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Monday, November 03, 2014

EU migration - a deliverable proposal for reform

As we already noted here, today we published a new pamphlet by Professor Damian Chalmers of the LSE and our Research Director Stephen Booth.

The basic question the authors ask is, in the current political climate, how in the world can we ‘save’ EU free movement? As we’ve stated repeatedly, Open Europe thinks that the single market – including free movement of workers – remains a clear net benefit to the UK and EU. However, like everything else, it needs to be subject to up-to-date, clear and fair rules to make sure it stands.

Therefore, the pamphlet argues that instead of reaching for “quotas” or a “points-based system”, Cameron should focus on the “pull factors” – who can access what benefits and when – which if done right, will have a big impact but without ending the basic free movement principle (a red line to Merkel and others).

Chalmers and Booth – both writing in a personal capacity - argue that national governments should be able to limit EU migrants’ access to out-of-work and in-work benefits, social housing and publicly funded apprenticeships until after three years. EU citizens would have a right to access public healthcare within their host country, but, for the first three years, the costs would be borne by their state of nationality and, insofar as there was a shortfall, through private health insurance that they were required to purchase. Children of an EU citizen would have a right to access childcare and primary and secondary education. The changes wouldn't be retroactive but only apply to future EU workers.

This could be done through EU legislation and avoid a treaty change to the totemic EU principle of free movement. But it needs to be recognised that, while it often comes with overall net benefits, free movement does have an impact, particularly at the low-skilled / low-income end of the job market where the competition between school/university leavers, those moving from welfare into work and migrant labour can be fierce, with the consequent knock-effect this can have on wages.

The length of the qualification period can be discussed and needs careful thought to strike the right balance between incentive to work and ability to live.

The proposal could kill three birds with one stone:

First, it would remove the effective “subsidy” to EU workers who perform the lowest-paid jobs in the UK by removing the state top-up to low wages. For those thinking of coming to the UK, this could certainly change their cost/benefit calculation before they make the leap. It would create a fairer system, which could well have an impact on numbers and boost public confidence in free movement.

Secondly, and just as importantly, it would hand back an important public policy tool to national governments. If welfare (out of work and in work) is not open to EU migrants, national governments can better target their policies at their own citizens – helping the young with publicly-funded apprenticeship or those coming of welfare with income top-ups. The effect of these policies is blunted if they open to people across the entire EU.

Thirdly, unlike ideas for quotas or caps on EU migrants, it leaves the basic principle of free movement of workers intact, while not requiring a complicated EU treaty change.

Finally, because of that, this proposal could win support in other capitals, including, importantly, Berlin.

We will soon be publishing further research looking at the economic impact these and other potential proposals could have on EU migrants considering coming to the UK – and to what degree removing access to welfare for three years might act as a disincentive to those migrants who would be coming to working in the UK on the lowest incomes. We'll also look at other areas such as minimum wage. However, also, we’ll investigate the trade-off this involves in terms of the UK’s overall wealth and competitiveness, for which EU migrants no doubt play an important part.

11 comments:

DeeDee99 said...

This proposal does nothing to address the fundamental issue with the EU, which is Sovereignty.

The British electorate has been demanding an end to free movement of people for well over a decade, since the Eastern Europeans started flooding here in large numbers.

The British electorate has been ignored insulted and traduced by LibLabCON - called racists and bigots - because our political elite favour EU membership.

Only now when their political lives are on the line are they taking any notice. But they still aren't doing what the electorate wants - ending the automatic right for any EU citizen to pitch up to live in the UK.

We want our Government to be in control of our immigration policy. That's what a Sovereign nation does.

Jesper said...

A proposal befitting an ivory-tower 'intellectual' with limited understanding of life among the low-paid and immigrants.

The net-effect is that migrants will have weaker social-safety nets and what will that do to their negotiating power?

They'll be completely beholden to their employer. Will employers chose locals or opt for immigrants who'll become homeless if they lose their jobs?

Horrible proposal. The race to the bottom picks up speed. Indentured servants again...

Or maybe the proposal would come with what the new and unthinking liberals hate? A legally binding minimum wage that is sufficient to live on?
If not, then wages will go down leading to domestic consumption going down leading to shrinking economy.

Rik said...

The issue is that even with measures against pull factors, EU immigration is much higher than the 100 000 annually (for all) would allow. Just working on pull factors will not do the job. It is as simple as that.

On top of that. Most immigrants are rather positive when they arrive. A lot of the problems however occur first after some time. While a lot of those problems are within groups for which it was clear that they would be overrepresented in the problem areas (uneducated, lack of languageskills, low income background, difficult compatible background). With Eastern Europe these problems originally mostly 3rd worldish have become common for the EU as well.

Good intensions partly suck as well. Less than bad ones but still an awful lot. What you need is immigrants that are more than average taxpayers and less likely longterm (not the next day as the EU does) to become a fiscal burden.
Or are not available on the localmarket (not as eg social workers for less priviliged immigrants of course).

I still havenot seen proper proof that long term low income immigration is beneficial for a welfarestate like the UK. Family usually comes over, children need extra attention in school, often fall out first in case of a recession. Not even to mention the social aspects.
Back of an enveloppe calculations make me believe that non- or semi- educated (everything but BA or more) immigration from low/middle income countries results long term in a considerable nett fiscal cost for the group they belong to as a whole (so in average).

Immigration overall is likely beneficial for the UK at least in economic terms. However how to compare that with the social costs is difficult to do. Only focuss on economics like OE seem to do here simply only does half (or less) of the job.

Immigration imho clearly can be divided in 2. Top half and bottom half. More than all benefits seem to come from the first mentioned part. The bottom half is simply not contributing more than they cost (also in economic terms).
It is furthermore pretty clear who belongs to which group. Western plus 3rd world academics and such do very well while the rest as a group are a huge financial burden.

So in other words you need a revised treaty at least as far as the UK is concerned or run the chance of an electoral uproar.

Rik said...

May be not so nice for the Ru- and Romanians and such.
But it is clear that also in other countries these sort of countries are a large part of the problem.
problem summarised that the locals simply are strongly against that (for whatever reason).
Amsterdam University did a poll at least half a year ago.

First they asked about free travel within the EU. A majority was positive on that.
After that the question was changed ( to free travel by eg Rumanians and Bulgarians) and 80-90% was against that.
The full picture was clearly not clear at all with a simple question (like often in EU matters).

Lessons

East block immigration has no sustainable platform in most of Western Europe.

If you want to attack that for electoral reasons go for the Rumenians, Romanians, Bulgarians.
There is massive popular support for that. Make the link immigration Rumenia/Bulgaria.

Let the traditional parties defend especially Balkan immigration. They will shoot in their own feet.

Anti-EU link immigration (especially Balkan) with the EU.

jon livesey said...

Sorry, but this proposal just doesn't work. No country like the UK is going to allow people to literally die on its streets. So all it takes is for someone to make it to the UK, and then unless they commit a deportable offense, they will get welfare of some kind from the UK.

The idea that you can somehow 'save' free movement but also limit access to welfare just doesn't add up.

David Horton said...

Maybe Cameron believes that everyone who is EU-sceptic or EU-hostile is unable to understand statistics.

We KNOW that not every person who comes to UK comes for the Welfare handouts. The generous benefits system we have here is a small part of the problem. It isn’t the unemployed hopefuls from Romania, Portugal, Latvia or Greece who are the primary reason why we should reconsider the movement of people.

There are at least four issues here, caused by the intransigence that EU has shown by not compromising on freedom of movement, the politically-inspired enforced multiculturalism of British socialism and the joyous welcome from British capitalism at all these lovely cheap workers.

1. The erosion of extant communities & societies by the sudden, huge influx of people from wholly disparate cultures.
2. The fact that migrant workers from the EU can undercut the British worker, causing hurt to indigenous families
3. A significant amount of the money paid to migrant workers, leaves these shores and goes to the worker’s home country. This is in contrast to British retirees who BRING their money into their new country of residence(a fact that often goes ignored in the net migration argument)
4. Lastly, a signal issue for many, is that it is atavistically & deeply unpleasant to be told by Merkel, Juncker, Barosso, Schulz et al, that we have no choice on limiting immigration and proper Border controls. Oh yes we do, and I think that they are all about to find out.

Cameron must stand up to Merkel. If that means pushing her to the wire and calling a referendum, then so be it. If he doesn’t do that, he is finished as a PM, and MP and even as a British citizen.

Merkel is making it difficult for us to stay in the EU. I suggest that we thank her politely, accept her assistance and leave this failed European experiment.

Open Europe blog team said...

Jon and Jesper – many thanks for your comments. Always great to hear from you. However, we would take issue with both.

The pamphlet makes clear that this about preserving the free movement of labour and national welfare systems on the one hand but safeguarding the rights of domestic and migrant labour on the other.

The proposal to deny access to welfare for three years is meant to act as a disincentive to migrate to work on a low income if the only means of supporting oneself is a top up from state welfare so far from a return to the Dickensian state you’re alluding too. Reducing access to welfare means reducing the income differential between sending and receiving states. At the same time, migrants should be able to access childcare for their children and healthcare, but the latter should be funded by their state of nationality and/or private health insurance. This is, de facto, the system several other contribution-based member states have at the moment.

The fact is different countries have different social models – which are the result of national politics and industrial relations. The UK has a legally binding national minimum wage (you can debate whether it is sufficient). Scandinavian countries make provision for ‘collective agreements’, which effectively set minimum wages and conditions for a specific sector. The pamphlet argues that member states should be free to set these arrangements without interference from EU law as long as they apply to all EU citizens equally. These arrangements would be in place for domestic and migrant workers. Rules on housing regulations, minimum wages, etc need to be strictly enforced.

Member states are already able to deport EU citizens who are not exercising a ‘treaty right’ and the UK already does this. EU citizens already do not have an unqualified right to live anywhere in another member state. The proposal would tighten this further by ensuring that EU migrants were self-sufficient either through work or private funds.

Denis Cooper said...

Once again diverting attention to a secondary issue and away from the primary issue that our elected Parliament and government have effectively relinquished control of immigration from the rest of the EU. It not a case of just having for the time being relaxed control over the entry of the citizens of some countries because potential mass immigration of those people is not a concern, but having permanently and indiscriminately relinquished control over immigration from, and indeed through, all of the EU countries.

Jesper said...

@OE,

thank you for your reply.

I think we might also be in agreement that wages differ across the EU?

I think we might also be in agreement that to get a low wage job then you need to already be at the location where the job is?

I know that a low wage job with with an abusive employer in a rich country can for many be a lot better than the welfare received in the poorer countries in the EU.

The result is that some/many people will move in the hope of obtaining a job. The proposal will not change the logic or benefits in making the move.

I think we might be in agreement that welfare and low wage are linked?
If not, then cutting welfare should no longer be used as incentive to get people to accept low wage work. The proposal is about cutting welfare so if the link isn't there then the proposal is meaningless.

What the proposal will do is to put the migrant in a very weak position towards his/her employer. It will be legal discrimination and employers will (ab)use that fact, believing anything else is naive.
The losers will be the ones who move and the ones who'll be displaced by the ones who move.

& self-sufficient means something completely different between different people. Sharing a bedroom with complete stranger(s) and constantly being hungry (as opposed to starving) is by some seen as self-sufficient. So your closing comment: "EU migrants were self-sufficient either through work or private funds."
is at the moment not defined.

Maybe you'd like to define what you consider to be self-sufficient?

And I agree with you on this: "Rules on housing regulations, minimum wages, etc need to be strictly enforced."
However, I've yet to encounter a liberal willing to allocate resources for the enforcement. No resources allocated for it leads to no enforcement.
So, who should enforce it and who should pay for it? Any estimates on the costs?

Denis Cooper said...

I have to go out and so far I have only had time for a very quick scan of your pamphlet, but my first reactions are:

1. You want a new EU Directive.

Pass over the fundamental constitutional fact that this means you are still determined that immigration into my country, MY COUNTRY, which is supposedly an independent sovereign and democratic state, should be under a form of transnational control and not under the exclusive control of its citizens acting through their national democratic institutions and processes. In other words, you are setting yourselves up as inveterate enemies of our national sovereignty and democracy, and therefore of our nation.

As I say, pass over that abstract but nonetheless essential aspect, and produce a draft Directive starting with the usual series of paragraphs starting "WHEREAS" and inter alia citing the precise legal bases so that there can be no question at all of it being struck down or re-interpreted by an ECJ committed to the process of "ever closer union" leading to the establishment of a pan-European federation.

2. You say that an advantage of using secondary legislation rather than treaty change would be:

"It could also be amended by the ordinary legislative procedure, and, unlike Treaty amendments, therefore does not require the agreement of all national governments to bring into force these amendments."

I would point out to you that if we simply left the EU under Article 50 TEU then the new treaty arrangements would also not require the agreement of all the governments of the other EU member states, as under that "exit clause" they would adopt a common position by qualified majority voting and all of them would be bound by the EU treaties to accept that outcome and ratify the new treaty with the UK even if they didn't like it.

jon livesey said...

"Member states are already able to deport EU citizens who are not exercising a ‘treaty right’ and the UK already does this. "

Sorry, but until I got to this sentence, I thought you were making a serious reply.

We can't even *find* illegal immigrants, much less deport them.

The fact that we may deport some specific number, doesn't mean that you can make the blanket statement that we are able to do so in the general case.

The fact remains that if you make it to the UK, we won't let you starve, so the goals of limiting welfare while "saving" free movement just makes no logical sense.