Tuesday, October 26

Cameron closing in on four years deal on in-work benefits to deter EU migrant workers



British Prime Minister David Cameron is poised to do a deal with Europe that would strip away incentives for EU workers to come to Britain – a move that could hand him a big “win” ahead of next summer’s planned referendum on Britain’s EU membership, The Telegraph has learned.

The outlines of a deal acceptable to all sides have emerged following December’s European Council summit where Mr Cameron made an impassioned case for Britain’s need to curb the wave of migration that has hit the country since it opened its doors to new EU states in 2004.

Mr Cameron had demanded the right to make non-British EU workers wait four years before claiming in-work benefits, but was roundly rebuffed at the summit on the grounds that it would infringe the core EU principle of non-discrimination.

However the Telegraph understands that European states are now offering Mr Cameron a deal that would require new British workers aged 18-22 to wait four years for in-work benefits, while simultaneously finding a back-door “fix” to ensure those workers were not left out of pocket.

“It was clear from the December summit that discrimination was simply not possible, so this is the solution that a number of European countries have agreed is the only one that works,” a European diplomatic source with knowledge of the negotiations said.

The source added that following the summit the onus was placed on Britain to find a reform to the UK’s own benefits system that would enable the Treasury to make up the difference for British workers through a separate “social payment”.

The solution would satisfy EU legal concerns on discrimination and take advantage of recent European Court of Justice opinions accepting that EU migrants can be denied some kinds of non-contributory social security benefits.

Such a deal would also enable Mr Cameron to claim victory over his talismanic “four years” demand while rebutting the claims of Nigel Farage and other “Out” campaigners that his renegotiation was “of very little consequence”.

Mr Cameron was in Budapest on Thursday trying to generate political will for a deal that will require careful choreography to enable central and eastern European countries including Hungary and Poland – who will be most affected – to sell it to their publics.

Viktor Orban, the Hungarian prime minister, repeated Hungary’s red line on discrimination today at a press conference with Mr Cameron, warning that Hungarians could not accept discrimination, but adding he was “confident” of reaching an agreement.

“We should be looking for solutions rather than compromises,” he said, adding that Hungary was open to a fix that did not discriminate. “We are also quite willing to consider the recommendation as to how, with regard to the very special British social benefits, we set up a system without any discrimination which would be acceptable for the Brits as well. In that, we are going to be partners.”

British officials are now engaged in four weeks of feverish negotiations to prepare a legal text of a deal that can be agreed by all 28 member states at the next European Council summit on February 18-19.

No final papers have been presented, and it is understood British negotiators would still ideally prefer a narrower concession to the EU countries by making only returning British expats wait four years to receive in-work benefits.

However, EU diplomats from three separate countries spoken to by The Telegraph indicated a growing consensus that the so-called “expat fix” would be insufficient.

A UK source close to the negotiations said there were still “discussions to be had” but conceded that applying the four-year rule to all Britons, with safeguards to ensure they recoup any losses, “may ultimately be where we end up”.

Whatever the eventual fix, a separate senior EU source told The Telegraph that Mr Cameron would get “something very close” to his four years demand.

“It’s in his party manifesto, it was in his letter to [Donald] Tusk, everyone understands Cameron needs a ‘win’ on benefits within the limits of the Treaties – which are broad,” the source added.

Mr Cameron was also in Germany on Thursday attending a political conference with Angela Merkel, the German chancellor, where he warned in a newspaper article that curbing migrants’ benefits would make a “big difference” to whether the UK stayed.

“We want to stop people taking out from a welfare system without contributing to it first,” he wrote in the German tabloid, Bild.

“Like Germany, Britain believes in the principle of free movement of workers. But that should not mean the current freedom to claim all benefits from day one and that’s why I’ve proposed restricting this for the first four years,” he wrote.

Separately from any deal over benefits and migration, the European Commission is pushing the idea of an “emergency brake” on migration that would kick in when migrant flows reached a certain level.

The idea has been played down by the British side in recent weeks since any mechanism would leave control of the brake in the hands of the Commission, but senior EU sources have indicated to The Telegraph that ways could be found to give the UK or independent institutions more control.

Mr Cameron’s deal is also expected to secure a clear commitment that the euro-federalist ideal of inexorable “ever closer union” should not apply to the UK as well as a strengthened “red card” system that will allow groups of national parliaments to block European legislation.

Lastly, in what Mr Cameron will argue is a fundamental change to the UK’s relationship with the EU, the deal will include legally binding assurances that eurozone countries should not be able to gang up on Britain in the future.

Sources close to the negotiations expect clear language spelling out that the eurozone countries can only discuss matters that directly affect them, but in all other areas – including the contentious area of social Europe – they must invite non-Euro states to participate.

There are continuing legal disagreements over whether all this would require formal treaty change – a road the Commission remains reluctant to go down – or some other mechanism based on a broad interpretation of the EU treaties.

Crucially, however, all sides have agreed that the deal must be unanimous and wrapped up in a “legally binding” manner that would preclude a damaging European court challenge in the midst of what is expected to be furious referendum, now expected in June or July.