1. The government should strongly resist efforts by the EU to further weaken British control over access tour welfare system.
The Habitual Residence Test
2. It was announced today that the UK is to be taken to the European Court of Justice over its rules regarding access to welfare for EU immigrants (See here).
3. The UK welfare system is already uniquely open to EU migrants as most benefits in the UK are based on residence and ‘need’. Most other member states have a largely contributions based system.
4. The criteria for access to benefits are met automatically in the case of workers or self-employed persons. Other applicants such as job-seekers may have to pass the Habitual Residence Test (See here). This test has two elements:
• Is the UK now your place of residence based on a demonstration of intention to stay (also, confusingly, known as habitual residence)
• Are you exercising a specific treaty right as an EU citizen, such as worker, job-seeker or student (technically known as the “right to reside”).
The European Commission objects to the right to reside part of this test.
5. The removal of this part of the test would make it even easier to turn up in the UK and gain full access to the welfare state, without even the need demonstrate that you are looking for work.
Recommendations
6. We recommend that the government moves in the opposite direction and makes it much harder for EU nationals to access the welfare state. A significant part of the economic incentive to migrate from Eastern Europe to the UK is the availability of tax credits and other in-work benefits for low paid workers (See here). This has created a situation in which the UK taxpayer is subsidising low paid immigration from the EU.
7. It must, therefore, be a key objective of the Government’s renegotiation of our arrangements with the European Union that no worker should receive benefits (in-work or out of work) until he or she has worked for five years in this country. That would bring EU citizens more closely into line with migrants from the rest of the world. It would also both reduce the current massive financial advantage to move to the UK and make the system much fairer to British tax payers who have contributed all their working lives. Such arrangements would not interfere with the free movement of workers which is, of course, fundamental to the EU but the free and immediate access to all benefits is quite another matter.