Will restricting benefits reduce EU immigration?

Unfortunately, the policies that work tend to deliver much less dramatic headlines.

Jenny Pennington is  a researcher at IPPR

The media-storm about EU migration resurfaced again this morning as the government announced plans to deny jobless migrants from within the EU access to housing benefit, adding a new layer to the debate about how long EU migrants should be in the UK before they are entitled to claim benefits.

Nigel Farage says five years. Boris Johnson thinks two. The existing guidance states three months. The government chose to focus on this area when implementing last minute changes in the run up to January 1. These changes achieved little more than to clarify current rules. However there appears to be interest within government in exploring this further.

In the flurry of last-minute policymaking and hysterical reporting, the reasons for debating this issue have been somewhat lost. Three main arguments have been advanced for why the government should restrict migrants’ benefits: reducing low-skilled immigration, minimising costs to the Treasury and because to do so would meet a test of fairness.

All three can be progressive objectives. However, current proposals are unlikely to meaningfully advance any of them.

The argument that benefits attract people to the UK who would otherwise not come is the one most commonly made. This morning, Rachel Reeves was asked about it on the Today Programme, ahead of her speech to IPPR. She responded by defending the contribution that migrants make to the welfare state, through working and paying taxes.

Reeves also said she wants to further extend the ‘contributory principle’ in her welfare reforms, something that IPPR has been looking at in detail.

By contrast, Migration Watch says that limiting benefits ‘would reduce the economic incentive to migrate’ to the UK.

Yet this confidence is misplaced. Strict benefit restrictions were imposed on immigrants from the eight eastern European countries that joined the EU in 2004. The rules were complex, but from 2004 to 2011, migrants from these countries had to show they had completed an uninterrupted year of work before they were entitled to out-of-work benefits; something that was difficult to achieve on the temporary, agency work that many migrant workers filled.

We all know what happened. Even before these benefit restrictions were lifted in 2011, the UK census recorded that an additional 800,000 migrants from these countries came to the UK and stayed anyway. The experience of the last ten years shows that limiting eligibility to benefits is unlikely to limit immigration flows, nor meet the challenges that immigration can bring.

So would the policy save the country money? Again it is not so clear.

Firstly, very few EU migrants claim benefits, so any savings would be small and diminished through necessary bureaucratic changes.

In addition, there are serious consequences to limiting benefit eligibility that should be considered.

Victims of domestic violence rely on welfare benefits to draw down specialist support. Research over the last ten years has found that benefit restrictions on migrant women have forced them to return to abusers.

Similarly, research has found that many rough sleeping migrants in the UK did not arrive as benefit seekers but ended up on the streets as they were unable to access short-term benefits to avoid destitution.

Beyond this human impact, responding to these issues has cost implications that may dwarf any savings in welfare spending.

The final point is one of fairness: that because migrants haven’t paid into a system before arriving, they are not entitled to take out of it. These arguments may be valid. The UK’s welfare system is not as contributory as other European states, meaning that those who have paid in for decades get little more than those who have rarely worked.

However it is important to recognise that immigration is revealing something about the UKs welfare system that we don’t like, rather than causing it. Wider reform is needed to make the UK’s welfare system effective and fair.

Tinkering with migrants’ eligibility will not achieve this.

This is not to say that nothing can be done to ensure that EU migration works for the UK, nor that changing migrants’ eligibility to benefits should not be considered.

However, as recent and forthcoming research by IPPR shows, there is far more that the UK can and should be doing in this area. Better enforcement of the minimum wage and more effective efforts to integrate migrants will have more meaningful effects.

The re- instatement of a migration impacts fund would ensure that local areas can cope from unexpected inflows. The government should work to make welfare more contributory, for example through introducing a salary insurance scheme and a separate benefits system for young people.

EU immigration is a contentious issue but effective policy options are available. Unfortunately, the policies that work tend to deliver much less dramatic headlines.

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3 Responses to “Will restricting benefits reduce EU immigration?”

  1. Sparky

    If restricting benefits does reduce EU immigration then it’s worked, we’ve saved money. If it doesn’t, then it doesn’t, no harm done. Nothing to debate.

  2. Dave Roberts

    Sparky got in first. Argument closed.

  3. swatnan

    You ask a sensible question. And the sensible answer is NO.

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