Analysing the UK’s deal: immigration, free movement, and benefits

On the same day that the Prime Minister was negotiating his “emergency brake” on the payment of some in-work benefits to EU migrants, the Treasury answered a Parliamentary Question asking how much EU migrants actually claimed in benefits, and how much they paid in tax. The response: “The information is not available”. In other words, the UK government had not even bothered to gather the most basic data on an issue that it claimed was vital to the future of the UK within the EU.

Both the Prime Minister and his counterparts knew that these negotiations were not really about reducing immigration to the UK or even about saving money; no serious analyst, inside or outside the UK government, thinks the impacts will be significant. Instead, they were about sending a signal.  In the case of the Prime Minister, that it was possible to treat EU migrants differently from UK citizens for the purposes of in-work benefits. For Eastern European leaders, it was about showing that their citizens could not be treated as second-class Europeans.

In the end, as usual, everyone can claim to have got what they wanted.  The “emergency brake” will allow the UK to phase in entitlements to in-work benefits for new arrivals from the EU over a period of four years. But this arrangement will be time-limited – after 7 years it will expire entirely, and we will be back to the status quo.  The UK will also be allowed to reduce, but not eliminate, child benefit payments paid in respect of children living abroad.

None of this will happen overnight.  After the referendum – if the vote is to Remain – the Commission will have to draft a proposal, and this will have to be discussed by the Council and passed through the European Parliament.  Social security is a very complex area, both legally and administratively, and there will inevitably be lots of knotty issues. What happens to people who go, or have gone, back and forth between the UK and their home countries? What about those married to British nationals? And so on. The Parliament, in particular, is unlikely to allow the proposals to pass unamended.  And I very much doubt my former DWP and HMRC colleagues are looking forward to changing their already creaking computer systems to accommodate the resulting complications – particularly since it will overlap directly with the already long delayed Universal Credit project.  But of course all this will happen after the referendum. By then, the details will largely be forgotten.

Of course, perhaps the most enjoyable irony of this entire episode is that the Prime Minister’s renegotiation has acted as a massive advertising campaign for the UK benefit system in the countries from which most migrants come. Prior to this, awareness of the availability of in-work benefits in the UK was very low. After a few days in which the Polish press, for example, has been full of little else, this is no longer the case.  In future, I’d guess that new arrivals will be rather better informed about their potential entitlements.

So, even by the standards of the European Union, this has been an Alice-in Wonderland episode. The government has negotiated a watered-down version of something that it knew did not matter very much, and in the process has if anything made a largely non-existent problem slightly worse. Does it matter?  Perhaps the real significance of the negotiation is that it has clarified just how fundamental free movement and non-discrimination are to the European Union.  And on this, the UK has clearly had to accept the status quo. There is no Treaty change, now or promised, and the main measures the UK is entitled to impose are temporary and/or time-limited.

That means the dividing lines for the referendum are more clearly drawn. Those in the UK who oppose either European migration, or EU membership itself, frequently complain that somehow the British people were never consulted on whether or not we had “open borders” with the rest of the EU. Whatever the truth of that claim, it has considerable resonance. But after the referendum, it will no longer be true.  If the UK votes to stay in, it will have accepted – however reluctantly – that staying entails a commitment to free movement of workers in the EU, both in principle and practice, and the resulting migration flows.  The issue will be settled.  It is now up to the Leave campaign, deeply divided on this, to decide whether and how to make this a central issue in the referendum debate.

[Jonathan Portes is a Senior Fellow of the Economic and Social Research Council’s “The UK in a Changing Europe” programme, which funds his research in this area.  More analysis from the programme on this and other issues is at ukandeu.ac.uk  ]