Open Europe Blog

The Sunday Telegraph‘s front page story about a study commissioned by the European Commission into EU migrants and access to welfare has caused a bit of a stir.

As we have pointed out several times before, we support the principle of free movement as it has the potential to boost growth and competitiveness. In addition, the ability for companies based in the UK to easily draw on a wide talent pool is seen by many firms as an advantage of EU membership. However, there is no doubt that EU migration also throws up a huge number of political challenges, such as a substantial loss of national control over who can enter the country, increased competition in low-skilled sectors of the labour market, and increased demand for public services and infrastructure.

Therefore, if public confidence is not to be lost, free movement needs to be managed with extreme care and tempered with other policies including the right of national governments to protect their welfare systems from abuse.

In recent months, the risk of ‘welfare tourism’ is something that has been highlighted by both national governments and the media, not just in the UK but also recently in Germany, Austria and the Netherlands. Several governments have complained that the rules need to be tightened. EU Commissioner László Andor has responded by accusing the UK of pandering to xenophobia and taking the Government to court over the ‘right to reside test’ it applies to anyone seeking to access benefits. Both sides have been talking past each other, and the result is a focus on ‘welfare tourism’ that is almost certainly disproportionate to the problem it poses.

The available evidence and academic research overwhelmingly suggests that EU migrants have come to the UK in search of work and not to claim welfare benefits. For example, a 2010 study found that migrants from the new EU member states are “59% less likely than natives to receive state benefits or tax credits and 57% less likely to live in social housing.” The study concluded that in the four fiscal years after 2004, these migrants made a positive contribution to the UK’s public finances. In 2008, the ONS estimated that the employment rate of these migrants was over 80%.

Nevertheless, the report cited by the Sunday Telegraph did have some important findings for the current debate between national governments and the European Commission about EU migrants and access to welfare. Much of the focus has been on the study’s finding that over 600,000 “non-active” EU migrants are living in Britain. Now this doesn’t actually tell us that much about the impact on welfare. For example, these people could be family members of EU migrants working in the UK, pensioners and so on. The fact the UK Government does not currently keep statistics on those who claim benefits means we do not know exactly who is receiving them or how much this costs.

However, what is relevant in this context is that the report found that the “number of job-seeking EU migrants increased by 73 per cent between 2008 and 2011” and that the number of EU migrants coming to the UK “without a job awaiting them has been increasing”.

At the moment, it is unlikely that this is having a major impact on the UK’s welfare system, but precisely because the UK applies its ‘right to reside’ test to those claiming benefits (this is an important safeguard because the UK’s universalist welfare system is particularly hard to police). But logic would suggest that weakening these rules would create the wrong incentives by allowing access to benefits such as jobseekers allowance more or less from day one. It would also further undermine UK public confidence in the principle of free movement altogether. However, this is precisely what the European Commission’s legal challenge to the UK’s right to reside test would do, if successful. This is why the UK and other member states are so concerned.

So, in summary, no there is not a welfare tourism crisis at present, but this is no reason for the European Commission to seek to remove the UK’s welfare safeguards. It is the European Commission that is moving the goalposts here.

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