Westminster Blog

I’ve updated this post at the bottom in light of this afternoon’s parliamentary debate on the issue.

As the Tories contemplate the fallout from coming third in the Eastleigh byelection, different ministers have been floating different ideas for recapturing the votes lost to Ukip. One such idea is banning newly-arrived migrants from accessing certain benefits and NHS services.

Polls suggest immigration is a major reason for voters choosing Ukip, and Conservatives worry that trend will only accelerate when limits on movement from Bulgaria and Romania to elsewhere in the EU are removed.

A cabinet sub-committee has been convened to look into the policy options, but in the face of EU rules forbidding discrimination between citizens of different European countries, is there anything they can do, or is this empty populist rhetoric?

Benefits – residency test

Iain Duncan Smith recently spoke about this on the BBC, and he suggested one option available was to tighten up on the so-called “habitual residency test”, which Job Centres are allowed to apply before letting someone claim out-of-work benefits. This aims to test whether someone is genuinely in the country to work or not (interestingly, EU citizens are NOT guaranteed freedom of movement within the union, they are granted freedom of movement to work). IDS said this to the BBC’s Eddie Mair (emphasis mine):

What we can do, and it’s what we’re doing, we’re looking at the way we apply some of those benefits – for example whether or not they are contributory benefits or not, whether we can enlarge that process; and whether or not those individuals, we can lengthen the time that we look at in terms of their leasing arrangements – for example is it feasible for us to look at whether somebody has a leasing arrangement lasting nine months, a year, rather than just a matter of months.

When they were in power, Labour lengthened the mandatory time on a leasing arrangement for the habitual residency test from one month to three. Lengthening it again would be the obvious next move, but the problem is that this could be open to legal challenge under the right of freedom of movement to work.

Someone who has been in work for six months then left or lost their job for a short time could fairly claim they were being denied freedom of movement to work if they were not supported for the time they were out of work.

Benefits – contributory principle

Another option is to increase the amount of benefits that depend on how much a person has contributed in the past through taxes. Other European countries often have smaller numbers of recent migrants claiming benefits, because their benefits systems are governed by the so-called “contributory principle” to a far greater extent.

Labour has been looking into this for some months now, and is hoping to emulate some Scandinavian countries, where up to 90 per cent of payouts are decided on what a person has previously contributed.

Increasing the contributory principle would reduce the amount newly-arrived migrants could claim, but it would also reduce the amount young people or low earners could claim, benefiting instead those who have worked for a long time in a well-paid job – which doesn’t seem like the fairest of outcomes.

NHS – screening

As for limiting NHS resources, health professionals are already supposed to screen patients to make sure they genuinely do live in the UK and have permission to do so. However, many don’t bother because of the effort involved. If ministers wanted more hospitals and surgeries to do so, it might have to give them more resources to be able to carry out interviews on prospective patients.

Alternatively, they could simply require that every patient has an “NHS card” which grants them access to services, but as we saw with the ID card debacle, this would probably be expensive and unpopular.

How big is the problem?

One other thing worth noting is that benefit tourism is really not a big problem, whatever people’s perceptions of it might be. Of those coming from countries that joined the EU in 2004, for example, 1.3 per cent are on out-of-work benefits, compared to a rate of 3 per cent among the native British population. Stats published by DWP at the beginning of last year suggested that the proportion of those coming from the EU as a whole who claim out-of-work benefits is roughly the same as among Brits.

Sarah Mulley, associate director of the Institute of Public Policy Research, said:

There is a wider argument for having more contributory benefits, but bringing this in to deal with so-called “benefit tourism”, which is not a big problem, is a case of the tail wagging the dog.

But the bigger obstacle for ministers is that their options are limited. One person, who was a policy adviser to Gordon Brown when Labour was in power, told me yesterday:

We went as far as we could go – there was no viable option that was presented to us that we turned down.

UPDATE: Even though the statistics suggest benefit tourism is not a significant problem, Iain Duncan Smith has just branded it a “crisis” on the floor of the House of Commons.

The work and pensions secretary has suggested a few possible policy areas that might get changed:

1) Lengthening the time in work needed to pass the habitual residency test (see above).

2) Stopping child benefit being paid to children living abroad. At the moment parents in the UK can claim top ups from the UK on any child benefit they claim abroad so that the overall amount matches what they would have got if the child lived in the UK. IDS is planning to challenge this at the European Commission.

3) Banning any European migrant from claiming tax credits. This suggestion seemed particularly unformed, as tax credits will cease to exist under IDS’ Universal Credit, which goes nationwide from October.

4) Stopping new arrivals getting on the housing ladder before those who have waited a long time. Labour have already instructed councils to do this, but the problem is that it remains controlled by the councils, and ministers cannot force them to do anything they don’t want to.