Free movement: Why reforming rules on in-work benefits doesn't require treaty change

Following David Cameron's speech on immigration, much has been made of his comments that the package of measures he proposed to reform EU free movement would require treaty change.

In some cases, the speech was ambiguous about what exactly was being proposed. For example, did Cameron really say EU migrants will need a job offer before coming to the UK? This is important because it has legal implications regarding whether some, all, or none of the proposals require treaty change, changes to secondary EU legislation or simply changes to domestic law. Although, politics will of course also play a major part.

In addition, some have questioned whether the proposal, outlined by Professor Damian Chalmers and our Research Director Stephen Booth and adopted by Cameron, to limit EU migrants' access to in-work benefits for a certain period of years could be achieved without treaty change, as the authors claim.

Today we have published  Chalmers' and Booth's assessment of the legal implications of the measures proposed in the Prime Minister's speech and a restatement of the case for why access to in-work benefits can be restricted via amendments to EU legislation rather than a treaty change.

Safe to say much of this is legally complex, but below is a summary of a summary of a longer legal note by Professor Damian Chalmers, which you can read in full here.

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David Cameron's speech can be divided into four broad types of demand:

1. Four-year restriction on EU migrants’ access to in-work and child benefits

David Cameron mentioned two proposed reforms:

a) “once they are in work, they won’t get benefits or social housing from Britain unless they have been here for at least four years.”

This could be achieved via amendments to EU legislation: This is the most legally complex of the proposals but we argue that it does not require Treaty change for two reasons. Firstly, access to in-work benefits is currently granted in EU law by virtue of a piece of secondary legislation, rather than by the Treaty article on free movement of workers. Secondly, the Treaties grant considerable discretion to the EU legislature (the Council of Ministers and the European Parliament) to place restrictions on access to such benefits provided that the legislation facilitates free movement more generally (which the relevant Directive would continue to do), the restrictions are based on objective criteria and are not disproportionate to the objectives they pursue.

b) “If their child is living abroad, then there should be no child benefit or child tax credit at all no matter how long they have worked in the UK and no matter how much tax they have paid.”

Depending on what is sought this could be achieved under domestic law or amendments to EU legislation but if the objective is a hard and fast residence requirement this could be achieved via amendments to EU legislation rather than Treaty change.

2. Tighter restrictions on EU jobseekers

David Cameron mentioned two proposed reforms:

a) “We want EU jobseekers to have a job offer before they come here and to stop UK taxpayers having to support them if they don't.”

This depends on exactly what is proposed. If he meant that any EU citizen must have a job offer before they can come into the UK, this would certainly require Treaty change.

However, read in combination with the pledge to “stop UK taxpayers having to support them”, the proposal is better interpreted as suggesting that no social benefits will be granted to jobseekers. EU law already establishes that jobseekers are not entitled to social assistance and therefore such a reform would not require changes to EU legislation.

b) “We also want to restrict the time that jobseekers can legally stay in this country. So if an EU jobseeker has not found work within six months, they will be required to leave.”

In principle, the UK can already do this under its domestic law. EU law only grants a right of residence for more than three months to those who are employed, self-employed, and economically self-sufficient as well as their family members.

However, the ECJ has ruled that individuals cannot be expelled as long as they “can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged”. While the onus is on the individual to prove this, clarifying what this condition means could be achieved by amending EU legislation. A hard and fast six month deadline would likely require Treaty change.

3. Abuse of free movement

David Cameron mentioned two proposed reforms:

a) “stronger powers to deport criminals and stop them coming back…and tougher and longer re-entry bans for all those who abuse free movement including beggars, rough sleepers, fraudsters and people who collude in sham marriages.”

Those deported at the time of conviction can be refused re-entry under existing EU law. Indeed, the German government has said it will use its domestic law to impose re-entry bans of five years for those who commit benefit fraud. The potential difficulty is for those EU citizens with family in the UK, who may be able to appeal deportation under the rights to family life guaranteed by the European Convention on Human Rights.

In the case of significant criminal offences where the individual has served a long prison term, the deportation may be several years after the offence, and it is open to the individual to argue that they are a reformed character. This poses difficulties as the individual threat to public policy must be a present threat. Albeit this requirement is currently imposed by an EU Directive, we believe that, if the provision were repealed, there is a strong chance that the ECJ would reinstate it as a Treaty requirement.

b) “We must also deal with the extraordinary situation where it's easier for an EU citizen to bring a non-EU spouse to Britain, than it is for a British citizen to do the same. At the moment, if a British citizen wants to bring, say, a South American partner to the UK, then we ask for proof that they meet an income threshold and can speak English. But EU law means we cannot apply these tests to EU migrants.”

This would likely require Treaty change: There are a number of judgments where the ECJ has stated that refusing to grant a non-EU national family member residence would violate the Treaty because it would discourage the EU citizen from exercising their rights to free movement.

Alternatively, it would be possible for new EU legislation to harmonise requirements on family reunification between EU citizens and non-EU nationals, so that the latter could only join the EU citizen in another member state if they meet certain requirements. However, this would entail harmonisation in an area (non-EU migration) where successive UK Governments have sought to limit the EU’s influence. Concern to prevent marriages to citizens from other member states being used as a vehicle for marriages of convenience can be addressed through tightening up existing EU legislation.

4. Tighter restrictions on migration from new EU member states

David Cameron proposed:

“So we will insist that when new countries are admitted to the EU in the future, free movement will not apply to those new members until their economies have converged much more closely with existing Member States.”

The UK could use its existing veto over new countries joining the EU to insist on these terms.

Six arguments Cameron can make to help reconcile Warsaw to his proposals for reforming EU free movement

Polish Europe Minister Rafał Trzaskowski's comments on Monday's Newsnight, where he said David Cameron’s plans to stop EU migrants from claiming benefits for the first four years after they arrive in Britain would be a "red line" for Warsaw, were widely cited in the UK media, much like Polish Ambassador Witold Sobkow's response to our initial report which heavily influenced Cameron's immigration speech.

As expected all along, Poland will be the biggest single obstacle to the changes.

Some of the reluctance is understandable. Following Poland's accession into the EU after having spent too long on the wrong side of Europe's historic dividing lines, Poles understandably do not want to accept anything that smacks of 'second class' status within the EU. While many Poles may privately think the proposals are reasonable, they also expect their government to stand up for the interests of Poles abroad, and any Polish government will find this hard to sell domestically, including a Law and Justice-led one (the issue has already lead to interesting discussions within the ECR group).

So how should Cameron deal with this? Here are six arguments he can make:

1. These reforms are the best way to let free movement stand: Cameron defended the principle of free movement in his speech and he did not pledge to impose an 'emergency brake' or quotas despite substantial domestic pressure, as to his credit Trzaskowski recognised. This reform package will allow the UK to stay signed up to free movement rules - a key Polish objective.

2. The UK cannot become a contribution-based system overnight: We hear this argument a lot out of Warsaw: "If the UK is concerned that its welfare model is too open, it can re-design it to bring it into line with those on the continent - tomorrow if it so wished. It can be done unilaterally and has nothing to do with the EU."

There are several problems with this position. Re-organising the UK's entire welfare system would be an absolutely massive undertaking - politically, economically and administratively. It would basically involve re-writing the UK's entire postwar settlement. This may or may not be desirable, but it simply won't happen any time soon, especially as a result of EU pressure. For one, the UK public won't have it.

Cameron could even bat the ball back in Warsaw's court by arguing that "It would be super-easy for you to adopt more ambitious emissions reductions. You just need to replace your dependence on coal with renewable energy, and you're in line with the rest of the EU. It can be done unilaterally and has nothing to do with the EU."

3. The UK shouldn't have to choose between keeping its welfare model and staying in the EU: The logical extension of the argument above is that only a French or Germany style insurance system is compatible with EU membership. Clearly, giving the EU an effective veto over such a sensitive area is not politically sustainable - in addition to being awfully discriminatory against the UK. Changing the rules around in-work benefits on the other hand is a pragmatic way to in effect bring the UK into line with continental systems without challenging the country's entire political order.

4. Poles and other EU migrants in the UK could be worse off under such a system: Ironically, if the UK were to adopt a continental model and scrap in-work benefits and tax credits for low-wage earners entirely, it would hit EU migrants in the UK much harder than the introduction of a temporary qualification period as it would permanently reduce their income. Is this really a more desirable outcome from the perspective of the Polish government and other opponents of Cameron's proposals?

5. Workers on low wages do not contribute significantly to the welfare pot: While the vast majority of EU migrants come to the UK to work and make a positive contribution to the UK economy, as our research showed, workers on low-wages pay very little in income tax and national contributions due to the UK's generous tax free allowance (£10,000 per year and rising) and national insurance contributions threshold (£153 per week). This means that far from funding their own benefits, these workers, especially if they have dependent children, can actually be a net burden on the public purse. Furthermore, despite their misleading name, tax credits in the UK are a cash benefit funded via general public spending and are not correlated to individuals' tax payments.

6. The principle enjoys widespread public support across the EU: The basic principle of establishing a link between contributions and right to access benefits enjoys wide-spread support in other EU member states as the YouGov polling below demonstrates:


Finally, tone is also vital. Cameron made a big mistake by singling out Poles earlier this year leading to the deterioration in relations as revealed in the leaked Wprost tapes, a mistake which he avoided making again in his immigration speech last week. The rules will apply to everyone from the rest of the EU and not one particular group or country. 

Cross-party consensus developing in favour of OE's proposals for free movement reforms

Deputy Prime Minister Nick Clegg has today said he wants EU migrants to be blocked from accessing the new Universal Credit – which includes income-based jobseeker’s allowance, employment and support allowance, income support, child tax credit, working tax credit and housing benefit – until they have worked in Britain for six months: the benefit would then only be payable for a maximum of six months.

This echoes Open Europe’s proposal that EU migrants should only have access to these benefits after a certain residence period, but that the principle of free movement should stand.

Mr Clegg has also suggested that he wants to permanently restrict the access of migrants to in-work benefits like tax credits, saying they should only be paid to people working the equivalent of a 35-hour week on the minimum wage: a threshold of £227 instead of the current £153.

Writing in the FT, he argues that:

As we streamline our welfare system by combining a range of benefits in a single Universal Credit, we should make sure that only migrants who have worked and contributed can receive the support. New jobseekers should not be eligible. Applying the same principle – that support should be reserved for migrants who are paying something into the pot – we should look at increasing the earnings threshold for in-work benefits such as tax credits. EU migrants could, for example, be required to work the equivalent of full-time hours on the minimum wage in order to qualify.

Meanwhile, Iain Duncan Smith has told MPs that  EU jobseekers will not be able to claim Universal Credit and that access to in-work benefits "will be negotiated" within the EU.

There are two interesting things about this. First, following OE's first pamphlet on this a month ago, there now appears to be cross-party consensus on the need to re-write the rules around in-work benefits - minus Ken "party like its 1992" Clarke, of course.

Secondly, this is a blessing and a curse for Cameron. The former because it boosts the chances of getting stuff done in Europe. The latter, because he does need to differentiate himself somehow from the others and he needs to announce something "new"in his forthcoming speech.

Open Europe report on reforming EU free movement: Make it fair to keep it free

Open Europe this morning published in full the already much cited report on how Cameron can win on EU migration without sacrificing free movement – trailed on the front page of Sunday Times yesterday and featured on BBC News at Ten and the Today Programme, amongst others.

The basic idea is that instead of putting an outright cap on the number of EU migrants who can come here, David Cameron should look elsewhere: Let free movement and its benefits stand, but bring back control over who can access in-work benefits in the UK, restricting EU migrants’ access to tax credits and social housing for an initial period.

It would reduce pressures on both UK wages and local services. At present tax credits provide a big boost to low income wages – sometimes doubling a workers wage. Under OE’s proposal, in some cases, without access to in-work benefits EU migrants’ take home pay would therefore drop below that which they would receive in their home states, meaning that the move would no longer make financial sense. It would also redefine EU free movement to mean the movement of “workers” – not access to benefits – as originally intended. We have a lot of figures to back up our argument that tax credits contribute to the income pull factor to come to the UK – and an annex which elaborates at length about into the Spanish, Bulgarian and Polish income tax, insurance and welfare systems (all done in-house, mind you, Cyrillic alphabet and everything).

A few quick points: First, we clearly note the trade-off: free movement is a net benefit to the UK economy and this would be a way to save it. On Today this morning, John Humphreys tried to frame the debate as us against Ken Clarke, “being on opposite ends of the debate”. The opposite end of the debate would be those who want to end free movement. Our proposal is a pragmatic one which aims to strike the right balance between an open economy and democratic control.

Secondly, Clarke’s substantive point of criticism was that the proposals would be “totally discriminatory”. Why should an EU migrant working in the UK get less, in benefits and tax credits, than a UK worker doing the same job?

• As we argued on Today, the UK’s system is much less contribution-based than most other EU countries. The UK can choose to either move to a full contribution-based system, or change EU rules to better accommodate for 28 different social and welfare systems.
• The UK’s tax credits are effectively social policy – not tax policy. There is no direct link between how much tax you pay and how much you get back in tax credits. They were designed to help UK workers back into work – it is not discrimination to say that these benefits, designed to help make work pay for UK workers, should not be open to the entire EU workforce from the outset. Free movement was never meant to be mutual and unrestricted to other countries’ full social policies.
• If our proposal is discriminatory, taking the argument to its logical conclusion, should we extend tax credits to migrants from outside the EU as well from day one? We look forward to hearing Ken Clarke or others making that particular argument.

This is a fair proposal to try and square the principle of free movement with differing social welfare systems across the EU, and the fact that the UK’s system is far more open than other systems - this proposal will help to reinstate some trust in free movement.

Responding to our report on Today, the Polish ambassador to the UK, Witold Sobkow said that the report has a “sound analytical basis” but argued that migrants don’t make a sophisticated spreadsheet analysis of income differentials before moving to the UK. That may or may not be the case but they will consider in broad terms how much better off they – and in many cases their families – will be by moving to the UK as migration is not a decision most people make lightly.

It stands to reason that state support will be part of that equation even if the exact level of things like housing benefit is very hard to pin down before moving. As our analysis shows, under our proposals, it would no longer make financial sense for someone to move from the average Polish wage to earn the UK minimum wage due to the withdrawal of the right to immediate in-work benefits – it stands to reason that this will impact on potential migrants’ decisions. But without, of course, taking away the basic right to come here to work.

Labour turns its attention to restricting EU migrants' access to in-work benefits

Iain Duncan Smith's opposite number, Labour's Rachel Reeves, has written an interesting piece on EU migrants' access to welfare for the Mail Online, in which signals an important shift in Labour's policy.

Last week we noted that IDS had set out that he wanted to restrict EU migrants' access not simply to out-of-work benefits but also in-work benefits such as tax credits - something that our Research Director Stephen Booth and LSE Professor Damian Chalmers proposed in a recent Open Europe pamphlet.

Reeves sets out three proposals to reform the EU rules on access to welfare. Firstly:

"We believe that it is right to extend the period that EU jobseekers need to live and support themselves in the UK before claiming out-of-work benefits from three months to two years."

This had been hinted at by senior Labour figures before. But, for the first time, Labour have said they also want to address in-work benefits:

"We must also look at the role of in-work benefits. It is far too easy for employers in Britain to undercut wages and working conditions by recruiting temporary workers from elsewhere in Europe on very low pay and with no job security, knowing that the benefit system will top up their income." 

"So while some have said that we cannot negotiate changes to benefits paid to people in work, I am determined to look at how we can deliver reform in this area too."

As we have noted before, restricting access to this low-wage welfare supplement could reduce the incentive to migrate to the UK for the lowest paid jobs as the UK's system of in-work benefits can make a significant difference to the incomes of the lowest paid.

And thirdly, Reeves has said:

"We will work with European countries to end the absurdity of child benefit and child tax credits being claimed for children living in other countries."

This is near unanimous consensus among all the main parties on this point.

The change in stance on in-work benefits is significant and would have the biggest impact, and it is therefore interesting why this wasn't given top billing in the article?

IDS sets out broad strokes of reforms to EU free movement

The Telegraph has an interesting transcript of an Iain Duncan Smith interview with LBC Radio, which outlines the Government's current thinking on EU migration and which might signal the types of reforms that David Cameron is weighing up before delivering his promised speech on immigration in the aftermath of the Rochester and Strood by-election.

Here's what the Work and Pensions Secretary said, following this week's European Court of Justice ruling on access to benefits:

"This is about people who want to enter a country and have no prospects of work and are not intending to work, so that is stopping and shutting the door to them as we have done." 

Essentially, IDS says that the ECJ's ruling runs with the grain of the domestic changes the UK has already made to restrict access to out-of-work benefits. But he is clear that he wants to go further:

"The next problem is people who come to work, and then can claim full tax credits even though they have made no contribution. And that is the point I am making... countries shouldn’t have to do that. They shouldn’t have to support people who are coming over here, who have made no contribution." 

This is very much along the lines of what our Research Director Stephen Booth and Professor Damian Chalmers proposed in their pamphlet on EU migration and national welfare systems - a re-write of EU legislation to enable national governments to restrict access to non-contributory benefits for up to three years.

And, thirdly, IDS suggests that:

"And the third area which you talked about…is that the issue around freedom of movement isn’t that you don’t want to stop freedom of movement, but what you want to be able to say is: ‘sometimes there are limits that communities can absorb people and the pressure on public services and housing and stuff like that’." 

"European rules need to take recognition of the pressure that puts on local communities, and that’s really part of the negotiation."

This last point is perhaps the most interesting as it suggests that the option of some form of 'emergency brake' on EU migration is still under consideration.

As we have said before, there are many ways in which such a mechanism could operate, and it might just be negotiable, although this would be a much taller ask than reforming the rules around access to welfare.

What are the implications of today's ECJ ruling on EU migrants' access to benefits?

As we've said on many occasions, it is not only the UK that is having problems reconciling EU free movement with maintaining control over national welfare systems; Germany has recently tightened up its own domestic rules recently and the country also faced a legal challenge from a Romanian woman living in the country who claimed the right to receive German unemployment benefits - a case which was referred all the way up to the ECJ.

Essentially, the Dano case concerns the interpretation of existing rules around EU free movement and the extent to which EU migrants have a right to equal treatment with nationals of the host member state with regards to access to benefits,

The Court has finally issued its verdict today, ruling that:

"The [2004 free movement] directive thus seeks to prevent economically inactive Union citizens from using the host Member State’s welfare system to fund their means of subsistence. A Member State must therefore have the possibility of refusing to grant social benefits to economically inactive Union citizens who exercise their right to freedom of movement solely in order to obtain another Member State’s social assistance although they do not have sufficient resources to claim a right of residence." 

It is also interesting that the Court has confirmed that certain non-contributory benefits are outside the scope of EU rules which guarantee equal treatment and non-discrimination. The UK and other national governments can therefore use this precedent to defend their restrictions on EU migrants’ access to non-contributory benefits (i.e. the ‘right to reside’ test which could be subject to an ECJ legal challenge).

It also states clearly that ‘special non-contributory benefits’ are a national competence – much of the dispute between the UK and Commission over the ‘right to reside’ test relates to the categorisation of certain UK benefits. This could be useful to the government but it is also true that the UK's case still rests on how the benefits they restrict are defined (i.e. do they fall under the label of 'special non-contributory benefits'), and whether the Commission and the ECJ agree, which we still don’t know yet.

In short – this is likely to be a helpful precedent for the UK and potentially a sign that the Commission/ECJ are prepared to back down over the ‘right to reside’ issue. But more fundamental changes on in-work benefits, which are increasingly important issues in this debate and particularly for the UK, will require changes to EU law - here we set out how this could be done while keeping the principle of free movement itself intact.

Germany's Bundestag votes in favour of stricter benefits rules for EU migrants

The German Bundestag today approved changes to the country’s Immigration Act which are meant to prevent the abuse of EU free movement. This is not yet a done deal as the Bundesrat - the German upper house - needs to approve the changes, and the grand coalition doesn't have an automatic majority there.

Re-capping our previous blogs on this, here are the key proposals - none of them will involve changes to EU law, according to the German government:

Six month maximum stay for EU job-seekers: Jobless EU migrants seeking work in Germany, who don't have sufficient means of supporting themselves (including health insurance) and have limited job opportunities, will be forced to prove after six months that they have a "reasonable chance" of being employed. Otherwise, they will be forced to leave. Exactly how this will work in practice is unclear. This is very similar to what the UK Government already is doing.

Five year re-entry bans: EU migrants abusing EU free movement (by forging documents or being in a fake marriage, for example) will face a re-entry ban of five years. 

Linking child benefit payments to national tax ID numbers: to avoid duplication of payments to EU migrants - which will only apply to EU migrants, not German citizens (which raises a number of questions and which may well be challenged at the ECJ, depending on the outcome of some pending ECJ rulings). 

€225m (€200m of this was already agreed) in financial assistance to help local authorities to deal with migration (€140m would come out of the European Social Fund). 

Interestingly the report that served as basis for the draft law also has a section on “possible further measures on the European level” which notes that:

“Also in other [EU] member states…the issue is debated, in parts very controversially. In this respect the question arises….if and in how far considerations for further steps on the European level or together with European regulations are necessary and reasonable. The Committee will deliver an opinion on this in its final report.”

There are two separate cases referred from German social courts to the ECJ to keep an eye on. The first ruling - relating to the access to benefits for “economically inactive” EU migrants - will be delivered on 11 November and Angela Merkel stressed already that she "spoke with David Cameron and we are both anxious to receive the verdict and we will interpret it together."

'Benefit tourism' is a red herring but welfare and low-income migration are inextricably linked

Today’s UCL report on the fiscal impact of migration to the UK has understandably provoked a lot of interest.

The top line findings are that:

• Between 1995 and 2011, migrants from EEA countries made a positive fiscal contribution over that period of more than £4bn, while those from non-EEA countries made a negative contribution of £118bn, compared to an overall negative native fiscal contribution of £591bn.
• The positive net fiscal contribution of recent immigrant cohorts (those arriving since 2000) from the A10 (the ten Central and East European EU member states that joined since 2004) amounted to almost £5bn, while the net fiscal contributions of recent European immigrants from the rest of the EU totalled £15bn. Recent non-European immigrants’ net contribution was likewise positive, at about £5bn. Over the same period, the net fiscal contribution of native UK born was negative, amounting to almost £617bn.

The obvious conclusion to draw from such studies is that the economic case for EU migration is clear and that ‘benefit tourism’ is simply a myth in the immigration debate (as others point out, there are social and economic arguments for and against migration). Open Europe has consistently sided with those who argue that on net, EU migration is positive for the UK, also from a purely transactional point of view.

Why then the focus on EU migrants’ access to welfare?

We and others have suggested that the Government should prioritise this as an issue for negotiations on the reform of EU free movement - rather than seeking to impose caps on the number of EU migrants or end free movement. Not because we think the majority of EU migrants are ‘benefit tourists’ but because that, unlike many other EU states, the UK offers effective income support to low-paid migrants. This creates some unintended consequences.

Again, at the aggregate level, free movement brings economic benefits. But the aggregate net benefit masks net losers (similarly, there is no such thing as a typical EU migrant – they perform different jobs, earn different wages and, if they are entitled to claim welfare, may not do so). Nevertheless, it is the duty of governments to come up with policies that mitigate the effect on those who might lose out from migration.

The labour market is the obvious area where the impact of migration is felt differently. The evidence overwhelmingly supports the view that low-skilled and low-wage workers can be adversely affected in the form of greater competition for jobs and a depressing effect on wages, even if the magnitude of this tends to be overstated. Higher-paid workers tend to gain.

This is where welfare does come into it – particularly for a country such as the UK which supports low incomes with fairly generous levels of income support in various forms. ‘Benefit tourism’ is indeed a red herring, in the sense that the vast majority of migrants move to work, not to ‘sponge off the state’. However, as our recent pamphlet argued, it is hard to justify to domestic electorates in economic and social terms why low-paid migrant workers should be immediately entitled to income support paid for by their new host country. These relaxed rules on access to state top-ups not only act as an extra incentive to migrate into low-income jobs, they prevent national governments from targeting these policies at their own citizens.

Many have suggested that reform to EU access to welfare rules is simply about tackling ‘abuse’ and ‘welfare tourism’. This not only stigmatises migrants, the vast majority of whom do not ‘abuse’ the system but simply abide by the current rules, it devalues the fundamental point – which is that it is probably not politically sustainable for national governments, in some instances from the get-go, to subsidise low-income migration via their welfare systems.

Two additional points. First, such a system need not mean that EU migrants are left to fend entirely for themselves, only that like in most other EU countries, benefits are tied to contributions through employment. For example, non-EU migrants who have a right to live in the UK but 'without recourse to public funds' are entitled to basic safety net benefits tied to their National Insurance contributions, but not income support. There are also discussions to be had about raising the floor for working conditions in general, including revisions to the minimum wage.

However, secondly, the UK should also be aware of the trade-offs involved. Fewer EU migrants and higher wages - if that is the objective - could well make the UK a less competitive place.

EU migration - a deliverable proposal for reform

As we already noted here, today we published a new pamphlet by Professor Damian Chalmers of the LSE and our Research Director Stephen Booth.

The basic question the authors ask is, in the current political climate, how in the world can we ‘save’ EU free movement? As we’ve stated repeatedly, Open Europe thinks that the single market – including free movement of workers – remains a clear net benefit to the UK and EU. However, like everything else, it needs to be subject to up-to-date, clear and fair rules to make sure it stands.

Therefore, the pamphlet argues that instead of reaching for “quotas” or a “points-based system”, Cameron should focus on the “pull factors” – who can access what benefits and when – which if done right, will have a big impact but without ending the basic free movement principle (a red line to Merkel and others).

Chalmers and Booth – both writing in a personal capacity - argue that national governments should be able to limit EU migrants’ access to out-of-work and in-work benefits, social housing and publicly funded apprenticeships until after three years. EU citizens would have a right to access public healthcare within their host country, but, for the first three years, the costs would be borne by their state of nationality and, insofar as there was a shortfall, through private health insurance that they were required to purchase. Children of an EU citizen would have a right to access childcare and primary and secondary education. The changes wouldn't be retroactive but only apply to future EU workers.

This could be done through EU legislation and avoid a treaty change to the totemic EU principle of free movement. But it needs to be recognised that, while it often comes with overall net benefits, free movement does have an impact, particularly at the low-skilled / low-income end of the job market where the competition between school/university leavers, those moving from welfare into work and migrant labour can be fierce, with the consequent knock-effect this can have on wages.

The length of the qualification period can be discussed and needs careful thought to strike the right balance between incentive to work and ability to live.

The proposal could kill three birds with one stone:

First, it would remove the effective “subsidy” to EU workers who perform the lowest-paid jobs in the UK by removing the state top-up to low wages. For those thinking of coming to the UK, this could certainly change their cost/benefit calculation before they make the leap. It would create a fairer system, which could well have an impact on numbers and boost public confidence in free movement.

Secondly, and just as importantly, it would hand back an important public policy tool to national governments. If welfare (out of work and in work) is not open to EU migrants, national governments can better target their policies at their own citizens – helping the young with publicly-funded apprenticeship or those coming of welfare with income top-ups. The effect of these policies is blunted if they open to people across the entire EU.

Thirdly, unlike ideas for quotas or caps on EU migrants, it leaves the basic principle of free movement of workers intact, while not requiring a complicated EU treaty change.

Finally, because of that, this proposal could win support in other capitals, including, importantly, Berlin.

We will soon be publishing further research looking at the economic impact these and other potential proposals could have on EU migrants considering coming to the UK – and to what degree removing access to welfare for three years might act as a disincentive to those migrants who would be coming to working in the UK on the lowest incomes. We'll also look at other areas such as minimum wage. However, also, we’ll investigate the trade-off this involves in terms of the UK’s overall wealth and competitiveness, for which EU migrants no doubt play an important part.

Everyone take a deep breath: suggestions Merkel ready to accept Brexit following free movement row are wide of the mark

Der Spiegel reports that German Chancellor Angela Merkel warned David Cameron at last month’s EU summit that she would no longer try to keep the UK in the EU if Cameron sought to impose quotas or a cap on workers from other EU countries, as opposed to changing the rules around EU migrants’ access to benefits. The magazine also reported that the German Chancellery and Foreign Ministry fear that, for the first time, Cameron is pushing the UK towards a “point of no return” in terms of its EU membership and that a UK exit is “possible”. But there’s no reason to be get overly excited though.

• This was a report from one magazine which didn’t include any direct quotes from Merkel, but merely quoted unnamed sources. Moreover, as Sky News' Faisal Islam points out, the report isn't exactly front page either... its on page 36 of the print edition.
• The reported comments were specifically about reports in the UK media about Number 10 possibly considering putting outright caps on the number of EU migrants who can come to Britain to work, either via quotas or a points-based system. So one speculative media report leading to another.
• As we’ve argued repeatedly, there are two elements to free movement: volume – how many EU migrants come to the UK every year. And fairness: who can access what benefits and when. That Merkel doesn’t support an end to the basic right for EU migrants to come to the UK to work isn’t surprising at all. It’s been the German government position for ages. Stefan Seibert, Merkel’s spokesperson this morning re-stated Germany’s commitment to “the general principle of free movement”.

However, within that there’s a lot of scope for change and plenty of EU reforms that could fly in Berlin. Remember, the Bundestag will this week vote on a number of proposals aimed at tightening EU migrants’ access to benefits, including re-entry bans for those migrants that abuse of the German welfare system.

It’s interesting that since the stories in the UK media about a points-based system or quotas for EU migrants, FAZ and the Sunday Times note that the UK government is now looking to make its EU free movement proposals “Germany-compatible”. Also, UK Chancellor George Osborne told the BBC this morning,

“It was never envisaged that you would have such large numbers of people coming, people coming who don’t have job offers, people who move on to our benefits system…We are going to do this in a calm and rational way, but the British people want this addressed.”

The “job offer” part is interesting – the right to move to another EU country without a specific job offer hasn’t always been there. However, note there’s nothing about a cap – what the Der Spiegel report was about.

Similarly, at Downing Street’s briefing to journalists today, Cameron’s spokeswoman said:

“When the founding fathers established the European Union and introduced the principle of free movement, it was about labour and how you integrate the countries of the single market. The mass migration that we have seen with new countries joining, the impact on countries like the UK, the free movement to claim benefit – these are areas that have evolved and need to be addressed.”

There’s the point about wider “impact” but, again, the main focal point is benefits.

Which may suggest that No 10 remains primarily committed to looking at “fairness” – not actually ending free movement per se.

So only tweaks then? Not at all. Open Europe has today published a new pamphlet by Professor Damian Chalmers and Open Europe Research Director Stephen Booth which argues that the basic right to go and work anywhere in the EU should stand – on the whole, free movement remains a clear benefit to the UK. However, national governments should be able to limit EU migrants’ access to out-of-work and in-work benefits, social housing and publicly funded apprenticeships until after three years.

Incidentally, Der Spiegel did not claim that Merkel was now ‘ready to accept’ the UK exiting the EU, as some UK media outlets have reported. Instead, she now considers Brexit “möglich”, which translates as “possible”, which is more along the lines that it is something she fears.

In other words, whilst certainly a strong indicator of the mood music in Germany and the UK, on specific substance, this is much less of a story than the headlines suggest.

Barroso lets his hair down - and British media loves it

Would the UK have zero influence outside the EU? 

Outgoing European Commission President José Manuel Barroso is in London, and he has made a few interesting remarks about the Tories, Brexit, EU free movement and Grant Shapps. Wading into the most intense debate on EU migration in the UK since 1066, he has really hit the headlines. 

However, Barroso no longer has any real say over decisions in the EU - it's Juncker's show now, and he has made addressing the UK's concerns a key priority, although it remains very much an open game. Also, remember, the bulk of Cameron's renegotiation won't be with the Commission - it'll primarily be with member states (though having the Commission on-side will certainly help). 

In any case, Barroso told the BBC's Andrew Marr Show yesterday:

"So far the British government has not presented a proposal, a concrete proposal [on reform of EU free movement rules]. There are ideas floating, there are rumours. I cannot comment on specific suggestions that have not yet been presented. What I can tell you is that any kind of arbitrary cap seems to me to be not in conformity with the European rules."

Barroso is of course right - restricting the number of EU workers coming to the UK, via quotas, would be illegal under EU rules - as we argued in our recent flash analysis and most people agree on. The question is whether changes to these rules are possible - this is a big discussion which we've looked at here. However, Barroso also tried to strike a more conciliatory tone when he stressed that there are "widespread concerns in the UK and elsewhere about abuse of free movement rights" and further changes could be made to address them, although "changes to [EU migrants' access to benefits] need all countries to agree."

Barroso had some less well-targetted comments, claiming for example, that the UK would be "irrelevant" and "have zero influence" outside the EU, while also appearing to link EU membership to Cameron's ability to fight the Ebola virus.

At an event this morning, Barroso was also asked about remarks made by Conservative Party Chairman Grant Shapps, who was sent out yesterday to dismiss Barroso's comments, calling the outgoing European Commission President “an unelected bureaucrat”. Barroso - now clearly free to let his hair down - went all in:

“Since I was 29 years old, I was elected in my country…I don’t know who this gentleman is, but certainly he has not more democratic legitimacy than I have.” 

Which begs the question, if Barroso doesn't know who Shapps is, how can he comment on the man's electoral record? Anyway, it allowed the Tories to play the 'we stand up to Brussels card'.

German 'crackdown' on EU citizens’ access to benefits: what does it involve?

The issue of how to balance EU free movement and the rights of member states to control their welfare systems has been a long running issue, one which several countries (not only the UK) are struggling with. We've previously reported about how the influx of EU migrants has caused problems in Germany, prompting the grand coalition to commission a review into the issue.

In March, we reported on and analysed the key recommendations of the interim version, and now it appears the final version will be adopted by the German cabinet later this month. According to FAZ, here are the key points, which are virtually unchanged from the draft version:

• Limiting the period in which EU citizens can be registered as jobseekers to six months, after which they are obliged to leave the country if they are still unemployed. This is similar to the UK's current approach, although David Cameron announced last month that this would be toughened.
• Banning any EU citizens found guilty of “abusing or defrauding” the German welfare system from re-entering Germany for a period of five years. How easy this will be to enforce in the Schengen border-free zone is questionable.
• Making it harder to export child benefit abroad by demanding additional documentation and changing domestic taxation rules. David Cameron has also made this a priority and it remains unclear whether limiting payments to working migrants' children who live abroad is permissible under EU law.
• In addition, German municipalities are to get additional financial assistance from the government to cope with the effects of an influx of migrants to help cope with extra pressures on local services.

This 'crackdown' comes at an interesting time for two reasons. Firstly, today's Bild reports, according to new figures from the German Federal Employment Agency, the number of EU citizens from Greece, Spain, Portugal, Italy and the ten Central and Eastern European member states claiming unemployment benefits in Germany has for the first time exceeded 300,000 after going up by 53,216 (21.6%) in April compared with April 2013. Secondly, confidence in the German economy is on the decrease which could add political momentum to those who want to further restrict free movement.

Is David Cameron's latest immigration crackdown legal under EU law?

David Cameron today announced another 'crackdown' on EU migrants, stating that from November, EU jobseekers "will only be able to claim Jobseeker's Allowance and other key welfare benefits for a maximum period of 3 months." This will halve the current period over which unemployed EU migrants can claim these benefits. The result of this change will therefore be that new arrivals from the EU cannot claim Jobseeker's Allowance for their first three months in the UK but can receive it for three months after that, rather than the six allowed under the existing rules.

In addition, a consultation has been launched on banning overseas-only advertising – legally requiring employment agencies to advertise in Britain, and new plans to restrict the number of Job Centre Plus jobs which are automatically advertised on an EU-wide job portal.

The European Commission has already said it will investigate whether the changes to the benefit rules are legal under existing EU law (the UK and Commission are already locked in a long-running legal dispute over EU migrants' access to benefits). So, are they?

Needless to say No10 and the DWP are confident they are, and we think the Government has a strong case. However, as we noted of David Cameron's last 'immigration crackdown' in November 2013, the UK is at the very limit of what it can do within the confines of EU law.

In order to keep this latest measure within the EU rules, it will only apply to new arrivals to the UK who have never worked in Britain. This is because under existing EU rules, people who have worked in the UK must be treated differently because they enjoy 'worker status' for at least six months. As others have noted the impact of this policy on the ground is therefore likely to be small as not many EU migrants will be affected.

We have ourselves called for the Government to address public perceptions about free movement, primarily by instilling the principle that EU migrants should only be entitled to benefits after having made an economic contribution. This is clearly David Cameron's intention and he used today's Telegraph article to make the point: "You cannot expect to come to Britain and get something for nothing."

But unless this latest measure is followed up with reform of the underlying EU legislation, the UK Government is in danger of chasing diminishing returns with the risk is that voters simply become desensitised to the flurry of crackdowns that make only piecemeal changes.

Government's Balance of EU Competences Review sets out need for reform - finally

Today, the UK Government has published the third batch of its reports reviewing the ‘Balance of Competences’ between the UK and the EU. We have noted before that many of the previous reports, whilst interesting on much of the detail, have for various reasons turned out to be rather disappointing and dodged the major questions facing Britain in the EU, so how do today’s tomes compare?

Most interestingly, the controversial, and much delayed, report on the free movement of persons has finally been published and, unlike many of the previous reports, it is much clearer about the Government's thinking in what is one of David Cameron's primary targets for renegotiation. The report, which was trailed in today's papers and quotes extensively from our submission to the consultation, which you can read in full here, makes the following points:

• "Whilst there is broad consensus that highly skilled migrants from the EU have been beneficial to the UK, there is less agreement regarding low skilled migration, with some arguing that gains for employers are offset by negative impacts on the lowest paid workers."
• "The scope of free movement rights has now expanded beyond their original intention, and is no longer limited to economic factors."
• "Successive judgments by the ECJ have interpreted the right to free movement set out in the Treaties and the Free Movement Directive broadly, with the consequence of expanding the rights of entry and residence which may be asserted in reliance upon them, and consequently restricting Member States’ competence in this area."
• Other concerns expressed were criminals' exploitation of the rules, the localised impact on public services, and falling public confidence in the concept of free movement.

Specifically regarding the existing rules on EU migrants' access to welfare, this is the key passage:

"The Government considers that now is an appropriate time to review the EU level rules with a view to modernisation and ensuring they are fit for purpose in the EU of today. The rules have evolved beyond the original scope as the EU has evolved and the interaction between rules on residence and social security coordination becoming increasingly complex. This complexity has led to an increasing number of challenges through the ECJ, creating uncertainty and, in the majority of cases, weakening the ability of Member States to determine how their systems operate."

"Without reform, legitimate public concern about how EU migrants access social security in other Member States is likely to significantly undermine support for the principle of free movement."

This is the most explicit any of the BoC reports has been about the need for reform and, while there is no settled policy prescription (the report discusses OE's and David Goodhart's reform proposals at length), the key issues have been clearly identified.

This is apparently the third iteration of the report, following several rounds of coalition ping-pong. Nevertheless, it highlights the degree of cross-party consensus on the need for reform of benefits rules - which Labour has also called for. It would however be intriguing to know what was cut in the various edits.

We will be leafing through the other reports published today and will return to them on the blog later this afternoon.

EXCLUSIVE TRANSLATION: "Cameron f***** it up" - Leaked tapes shed light on difficult relationship between London and Warsaw

As far as leaked tapes are concerned, this is extraordinary - and Open Europe offers the first translation of it all.

Poland has been rocked by a political scandal involving the covert surveillance of senior government ministers, state officials - including the governor of Poland's Central Bank Marek Belka - and business figures, and recordings of their conversations were leaked to Polish magazine Wprost. 

The whole business is distinctly shady - who did the recording and for what purpose (some have suggested Russian involvement) - and could yet lead to early elections. It has also revealed how Polish politics operates behind closed doors and shed light on what senior figures really think about a range of issues, including UK-Polish relations in the context of the EU.

We have highlighted before that this is a crucial bilateral relationship, the health of which will have a significant impact on the success or otherwise of Cameron's EU reform agenda. Unfortunately, this relationship has become particularly strained in recent times, particularly over the related questions of free movement and access to benefits. Here are the key sections of a conversation between Foreign Minister Radoslaw Sikorski and former Finance Minister Jacek Rostowski at some point this spring (we try to keep this blog family-friendly so apologies for the bad language).

Rostowski: “[Cameron] thinks he’ll go renegotiate and come back, no Polish government could agree to it. Except in return for a mountain of gold.”

Sikorski: “Its either a very badly thought through move, or, not for the first time a kind of incompetence in European affairs. Remember? He f***** up the fiscal pact. He f***** it up. Simple as that. He is not interested, he does not get it, he believes in the stupid propaganda, he stupidly tries to play the system... his whole strategy of feeding [his critics] scraps in order to satisfy them is just as I predicted, turning against him; he should have said, f*** off, tried to convince people and isolate [the sceptics]. But he ceded the field to those that are now embarrassing him.”

Rostowski: “For the Polish government to agree, someone will have to give us some mountain of gold. The Brits won’t give it to us, and the Germans, in order to keep the Brits on board, won’t give it to us either in all likelihood. So the answer will be: f*** off... [the impact of a Brexit] will generally be bad for us, because we would like for Great Britain to stay. I think it’ll be the case that [Cameron] will lose the elections. Great Britain will leave. Once they do, they’ll keep open borders. Not for [gypsy] beggars…"

Sikorski: “Just like Norway... Enough of this!” They've f***** up Eastern Europe and a few other things. [Mimics a Brit] If Europe doesn't reform, it’ll end badly! Let them worry about their economy. If they don’t re-organise themselves, they’ll have as bad an economy as Germany. What is that? What, how is that so monstrous?”

In a separate conversation with Jacek Krawiec, head of Poland's largest oil and gas conglomerate Orlen, Pawel Gras, Prime Minister Donald Tusk's then media spokesperson referred to a phone conversation between Tusk and Cameron in the wake of Cameron's comments about Polish migrants claiming benefits in the UK.

Krawiec: “What the f*** are they on about with these benefits? [Cameron] seems like a really sensible bloke... when I met him in London he talked a lot of sense”.

Gras: “Thoughtless, probably suggested by [some spin doctor] probably came from some focus group, he didn't think through the consequences, the whole thing was stupid, Donald called him at once to discuss it, he had such a go at him, I mean f*** it’s a shame we didn't record it, he had a such a proper f****** go at him.”

So what does this tell us (other than politicians use words in private they'd never use publicly)? Well leaving aside the criticism of Cameron's EU policy - which has been made before - here are a few points we've picked up on:

• It is notable that Rosowski assesses the prospects of Brexit as highly likely, and how resigned both he and Sikorski are to that outcome even while admitting that it would be bad for Poland. 
• As such, it is outright bizarre that they are so flippant and dismissive about Cameron's reform agenda - which - for all its flaws from a Polish perspective - remains the best chance for keeping the UK in the EU from a wider perspective.
• Both Rostowski and Sikorski are adamant that even in the event of a Brexit, the UK will not be able to block free movement - if it wants to maintain access to the single market - a key demand of many better off outers (Switzerland is currently facing this dilemma). 
• As the Krawiec comments demonstrate, when addressing issues of substance, Cameron can count on a good hearing from Polish business leaders, a crucial constituency, but he risks alienating Poles by ill-judged claims about 'benefit tourism'.

In conclusion, international diplomacy remains rooted in pragmatism and it is unlikely this incident will result in long term damage between London and Warsaw. It is also worth mentioning that these conversations could well have taken place before the escalation in the Ukrainian crisis which has helped to firm up Polish-British relations (with the UK taking a tougher position on sanctions than other EU member states and sending RAF fighter planes to the region). 

However, it is clear that issues like EU migrants' access to benefits - something UK public opinion will simply not allow Cameron - or indeed any other UK Prime Minister - to ignore. It is crucial therefore that both governments put aside the hyperbole and think about how tricky issues can be resolved in such a way that benefits both countries. 

Labour finally wake up to the fact there is a European election next week

Do Ed Balls and Ed Miliband see eye-to-eye on the EU?

Anyone following Labour's election campaign up until now would be forgiven for thinking the party was fighting a general election as opposed to a European one - any references to Europe were hard to come by. However, Shadow Chancellor Ed Balls has emerged with a hard-hitting piece in yesterday's Evening Standard in which he argues that:

"Europe needs to work better to respond to public concerns, deliver better value for money for taxpayers and secure rising prosperity."

"First, we need the EU to be better focused on creating jobs and growth. An EU Commissioner focused on growth, and an independent audit of the impact of any new piece of EU legislation on growth, would be key to helping re-focusing the Union on this key task. And we need to drive forward the completion of the single market in digital, energy and services."

"Second, our reforms will help ensure that EU citizens seeking work here contribute to our economy and society. So we will extend the period of time that people from new member states have to wait before being able to come to the UK to look for work. We will work to stop the payment of benefits to those not resident in this country, consult on changing the rules on deporting someone who receives a custodial sentence shortly after arriving in the UK, and have called on the government to double the time that an EU migrant has to wait before being able to claim the basic Job Seekers Allowance."

 "And third, any agenda for change in Europe must also address people's concerns about how power is exercised at a European level. So we have called for national parliaments to have a greater role in EU decision making by being able to 'red-card' any new EU legislation before it comes into force; for serious reform of the EU Commission."

This commitment to reform is very welcome, even if this is merely a re-statement of existing Labour EU policy. It's worth noting that these reforms are not a million miles away from David Cameron's own priorities for EU reform - especially the further restrictions on EU migrants' access to benefits and the red card for national parliaments. Yet more evidence - as we've pointed out before - that tone and rhetoric aside, there is a surprising degree of consensus among the main parties when it comes to the substance of EU reform. 

As the New Statesman's George Eaton pointed out recently, there is a lot of frustration within Labour over how to deal with the EU question:

"Other shadow cabinet members complain of the party's failure to promote its commitment to reform the EU, which they regarded as a quid pro quo for Miliband's refusal to guarantee an in/out referendum under a Labour government."

It appears that Ed Balls is among the Labour heavy hitters keen to address this disparity.

Free movement: Germany pushes the limits of EU law [updated]

How much are the new immigrants costing us asks Bild

The German government's preliminary report on EU migration was presented yesterday by Interior Minister Thomas de Maizière and Labour Minister Andrea Nahles, and contains some very interesting measures.

The explosive combination of EU migration and access to benefits has been giving David Cameron a headache for a while now, although as we’ve noted in our press summary and on our blog, similar debates have also been kicking off in Germany, Denmark, the Netherlands and elsewhere. In particular in Germany it has been rumbling for some time, with some mention of it during the election and the new coalition agreement, however this intervention is likely to step up the debate a notch or two.

The proposals actually have quite a lot in common with Cameron's position, although not exactly and each side goes further on certain specific issues. The key question remains though whether they will be judged to be consistent with EU law. This remains unclear and whether or not a challenge from the ECJ is forthcoming will certainly set a precedent in this area. 

Key proposals

Potentially the most important proposal in the draft report is that:

• Jobless EU migrants seeking work in Germany, who have no means of supporting themselves and have limited job opportunities, should be given a limited window to find a job before being required to leave.

Crucially, the report stresses that this can be achieved within the constraints of existing EU law as this would not apply to those EU jobseekers who have a 'reasonable' chance of being employed, those with sufficient financial means including affording their own health insurance, or even those who have a “mini-job” involving just a few hours of work per week. 

The report recommends that EU migrants who cannot fulfil these requirements would have a grace period before being expelled, and notes that the ECJ deems six months to be appropriate. However, whether such expulsions would work is not clear, since, in theory, EU migrants’ right to free movement would kick in immediately after they left Germany, allowing them to return right away again.

Other proposals in the paper include:

• Temporary re-entry bans on migrants abusing EU free movement (by forging documents or being in a fake marriage, for example).
• Linking child benefit payments to tax identification numbers.
• €200m in financial assistance to help local authorities to deal with migration (€140m would come out of the European Social Fund). 

How does this compare to Cameron's position?

There are some similarities between the German position as set out yesterday and Cameron's position as set out in his FT piece last year, but also some important differences.

On the question of kicking EU migrants out, Berlin is proposing to do so in cases where migrants do not have a job after six months, have no realistic prospects of finding one and are not financially self sufficient, while Cameron wrote that:

“If people are not here to work – if they are begging or sleeping rough – they will be removed. They will then be barred from re-entry for 12 months, unless they can prove they have a proper reason to be here, such as a job.”

This means that Cameron and Merkel have adopted a similar position on removing people who are not working, but London is going further on the specific question of the re-entry ban which would apply to everyone in that position, whereas the German re-entry ban would be limited to more serious cases such as fraud. 

On the question of child benefit, the German and UK positions differ. In the UK, Cameron, Clegg and Miliband all want to be able to stop paying child benefit to parents whose children do not live in the UK. The German position is different – the government currently has no plans to restrict child benefit for children not resident in Germany, the linking of the payments to tax ID numbers is designed to crack down on potential fraud and duplicate payments. 

Next steps

The preliminary report will be finalised by end of June before it enters the legislative process. How will the EU respond? The big question mark is if - despite what the report says - these proposals are compatible with EU law or if either the six-month cut off, or the re-entry ban could face a legal challenge.

Interestingly the report also has a section on “possible further measures on the European level” which notes that:

“Also in other [EU] member states…the issue is debated, in parts very controversially. In this respect the question arises….if and in how far considerations for further steps on the European level or together with European regulations are necessary and reasonable. The Committee will deliver an opinion on this in its final report.”

Meanwhile, there are two separate cases referred from German social courts to the ECJ to watch out for. They deal predominantly with the questions in how far EU jobseekers and EU migrants which are “economically inactive” can be generally excluded from receiving unemployment benefits in Germany. We will closely monitor the developments and keep you updated.

Fact-checking the Clegg v Farage EU debate

The first EU debate between Nick Clegg and Nigel Farage on LBC was for the most part restrained with a surprising amount of detail and substance. Most of the key fault lines in the UK-EU relationship were touched on.

However, given that the two men represent the polarising ends of the debate, there were also a number of claims that struggled in the accuracy department. Here is our quick 'fact-check' of the key debating points:

Claim - Clegg: I supported a referendum on Lisbon

Verdict: Technically true but highly misleading

On the referendum question, Clegg said that when it came to new EU Treaties transferring new powers to Brussels,

"I've never wavered in that position, that's why the last time the rules changed, something called the Lisbon Treaty, I said there should be a referendum."

It is true that the Liberal Democrats called for referendum on Lisbon but crucially it was an in/out referendum which was not on the agenda at the time - the issue wasn't even put to put to a vote. There was however a vote on whether to have a referendum on the Lisbon Treaty itself on which the party abstained, despite the fact that together Tory MPs, Lib Dem MPs and Labour rebels could have passed it. Clegg is being highly disingenuous by blurring the distinction between an in/out referendum and a treaty specific one. Farage's quip that there was no point waiting for a new Treaty as powers were being transferred to the EU every week via directives and ECJ rulings was quite effective in this context.

Claim - Farage: Under EU rules we have a completely open door to 485 million Europeans 

Verdict - Partially true but unclear on the numbers

It is true that the free movement of labour is a fundamental principle of the EU and the UK cannot limit the numbers of EU migrants coming over. However, Clegg was right to point out that the right to free movement is not completely unqualified - under the free movement directive migrants have to be able to support themselves financially or have 'reasonable' prospects of finding a job.

In terms of Farage's 485 million figure though we have to say we are a bit confused as to where exactly this comes from - the population of the EU28 is around 506 million, which minus the UK's approximately 63 million leaves 443 million.

Claim - Clegg: 3 million jobs would be at risk if UK left the EU

Verdict - Highly unlikely - would depend on a range of other factors

Clegg cited the well-worn '3 million jobs linked to the EU figure' despite established doubts over its veracity. Recently those tending to cite this number have replaced "depend on" with "linked to" but it's still dubious. As we've argued in the past, this claim is one of the most conspicuous examples of a rogue statistic without any credible counter-factual attached to it. The assumptions behind the 3 million jobs figure is that there would be no trade at all trade with Europe if the UK left the EU, which of course is nonsense -  a similarly heroic assumption to that which Better Off Outers make when calculating the cost of EU membership based on all regulatory cost magically disappearing on Day 2 post-Brexit.

Claim - Farage: UK would hold the whip hand in negotiations over a new trade deal with the EU

Verdict - Very uncertain 

Farage argued that in the event of an exit, the UK would "hold the whip hand" in trade negotiations with the EU due to the EU's trade deficit with the UK. We've looked at this in detail - the key point is that while this is true in the area of goods, when it comes to services - a crucial and thriving area of the UK economy - this is not the case. So with that logic, EU countries would have incentive to strike a deal with the UK in goods but not services including financial services. Secondly, the process for leaving the EU - the so-called Article 50 - actually involves less control for the UK than is often assumed, including a Qualified Majority Vote on the final deal in which the UK will not take part.

Claim - Farage: 75% of UK laws come from the EU. Clegg: no it's 7%

Verdict - Both are wrong

The contentious topic of how exactly how many UK laws are derived from the EU also came up, with Farage gleefully citing Viviane Reding's absurd claim that 75% of UK laws are decided in Brussels (as we've argued many times, Reding must secretly be on the UKIP payroll). Clegg went with the House of Commons' Library's briefing which estimated this to be around 7%. Regular readers will know we've analysed this in painful detail and the truth is it is simply not possible to say exactly - what's clear is that it's neither 7% (this only counts primary legislation which isn't meaningful at all) nor 75%. (But basically too many).

Claim - Farage: We give the EU £55 million per day

Verdict - True if counting gross cost, untrue and misleading if counting net cost

Farage is correct that the UK's contribution to the EU works out as around £55 million per day. However, that it is a gross figure which does not include the UK rebate (cold, hard cash the UK gets back from Brussels every year) and nor the UK's receipts from the EU budget (even if this is only UK taxpayers' cash being re-routed via Brussels).

Claim - Clegg: Without the EAW we'd struggle to extradite criminals and terrorists

Verdict - The EAW makes the process faster but it is not indispensable

The European Arrest Warrant (EAW) is used by EU states to speed up extradition procedures. It is true that the EAW has been used by the UK to recover suspected terrorists and other criminals from other EU states who have subsequently been found guilty and locked up. It is however untrue to claim that suspects such Hussain Osman and Jeremy Forrest could not have been recovered without it. Also before the EAW was agreed, there were agreement on extradition and the UK managed to successfully extradite plenty of criminals from EU countries through bilateral procedures. These were considerably slower but it is highly unlikely that with or without the EAW Italy would have wanted to hang on to Hussain Osman or France to Jeremy Forrest.