I share people's concerns about immigration and spell out plans to beef up our benefits system in the Financial Times today:
On January 1, the people of Romania and Bulgaria will have the same right to work in the UK as other EU citizens. I know many people are deeply concerned about the impact that could have on our country. I share those concerns.
Ever since the fall of the Berlin Wall, Britain has championed the case for bringing nations which languished behind the Iron Curtain into Nato and the EU. That is important to their prosperity and security – and ours. Britain has also been one of the strongest supporters of a single market. It is in our interests that it should grow, and for our citizens to have the opportunity to work in other European countries.
But things have gone wrong. Since 2004, we have witnessed the biggest migration in Europe outside wartime. In Britain’s case, 1m people from central and eastern Europe are now living here. So what lessons can be learned? There is the lesson on transitional controls. In 2004, the Labour government made the decision that the UK should opt out completely of transitional controls on the new EU member states. They had the right to impose a seven-year ban before new citizens could come and work here, but – almost alone in Europe – Labour refused it. That was a monumental mistake.
There is the lesson on income disparity. It was hardly surprising that with income per head in the joining countries around half of the EU average, so many people chose to come here. Yet when Romania and Bulgaria joined the EU, Labour had not learned the lesson. That was the moment to address difficult questions about when to allow new entrants full access to each other’s labour markets – but the Labour government ducked these questions. That is why this government extended transitional controls on Bulgaria and Romania from five to the maximum seven years.
The other major lesson was that failures in immigration policy were closely linked to welfare and education. If it does not pay to work, or if British people lack skills, that creates a huge space in our labour market for people from overseas to fill. You cannot blame people for wanting to come here and work hard; but the real answer lies in training our own people to fill these jobs. That is what this government is doing: providing record numbers of apprenticeships, demanding rigour in schools and building a welfare system that encourages work.
But of course people are most concerned with the action we are taking now. We are changing the rules so that no one can come to this country and expect to get out of work benefits immediately; we will not pay them for the first three months. If after three months an EU national needs benefits – we will no longer pay these indefinitely. They will only be able to claim for a maximum of six months unless they can prove they have a genuine prospect of employment.
We are also toughening up the test which migrants who want to claim benefits must undergo. This will include a new minimum earnings threshold. If they don’t pass that test, we will cut off access to benefits such as income support. Newly arrived EU jobseekers will not be able to claim housing benefit.
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. We are also clamping down on those who employ people below the minimum wage. They will pay the price with a fine of up to £20,000 for every underpaid employee – more than four times the fine today.
Britain is not acting alone in taking these steps. Other countries such as the Netherlands already impose a three-month residence requirement before you can access benefits such as job seekers’ allowance. All this is what we can legally do within the limits of the treaties Labour signed up to. But finally, let me set out how my party is planning to prevent these problems arising in the future.
The EU of today is very different from the EU of 30 years ago. We need to face the fact that free movement has become a trigger for vast population movements caused by huge disparities in income. That is extracting talent out of countries that need to retain their best people and placing pressure on communities. It is time for a new settlement which recognises that free movement is a central principle of the EU, but it cannot be a completely unqualified one. We are not the only country to see free movement as a qualified right: interior ministers from Austria, Germany and the Netherlands have also said this to the European Commission.
So Britain, as part of our plan to reform the EU, will now work with others to return the concept of free movement to a more sensible basis.
And we need to do the same with welfare. For example, free movement should not be about exporting child benefit – I want to work with our European partners to address this.
Bringing new countries in to give them peace and prosperity remains one of the EU’s greatest strengths. It will be many years, perhaps a decade, before another country joins. It cannot be done on the same basis as it was in the past. We must put in place new arrangements that will slow full access to each other’s labour markets until we can be sure it will not cause vast migrations.
There are various ways we could achieve this. One would be to require a new country to reach a certain income or economic output per head before full free movement was allowed. Individual member states could be freed to impose a cap if their inflow from the EU reached a certain number in a single year.
The EU needs to change if it is to regain the trust of its peoples. I look forward to working with other countries who also want reform – and to putting the choice about our future in Europe in a referendum. If I am prime minister after the next election, the British people will have their say.