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? 

The £1.7bn question - who's right: Osborne, Farage or the European Commission?

Below we give a blow by blow breakdown of what George Osborne did or did not secure at today’s EU finance ministers meeting. This basically comes down to the UK’s rebate and how it’s applied - and whether it was always going to apply to the £1.7bn.  Osborne claimed that:

As PM said EU bill unacceptable. Now we've halved the bill, delayed the bill & pay no interest on the bill. Result for Britain
— George Osborne (@George_Osborne) November 7, 2014

Whilst Ukip leader Nigel Farage has claimed that:

Osborne trying to spin his way out of disaster. UK still paying full £1.7bn, his credibility is about to nose dive.
— Nigel Farage (@Nigel_Farage) November 7, 2014

This is what EU Budget Commissioner Georgieva said at a press conference just now:

“As we all know the UK receives a rebate on their contribution, but in years when the UK has to pay additional because of GNI corrections, normally this payment would be on 31 December and it would be in the full amount. With the proposal [under discussion]…in exceptional years this period of time would be stretched into the next year, and when this happens, and it would be in these exceptional circumstances, then the payment and the rebate on the payment could converge. In a normal year, they would not. In a normal year, you have a payment on 31 December and then next year, in the spring, we have the calculation of the rebate on this payment.” 

So who’s right?

Well, Osborne is right that the UK will pay half of the initial £1.7bn demand, since the UK’s rebate will now knock off the difference. So in that sense, Farage is wrong. Britain “will not pay the full £1.7bn”. However, the Government’s position isn’t’ entirely what it seems either, since it’s possible (though still not clear) that the rebate was always going to apply to the £1.7bn.
 
Confused? Don’t worry. Few people know how the rebate actually works. Below is our attempt to clarify the issue.

What has actually been agreed?

• The UK secured a delay on its payments and will now have until September 2015 to pay. It will probably pay in July and September 2015.
• It was also agreed that the UK’s £1.7bn bill will have the UK’s rebate applied to it (in the same way all annual contributions do). The Government claims that it wasn’t ever clear whether the rebate would apply, however, Commissioner Georgieva’s suggest that it always would. Usually  the rebate operates on a one year time lag, but now it will be netted off at the same time when the payment is made. The UK government also claims that the rebate applied to the specific amount is above and beyond that which applies normally, due to the way different facets of the rebate are applied and the time period over which it was calculated (we're still looking into this one). 
• This accounts for the reduced the bill from £1.7bn to £850m.

So, Osborne has effectively achieved an ‘interest free’ payment plan for the surcharge, which will see it coincide with the rebate on said surcharge.

Would this always have happened?

• It has been unclear for some time how the rebate would factor in here. Either people were purposefully trying to obscure the question or it was genuinely unclear.
• However, now that it has been settled that the rebate would be applied, it can be said that this reduction would always have happened. The main change is that the rebate has been moved forwarded allowing the initial payment to be reduced.
• On net the UK will pay £850m, but this should always have been the case thanks to the rebate.

Does this impact other countries?

• Since other countries essentially pay for the UK rebate, they will on net be hit.
• Our understanding is that the countries will still get the full amount expected from the GNI calculations – i.e. France should still get €1bn.
• That said, since the rebate is being paid and also a year early, it is likely that their annual EU budget contributions will increase in 2015. On net then, the gains for certain countries (such as France) could actually be less than expected.

So are we looking at a cash flow problem for the EU budget?

• One outstanding question is how this will all work in practical terms. Judging from the European Council conclusions, countries who are getting a pay-out from the GNI calculations can still claim the money on 1 December.
• However, countries who are paying in large amounts can delay their payments until September 2015. It is not clear whether there is enough spare cash in the budget to smooth over this gap.
• Furthermore, the UK is using its rebate to offset its payment. This will not be covered until all countries have paid in their (higher) annual EU budget contributions next year. This further worsens the cash flow problem.

A political conspiracy or genuine uncertainty?

• Questions will now swirl around when all this was known. Surely, if the rebate applies, that was always known to be the case? Logically, since all UK contributions are subject to the rebate, it always was going to be. The only thing that wasn’t entirely clear was when and how it would be factored in. While this is tricky to work out, it’s not clear why the HM Treasury and the European Commission let the dispute run for two weeks. If this was a “set up” by the UK government to claim success, then the Commission was in on it.
• Maybe the handover in Commission has helped breed uncertainty.

So what’s the verdict? Who’s right, Farage, Osborne and Georgieva? Well, Farage is wrong, Osborne right on the amount but may be exaggerated the extent of the concession. The most right is probably Georgieva - though, we still don't have evidence that the rebate was always going to apply.

And of course, the UK will still pay an additional £850 million.

We will update this as events unfold, but what a mess.

The Farage Paradox part II: Support for EU membership at highest level since 1991

Back in May, we pointed out the so-called 'Farage Paradox' - even as the party came first in the European elections in the UK and Farage himself was widely seen as having bested Nick Clegg in their TV debates, support for leaving the EU had fallen to its lowest level for a long time according to Ipsos-MORI with 37% in favour of Brexit and 54% in support of staying in.

A few months later and UKIP is still riding high in the polls with a victory in the Clacton by-election under its belt and with the Tories on the run in Rochester and Strood - amid all kinds of noise around EU migration. However, on the wider EU question, support for membership has climbed even higher - today's Ipsos-MORI poll has support for membership at 56% - its highest since 1991!! - with support for leaving on 36%.

It's not entirely easy to nail down the drivers behind the trend - even the UK's public defeat over the appointment of Jean-Claude Juncker as European Commission President hasn't reversed it but one possibility could be that as the prospect of exit becomes more real, especially in the wake of the Scottish referendum, people are more likely to go with the 'better the devil you know' option. Another explanation is that Farage is good at stirring up support in concentrated parts of the country, but his divisive rhetoric turns others off. A feel-good factor over the economy (through as we've argued before, this can cut both ways) combined with increased uncertainty around the world - making the status quo look safer and club membership more attractive - could be other reasons.

Either way, it shows that even as UKIP find a way of tapping into disenchantment with the EU and mainstream UK politics, they are failing to convince  people that they have the right remedies and this risks derailing the broader 'out campaign, as the pro-Bexit Tory MP Michael Fabricant has warned:

"The out team will be very different, with no leader who commands popular support. Before you can even make the case for Britain becoming a mid-Atlantic economic hub, freed from the shackles of Brussels diktats, the Eurosceptics will be all over the place. No clear leader, and angry looking grey men who have been arguing the toss on Europe for years, will fail to impress. Yes, Nigel Farage is clearly the most charismatic Eurosceptic in years, but does anyone really imagine Farage being the Alex Salmond of the out campaign? Would he be persuasive enough to seduce a nation?"

However, it is worth bearing in mind that other polls have slightly different outcomes. Today's YouGov poll for the Times' red box showed lower levels of support for EU membership - support for membership is roughly the same under their 'major changes' scenario as under Ipsos-Mori's status quo scenario (YouGov's status quo option assumes renegotiation was attempted but failed to secure even modest changes, so can't be directly compared with the Ipsos-MORI one).

This shows that even if some polls suggest a majority of Brits would vote to stay in no matter what, EU reform and renegotiation remains by far the best option for any UK government. 

As has been noted before, that's why some Better Off Outers are now starting to fear that long sought after In/Out referendum - in itself an ironic development. 

Has Marine Le Pen put Farage's European Parliament group out of business (and out of pocket)?

UPDATE 16:10 - A spokesperson for Lithuania's Order and Justice told EUobserver that the party "hasn't had any discussions" with Marine Le Pen on a possible alliance. This confirms Le Pen remains at least one party short of forming a group in the European Parliament (see previous update). 

UPDATE 14:05 - We are still waiting for an official confirmation that Marine Le Pen has managed to put together her new group in the European Parliament.

In the meantime, though, it seems the two Lithuanian MEPs from Order and Justice have denied reports that they are going to join forces with Front National. This would leave Le Pen's group one party short of the required number. A Lega Nord spokesman quoted by Die Presse admits that "final discussions are still under way", but still expects Le Pen to officially announce the creation of the group later this afternoon.

ORIGINAL BLOG POST  

It looks like there could be a winner in the contest between Nigel Farage's UKIP and Marine Le Pen's Front National to gather as much support among the fringe parties elected to the European Parliament in order to be able to form (or in UKIP's case maintain) a parliamentary group. Although there has not yet been any official confirmation, Giovanna Pancheri - the Europe correspondent of SkyTG24 - broke the news on twitter yesterday evening that the Polish KNP party (led by Janusz Korwin-Mikke) and the Lithuanian Order and Justice party had agreed to join Le Pen's new European Alliance for Freedom Group. 

Along with the FN, Geert Wilders' PVV, Belgium's Vlaams Belang, Austria's Freedom Party and Italy's Lega Nord, the EAF has enough member states to qualify for an official group. In total, the group will have 44 MEPs (24 of which are from the FN). Having a group means additional staff and funding, a high profile platform in the parliament, and possibly the right to some committee posts.

This means that, as Open Europe predicted a couple of weeks ago, UKIP's Europe of Freedom and Democracy (EFD) group looks in serious trouble having lost the Danish People's Party and the Finns party to the ECR and Lega Nord and now also Order and Justice to the EAF.

In theory, the EFD could yet survive if it holds onto its Dutch MEP, as well as getting Beppe Grillo's Five Star Movement on board (which may prove difficult given its activists will have the final say), the Sweden Democrats, and a couple of other small parties and independents. If it manages to get MEPs from six different member states, it could also potentially secure a special dispensation under EP rules, but this would require the consent of the other group leaders (not sure we would fancy Farage's chances!). While being forced to sit without a group would hardly be disastrous for UKIP politically, given that it has its eyes set on Westminster, losing millions of euros, a bunch of staff that can be used for campaigning and a high profile platform from which to attack the EU would hurt. Ukip better get busy searching for more donors. 

However, despite Le Pen's apparent success in emerging as the figurehead of the main anti-EU group in the EP, there remain a number of questions over the EAF's durability. For a start, the PVV have made clear their unhappiness over Jean-Marie Le Pen's recent anti-Semitic outburst (which is splitting the FN), while the addition of the highly volatile Korwin-Mikke could alienate more 'moderate' MEPs within the group.

So, Nick, how many laws come from Brussels?

In the first IN/OUT Europe debate between Nigel Farage and Nick Clegg on 26 March, the leader of the Liberal Democrats claimed that the percentage of UK laws coming from the EU was 7%, citing research by the House of Commons Library.

This created much debate at the time, particularly as Nigel Farage claimed that figure was actually 75%, quoting the long-standing UKIP supporter Viviane Reding.

We are no stranger to this debate having written a number of times about the futility of estimating the proportion of EU laws implemented in the UK, and the differing claims. However we were surprised to discover that Nick Clegg himself is no stranger to this debate. Here he is writing in 2003:

Probably half of all new legislation now enacted in the UK begins in Brussels. The European parliament has extensive powers to amend or strike down laws in almost every conceivable area of public life.

And in case that was an accidental slip of the keyboard, here he is again speaking in 2004:

Well over 50 per cent of all new laws in the UK now emanate from Brussels and are processed by Parliament and that MEPs are now arguably some of the most powerful legislators in Europe.

That people - usually depending on ideological disposition - give wildly conflicting estimates about the share of EU laws is old news. Radically conflicting estimates from the same person is something new, however.