Free movement: Why reforming rules on in-work benefits doesn't require treaty change

Following David Cameron's speech on immigration, much has been made of his comments that the package of measures he proposed to reform EU free movement would require treaty change.

In some cases, the speech was ambiguous about what exactly was being proposed. For example, did Cameron really say EU migrants will need a job offer before coming to the UK? This is important because it has legal implications regarding whether some, all, or none of the proposals require treaty change, changes to secondary EU legislation or simply changes to domestic law. Although, politics will of course also play a major part.

In addition, some have questioned whether the proposal, outlined by Professor Damian Chalmers and our Research Director Stephen Booth and adopted by Cameron, to limit EU migrants' access to in-work benefits for a certain period of years could be achieved without treaty change, as the authors claim.

Today we have published  Chalmers' and Booth's assessment of the legal implications of the measures proposed in the Prime Minister's speech and a restatement of the case for why access to in-work benefits can be restricted via amendments to EU legislation rather than a treaty change.

Safe to say much of this is legally complex, but below is a summary of a summary of a longer legal note by Professor Damian Chalmers, which you can read in full here.

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David Cameron's speech can be divided into four broad types of demand:

1. Four-year restriction on EU migrants’ access to in-work and child benefits

David Cameron mentioned two proposed reforms:

a) “once they are in work, they won’t get benefits or social housing from Britain unless they have been here for at least four years.”

This could be achieved via amendments to EU legislation: This is the most legally complex of the proposals but we argue that it does not require Treaty change for two reasons. Firstly, access to in-work benefits is currently granted in EU law by virtue of a piece of secondary legislation, rather than by the Treaty article on free movement of workers. Secondly, the Treaties grant considerable discretion to the EU legislature (the Council of Ministers and the European Parliament) to place restrictions on access to such benefits provided that the legislation facilitates free movement more generally (which the relevant Directive would continue to do), the restrictions are based on objective criteria and are not disproportionate to the objectives they pursue.

b) “If their child is living abroad, then there should be no child benefit or child tax credit at all no matter how long they have worked in the UK and no matter how much tax they have paid.”

Depending on what is sought this could be achieved under domestic law or amendments to EU legislation but if the objective is a hard and fast residence requirement this could be achieved via amendments to EU legislation rather than Treaty change.

2. Tighter restrictions on EU jobseekers

David Cameron mentioned two proposed reforms:

a) “We want EU jobseekers to have a job offer before they come here and to stop UK taxpayers having to support them if they don't.”

This depends on exactly what is proposed. If he meant that any EU citizen must have a job offer before they can come into the UK, this would certainly require Treaty change.

However, read in combination with the pledge to “stop UK taxpayers having to support them”, the proposal is better interpreted as suggesting that no social benefits will be granted to jobseekers. EU law already establishes that jobseekers are not entitled to social assistance and therefore such a reform would not require changes to EU legislation.

b) “We also want to restrict the time that jobseekers can legally stay in this country. So if an EU jobseeker has not found work within six months, they will be required to leave.”

In principle, the UK can already do this under its domestic law. EU law only grants a right of residence for more than three months to those who are employed, self-employed, and economically self-sufficient as well as their family members.

However, the ECJ has ruled that individuals cannot be expelled as long as they “can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged”. While the onus is on the individual to prove this, clarifying what this condition means could be achieved by amending EU legislation. A hard and fast six month deadline would likely require Treaty change.

3. Abuse of free movement

David Cameron mentioned two proposed reforms:

a) “stronger powers to deport criminals and stop them coming back…and tougher and longer re-entry bans for all those who abuse free movement including beggars, rough sleepers, fraudsters and people who collude in sham marriages.”

Those deported at the time of conviction can be refused re-entry under existing EU law. Indeed, the German government has said it will use its domestic law to impose re-entry bans of five years for those who commit benefit fraud. The potential difficulty is for those EU citizens with family in the UK, who may be able to appeal deportation under the rights to family life guaranteed by the European Convention on Human Rights.

In the case of significant criminal offences where the individual has served a long prison term, the deportation may be several years after the offence, and it is open to the individual to argue that they are a reformed character. This poses difficulties as the individual threat to public policy must be a present threat. Albeit this requirement is currently imposed by an EU Directive, we believe that, if the provision were repealed, there is a strong chance that the ECJ would reinstate it as a Treaty requirement.

b) “We must also deal with the extraordinary situation where it's easier for an EU citizen to bring a non-EU spouse to Britain, than it is for a British citizen to do the same. At the moment, if a British citizen wants to bring, say, a South American partner to the UK, then we ask for proof that they meet an income threshold and can speak English. But EU law means we cannot apply these tests to EU migrants.”

This would likely require Treaty change: There are a number of judgments where the ECJ has stated that refusing to grant a non-EU national family member residence would violate the Treaty because it would discourage the EU citizen from exercising their rights to free movement.

Alternatively, it would be possible for new EU legislation to harmonise requirements on family reunification between EU citizens and non-EU nationals, so that the latter could only join the EU citizen in another member state if they meet certain requirements. However, this would entail harmonisation in an area (non-EU migration) where successive UK Governments have sought to limit the EU’s influence. Concern to prevent marriages to citizens from other member states being used as a vehicle for marriages of convenience can be addressed through tightening up existing EU legislation.

4. Tighter restrictions on migration from new EU member states

David Cameron proposed:

“So we will insist that when new countries are admitted to the EU in the future, free movement will not apply to those new members until their economies have converged much more closely with existing Member States.”

The UK could use its existing veto over new countries joining the EU to insist on these terms.

Did David Cameron really say EU migrants will need a job offer before coming to UK?

The dust has settled somewhat after Cameron’s much-anticipated immigration speech.

As we set out here, we welcomed the balance the Prime Minister struck and were particularly pleased that he co-opted our proposal to let the principle of free movement stand, while limiting access to in-work benefits until after a certain period working in the UK.

However, there is one particular passage that has caused some confusion, which is the following:

“…Second, we want EU jobseekers to have a job offer before they come here and to stop UK taxpayers having to support them if they don’t.”

This sounded like David Cameron wants to require EU migrants to have a job offer before they come to the UK. As some have pointed out this would definitely require a treaty change, since the ECJ has made it clear that the EU treaty articles on free movement must be interpreted as granting a right to move “freely within the territory of the other Member States and to stay there for the purposes of seeking employment.”

However, elsewhere in the speech, Cameron was much less categorical:

"So let’s be clear what all of these changes taken together will mean. EU migrants should have a job offer before they come here. UK taxpayers will not support them if they don’t. And once they are in work, they won’t get benefits or social housing from Britain unless they have been here for at least four years."

In combination with the "UK taxpayers will not support them" bit, the "should have a job offer" line is much more like an aspiration than a requirement. Indeed, this is the logic of the rest of the speech: Cameron would not have needed to pledge to ask unsuccessful jobseekers to leave after six months if they were to be denied entry in the first place.

Admittedly though, Cameron could have been much clearer on the specific point about the need for a job offer prior to entry. The ambiguity in his speech may risk creating false expectations.

We will publish a short briefing in the coming days looking at the various legal implications of the proposals set out in the speech.  David Cameron was clear that he thought the entire package would require treaty change. However, there are several elements to the speech and the proposals - changing the rules around in-work benefits only one. Here, we are of the view that ours and Professor Damian Chalmers' proposed changes to in-work benefits could be achieved via EU legislation rather than treaty change (we should point out that others disagree).

So stay tuned...

What impact will Cameron’s EU free movement changes actually have on the ground?

We’ve laid it out in our response today, but in an attempt to elucidate things we’ll go into a bit more detail in this post. In addition to the general 'fairness' discussion - making sure that there's a link between what people put in and what they take out - the debate is now centred on the practical impact of the proposals.

In a twitter discussion we had last week with Michael O’Connor and Jonathan Portes on the number of EU migrants effected by these sorts of curbs, they seem to claim that around 10% of "Eastern Europeans" will be affected. The conclusion they seem to draw is that the proposal won't make that much of a difference.

To reach that figure they seem to simply take the percentage of Eastern European's claiming benefits in 2013 - it does not seem to be based off the data over four years or compared over time to see if this snapshot is representative. The data available is unfortunately pretty bad, but there's enough data to look over time, rather than a single year.

 

As we have laid out in our response today, we think these measures will hit between 14% and 16% of total EU migrants - one in seven EU migrants. This is shown in the table above and taken from the average of the final four years percentages in the graph below.  As we have noted before, its obvious and logical that the longer migrants stay in the UK the more benefits they claim (as they have more children etc) - but from that it's hard to draw the conclusion that the impact is insignificant.

As a share of gross flows (shown in graph below) this will likely impact around 100,000 people over the four year period. This is based on flows from the four years before 2008 and 2014.

Is this a significant impact?  Depends on what you want to achieve. If you want to end free movement, it's not. If you want to put a cap on free movement, it's not enough either. That's not what we want, however - we think free movement should stand. That's the point.

If, however, you want to target the one area that seems to be of the most concern to the UK with respect to EU migration - the low-wage sector - then 100,000 over four years matters. This number will be largely at the low-wage end of the labour market - since these are the workers that claim significant amounts of in work benefits. In other words, as we've said all along, this is a targeted policy, intended to take away the de facto taxpayer-backed subsidy to perform low-paid jobs which does not exist in most other EU countries.

It's impossible to put a firm number on how many people will decide not to come due to this measure. We've provided plenty of figures showing how this would take away the incentive in many cases to move from a minimum or an average wage in some parts of Europe to a minimum wage in UK, using in-work benefits as effective top-up, in turn making the move financially attractive in the first place. In other cases the de facto income gap between the sending state and the UK will be massively reduced.

Taken together, and as anyone who has moved across borders will know, changes in the cost of living in the country of destination will feature in any decision to make the move in the first place. Perhaps not in a detailed spreadsheet kind of way, but it does clearly feature.

The volume dimension is one part of the the package - and it shouldn't be over-stated. However, it certainly shouldn't be under-stated either. Unless, of course, you want to end free movement. 

Will the new migration figures force the Tories to go one step further on free movement?

Where do migrants to the UK come from the EU or non EU?

David Cameron's hopes of getting back on the front foot on migration have been dealt a blow this morning - ONS figures show that immigration is up, and specifically immigration from the EU is up as well.

These figures are important for two reasons, firstly the timing - these figures come ahead of a much anticipated speech David Cameron is about to deliver on the whole subject. Secondly, the numbers when compared to two targets, firstly the Conservatives' 2010 manifesto migration target of "tens of thousands a year not hundreds of thousands." Secondly, the comparison to migration flows under Labour. Here are some of the headline figures:

• Total net long-term migration estimated to be 260,000 in the year ending June 2014 up from 182,000 in the previous 12 months.
• Total gross immigration of 583,000 in the year ending June 2014, a statistically significant increase from 502,000 in the previous 12 months.
• EU immigration up 45,000 and non-EU up 30,000.
• 32,000 Romanians and Bulgarians came to the UK up 11,000 and EU15 migration also up 10,000.
• Estimated employment of EU nationals resident in the UK was 16% higher in July to September 2014 compared to the same quarter in 2013.

Interestingly, while immigration is also up from the new EU member states, the longer term trend driving EU migration is that from the EU15.

So how will all this play out? Well as you can see from the ONS graph below EU migration is not the largest component in total UK migration. That non-EU migration also went up for the first time in a while is politically significant.

However, EU migration is a large portion. The fact it is not showing any sign of decreasing will fuel trust issues over both the EU and migration.

Politically, perhaps the most significant aspect here is that net migration to the UK is now higher than when Labour left office (but lower than the peak during the Labour government). Ukip and some media are already jumping on this. Ahead of the speech, there’s one key question:

Has the Tory leadership already ‘priced in’ today’s figures, or has this made a cap of some sort more likely? 

Cross-party consensus developing in favour of OE's proposals for free movement reforms

Deputy Prime Minister Nick Clegg has today said he wants EU migrants to be blocked from accessing the new Universal Credit – which includes income-based jobseeker’s allowance, employment and support allowance, income support, child tax credit, working tax credit and housing benefit – until they have worked in Britain for six months: the benefit would then only be payable for a maximum of six months.

This echoes Open Europe’s proposal that EU migrants should only have access to these benefits after a certain residence period, but that the principle of free movement should stand.

Mr Clegg has also suggested that he wants to permanently restrict the access of migrants to in-work benefits like tax credits, saying they should only be paid to people working the equivalent of a 35-hour week on the minimum wage: a threshold of £227 instead of the current £153.

Writing in the FT, he argues that:

As we streamline our welfare system by combining a range of benefits in a single Universal Credit, we should make sure that only migrants who have worked and contributed can receive the support. New jobseekers should not be eligible. Applying the same principle – that support should be reserved for migrants who are paying something into the pot – we should look at increasing the earnings threshold for in-work benefits such as tax credits. EU migrants could, for example, be required to work the equivalent of full-time hours on the minimum wage in order to qualify.

Meanwhile, Iain Duncan Smith has told MPs that  EU jobseekers will not be able to claim Universal Credit and that access to in-work benefits "will be negotiated" within the EU.

There are two interesting things about this. First, following OE's first pamphlet on this a month ago, there now appears to be cross-party consensus on the need to re-write the rules around in-work benefits - minus Ken "party like its 1992" Clarke, of course.

Secondly, this is a blessing and a curse for Cameron. The former because it boosts the chances of getting stuff done in Europe. The latter, because he does need to differentiate himself somehow from the others and he needs to announce something "new"in his forthcoming speech.

IDS sets out broad strokes of reforms to EU free movement

The Telegraph has an interesting transcript of an Iain Duncan Smith interview with LBC Radio, which outlines the Government's current thinking on EU migration and which might signal the types of reforms that David Cameron is weighing up before delivering his promised speech on immigration in the aftermath of the Rochester and Strood by-election.

Here's what the Work and Pensions Secretary said, following this week's European Court of Justice ruling on access to benefits:

"This is about people who want to enter a country and have no prospects of work and are not intending to work, so that is stopping and shutting the door to them as we have done." 

Essentially, IDS says that the ECJ's ruling runs with the grain of the domestic changes the UK has already made to restrict access to out-of-work benefits. But he is clear that he wants to go further:

"The next problem is people who come to work, and then can claim full tax credits even though they have made no contribution. And that is the point I am making... countries shouldn’t have to do that. They shouldn’t have to support people who are coming over here, who have made no contribution." 

This is very much along the lines of what our Research Director Stephen Booth and Professor Damian Chalmers proposed in their pamphlet on EU migration and national welfare systems - a re-write of EU legislation to enable national governments to restrict access to non-contributory benefits for up to three years.

And, thirdly, IDS suggests that:

"And the third area which you talked about…is that the issue around freedom of movement isn’t that you don’t want to stop freedom of movement, but what you want to be able to say is: ‘sometimes there are limits that communities can absorb people and the pressure on public services and housing and stuff like that’." 

"European rules need to take recognition of the pressure that puts on local communities, and that’s really part of the negotiation."

This last point is perhaps the most interesting as it suggests that the option of some form of 'emergency brake' on EU migration is still under consideration.

As we have said before, there are many ways in which such a mechanism could operate, and it might just be negotiable, although this would be a much taller ask than reforming the rules around access to welfare.

'Benefit tourism' is a red herring but welfare and low-income migration are inextricably linked

Today’s UCL report on the fiscal impact of migration to the UK has understandably provoked a lot of interest.

The top line findings are that:

• Between 1995 and 2011, migrants from EEA countries made a positive fiscal contribution over that period of more than £4bn, while those from non-EEA countries made a negative contribution of £118bn, compared to an overall negative native fiscal contribution of £591bn.
• The positive net fiscal contribution of recent immigrant cohorts (those arriving since 2000) from the A10 (the ten Central and East European EU member states that joined since 2004) amounted to almost £5bn, while the net fiscal contributions of recent European immigrants from the rest of the EU totalled £15bn. Recent non-European immigrants’ net contribution was likewise positive, at about £5bn. Over the same period, the net fiscal contribution of native UK born was negative, amounting to almost £617bn.

The obvious conclusion to draw from such studies is that the economic case for EU migration is clear and that ‘benefit tourism’ is simply a myth in the immigration debate (as others point out, there are social and economic arguments for and against migration). Open Europe has consistently sided with those who argue that on net, EU migration is positive for the UK, also from a purely transactional point of view.

Why then the focus on EU migrants’ access to welfare?

We and others have suggested that the Government should prioritise this as an issue for negotiations on the reform of EU free movement - rather than seeking to impose caps on the number of EU migrants or end free movement. Not because we think the majority of EU migrants are ‘benefit tourists’ but because that, unlike many other EU states, the UK offers effective income support to low-paid migrants. This creates some unintended consequences.

Again, at the aggregate level, free movement brings economic benefits. But the aggregate net benefit masks net losers (similarly, there is no such thing as a typical EU migrant – they perform different jobs, earn different wages and, if they are entitled to claim welfare, may not do so). Nevertheless, it is the duty of governments to come up with policies that mitigate the effect on those who might lose out from migration.

The labour market is the obvious area where the impact of migration is felt differently. The evidence overwhelmingly supports the view that low-skilled and low-wage workers can be adversely affected in the form of greater competition for jobs and a depressing effect on wages, even if the magnitude of this tends to be overstated. Higher-paid workers tend to gain.

This is where welfare does come into it – particularly for a country such as the UK which supports low incomes with fairly generous levels of income support in various forms. ‘Benefit tourism’ is indeed a red herring, in the sense that the vast majority of migrants move to work, not to ‘sponge off the state’. However, as our recent pamphlet argued, it is hard to justify to domestic electorates in economic and social terms why low-paid migrant workers should be immediately entitled to income support paid for by their new host country. These relaxed rules on access to state top-ups not only act as an extra incentive to migrate into low-income jobs, they prevent national governments from targeting these policies at their own citizens.

Many have suggested that reform to EU access to welfare rules is simply about tackling ‘abuse’ and ‘welfare tourism’. This not only stigmatises migrants, the vast majority of whom do not ‘abuse’ the system but simply abide by the current rules, it devalues the fundamental point – which is that it is probably not politically sustainable for national governments, in some instances from the get-go, to subsidise low-income migration via their welfare systems.

Two additional points. First, such a system need not mean that EU migrants are left to fend entirely for themselves, only that like in most other EU countries, benefits are tied to contributions through employment. For example, non-EU migrants who have a right to live in the UK but 'without recourse to public funds' are entitled to basic safety net benefits tied to their National Insurance contributions, but not income support. There are also discussions to be had about raising the floor for working conditions in general, including revisions to the minimum wage.

However, secondly, the UK should also be aware of the trade-offs involved. Fewer EU migrants and higher wages - if that is the objective - could well make the UK a less competitive place.

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.

What are David Cameron's options on EU immigration?

Following reports that David Cameron is considering a new announcement on how he would renegotiate EU free movement, potentially considering an "emergency brake", we have set out in a short briefing what his potential options are.

Here are the key points:

The debate about internal EU migration has two dimensions. Though inter-linked they should be treated separately. “Fairness” – who can access what benefits and when; and “volume” – how many migrants come to the UK every year. David Cameron is reportedly considering moving from addressing fairness to making a demand to curb the numbers of EU migrants to the UK.

There is substantial support at the EU level to give national governments greater control over access to their welfare systems and doing so would not require treaty changes but a qualified majority vote among governments and the agreement of the European Parliament.

Any move to limit the numbers of EU migrants coming to the UK would most likely require treaty change (with the possible exception of an ‘emergency brake’) and therefore the unanimous agreement of other EU governments. It is currently unclear what exactly – if anything – Cameron might ask for on volume, but he may have three broad options, which in order of increasing difficulty to secure EU agreement are:

1. An ‘emergency brake’ triggering temporary controls on EU migration if the flow is considered ‘destabilising’, too large and/or concentrated;
2. Permanent quotas on EU migrants;
3. A points-based system, similar to that which exists for migrants from outside the EU, differentiating between “skilled” and “low-skilled” migrants.

There are a number of questions around how an ‘emergency brake’ could be organised practically, but if this is David Cameron’s top EU negotiating priority he may just achieve it, given that there are precedents for brakes in other areas in the EU treaties and there is increasing awareness across the Continent that public concern about free movement is contributing to the EU’s unpopularity.

Whatever the merits of the proposal, as a domestic political strategy, it is unclear whether an ‘emergency brake’ would be enough to see off UKIP – as Cameron could still be accused of failing to secure full control over Britain’s borders and migration policy – although it may reassure 'swing voters'. Therefore, Cameron risks spending a lot of political capital abroad for limited political return at home.

Securing either option 2 or 3 would be an extremely difficult task as it would involve fundamentally rewriting the EU treaties and unpicking one of the founding principles of EU membership. There is likely to be little or no political appetite for such a move among other EU countries. The Swiss experience shows that, even outside the EU, measures to limit EU migration could result in threats from Brussels of reduced trade access to EU markets.

This is not to say that EU rules on free movement can ever be changed, but rather that this is one area where Number 10 will find it hard to get away with creating the headline first, and the content later. Given the domestic sensitivity of the issue and how deeply it strikes at the heart of existing terms of EU membership, successfully negotiating change requires a well thought out plan that has domestic and European level buy-in.

David Cameron and his Ministers continue to tread fine line on EU migration reform

UPDATE: The Prime Minister has now given his conference speech. This is the passage on EU migration:

"Immediate access to our welfare system, paying benefits to families back home, employment agencies signing up people from overseas, not recruiting here, numbers that have increased faster than we in this country wanted and at a level that was too much for our communities and for our labour markets. All of this has to change and it will be at the very heart of my renegotiation strategy for Europe. Britain: I know you want this sorted, so I will go to Brussels, I will not take no for an answer and when it comes to free movement I will get what Britain needs."

So, no new policy announcement today. However, David Cameron's reference to the "numbers that have increased" and "at a level that was too much for our communities" leaves the question we posed below hanging. He could argue that tackling migrants' access to benefits (particularly in-work benefits) will help with the numbers, as it could reduce the incentive for some to migrate, particularly those at the lower end of the job market. Will he be prepared (or be allowed) to stop there?

Original post: The Times and the Mail today both feature stories on the increasing pressure on David Cameron to take a stronger stance on migration from the EU.

The Times suggests that senior figures within his party are calling on him to use his renegotiation to explore the introduction of quotas on migrants from existing EU member states. It quotes London Mayor Boris Johnson saying that

“We all want change, we all want a renegotiation. We want sensible control of the numbers of people coming in. I think you would agree that it is the right and duty of every state to have some idea of how many people want to settle in its boundaries, what jobs they propose to do there, and how much they cost the local authorities. Isn’t that fair enough?”

As we have noted before, the free movement debate is about fairness and volume. So far, David Cameron and his Ministers have concentrated on the former - rules on migrants' access to benefits can be changed through secondary EU legislation via QMV and co-decision with MEPs and there is widespread support for addressing the issue among like-minded countries in Northern Europe. David Cameron is also on the record saying that he wants new conditions placed on migrants from countries that join the EU in future. However, the latter issue, addressing the numbers of migrants coming from existing EU member states is much tougher - it means addressing what is seen as a fundamental tenet of the EU and altering it would require unanimous agreement, almost certainly via treaty change.

Home Secretary Theresa May and Foreign Secretary Philip Hammond have both been quoted on the subject today, but both have stuck to line that an 'emergency brake' or measures to tackle the numbers of migrants would apply to new members of the EU, not existing ones.

May said:

"This is an area where David Cameron and I have said we need to look to the future to talk about the rules, particularly for countries coming into the EU in the future, and putting some sort of brake on their access to full free movement. For example, one idea we’ve suggested is they shouldn’t have full free movement rights until their GDP, their economy, is at a certain level compared to other economies within the EU."

Similarly, Hammond told an Open Europe fringe event that:

“It isn’t going to be enough just to look at benefit abuse...We are going to have to look at how we accommodate future new member states with the implementation of free movement, future new member states and how we restrict them. We are going to have to look at how we deal with destabilising flows."

There has been speculation that Cameron will address the issue in some way in his conference speech today, it will be interesting to see how he treads what is an increasingly fine line.

Latest UK migration statistics likely to further turn up political heat on EU migration

The ONS has this morning released its latest long-term UK migration statistics and they are likely to increase the intensity of the spotlight on EU migration - if that was possible. The headline statistics are:

• 560,000 people immigrated to the UK in the year ending March 2014, a statistically significant increase from 492,000 in the previous 12 months. Two-thirds of the increase is accounted for by immigration of EU citizens (up 44,000 to 214,000).
• 28,000 Romanian and Bulgarian citizens immigrated to the UK in the year ending March 2014, a significant increase from 12,000 in the previous 12 months.
• This contributed to overall net migration rising to 243,000 from 175,000 the previous year, way over the totemic 100,000 figure targeted by Conservative ministers.
• It is also interesting to note that the decline in non-EU migration (the part the Government can control) seems to have stopped. The latest estimates for the year ending suggest that 265,000 non-EU citizens immigrating to the UK, a slight increase but not a statistically significant change, from 246,000 in the previous year. Net migration of non-EU citizens increased from an estimated 145,000 in the year ending March 2013 to 162,000 in the year ending March 2014.

Source: ONS

These estimates show that 54%, 30% and 14% of total EU immigration was accounted for by citizens of the EU15 (the 'old' EU member states), EU8 (central and eastern member states that joined in 2004) and EU2 (Bulgaria and Romania) respectively. Overall net migration of EU citizens was 131,000, a statistically significant increase compared to 95,000 in the previous year.

This highlights, once again, that a large part of the recent increase in EU migration is being driven by migration from the more established EU member states, presumably a large number of them looking for an alternative to the high levels of unemployment in the countries worst affected by the eurozone crisis.

In contrast, migration from the 2004 accession states has been relatively stable. Net migration from these countries was 41,000, not a statistically significant increase compared to the 34,000 in the previous year. For Bulgaria and Romania, it looks as though the ending of transitional controls on access to the UK labour market in January 2014 could have had some impact with a 12,000 increase in migration on the previous year (although we should be careful since this data mostly reflects 2013), and almost 80% of EU2 citizens arriving for work-related reasons.

Yesterday saw the German government announce tough new domestic rules on EU migrants' access to benefits, which closely mirror those announced by David Cameron late last month. Downing Street has welcomed the German proposals and added, "Clearly there is now a case for looking at other things we want to do where we may need to change the [EU] rules". The question now is whether Cameron can muster enough European support to change the EU rules in this area sufficiently to satisfy public and political opinion in Britain.

Fairness vs Volume: EU free movement debate hotting up in upper echelons of the Tory party

The Times yesterday noted that pressure among some senior Tories is building on David Cameron to prioritise the negotiation of 'curbs' on the free movement of persons. The word 'curb' is used often in this debate, but it is not always clear what it is that people are demanding be 'curbed'.

There are essentially two issues here: one about fairness - fair, sound and transparent rules around who can access what benefits and when. And one about the level of EU migration - volume. The first is what David Cameron and Downing Street have been trying to address by tightening EU migrants' access to out of work benefits. As we've noted before, more could certainly be achieved through amending legislation at the EU level.

Other issues that arguably fall into this category are access to the UK's system in-work benefits, such as working tax credits, which are meant help to boost incomes at the lower end of the labour market and ease the transition from out of work benefits. However, the UK is currently unable to regulate EU migrants' access to these under the EU's current non-discrimination rules and the definitions of an 'EU worker' set down by EU courts. This is another area that could potentially be addressed to some degree by amending secondary legislation.

But what is clear is that an increasing number of Tory 'big beasts' - Iain Duncan Smith, Theresa May and Boris Johnson - are looking to address the second issue: public concerns about the volume of EU migrants (the latest stats showed a marked increase in the number of central and eastern EU workers). This is a much taller ask and would almost certainly require treaty change and therefore unanimity. This does not make it entirely impossible but certainly more difficult than addressing concerns about fairness. Remember, this involves amending one for the most fundamental principles of the EU treaties.

Another massive question is how, exactly, strengthened control over the volume of EU migration could work in practice.  There have already been suggestions that the Home Office is considering options that fall under this category. In May 2012, at the height of the Greek social and economic crisis, it was reported that Theresa May was looking at whether emergency immigration controls could be applied if required by exceptional circumstances. Another proposal, put forward by David Goodhart, is that governments should be able to introduce qualifications or restrictions on free movement "if the EU inflow breaches a cap of, say, 75,000 in a single year".

In any case, this will be a key debate within Tory ranks leading up to the potential 2017 EU referendum.

Latest employment stats suggest no new 'wave' of Bulgarian and Romanian migration

The ONS has today released its UK labour market statistics for the period April-June 2014, which include the latest estimates of the number of EU migrants in the workforce. These are the key points:

• In total, there were around 820,000 more people employed in the UK than a year earlier, of which around 500,000 were UK born and 327,000 were non-UK born. 
• Of the non-UK born, 187,000 were from the EU and 140,000 from non-EU countries.
• The number of Bulgarian and Romanian born people employed in the UK stood at 153,000, up by 13,000 from the same period last year (a 9% increase), before transitional labour market controls were lifted.
• However, the numbers from other central and eastern European countries increased far more dramatically to 861,000, up by 178,000 from last year (a 26% increase).
• The number of migrants from the ‘old’ EU member states fell by 9,000 (a 1.2% decrease).

This is only one set of data and refer only to employment (not the same as migration figures, the latest batch of which will be released later this month), and it will be interesting to see how the figures match up.

Source: ONS

The chart above breaks down the share of EU born employed and shows that the group responsible for the biggest increase is the central and eastern European countries that joined the EU in 2004. The Romanian and Bulgarian share is up a little but, as we noted before, there has not been a major change since the lifting of transitional controls on 1 January 2014. Interestingly, the number of people employed from the 'old' EU 14 states has dropped slightly - the number of migrants from this group had been increasing as a result of the eurozone crisis. Is this a sign that this trend is slowing or reversing?

Is David Cameron's latest immigration crackdown legal under EU law?

David Cameron today announced another 'crackdown' on EU migrants, stating that from November, EU jobseekers "will only be able to claim Jobseeker's Allowance and other key welfare benefits for a maximum period of 3 months." This will halve the current period over which unemployed EU migrants can claim these benefits. The result of this change will therefore be that new arrivals from the EU cannot claim Jobseeker's Allowance for their first three months in the UK but can receive it for three months after that, rather than the six allowed under the existing rules.

In addition, a consultation has been launched on banning overseas-only advertising – legally requiring employment agencies to advertise in Britain, and new plans to restrict the number of Job Centre Plus jobs which are automatically advertised on an EU-wide job portal.

The European Commission has already said it will investigate whether the changes to the benefit rules are legal under existing EU law (the UK and Commission are already locked in a long-running legal dispute over EU migrants' access to benefits). So, are they?

Needless to say No10 and the DWP are confident they are, and we think the Government has a strong case. However, as we noted of David Cameron's last 'immigration crackdown' in November 2013, the UK is at the very limit of what it can do within the confines of EU law.

In order to keep this latest measure within the EU rules, it will only apply to new arrivals to the UK who have never worked in Britain. This is because under existing EU rules, people who have worked in the UK must be treated differently because they enjoy 'worker status' for at least six months. As others have noted the impact of this policy on the ground is therefore likely to be small as not many EU migrants will be affected.

We have ourselves called for the Government to address public perceptions about free movement, primarily by instilling the principle that EU migrants should only be entitled to benefits after having made an economic contribution. This is clearly David Cameron's intention and he used today's Telegraph article to make the point: "You cannot expect to come to Britain and get something for nothing."

But unless this latest measure is followed up with reform of the underlying EU legislation, the UK Government is in danger of chasing diminishing returns with the risk is that voters simply become desensitised to the flurry of crackdowns that make only piecemeal changes.