Leading article

Stricter benefits limits shouldn't stop with immigrants

Other countries manage to implement sensible systems without being rebuked by the EU. It's time we learnt from them

2 August 2014

9:00 AM

2 August 2014

9:00 AM

With Ukip snapping at the Conservatives’ heels, it is not difficult to see why David Cameron has hit upon the idea of limiting the entitlement of EU migrants to working-age benefits in the UK, so that they can claim only for three months, not six, as before. But it is a little harder to work out how the Prime Minister and his party will benefit politically from the change. No sooner had Cameron made his announcement than two obvious questions arose: if this proposal is legal, why didn’t he do something like it earlier? And if it is possible to limit eligibility to benefits to three months is there any reason he can’t go further and prevent EU migrants claiming benefits in Britain at all?

This magazine has long been a keen supporter of open labour markets, but it is self-evident that they are incompatible with an open benefits system. The public purse already struggles to cope with paying benefits to British citizens. To make taxpayers in Britain liable to fund the unemployed from countries whose joint population is significantly in excess of our own is potentially ruinous. That not all eastern Europeans are likely to arrive in Britain to make claims is of little reassurance; the point is that they could, and that the number who will do so is very likely to be of a magnitude greater than official projections. Before the EU expansion in 2004, it might be remembered, Labour ministers predicted that 13,000 eastern Europeans would take advantage of the right to come and live and work in the UK during the first year of membership. In the event 91,000 arrived in the first six months, rising to half a million by 2008.

There is no definitive answer to the question of whether migration since 2004 has been of net fiscal benefit to Britain. The Institute for Public Policy Research (IPPR) calculated the taxes paid by migrants in 2004 at £41.2 billion a year and the money spent paying them benefits and providing them with other public services at £41.6 billion, suggesting a net loss to the Treasury of £400 million. MigrationWatch, which takes a sceptical approach, found fault with the methodology in that benefits and public services paid to children with one British and one foreign parent had not been counted. It recalculated the figures, counting half the cost of benefits paid to and public services provided to such children and came up with the figure that migrants are costing the Exchequer a net £5 billion a year.


But one thing is for sure: migrants would be more of a net benefit — or less of a burden, depending on how you look at it — if they were prevented from claiming benefits until they had been working and paying taxes in Britain for some time, perhaps two years.

The Prime Minister has vowed to renegotiate Britain’s relationship with the EU, which is proving something of an uphill struggle. Contained within his proposal is the assertion that on so many things Westminster has proved powerless against rules imposed from Strasbourg and Brussels. Yet while the government has pleaded national impotence on welfare, other nations —- many of which have more generous social security systems than we do — have found a way to limit migrant benefits without incurring the wrath of the European Commission or Court of Justice. They have done so because their welfare systems are more contributory in nature than is ours. The EU merely demands that a country’s welfare system treat EU migrants and natives in the same way. It does not, for example, rule out a law stating that nobody can claim unemployment benefit unless they have already been working and paying taxes in the local region for at least two years, a condition imposed in Madrid.

Rather than fighting the bureaucrats in Brussels, the government should use benefit tourism as an opportunity to tweak the whole British welfare state, ending instant qualification and making eligibility dependent on having been working here for a specified period. Such a change would go some way towards tackling the welfare ghettoes where generation after generation have been able to slip into a life on benefits without ever having known work.

The rules of the EU single market — one of the features of Europe most championed by Britain — do not force a generous welfare system on any member state. What it does, by insisting that EU migrants be treated the same as natives, is to exert downwards pressure on welfare all over Europe. The way to avoid welfare tourism is quite simple: make your benefits system less generous so that welfare tourists will have an incentive to go elsewhere. It is low taxes and light regulation which attract workers; generous benefit systems which attract welfare tourists. It would be a tragedy if public reaction against welfare tourism were allowed to undermine the case for a free labour market and lead to the closing of our borders, as Ukip would love to do once it had managed to extract this country from the EU.

David Cameron should ensure that our tax and benefits system is sending out the right message to would-be migrants: yes, we want you to find jobs here, but if it doesn’t work out we expect you to return home, not settle into a new life on British benefits.​

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  • Amir

    Read my interview with Normam Lamont on immigrant’s benefit claimants, immigration, europe and scotland:

    http://www.casualpolitics.co.uk/2014/07/lord-norman-lamont-speaks-to-casual-politics/

    I’ll be grateful to you if you click on the advert, underneath of the page (no virus),each click will bring me 45 p which will contribute to keep my website open.

    • P_S_W

      Stop trolling.

  • Fraser Bailey

    Naturally, I agree with the article. But The Spectator has been calling for a less generous benefits system for as long as I have been reading it – which is about 35 years. The Tories were in power, or shared power, for 22 of those years, and the benefits system has only become more generous.

    • HJ777

      It’s not so much that our welfare system is particularly generous – it is that it doesn’t require much (in terms of contributions) from most of the biggest recipients of welfare and doesn’t sufficiently incentivise them to get off welfare.

      If you lose your job in this country, for most people you will just get JSA for 6 months regardless of how much you have contributed. JSA is hardly generous – and, strangely, it provides much greater incentive for those who have always worked and contributed and saved to get back into work (because it is means-tested after 6 months) than it does for long term recipients who haven’t worked and contributed or saved.

      • Fraser Bailey

        Yes, I agree. I should have mentioned in my post that the particular evil of our insane benefits system is the non-contributory principle.

        Only in Britain…

  • Blindsideflanker

    “This magazine has long been a keen supporter of open labour markets”

    Not for them the chance that their middle class lifestyle would be under cut by cheap immigrant labour.

    And for the Spectator to run a piece like this shows they are dogmatically attached to a policy, rather than taking a look around them at the consequences of their much beloved policy.

    We have more people in work than ever in our history, yet we cannot make ends meet.

    Employers are using open labour markets to lower wages and dump social responsibilities so much so we have the grotesque situation of the working poor, who have to rely on the state to subsidise their wages.

    We already have people living in some pretty squalid conditions, stripping away benefits will push people from poverty to extreme poverty, for when you might expect the employers to make up the difference, they don’t have to, for with the employment market rigged with mass immigration, the employment market is no longer responsive to the living costs here, but the costs in Poland, Bulgaria and soon Albania. So we have the Spectator middle class who think it wonder full to have Albanian levels of wages here , but expect people to pay Western levels of their buy to let rents. Sorry mate the two sums just don’t add up.

    WE DON’T HAVE A PROBLEM OF TOO HIGH LEVELS BENEFITS, WE HAVE A PROBLEM OF ABYSMALLY LOW WAGES.

  • willshome

    The bulk of our social spending bill, over £75 billion, goes on pensions so it won’t change that much to cut benefits but, hey, let’s at least do it in a way that makes sense.

    The major beneficiaries of our benefits system are the companies that pay less than a living wage, which mean the working poor have to be subsidised by the taxpayer if they are not to starve; and private landlords who pocket housing benefit, (often on properties that were once publicly owned so, in many cases, cost us nothing at all to house families or even made a profit that could be ploughed back into more housing).

    So, by all means raise the minimum wage to a living wage and stop profiteering employers sucking on the public teat. And impose strict rent controls at levels that are affordable to families in full time work on a living wage, so there will be need no for the public to subsidise the rentier class’s lifestyle.

    The benefits bill will shrink overnight by £25 billion-plus. And with luck the newly-impoverished exploiters can discover for themselves just how “generous” Job Seeker’s Allowance of £72.40 a week (£57.35 if you’re under 25) really is.

    • Blindsideflanker

      We don’t need to raise the minimum wage, for that is just a big state solution to compensate for allowing the employers to rig the employment market with mass immigration.

      A proper market solution would be to restrict the supply of labour, force up the cost of labour, in doing so we would winnow out low skilled, low productivity jobs that have to be subsidised, which would also mean that employers would have to invest in productivity, because right now with mass immigration they don’t have to bother.

      We need to get control of our borders.

    • Fraser Bailey

      I agree. But those employers and landlords sucking on the public teat tend to be Tory voters, or indeed politicians of all parties. And therein lies the problem.

    • HJ777

      Are you serious?

      Nobody is obliged to employ anyone. If you artificially make employers pay higher wages, they will employ fewer people or not employ people at all. They employ people with the objective of making a profit out of the exercise – if they can’t make a profit, no job.

      Higher wages have to be justified by higher productivity – otherwise the jobs will just go abroad (and don’t pretend that you don’t, or wouldn’t, buy cheap imports in preference to higher-priced goods made here).

      Rent controls – very bad idea which has been tried before with disastrous results. Rent controls are an attempt to treat the symptoms of a problem instead of addressing the causes.

      • FDUK

        Housing Benefit is a subsidy paid to the landlord (who is the ultimate recipient of the benefit), which allows them to charge higher rents than the market would allow otherwise.

        Similarly tax credits are benefits to employers, in that they allow them to pay lower wages than would otherwise be possible. It does us no good to increase in work benefits if this just lets employers pay less. Remember, most Housing Benefit is paid to people in work.

        I suggest we get rid of both. Employers and landlords don’t need benefits.

  • Gabriel

    I would be interested in reading in more detail the information shown in this part of the article:

    “MigrationWatch, which takes a sceptical approach, found fault with the
    methodology in that benefits and public services paid to children with
    one British and one foreign parent had not been counted. It recalculated
    the figures, counting half the cost of benefits paid to and public
    services provided to such children and came up with the figure that
    migrants are costing the Exchequer a net £5 billion a year.”

    Funnily enough I am in that situation, and I know a fair few couples (more than 10+) in a similar situation, we are all above average earners, some of us even in the upper bracket, and several children. I fail to see how, our bracket, can incur in nearly £4.6 billion in cost to the Exchequer unless there are lots of families with one british and one foreign parent which are claiming benefits like there is no tomorrow. Again, I would like to see their methodology in detail and their figures in order to make my own mind up. I say this because MigrationWatch has been known, in the recent past, for innacuracies about the net amount of tax paid by European migrants in their figures.

    For future articles, I would refrain on using the word spectical for MigrationWatch, as skepticism works both ways not only the one that agrees with your particular worldview.

    • Suzy61

      I assume Migration Watch have added the British born Muslims who traditionally marry someone (often a relative) from their ancestral village back in Pakistan, or the like, and then bring their husband/bride back to the UK and between them have at least 5+ children. The benefit/public services bill for such a family would be huge – and there are many thousands of such families. Maybe if you do find out you will let us know.

      • Gabriel

        That would make sense Suzy, but I would prefer to see the data, which I can not seem to find.

  • whs1954

    I’m afraid the problem with the proposed solution is the soggy minded opposition of the British public to the idea of their own benefits being undermined. Look at the opposition, feeble in thought but potent in rhetoric, to such meagre welfare reforms as have taken place the last four years. The shrieks of “Axe the bedroom tax!” and “The NHS is being flogged off!” bear no relation to reality – but we Brits love our Attleeite welfare state and can’t bear the idea of not relying on the government to do all but wipe our backsides for us.

    And if that nice Mr Wallace gets in we can be governed by socialist children of the 80s, who grew up shrieking at Thatcher and shriek at Cameron today, and who can then pretend we can have our cake and eat it, and increased benefits all round. Well, if Britain votes for it, we will bloody well deserve what we get.

  • misomiso

    Or just leave the EU.

    What is Spectator policy that btw?

  • DaHitman

    “Other countries manage to implement sensible systems without being rebuked by the EU”

    Other nations ignore the EU

  • Lady Magdalene

    It is fairly obvious that the British welfare system should be based on contributions, but that doesn’t necessarily mean that a young adult who hasn’t contributed themselves should be blocked IF at least one of their parents has contributed for at least two years.
    However, the Spectator is ignoring the issue at the heart of this which is Sovereignty. This is OUR country and EU Law should not have supremacy over British law.
    Our political elite should not have transferred our Sovereignty to the EU in the first place: they had no mandate to do so. We should not have Open Borders – it is lunacy to give the power of deciding where they’d like to live and work to foreigners; WE should decide who we want in our country, just like Australia, Canada, NZ etc do.
    Changing our welfare system, in order to restrict immigration is accepting that the EU has the right to dictate to this country. The best solution is to get OUT and govern our own country the way WE want.

    • HJ777

      Your first sentence seems to be advocating being much harsher on unemployed young orphans than on unemployed young people with working parents.

  • BigCheddar

    This is an excellent article and a very good idea. A great opportunity to reform the morally corrupting welfare system.

    As Lady M says below, it does’t tackle the Sovereignty issue but it gives us an opportunity to do something very healthy for the country.

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