Skip to main content

Welfare Benefits (EU Citizens)

Volume 563: debated on Wednesday 5 June 2013

It is a pleasure to serve under your chairmanship, Dr McCrea, and to know that my hon. Friend the Minister will respond to the debate. I hope he will answer all the questions I ask.

The topic of this afternoon’s debate is very important to people not only in my constituency, but in many others. Almost all the British public are concerned, because too many British citizens are out of work, and taxpayers resent their money being used to fund welfare for foreigners. That is why my constituents wish to restrict access to out-of-work benefits that are currently being paid to non-UK nationals from other EU countries. I think that is the wish of the vast majority of the British people, and also, I hope, of our Government. Whatever the gravity of the situation now, it is nothing like as bad as it will be after 1 January next year, when the group of non-UK nationals from other EU countries will include Romanians and Bulgarians, who hitherto have been prevented from getting full access to welfare benefits and the employment market.

Does the Minister agree with the basic proposition that if someone from another European country decides to move to the United Kingdom, they should not expect to receive taxpayer-funded assistance for their housing, health care, education or living expenses? Does he accept that freedom of movement under the EU treaties should be defined as being a freedom to leave, as well as to arrive? If a person who is a non-British EU national cannot afford to live in the United Kingdom without recourse to taxpayer-funded services, should not that person return to his own EU country, rather than rely on UK taxpayer handouts?

How much money is being spent on those handouts? Unfortunately, the Government cannot tell us, because, as the Minister told the House in a written answer,

“the UK’s benefit payment systems do not currently record details of a claimant’s nationality. Looking forward, the Government is considering ways of recording nationality and immigration status of migrants who make a claim to universal credit”.—[Official Report, 14 January 2013; Vol. 556, c. 466W.]

I think it will come as a shock to many that after three years of a Government led by a Prime Minister who says that he is determined to take action on this subject, we have not even begun to collect the most basic information necessary to inform public debate. When are we going to start? Why can we not start right now and record the nationality of people when they claim benefits?

Only two months ago, the Prime Minister assured us that he was going to get tough on benefits being claimed by foreigners in the United Kingdom. A month ago, the Home Secretary, along with her counterparts from Germany, Austria and Holland, wrote to Alan Shatter, president of the EU Justice and Home Affairs Council, demanding tighter restrictions on immigrants’ access to welfare handouts and other state-funded services.

We are told that the Prime Minister is actively engaged in negotiating a new relationship between the British people and the European Union. I asked him a written question for answer on Monday this week about his top priorities for reforming the UK’s relationship with the EU. Unfortunately, the Prime Minister transferred the question to the Foreign Office, and the Minister for Europe’s reply makes no mention whatsoever of either welfare or immigration as being among the top priorities for reforming our relationship with the EU. That is despite a recent ComRes/Open Europe poll showing that 55% of voters regard those issues as a top priority, and despite the Prime Minister’s recent speeches in which he has indicated that he also sees them as a top priority.

I shall be grateful if the Minister can explain in detail which aspects of access to British taxpayer-funded welfare are currently being negotiated in the EU. What is the state of those negotiations, their time scale, their prospects for success and why, at the moment, are they not a top priority for our Prime Minister?

Please can the Minister also explain how confident he is that we can resolve the issue to our satisfaction, when the European Union Commission is saying that the UK, far from being too generous in welfare payouts to foreigners, is not being generous enough? That was the effect of the decision six days ago, on Thursday 30 May, by the EU Commission, when it announced that it is launching a prosecution against the United Kingdom in the European Court of Justice, because we have different and less favourable rules for access to out-of-work benefits for EU nationals, compared with British citizens. Even the EU-loving Financial Times described, in its leader on 31 May, the EU Commission as having

“lobbed a hand grenade into the political discussion about Britain’s membership of the EU”.

Does that episode not illustrate perfectly the utter contempt in which the EU Commission holds Ministers in our elected Government? In the 20 months since the EU Commission first threatened such action, there has been much huffing and puffing by our Government, but all apparently to no avail. If it has taken 20 months to make zero progress with the Commission on that issue, what hope is there that other issues we wish to renegotiate will be dealt with any quicker or with any greater success?

The background to the debate is the question I asked the Minister on 20 May, which was, what steps are the Government taking to reduce the eligibility to United Kingdom benefits of nationals of other European Union states? In his careful response, he told me:

“We are strengthening the habitual residence test; the Home Office is creating a statutory presumption that European economic area jobseekers and workers who are involuntarily unemployed will not have a right to reside here after six months unless they can demonstrate they are actively seeking work and have a genuine chance of finding a job; and we will prevent those with no entitlement to work in the UK from claiming contributory benefits.”

Analysing each element of the Minister’s response in turn, one can see the credibility gap between his precise words and the overall impression of toughness, which I am sure he was seeking to give. The habitual residence test was introduced on 1 August 1994. I recall my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), as Secretary of State for Social Security, telling the Conservative party conference in 1993 that he wanted to curb spending on benefit tourists. It is almost 20 years later, and have we succeeded in doing so? No. The situation has got worse rather than better. This coming weekend, it will be 30 years since I was first elected to the House, and it is a pity that all I have to report over those 30 years is a continuing decline in UK sovereignty, and ever more powers and decisions over our lives being taken away from us by the EU, despite the brave words of successive Ministers.

In 2004, the habitual residence test was supplemented with the requirement that a person has to satisfy a preliminary test of a right to reside in the UK, but that does not apply to EU and European economic area nationals who are classed as workers or self-employed persons under EC directive 2004/38 and the family members of such persons. On analysis, therefore, how is the Minister proposing to strengthen the habitual residence test, and how will it do anything to reduce the eligibility of nationals of other EU member states to access UK benefits? It does not seem to me as though it will achieve anything.

The second point that the Minister made in his answer, about jobseekers and workers who are involuntarily unemployed having to leave after six months, invites the question as to what is meant by “involuntarily unemployed”. How will one assess whether they have a genuine chance of finding a job? Are we going to introduce a language test? If so, how would that be compatible with current EU legislation? What about those who are self-employed, such as Romanian Big Issue sellers?

The third part of the Minister’s answer is perhaps the most disingenuous. He says that

“we will prevent those with no entitlement to work in the UK from claiming contributory benefits.”—[Official Report, 20 May 2013; Vol. 563, c. 890.]

How many people fall into that category? Every EU national who moves to the United Kingdom has the same entitlement to benefits as a UK national, regardless of their previous tax or national insurance contributions. That principle applies, without qualification, to all those who are “workers” or self-employed, while the qualification of “worker” is so broad as to include those not working but purportedly seeking work. Would it be unfair and going too far to summarise the Minister’s position as tantamount to an admission of impotence in the face of this crucial issue?

Let me emphasise that I do not blame the Minister at all, but do not his answers and the concerns of the Prime Minister, the Home Secretary and the Secretary of State for Work and Pensions amount to little more than spitting against the wind and grandstanding? What prospect is there of being able to change the European Union treaties to enable us to discriminate on the grounds of nationality in the way in which we distribute our welfare payments? Indeed, what is parliamentary sovereign democracy if it is not about the ability to treat our own citizens differently from the citizens of other countries?

One of the fundamental freedoms that lie at the heart of the EU treaties is “freedom of movement”. That was sold to the British people on the basis that we would be able to move to another country in the EU without impediment. We would be able to work there and live there and, through reciprocity, citizens of other EU countries could do the same in the United Kingdom. But what has happened is that, as with so many other aspects of the United Kingdom’s relationship with the European Union, freedom of movement has been applied as if to a federal superstate where there is no distinction between a British citizen and a Romanian or Bulgarian. The European Union Commission has continued to apply its ratchet of integration—ever closer union—systematically undermining our ability even to decide to whom we give British taxpayer-funded services.

Does this issue not illustrate the fundamental chasm between the European Union and us? The European Union sees itself as one country, with all its citizens sharing the same European nationality. Meanwhile, the United Kingdom sees itself as one of 27 separate countries within a free trade area, but with control over its own destiny and, in the context of this debate, control over those to whom it does and does not pay taxpayer-funded benefits. Does this not illustrate perfectly why my noble Friends Lords Lawson and Forsyth and Michael Portillo, all former Cabinet Ministers with a wealth of experience in negotiating with the European Union, are spot-on in pointing out the utter futility of the renegotiation exercise on which the Prime Minister has embarked? Does this saga not illustrate graphically the extent to which this Parliament has lost control over the most basic elements of national policy?

The starting point for the right to vote in a UK parliamentary election is being a British citizen. Citizenship confers privileges for citizens over non-citizens. Why cannot the same basic principles apply to the allocation of taxpayer-funded welfare benefits? Please can the Minister tell me how we will be able to restore control over our own affairs and give preference to our own citizens over foreigners without leaving the European Union? It seems to me that actions such as we have seen from the European Commission in recent days are driving more and more people to the conclusion that there is no alternative but to leave the European Union and that we would be much better off out, and in control of our own destiny.

There is a big issue about the fact that the European Union originally started off with a whole lot of countries that each had relatively similar standards of living, but now there are countries that are new entrants, particularly Bulgaria and Romania, where the standard of living is infinitesimal compared with that which we are lucky enough to enjoy in this country.

Figures I have obtained from the Library show that the annual household net income of a single-earner couple on the average wage with two children in 2011 was, using purchasing power parity exchange rates, €31,616 in the United Kingdom but only €7,750 in Bulgaria and even less—€7,514—in Romania. That means we have an average annual household net income of more than four times that of citizens in Bulgaria and Romania, so why will the Bulgarians and the Romanians not come to the United Kingdom in large numbers from next January? Apparently, there are already about 1 million of them in Spain, so it will not be very expensive for them to get here from Spain if they want to do so, and once they get here, unless something is done to the existing rules, they will basically have free access to as many benefits as they choose to apply for. They can come. They can try to get work. Even if they are unsuccessful at getting work, they can say that they are trying to get work and then access our benefits system. That can include other benefits that they can then export back to their families in their own countries. Is this not a state of complete farce? Have the Government grasped the political significance and importance of it?

Answering questions in the careful way that the Minister has answered them is absolutely right, because he wants to be intellectually honest in answering them, but could he also ensure that much fuller answers are given and that the areas where we obviously do not have any control at the moment are highlighted? I hope that as a result of this debate, he will assure us that the Prime Minister is serious about trying to do something about all this and that it is not just huffing and puffing, because we cannot carry on like this. There was 20 months between the European Commission saying that it was going to start taking infraction proceedings against us, and the matter now being referred to the Court. Will it take two years—three years?—before the Court decides? Many of us hope that we will have an in/out referendum long before then, but in any event, does this not show that the whole renegotiation process is a complete charade?

One example can be worth a thousand generalities, and the example highlighted in this short Adjournment debate is one the Government need to take really seriously.

I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on securing the debate and trying to highlight some of the challenging issues we have to deal with. The Government are rightly concerned that our rules on migrants’ access to benefits should be robust. We already have strong rules to protect the taxpayer and the public purse from abuse and fraud. Those rules are fair and just, and I think they are entirely consistent with the freedom of EU citizens to work and to look for work here—I will come back to the issue of those who come here with no intention of working and the controls that are in place in that regard. The rules rightly ensure that migrants cannot get benefits if they have never worked here and have no intention of doing so.

Let me set out a bit of the background to assist my hon. Friend. European law says that an EU citizen can move to another member state if they are a worker, self-employed or a student, if they are seeking work or if they are self-sufficient. When EU nationals come to work in the hotels and guest houses of Bournemouth and Christchurch, it is that right that they are exercising, in the same way that UK nationals exercise their right when they go and work in other European Union countries.

European law also says that we must treat EU nationals who come here to work in the same way as we treat British nationals. We comply with that principle. EU nationals who work here and then lose their job can claim jobseeker’s allowance and housing benefit and, if they are temporarily unwell and unable to work, they can claim employment and support allowance.

EU nationals who come here to seek work are expected under EU law to be actively seeking work and to have a genuine chance of getting a job, and if they do, we say that they can claim jobseeker’s allowance. When people try to claim JSA, we apply a fair test to assess whether they are genuinely here to seek work—the habitual residence test. That test is applied to jobseekers whether they are EU nationals or UK nationals.

My hon. Friend is absolutely right that no member state can afford to support migrants who have no intention of working and contributing economically to the community in which they choose to live. There is no requirement under EU law to provide such support, nor should there be. EU law has not sought to harmonise benefit regimes, nor should it. As he rightly points out, those are matters for national Governments. Member states have their own benefit regimes, some of which are more or less generous to their citizens than ours. It is easy to see why some people feel that they can move, not to work, but to take advantage of what they think is more generous welfare support in another country.

EU law sets out rules for co-ordination between member states to ensure that people who are genuinely exercising their free movement rights are not disadvantaged. There is no free movement right for those who are economically inactive and have no intention of working but want to be supported by state funds. We cannot be expected to support those who move just to take advantage of different benefit regimes, and the public are rightly concerned that that is what would happen if we were not allowed to check the legal basis for someone’s residence in this country, which is the basis of the infraction proceedings against us.

My hon. Friend the Minister uses the expression “no intention of working”, but all they need to do is show that they are applying for jobs and that they hope to be able to work. It is very hard to prove that they are not intending to work, particularly when his Department does not even have the information on whether they are British nationals.

I just say to my hon. Friend that when someone seeks to claim jobseeker’s allowance, they go through vigorous tests to identify whether they are looking for work. The only basis on which people receive benefit is by demonstrating that they are looking for work, which is why we have the habitual residence test. It tests not whether someone has popped across on holiday and decided to sign on while they are here, but whether they have any real intention to be here and work. That is why we ask a range of questions and why we are trying to strengthen the test, which I shall come on to in a moment. It was one of the commitments the Prime Minister made. I want to say more about the habitual residence test and the infraction process.

The Commission says that we discriminate against EU citizens when we apply the habitual residence test. We believe that we are following EU law correctly when we apply those rules. Rules in the residence directive explicitly allow us to protect our national finances and prevent migrants from becoming an unreasonable burden on our welfare system. When we ask people to satisfy the habitual residence test, we do so not on the basis of their nationality but on the basis that they have moved to the UK from abroad, even if they have previously lived here. We do so to protect our system from abuse. Why would a member state not want to protect its benefit system from abuse by checking that someone is legally resident before they make a claim? The advocate-general of the European Court, in giving his opinion on an Austrian case called Brey, said that

“the Court has held in various circumstances that Member States may require lawful residence before granting social assistance benefits, providing that such a requirement complies with EU law.”

That is exactly what we do when we assess someone’s right to reside as part of our habitual residence test. We treat each case on its own merits and consider the individual circumstances of the claimant. Our test is fair; it legitimately requires that a benefit claimant has a reasonable right of residence here and a degree of interconnection with and integration into UK society.

This is not the first time that someone has sought to challenge the habitual residence test. We have already successfully defended challenges to our test in our Supreme Court and the domestic courts. They found that the habitual residence test does not discriminate on the grounds of nationality and that its use is justified because it protects the public finances of the UK and prevents benefit claims by people who have no intention of working here at all. My concern and that of the Government, and the reason why we are fighting the case, is that if the Commission is successful in arguing its interpretation of the rules, it will open a new door that will mean that member states can no longer check that migrants meet national residence laws, thus extending free movement to inactive migrants who believe they can move to any member state and get social assistance benefits soon after arriving. That cannot be right, which is why the Government, the Secretary of State and I are determined to defend the test. We believe that we have strong grounds to win the argument in the Court.

My hon. Friend mentioned the measures that the Prime Minister announced to strengthen our position. I shall highlight two announcements, the first of which was on time-limited access to benefits. Under EU law, someone has a right to reside as a worker or a jobseeker only if they are “continuing to seek employment” and have a

“genuine chance of being engaged”.

It is not unreasonable to take the view that if someone has not found a job within six months, that right should terminate. At the moment, we expect that most jobseekers will find a job within six months. The Home Office will amend the regulations to create a statutory presumption that EEA nationals who are coming to look for work in the UK or who have lost their job will no longer be exercising their free movement right of residence as a jobseeker after six months, unless, in line with EU law, they demonstrate that they are actively seeking work and have a genuine chance of getting a job. Most jobseekers will find work quite quickly—within six months. It is hard to demonstrate after six months that they have a genuine chance of getting a job.

The other announcement was on strengthening the habitual residence test. We will continue our work to ensure that our decision making when assessing whether someone satisfies the test is consistent and fair. We are improving the test, as the Prime Minister said, by increasing the range and depth of evidence that advisers collect from claimants and making it easier for advisers to tailor the questions to someone’s circumstances. Those improvements will support our argument that our test is robust and that our decisions are fair and comply with EU law.

My hon. Friend asked about language skills and the assessment of the genuine chance of finding a job. We will assess whether language skills are a barrier to work, as part of the habitual residence test—it is built into the test. He also commented on the fact that we are in discussions with our European neighbours. My right hon. Friend the Secretary of State for Work and Pensions has been in Germany to meet his opposite number, the Deputy Interior Minister. The Home Secretary will raise these issues with other Interior Ministers at the Justice and Home Affairs Council over the next week. I am going to the Netherlands this evening to talk to my opposite number about how we can work together more closely. There are clear concerns in a number of member states that the Commission is seeking to extend its influence in this area and subvert the right of free movement, which is widely supported in member states. We need to continue to work with our allies, demonstrate a need for change and recognise the concerns expressed across a wide number of member states about the Commission’s role.

My hon. Friend started his speech by talking about the broader issues of access. I am sure that he will welcome the immigration Bill announced in the Queen’s Speech, which will tighten access to the NHS and controls on private landlords letting property to tenants from overseas. The Government are taking steps to tighten access to not only welfare benefits but other public services, which is an important part of our approach.

Does my hon. Friend not agree that it would be much better if we could do all that under our own control? If we were outside the European Union, we would be able to make such decisions ourselves, instead of being beholden to the European Commission, which, from the way he has described the infraction proceedings, is wholly intransigent. I sympathise with him. For all the effort he is making, he is banging his head against a brick wall; there is no give on the part of the European Commission. Does there not come a time when the British people have to say, “Enough’s enough. If you do not concede anything, we will leave”?

My hon. Friend is being uncharacteristically defeatist. We can make progress, which is why we are engaging with other member states. The support among other member states—we were party to the Brey case—demonstrates to the Commission how much concern there is. Member states can take the initiative to change the regulations, and we need to demonstrate to the Commission that there is support for that. I fully support the Prime Minster’s policy. We need to have the renegotiation and put the outcome of that renegotiation to the people in a referendum when we win the next general election. That is the right approach. We need to build alliances with other member states; we are not alone in our concerns. My hon. Friend will be relieved to know that other member states share his concerns exactly.

I hope that from my remarks this afternoon my hon. Friend sees that the Government are actively taking steps to protect our position not only in domestic law, by strengthening the habitual residence test through the new rules and the presumption about someone being out of work for six months, but by defending the matter strongly in the Court and building alliances with other EU countries. Our approach is right.

Sitting adjourned without Question put (Standing Order No. 10(13)).