Cabinet chaos over curbs on new Europeans

Last week the Prime Minister said that the Government was examining ways of restricting rights to work and claim benefits for immigrants from the ten states joining the European Union on May 1. However, The Times has learnt that ministers led by David Blunkett, the Home Secretary, have secured guarantees from Downing Street that there will be no change in existing policies that give all EU citizens unrestricted access to the UK labour market.

Frantic attempts have since been made to draw up compromise proposals that would tighten welfare rules so that immigrants from countries such as Poland, Slovakia and the Czech Republic will not be able claim benefit in Britain for up to two years.

But plans for an announcement have been delayed several times during what has been described as “a bruising week” in Whitehall. At least one minister has said privately that Mr Blair was pandering to “right-wing hysteria”.

Although the Prime Minister has backed away from his original position, the prospect of proposals finally being unveiled next week is now being hampered by growing doubts about the legality of blocking benefits for people who have the right to work here.

Most other EU members will either ban the “new Europeans” taking jobs and getting welfare for up to seven years — or allow them to seek employment only under strictly limited work permits.

The Government has come under strong pressure to take similar measures from the Tories and tabloid newspapers, which have raised the spectre of thousands of oppressed Roma flooding into Britain as “benefit tourists” when former Communist states join the EU.

But the Home Office believes that only 13,000 more migrant workers will arrive in Britain as a result of EU enlargement, many of whom may well have come here anyway to work illegally under student or tourist visas. If these figures turn out to be wrong, measures limiting rights to work can be introduced in Parliament at short notice.

Mr Blunkett is more concerned about illegal workers smuggled into Britain by human traffickers, possibly including the 19 Chinese cocklers who drowned in Morecambe Bay last week. The Government is likely this month to announce its support for a backbench Bill seeking to regulate the “gangmasters” running illegal workforces in Britain’s black economy. One senior government figure said: “Tony was worried this East European thing was becoming a real political issue and said he wanted to reassure voters. But we have spent a long time working on this. Unlike other countries, we have full employment and need a migrant labour force.

“It is far better to have them here legally without adding to the burden of business by introducing bureaucratic permits — or alienating EU accession states who regard us as a force for sanity in Europe.”

Downing Street said it expected that the Home Office would announce a package of measures within the next few days to “tighten loopholes” and prevent so-called benefit tourists abusing the system. However, a senior source acknowledged that there were still “legal wrangles” to be sorted out.

European Commission officials have told the Government that it would be illegal under EU law to deny benefits to people allowed entry into the UK labour market.

EU regulations require states to treat all workers equally, so that anyone with full employment rights gets the same access to many benefits as their own citizens. Although welfare systems like the state pension which is based on national insurance contributions are treated differently, immigrants would be entitled to claim jobseekers’ allowance and income support on arrival in the UK.

EU officials believe that earlier government proposals to allow people benefits only if they have been in Britain for two years would be illegal because it would be implicit discrimination in favour of UK citizens. “The European Court of Justice is very strict on discrimination issues,” said one source at the commission.

However, under the EU Residents Directive, people cannot go to another member state just to claim benefits if they are on holiday or retired. Existing UK regulations require immigrants to pass a “habitual residency test” showing they have links to Britain and a genuine desire to seek work.

A spokeswoman for the Department for Work and Pensions said that officials were examining these rules to see if they could be tightened.