Do we need to worry about Benefit Tourists?

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In a week when The Guardian attracted global attention for reporting that ‘thousand of Britons on benefits across EU’, and Philip Hammond, the UK’s Foreign Secretary, made headlines for claiming that Britain is ‘wide open’ to EU freeloaders,  immigration and welfare are back in the news.  But do we really need to worry about “benefit tourists”?

Freeloaders?

Among the chief reasons why British politicians – and the British public – claim to mistrust the European Union’s is a concern that the UK is open for ‘freeloading” EU exploiting the welfare state – so-called “benefit tourists”.1 The fear is that EU free movement rights are open to abuse, as poor citizens – especially those from Eastern and Central Europe move West not to seek work, but to enjoy an easy life – supported by state social security systems they haven’t paid into. The notion that Britain is one open border away from being flooded by immigrant scroungers looking to enjoy life on easy street is periodically reinforced by colourful tabloid stories about feckless immigrants –looking to exploit the ‘crazy benefits system’ in ‘soft touch’ Britain.2

It would be pretty hard – arguably all but impossible – to defend such behavior. European freedom of movement began as freedom of movement for workers. Deliberately moving to take advantage of social safety nets elsewhere can hardly be defended as ‘fair use’ of EU freedom of movement rights. But there is one big “if”. It’s not actually clear that “benefit tourists” really exist, or whether they are – like so many bogeymen – the product of over-anxious imaginations.

‘No Recourse to Public Funds’

So where might we find benefit tourists? Well first, it’s important to be clear that when we talk about the threat “benefit tourists” pose to the UK, we are really talking about EU migrants. That’s because nearly all migrants arriving in the UK from places outside the EU (refugees are an exception) will their passports stamped to record the fact they have ‘no recourse to public funds’.3 This means they aren’t eligible to apply for local authority housing, housing benefit, income support, child tax credits or income-based job seekers’ allowance (JSA).4 These non-EU migrants can apply for some other National Insurance based benefits, including contribution-based JSA, a pension, or statutory maternity pay – but only provided that they qualify for them, based on having paid into the NI system as workers.

Worries about benefit tourism also shouldn’t be conflated with concerns about irregular or “illegal” immigration. The vast majority of irregular migrants are living outside the system, without the necessary documents to lodge a claim for benefits – or to pay taxes. Of course, some irregular migrants to obtain papers fraudulently, but while tabloid headlines may scream that ‘600 000 illegals are given National Insurance numbers’, by obtaining NI numbers, these irregular migrants are also making fiscal contributions they are unlikely to ever benefit from personally.5 More research has been carried out on this in the US, where in April 2013 government actuaries concluded that ‘the presence of unauthorized workers in the United States has, on average, a positive effect on the financial status of the Social Security programme’.6 It may feel counter-intuitive, but the same is likely to be true in the UK.

Europe’s problem

So the real concern here is with EU workers, because as EU citizens exercising their freedom of movement rights under EU law, they too are eligible to apply for “public funds” shortly after arriving in the UK provided they pass a ‘habitual residence test’. This looks at various factors, including length of stay, activities, family status and their housing situation to determine if they are sufficiently attached to the host country.7

In fact, the UK actually goes further than this, and asks EU applicants to pass a more stringent ‘right to reside’ test in order to qualify for benefits like income support 8 – as well as requiring (since 2014) EU migrants in the UK show they have been earning £150 per week for three months before they can claim benefits. Germany has expressed similar concerns about poor and unskilled eastern Europeans, and migrants there now have just three months to find a job there before facing deportation.9

In other words, EU migrants can’t just arrive and immediately start living off British taxpayers. But it is true that after a relatively short period of time, an EU migrant earning a low wage, or working a series of short-term, casual or precarious jobs, or who registers as self-employed, can apply for a host of benefits like those offered to British workers.   This gives rise to two questions. First, how many migrants are actually claiming these benefits? And second, is it wrong for them to do so?

Migrants subsidize Citizens

The first question is easy to answer: the evidence is conclusive. There is no foundation for the claim that immigration is undermining the British welfare state. In fact, it looks like the opposite is true.

In February 2014, 4.9 million people of British origin claimed an out-of-work benefit (92.6% of the total number of claimants). This compares with 395,000 claimants with non-UK origins. 10The vast majority of this number will have been working in the UK for a significant amount of time – and, because of the way the data is collected, many of this group will also now be UK citizens.11 EU citizens represent just 2.5% of the total number of claimants – just over half of whom (1.3%) are from “Accession” states. In other words, the numbers are very small. Even when we look specifically at unemployment benefits, EU nationals amounted to only 5% of the claimants.12

Whatever way you cut the numbers, it is hard to find any evidence of significant migrant abuse of the benefits system. Furthermore, evidence from the British Department of Work and Pensions shows that the habitual residence tests already weed out many claims made by Eastern European migrants: in 2011, two-thirds of claims by A8 migrants for income-related benefits were refused.13This, at the very least, would seem to suggest that existing rules are already able to protect our benefits systems from nefarious interlopers.

In fact, all the data points to the fact that the vast majority of EU migrants actually pay into the UK’s social security system without taking as much out. A 2009 UCL study, comparing net tax receipts with likely expenditure, suggested that Eastern European A8 migrants14 paid in 35% more than they were likely to receive in welfare services, while natives’ taxes were equivalent to only 80% of the money they received in benefits. These A8 migrants in the UK – are also 60% less likely than natives to receive state benefits or tax credits, and 58% less likely to live in social housing.15 Although different models of income and outgoings shifted the balance slightly in local citizens’ favour, the overall conclusion was clear: ‘A8 immigrants are unambiguously net fiscal contributors, while natives are unambiguously receiving more than they contribute’.16 These findings have since been confirmed by a follow-up study released late in 2014, which calculated that EU migrants who have arrived in Britain since 2000 have made a net fiscal contribution of £20bn17 (non-EU migrants’ net contribution over the same period was £5bn).18

Similarly, in October 2013, the EU released the snappily-titled report, A Fact-finding Analysis on the Member States’ Social Security Systems of the entitlements of non-active intra-EU migrants to special non-contributory cash benefits and healthcare granted on the basis of residence. The report failed to find evidence of deliberate “benefit tourism”, although it did note that some social systems (such as the Spanish healthcare system) had been placed under strain by new EU arrivals (in the Spanish case, by British retirees). This report also pointed out that the UK is in fact the only EU country in which proportionately fewer EU citizens claim unemployment benefit than do nationals (2.8% of the total number of EU citizens in the UK, as opposed to 4% of UK nationals).19

 

Entitlement 

In macroeconomic terms, then, there is no “benefits tourism” problem. But that doesn’t answer a wider political question: who should be entitled to claim benefits in the first place?

This isn’t just a question about immigration: it’s a matter of political philosophy. Are benefits owed to all community members who have fallen on hard times, or just to workers? The treatment of migrants’ claims to benefits actually speaks to wider debate about who deserves social support more broadly. Surveys have consistently shown a hardening of attitudes towards benefit claimants in the past two decades: the most recent British Social Attitudes survey shows that 1 in 3 Britons believe most benefit claimants do not deserve help, and that a majority (54%) believe the unemployed could find a job if they really wanted one.20

Analysts who want to clamp down on supposed “benefit tourism” have tended to focus on the idea that benefits should only be paid to those who have made a fiscal contribution upfront – that the UK should in fact move closer to the insurance-based social model favoured in other European countries. But given the macroeconomic evidence that most migrants are contributors, such a move would be extremely unlikely to have a significant impact on EU migration. In fact, if we decide measure legitimate access to the welfare system and public services in terms of financial contribution, it’s hard to justify treating migrant workers any differently from British ones. As Polish foreign minister Radek Sikorski asked in response to UK Prime Minister David Cameron’s strong rhetoric on welfare and migration in 2013, ‘if Britain gets our taxpayers, shouldn’t it also pay their benefits?’21

But opposition to migrants claiming benefits can also be viewed as part of a shift – both socially and politically – to reduce overall spending on welfare by narrowing the numbers judged “deserving” of benefits. Migrants – especially recent arrivals – are an obvious target, because it’s not clear they are long-term members of our community, and that’s seen as one way of measuring desert. In November 2014, the UK government announced plans to bar EU migrants from being able to claim in-work benefits (like housing benefit and income support) until they have worked for four years, and to ban them from receiving out-of-work support altogether.22

However as critics have pointed out this approach is problematic, not least because barring migrants from claiming in-work benefits for four years ignores the fact that low-wage migrant labour is an integral part of our economy, as migrants fill jobs offering less than a living wage in sectors like healthcare, which British citizens are often reluctant to take on. Benefits subsidise employers paying low wages: but without parallel plans for systematic enforcement of a living wage, it is hard to argue that such migrant workers are really “undeserving” of support.23 Yet the targeting of migrants because they are not us, rather than because they are not working, arguably helps to mask a more general rollback of state support for the lowest paid workers in our economic, regardless of status.

Reciprocity

There is, of course, another way to think about what’s “fair” when it comes to benefits and EU immigration. There are, after all, 2.2 million British citizens resident in other EU countries (compared to approximately 2.3 million EU citizens living in the UK).24 Much of the furore around benefit tourism in the UK has centred on the idea that Britain is a ‘soft touch’ compared to other EU welfare systems. So how many British citizens are claiming benefits elsewhere? And is it really easier to claim benefits here?

Figures published in The Guardian in January 2015 actually show that there are more EU citizens claiming JSA in the UK than there are UK citizens claiming unemployment benefits elsewhere in the EU: 64,830 compared to (at least) 29,095.25In other words, only around 2.8% of the EU migrants in the UK are currently claiming JSA – and less than 1.4% of UK nationals who live abroad are claiming the equivalent benefit elsewhere.   However it is also true that the number of EU claimants has jumped steeply in the past three years, largely as a result of increasing number of claimants from “new” EU states (13,000 in 2011 to 38,000 in 2014).26

Yet these figures should not be taken as “proof” that the UK benefits system is under siege. The increasing number of EU JSA claimants reflects in part a general increase in the number of EU citizens in Britain – around 320,000 more EU citizens arrived in the UK between June 2011 and 2014.27 The growth in claimants may also reflect processes of integration. Ten years after the accession of the A8 countries, many migrant workers from countries like Poland have spent many years in the UK and – if they now lose their job after several years working – they may choose to stay here and look for new employment rather return home. 

Finally, it is also important to note that while fewer UK citizens living in other EU states may claim unemployment benefit than do EU citizens here, many thousands are still benefiting from EU reciprocity. Benefit systems do vary considerably across the EU, which makes it difficult to make overall comparisons in terms of “generosity” or ease of access. However in broad terms UK, benefits are more generous than those offered by Central and Eastern European member states, but largely comparable to those available in other Western European states – and in some countries like France, unemployment benefits are up to three times as generous as those available in the UK.28

Conclusions

Talk about benefit tourism is incendiary. It is also inaccurate. While there may be a small handful of rogue migrants who set out to systematically exploit the UK welfare system, only 1 out of every 25 EU migrants is claiming any kind of benefit at all. Most newly arrived non-EU migrants have no right to claim “public funds” at all.

There are more EU nationals claiming benefits in the UK than vice versa, and the number has risen sharply in the past three years. However this trend in part reflects the structural realities of the UK labour market. New plans to further restrict the ability of EU migrants to claim in-work benefits may reduce the number of EU migrants who arrive to take up low paid work, but it fails to address the real problem: the failure of such work to pay a living wage.

Ultimately, expressing concern about migrant “benefit tourists” deflects attention away from more fundamental recent shifts in the way that the state distributes benefits to citizens, too – as well as the way society judges those citizens.   Many analysts and campaigners have argued that since 2010, the UK welfare system has been fundamentally reframed and its founding principles – including universal benefits that guarantee the equal social rights of citizens – undermined. 29 This is a critical political issue that deserves our full attention, and it’s a debate in which “benefit tourists” are little more than red herrings.

  1. Dominiczak, P., ‘”Britain Wide Open to Abuse by Freeloading Migrants” says Foreign Secretary, The Telegraph, 20 January 2015
  2. Sheldrick, G. ‘ “Migrant benefits built my £60k mansion. It’s like FREE money,” boasts Roma gypsy’, The Express, 8 December 2014
  3. UK Visas and Immigration, Guidance: Public Funds, 17 February 2014 
  4. Although they will receive contribution-based job seekers’ allowance if made redundant, provided they have paid sufficient National Insurance contributions
  5. Hall, M., ‘Now 600,000 Illegals Are Given National Insurance Numbers in Labour Blunder’, The Express, 16 January 2008,
  6. Goss, S., Wade, A., Skirvin, J.P., Morris, M., Bye, K.M., Huston, D., ‘Effects of Unauthorized Immigration on the Actuarial Status of the Social Security Trust Funds’, Actuarial Note Number 151, April 2013
  7. BBC News, ‘Q&A: What benefits can EU migrants get?’, 3 November 2014
  8. In 2013, the European Commission announced it was referring the UK government to the European Court of Justice, believing the ‘right to reside test’ to be discriminatory.
  9. Kennedy, S., ‘Measures to Limit Migrants’ Access to Benefits’, House of Commons Library, 15 May 2014, SN/SP/6889, p.14; ‘Germany Moves to Expel Jobless Immigrants from other EU countries’, RT.com, 27 March 2014,
  10. McKinnes, R., ‘Statistics on Migrants and Benefits’, House of Commons Library, 27 November 2014
  11. The Department of Works and Pensions (DWP) doesn’t record benefit claimants’ nationalities – so the figures used are extrapolated from the nationality of claimants at the point they registered for a National Insurance Number (NINo). This is likely to be shortly after arrival, so even if an immigrant has lived in the UK for decades and is now a longstanding naturalised British citizen, they will be recorded as a claimant of non-UK origin in this data set because they were not a British citizen when they received a NINo.
  12. McKinnes, R., ‘Statistics on Migrants and Benefits’, House of Commons Library, 27 November 2014
  13. European Commission, A Fact-finding Analysis on the Member States’ Social Security Systems of the entitlements of non-active intra-EU migrants to special non-contributory cash benefits and healthcare granted on the basis of residence, 2013, p.175
  14.  The A8 countries are Czech Republic, Hungary, Estonia, Latvia, Lithuania, Poland, Slovakia and Slovenia: all joined the EU in 2004.
  15. Dustmann, C., Frattini, T., and Halls, C., ‘Assessing the Fiscal Costs and Benefits of A8 Migration to the UK’, Centre for Research and Analysis of Migration Discussion Paper, July 2009
  16. Many of the media reports drawing on the research chose to highlight another figure in the report – a calculation that between 1995 and 2011, all immigrants in the UK actually cost the state £118bn. However, the authors of the report criticized the use of this figure in isolation as ‘misleading’, because no account had been taken of money paid into the system before 1995 (by, for instance, migrants who had arrived in the 1950s, worked for 40 years, but by 1995 were drawing a pension).
  17. Dusmann, C. and Frattini, T.,’The Fiscal Effects of Immigration to the UK’, The Economic Journal, Doi: 10.1111/ecoj.12181  
  18. European Commission, A Fact-finding Analysis on the Member States’ Social Security Systems of the entitlements of non-active intra-EU migrants to special non-contributory cash benefits and healthcare granted on the basis of residence, 2013
  19. British Social Attitudes Survey 31, ‘Benefits and the Cost of Living’, 2014, p.4-6
  20. ‘The Abuse of Migrants: And Still They Come’, The Economist, 19 April 2014,  
  21. Nigel Morris, ‘David Cameron “We Will Bar EU Migrants from Benefits for Four Years”’, The Independent, 28 November 2014
  22. see e.g. Anderson, B. (2010) ‘British jobs for British workers? Understanding demand for migrant labour in a recession’, Whitehead Journal of Diplomacy and International Relations, 10(1), Spring/summer 2010
  23. Rettman, A. ‘Two Million British People Emigrated to EU, Figures Show’, EU Observer,  10 February 2014. The figure of 2.2. million UK citizens in Europe, from 2010, includes part-time EU residents.
  24. Nadelli, A., Traynor, I. and Haddou, L., ‘Revealed: Thousands of Britons on Benefits Across EU’, The Guardian, 19 January 2015
  25. McKinnes, R., ‘Statistics on Migrants and Benefits’, House of Commons Library, 27 November 2014
  26. Office for National Statistics, Migration Survey Quarterly Report, February 2013, 28 February 2013 ; Office for National Statistics, Migration Survey Quarterly Report, November 20141, 27 November 2014
  27. Nadelli, A., Traynor, I. and Haddou, L., ‘Revealed: Thousands of Britons on Benefits Across EU’, The Guardian, 19 January 2015
  28. see e.g. Wintour, P. ‘The Day Britain Changes: Welfare Reforms and Coalition Cuts Take Effect’The Guardian, 31 March 2013