Benefit tourism and Britain’s new deal: will the renegotiation stop EU migrants coming to the UK?

Professor Traute Meyer, Dr Paul Bridgen and Josh Moran explore the idea of “benefit tourism”, and whether David Cameron’s renegotiation of the UK’s relationship with Europe will have an effect on EU migration to Britain.

When he started the renegotiation of the UK’s relationship with the EU, David Cameron claimed immigration from European nationals could be stemmed by “reducing the draw that our welfare system can exert across Europe”.

The idea that Europeans enter Britain to live off of the social security system rather than to work captured the imagination of the public and press, so it was unsurprising that reducing ‘benefit tourism’ became a key goal of the renegotiation process. Agreement was reached on a new EU approach on benefit provision for migrants earlier this year, and Mr Cameron has argued that he has achieved his desired reforms.

But in light of these developments it is worth asking whether benefit tourism is really driving migration from other EU member states – and, if so, what effect would the renegotiated arrangement have on EU migration to the UK?

Benefit tourism to the UK: fact or fiction?

In December 2015, former labour leader Lord Kinnock asked the UK government to “provide all factual evidence they have… that UK in-work and out-of-work benefits are a factor in encouraging immigration to the UK from other EU member states”. The response revealed that there is no reliable data showing that Europeans are entering the UK to take advantage of its social security system.

When citing the existence of benefit tourism, the government used information that stated between 37% and 45% of households in the UK occupied by EU nationals were receiving benefits. However, these figures are not suitable to make such a claim. They include child benefit within working households, tax credits and pensions. Many citizens receive these payments as part of their work or after they retire. It is therefore impossible to know on the basis of these figures that the benefit system is what drew migrants to the UK in the first instance – at least equally likely is that they came for employment.

A more detailed analysis by the Migration Observatory of benefit claims made by EU citizens suggests that employment is indeed the main draw for migrants. This found EU migrants are considerably less likely to be claiming out-of-work benefits, such as Jobseeker’s Allowance, than their British counterparts. Instead, they are more likely to receive benefits intended to top-up the incomes of those working on low wages, such as tax credits.

This would suggest that EU migrants come to the UK to work rather than live off benefits, but that they are sometimes unable to earn as much as British citizens. In support of this, data from the International Passenger Survey shows that around 65% of EU nationals choose to come to the UK for “work related reasons”. This means that they either had a definite job offer before they arrived or they migrated to the UK with the intention of looking for work. The vast majority of the remaining 35% were either students, or EU citizens accompanying their spouse.

Benefit tourism to the UK: the public perception

In contrast to the data suggesting that EU nationals come to the UK for employment opportunities, opinion polls have shown British people think a significant proportion of EU migrants are claiming unemployment benefits, and are doing so at the earliest available opportunity.

In fact, the majority of the British public believe just under 20% of EU nationals living in Britain are not working, but getting their income from Jobseeker’s Allowance, and that almost a quarter of EU citizens had applied for benefits within six months of receiving a national insurance number in the UK. It is hardly surprising, then, that a 2014 YouGov poll found that 76% of respondents supported limiting migrants’ access to benefits for at least two years after arrival, and 62% were in favour of having a five year waiting period.

Existing evidence, the dominant narrative about EU migrants in the political debate and public understanding of why EU nationals come to the UK appear to be disconnected. Nevertheless, public opinion is in favour of reducing the number of EU migrants entering Britain. Will the Prime Minister’s renegotiated deal achieve this aim?

The UK’s new position in Europe

The new EU framework for benefit provision has two components which reduce benefit payments for EU citizens: changes to the provision of child benefits, and an ’emergency brake’ on benefits for EU nationals.

Currently, UK-based EU nationals are able to claim British child benefits or child tax credits for children who do not live in the UK. The new deal will mean that the amount to which parents are entitled will now be indexed in relation to the standard of living in the country where the child is based. But it is unlikely that this difference will dissuade EU migrants from choosing to settle in Britain.

Even under the current rules there are relatively few EU nationals who are claiming benefits for children living abroad. According to the ONS, just under 3 million EU citizens lived in the UK in 2013. During that year, less than one per cent (0.7%) of EU nationals living in Britain claimed child benefit for children based in another EU country. The full number is 20,400 child benefit claims, which were made for 34,000 children living elsewhere in the EU.

In other words, very few EU migrants are claiming child benefit, and the number of claimants is falling. There are even fewer child tax credit claims for children living in the EU, with 4,011 successful applications in 2013. Moreover, the change will reduce the payments migrants’ children receive, but the level of support will remain at least as high as it is in their country of origin.

The ’emergency brake’ is likely to have a bigger effect on the amount of benefits received by migrants. If the brake was in force now, new migrants would not be eligible to receive in-work benefits when they started work. Instead, their entitlements would build gradually to their normal amount within four years.

However, as the majority of EU nationals are coming to the UK for employment, it is doubtful that reducing benefits through the emergency brake will prove off-putting to any would-be migrants. The reduction in the government’s supplement to wages will certainly reduce migrants’ rewards from work, but one of the main economic drivers of migration is the wage differential between migrants’ home country and the UK, and this will remain very large.

Ultimately, will the renegotiated deal successfully meet the Prime Minister’s aim of “reducing the draw that the UK welfare system can exert across Europe”? The short answer is no. The changes are unlikely to have an effect on the number of EU nationals choosing to migrate to the UK for the simple reason that there is no evidence to suggest that the British welfare state has drawn potential migrants in the first place. The majority of those who come here have come for employment, not to claim benefits.

About the Authors

Professor Traute Meyer is Professor of Social Policy within Social Sciences: Sociology, Social Policy & Criminology at the University of Southampton. Her work contributes to comparative welfare state research in Europe, and it explores in particular the role of private agents as social policy players in European pension regimes.

Dr Paul Bridgen is Associate Professor in Social Policy within Sociology at the University of Southampton. Much of his most recent work has been on pension policy and politics, particularly occupational pension developments in Britain and Germany as part of the Anglo-German Foundation’s Creating Sustainable Growth in Europe research initiative.

Josh Moran is a research Fellow in Social Policy within Social Sciences at the University of Southampton. He is currently working on a project exploring how EU migrant’s entitlements to benefits have changed in the context of the UK’s shifting relationship with Europe.

This article was originally posted on the ESRC ‘The UK in a Changing Europe‘ website and is based on work done as part of the Understanding the drivers and consequence of population changes in the UK in the context of a changing Europe research project.  It also appeared on the Centre for Population Change website.