benefits for non-British EU migrants.  First, it is illegal, as EU law forbids discrimination on the grounds of nationality. The proposal could be made legal by renegotiating the Treaty of Lisbon, for which there is little support.

Allowing the proposal to apply for all EU nationals, including British citizens, would also render it legal, but would affect hundreds of thousands of people living in the UK, including almost all young people leaving education. There would be uproar if school leavers and new graduates were banned from getting tax credits on the grounds that they had not ‘contributed’ for four years.   

If the ban was based on four years’ residency, rather than nationality, it would still apply to many British citizens who return to the UK from overseas.

Second, only small proportions of EU migrants appear to be claiming tax credits, according to independent analysis.  Drawing on existing HMRC data, Oxford University’s Migration Observatory suggest that about 14 per cent of recently-arrived EU migrants are claiming tax credits, compared with 11 per cent of British citizens.

While other figures are being traced around, an informed debate about in-work benefits is being hindered by HMRC, which, remarkably, refuses to release figures on the numbers of EU migrants working here and claiming benefits.

A third and more fundamental problem with a ban on in-work benefits is that it is unlikely to cut migration. It is job prospects that cause EU migrants to come to the UK, rather than in-work benefits.  (Unemployment in Spain was 21.2 per cent in October 2015 and was 9.7 per cent in Poland, compared with 5.4 per cent in the UK).

Unless a person is working part-time and earning close to the minimum wage, any tax credit payment is likely to be small. Working Tax Credit tapers off after a person’s income exceeds £6,420 per year, and its average boost to income works out at about £1 per hour. With wages much lower in much of eastern and southern Europe than in Britain, and unemployment higher, withdrawing tax credits would be unlikely to reduce migration to the UK from the EU.

There have been hints that Cameron may try and turn his EU reform agenda towards further curbs on out-of-work benefits. Again there is little evidence to show large numbers of EU migrants getting these in the UK, either.

The government’s own research hows that proportionately fewer EU migrants are unemployed, compared with British citizens. Regulations on out-of-work benefits are tight, anyway, and stop EU migrants from getting unemployment benefit in the UK until they become ‘habitually resident.’

The proposed ban on in-work benefits supports the view that EU migrants make little or no contribution to the exchequer. But even a low-waged EU migrant will pay income tax, national insurance, VAT and council tax.

Whether trying to curb in-work or unemployment benefits, Cameron’s proposals are giving succour to myths about benefit tourism. The research and statistics that are available simply do not support the view that benefits are a significant pull factor for EU migrants.

Put simply, Cameron is peddling untruths, and also overstating his chances of success in changing EU policy. Both risk stoking Euro-scepticism.

In the run up to the referendum, immigration will remain centre stage in the EU debate in this country. An honest discussion is needed, informed by evidence. Unrealistic promises to deal with imaginary problems only plays into the hands of those who want Brexit.

Jill Rutter is a contributing editor to Left Foot Forward

8 Responses to “Immigration could be Cameron’s downfall in the EU”

  1. Sid

    Clearly it is time for the UK to leave the EU completely.

  2. Dai

    So what is the logic of Jill’s argument? Keep going as we are? Sorry but there are myths on the left as well as the right. Yesterday’s Bank of England report on the impact of migration on low wages shows that some of our migration ‘experts’ are peddling wrong information based on data from an earlier phase of EU migration.

  3. Mark Myword

    The test should be based on domicile not residence. Most ex-pats returning have retained their domicile in the UK, even if they have been resident abroad for many years. Most EU incomers will retain their original country of domicile, even though resident in the UK.

  4. Monkish

    Interesting. Any chance of a link to said B of E report?

  5. Monkish


  6. Thanks Tank

    The referendum will more than likely be in the Summer or the Autumn.

    Migration in to Europe is expected to hot 3 million this year. There is 5k a day coming in to Europe a day this week alone.

    In the Summer we’ll be hearing about the 25k a day in to Bavaria and the 10k in to Berlin, numbers that will cause social breakdown in areas, the death of the welfare economy.

    We’ll probably have seen another major terror incident, even a few of them. London and other cities in Britain will continue to be counting down to the inevitable.

  7. TheLyniezian

    It’s quite obvious that the author is quite opposed to us leaving the EU, which is I am afraid where I part company with her. As a left-wing site, it could be recalled how much of the left used to be opposed to European integration back in the ’70s and possibly early ’80s. I can agree that too much of the Euroskeptic movement is tied into the sort of populist right-wing bigotry which she would seek to avoid, but that does not invalidate the central argument of those who wish to leave the EU.

    However the article highlights a very obvious problem, that being the desperation of those in power who seem to want their cake and eat it, that they should resort to such questionable measures based on flawed assumptions which will have very little impact on the thing they are trying to prevent and which has little chance of passing. It is not as if the Euroskeptic movement is unaware of this fact, realizing that the so-called “renegotiations” Cameron is pushing for which aim to try and compromise to please everyone- selling “remain” to those who want out, reassurance that he’s a good European to those who want to remain, looking like he’s doing something for those who want reform. In doing so no-one with any sense is the least bit convinced. What he is doing, really, plays into the hands of no-one.

    I can agree that few would seek to leave their home country for the sole purpose of claiming benefits, and not to work for better wages. But this isn’t even the problem with immigration. What is the problem is overcrowding and, perhaps, too much competition for jobs. Even then I’m skeptical on the last one, as there is only so far you can drive down wages and the net effect of inward migration could be to boost the economy, generating further jobs for natives as well as immigrants. What we need is to be able to decide for ourselves as a country who we what to let in and why, so as to be able to form a sensible immigration policy which is actually less discriminatory (against non-EU nationals) and doesn’t have any impact w.r.t. population pressures and the job market.

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