OBR: Four-year ban on benefits 'unlikely' to cut EU immigration significantly

Posted On: 
8th December 2015

The Government’s plan to restrict access to in-work benefits will not significantly cut immigration from the European Union, the Office for Budget Responsibility has said. 

The Prime Minister has made limiting migrants’ access to welfare one of the key tranches of his renegotiation with Brussels, arguing that in-work benefits act as a ‘pull factor’ for people to come to the UK.

But Sir Stephen Nickell, a member of the Budget Responsibility Committee, told MPs the preferred plan to stop access to in-work welfare for four years would have a limited impact.

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“Changing the benefit rules for EU migration so that they become more difficult to obtain - you are asking me what impact that is likely to have. In my opinion: not much,” he told the Treasury Committee.

“I am prepared to say that any changes to benefit rules are unlikely to have a huge impact on migration flows. But to go further and start trying to analyse the actual consequences is not within our remit.”

Iain Duncan Smith brushed off the criticism, saying: “That’s an opinion.”

“I think it makes a huge difference,” the Work and Pensions Secretary
told Radio 4’s World at One.

“If you deal with the issue of migrancy through welfare as part of that process then it’s critical to any relationship, because taking out part of the pull factor of people coming over who can declare themselves to be on zero earnings and be getting tax credits, and maybe doing cash-in-hand work elsewhere – these are all problems that the country faces and we need to deal with it.

“I think most people listening who pay tax towards the system, know they pay legitimately to help support people in need who have that support whilst unemployed… what they don’t want to do is to be paying tax to support people who decided this is a better country to be in to be able to claim particular benefits.”

No 10 also questioned the reasoning behind Sir Stephen’s comments.

The Prime Minister’s spokeswoman said: “I haven’t seen those specific comments, but I think the Prime Minister has been clear that the proposals that we are seeking are about addressing some of the pull factors that there are for EU migrants coming and looking to work in Britain.

“If you look at the amount of in-work benefits that they can access from day one, we think this is a pull factor.”

Treasury Committee chairman Andrew Tyrie has said he will write to Sir Stephen to ask him “further to substantiate these remarks, and to offer a review of the robustness, or otherwise, of any conclusions that can reasonably be drawn on this”.