Bill Carmichael: This is not the end of benefit tourism

Benefit tourism – which the Left say isn’t an issue at all despite it costing British taxpayers billions of pounds a year – isn’t a problem any more, apparently.

This week European Court of Justice ruled that Germany was right to deny an unemployed Romanian woman some benefits because she showed no sign of looking for work.

Judges sitting in Luxembourg ruled 25-year-old Elisabeta Dano had no right to the non-contributory welfare payments that are paid to her German neighbours in Leipzig.

Cue celebrations among some British Tories, including Prime Minister David Cameron, and other ‘Euro-realists’ who insist the EU is capable of reform guided by common sense.

Manfred Weber, a German MEP and the leader of the main conservative group in the European Parliament, said the decision proved EU countries could “avoid social benefits tourism without violating the free movement of citizens”.

So nothing to worry about then?

Er...not so fast.

Let’s look at the detail shall we? First of all, Ms Dano is not being denied all benefits. She already receives about £250 a month in child maintenance and other benefits that were not contested by the German authorities. The argument in court centred on her demand for an extra £300 in unemployment payments.

However £250 is not a bad sum for sitting on your backside all day and it will undoubtedly still prove a big draw for impoverished people living on the breadline in Eastern Europe.

Second, this ruling will have a limited impact in the UK because we fork out billions in in-work benefits which are not affected by the ruling.

For example, under the fiendishly complicated tax credits system introduced by Gordon Brown, single migrants on the minimum wage earning £184 a week have their take home pay boosted to £254 thanks to tax credits and housing benefit.

According to the Migration Watch campaign group, migrants with a partner and two children on the minimum wage see their wages boosted to £543 a week – or more than £28,000 a year.

Not exactly a king’s ransom but not a bad amount, particularly if you hail from parts of the EU where jobs are increasingly scarce and even those in work don’t have two halfpennies to rub together.

Oh and just in case that’s not enough you can throw in ‘free’ health care, ‘free’ education and subsidised housing.

Figures released earlier this year estimated that 415,000 foreign nationals benefit from these payments at a cost to the UK taxpayer of £5bn a year – or about £100m a week.

Still think the problem is solved?

The truth is that the UK will continue to be a significant draw for migrants from throughout the EU. We are just about the only EU country creating jobs – two million in the last four years – and if you add to that cash benefits, subsidised housing and all the ‘free’ services provided by the taxpayer, we will increasingly be destination number one for millions of EU citizens (not to mention those from outside the EU!).

As a result, the pressure on housing, schools and health services is becoming intolerable.

For the record, I believe that immigration can be a great benefit to a country, both economically and culturally. But it needs to be controlled and used, for example, to address particular skill shortages. For that to happen the UK needs to wrest control of its own borders from Brussels.

What the EU is currently demonstrating is that you can either have a generous welfare state, or you can have freedom of movement – but you can’t have both, or else you have the massive movements of people that put so much pressure on the system that it breaks.

And while the supply of cheap labour remains more or less unlimited, and tax credits effectively subsidise businesses so they can continue to pay low salaries, it means employers have no incentive at all to raise wages.

And once we have drained all the poor people from Romania, Bulgaria and elsewhere in the EU, there are plenty more where they came from. For example Turkey is in the queue to join the EU, with a population of 75 million mainly poor people.

This is not an issue that is going to go away any time soon.