David Cameron is close to a deal to curb rights of EU migrants to send benefits abroad, which is set to be included in a package of labour market reforms that the European commission is hoping to publish in early March.
The measure, part of his bid to renegotiate Britain’s status in the EU, would see changes to the rules that allow migrants to send child benefits back to their country of origin.
According to HMRC data, there were 20,400 claims of child benefits used for children living in another European country in December 2013, accounting for around 0.3% of the total 7.55 million families receiving child benefits at the time. Poland topped the list with 13,174 awards.
The Guardian understands that east European nations have voiced concerns over an outright ban because they may find themselves in a situation where a worker is paying tax in one country, while the country of origin has to foot the cost of benefits for dependants back home.
But such worries could be addressed by indexing payments based on the living standard of the member state where the children are based; British officials believe that could be acceptable. Another source familiar with the ideas being explored suggested that asking workers to split their tax payments between countries could be another option.
Donald Tusk, the president of the European council, said in a letter in December that he saw good prospects for agreeing reforms related to the export of child benefits. The fiscal impact and costs of such measures is unclear, however.
A spokesperson for the Polish government said: “We are analysing various options to find compromise regarding the British demands aiming at curbing migration to UK since we would like Britain to remain in the EU.
“At the moment, we are waiting for the proposals from the EU institutions that try to find solutions after discussions between EU leaders during Decemberl. However, we need to find answers that would not undermine the rights of Polish citizens enshrined in the EU treaties.”
As speculation grows that the in/out vote could be held this summer, an increasing number of details of what Cameron’s deal will look like are emerging.
The same labour mobility package, which was originally due to be published on 9 December, could also see the introduction of a one-year waiting period before migrants can access in-work benefits.
The original proposal made provisions for a three-month curb but this was opposed by Britain and others.
It is now believed that the restriction could extend up to a year. Any arrangement would be reciprocal, applying to all EU workers, and would need to not threaten free movement, one of the EU’s founding pillars.
One government official said that although a four-year restriction, as requested by Cameron, is unachievable, a one-year wait would be fair, acceptable and, crucially, would not negatively affect labour mobility.
Proposals to introduce a waiting period before a migrant can access a member state’s benefits system were also highlighted by Angela Merkel at a press conference with the Romanian prime minister, Dacian Cioloș, on 7 January, where she cited an idea expressed by the German labour minister, Andrea Nahles, and by Olaf Scholz, the mayor of Hamburg.
Scholz said people coming to Germany under the EU principle of freedom of movement should only qualify for social benefits after 12 months of living and working in the country.
However, discussions are not yet finalised. Officials from two of the EU’s larger economies have separately indicated that even a one-year curb could be problematic for them. And Downing Street is adamant that a four-year restriction on tax credits remains on the table, although the prime minister said at a press conference in Budapest earlier this month that he was open to listening to alternative solutions.
A one-year restriction to in-work benefits would be a significant a compromise for Cameron but if the prime minister is to secure a deal in the spring before holding a vote this summer, alternatives covering a longer period of time would probably need to be made through changes to the UK welfare system – and any such arrangement would apply to all workers, including British citizens.
The commission’s labour mobility package is separate from Cameron’s official negotiation, which is carried out directly with other EU leaders. However, Jonathan Faull, the head of the commission’s task force for strategic issues related to the UK referendum, hinted this week passing legislation through the European parliament was one route through which parts of an agreement reached could be implemented.
There were also suggestions last week that that the prime minister had secured agreement on an “emergency brake”. This would allow the UK and other EU members to limit levels of migration, subject to agreement from the European commission, if they are able to prove that public services are facing unbearable strains in their countries. However, according to foreign secretary Phillip Hammond, there are issues with the idea as it stands: who would pull the brake? Who decides? How would it work? How can it be enforced without treaty change?
The agreement for a two-speed Europe would appear to trace an Anglo-Italian proposal announced in December.
This article was written by Alberto Nardelli, for theguardian.com on Wednesday 20th January 2016 19.14 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010