Published on June 15, 2013
On the 30th of May the European Commission (EC) announced that Britain is being taken to court over an extra test it imposes on migrant benefit claimants.
The EC, which represents the general interests of the EU and along with the European Court of Justice is a driving force of EU Law, announced on their website:
“UK nationals have a ‘right to reside’ in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this ‘right to reside’ test.
“This means that the UK discriminates unfairly against nationals from other member states. This contravenes EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.”
This allegation focusses on two different sets of criteria determining the right to claim social security benefits in the UK. The whole of the EU applies the “habitual residence” rules, a rule based on European Court of Justice case law, which requires that people must prove a legal right to reside in the UK and intend to settle in the UK before being able to claim benefits.
The United Kingdom however applies a second test, the ‘right to reside’ test. This test questions whether the immigrant has been economically active in the UK and paying contributions. If immigrants do not meet this criteria, they do not qualify for some of the welfare benefits.
The British public are not tested in the same way so the EC claim that the added test for immigrants is discriminatory and that the UK immigration legislation is having an impact on freedom of movement within the EU.
So what are the immediate consequences and future potential consequences of the EC deciding last week to take Britain to court?
The immediate consequence is that the sceptics of UK EU membership will use this as an added argument that the rules of the EU do not reflect what the public wants, so Britain must release itself from the shackles of the EU. Immigration is a big concern for the British public and this was reflected in the recent Queen’s speech outlining the immigration bill proposed which will close Britain’s door a little further to immigrants.
The EC says that it has been conducting research on the application of the test and has found that of 42,810 EU nationals who applied for benefits in the UK between 2009 and 2011, 64% (27,400) of applications were refused, which they claim shows that there has been discrimination.
When the issue previously arose in 2011, Ian Duncan Smith reportedly said that if these applications were not denied, it “could mean the British taxpayer paying out over £2 billion extra a year in benefits to people who have no connection to our country and who have never paid in a penny in tax”. Obviously this is not a consequence that anybody in Britain wants.
However free movement of labour and employment of foreign labour from other EU member states who live and contribute in the UK is a very important factor in this argument and cannot be undermined.
It is not just part of the debate around Britain’s membership of the EU, but important also when considering the current and future reputation of the UK. Our prime minister insists that the UK is open for business and this is the image that we are trying to portray, not an introverted society that wishes to act like the island that we actually are.
Immigrants make a significant contribution to the economy, so the loss of free movement of labour would be a large blow to Britain.
It is unknown how Britain’s relationship will develop or deteriorate over the coming years, but one thing is for certain; at present, two prominent contentious topics in Britain are membership of the EU and immigration policies, so the timing of this challenge by the EC could not have been worse.
The Author
Rahul Batra is the Director and Head of Department at Hudson McKenzie. Rahul Batra can be reached at rahul.batra@hudsonmckenzie.com