Free Movement of Persons:
What the EU Rules Permit Now

Introduction

Concern about the impact of free movement of persons within the EU on the United Kingdom was one of the main issues in the 2016 EU referendum. Although immigration from outside the EU has been greater over the last 20 years than from within it, public perception of EU free movement has been that it has enabled large numbers of low-wage workers to come to the UK, putting downward pressure on wages and placing a strain on housing, public services and community relations.¹  Whilst some evidence has been adduced to support that, particularly where relatively large numbers of EU migrants are concentrated in communities, the overall economic and social benefit has been greater.² Workers from other EU Member States have filled vital skill shortages, including in health and social care, in hospitality and catering and in several agricultural sectors, contributing substantially to the Exchequer. UK economic growth would have been lower without them.³

Public concern remains however and can be seen in other Member States. For example, it was a contributory factor in the recent decision of the EU to reform the Posting of Workers Directive.⁴ A complicating factor is that free movement has become linked with wider concerns about globalisation, particularly the contraction in the number of well-paid blue collar skilled and semi-skilled jobs, as well as a rising sense of insecurity in employment. But it remains the case that in most EU Member States migrants from inside the EU are politically and economically in a different category to those coming from elsewhere. That distinction is not made so clearly in the UK.

In this paper, after explaining the legal framework for free movement, we consider what options are available to the UK to manage free movement as an EU Member State. For ease of analysis they have been split into two sections – identity and removal, and employment, social security and support for affected communities – but there is inevitably much overlap between the two. Much of the analysis also applies to those European countries which are not in the EU but are in the European Economic Area – Iceland, Liechtenstein and Norway – as well as to Switzerland, although there are some differences.

The legal framework for free movement of persons

Free movement of persons is one of the four freedoms at the heart of the European Union’s single market: goods, services, capital and persons. Free movement of labour has been included in the EU treaties since the foundation of what was then the European Economic Community in 1957 but its scope was extended in the 1992 Treaty of Maastricht to include the notion of EU citizenship. Free movement of persons is part of the EU’s single market framework and not part of its immigration law. This reflects the fact that for the right to establish a business in any other Member State or to provide services in any other Member State to be effective, EU citizens need to be able to travel freely to that Member State.

The current rules on free movement of persons are set out in a directive adopted by the EU in 2004, usually referred to as the citizens’ rights directive.⁵ This provides for the free movement to live, work, study or retire of any EU citizen within the 28 Member States and for equal treatment between EU migrants and nationals of the host country. These rights are, however, not unrestricted. In particular, those wishing to live in another Member State must be able either to find work or be self-sufficient and have comprehensive sickness insurance. In addition to the 2004 directive, there is other EU legislation relating to the social security entitlements of those exercising free movement rights and legislation to deal with cross border crime, including the deportation of citizens from one Member State to another.

The 2004 citizens’ rights directive contains a basic set of requirements and then enables Member States to legislate to cover all the details. National legislation must follow the basic principle in the treaties of non-discrimination between EU citizens. That means the Member States cannot adopt national laws that would give their citizens superior rights to those of other EU citizens resident in that country; but it does not prevent non-discriminatory national rules, which the UK has been reluctant to introduce (for example, registration of all citizens). The Immigration (European Economic Area) Regulations 2016 set out the details of how free movement is implemented in the UK.⁶

When a country joins the EU, transitional controls are invariably included in the treaty of accession. In the past these have enabled existing Member States to limit free movement rights for up to seven years. In future transitional periods could be longer. The UK was one of only three Member States not to impose controls in 2004 on migrants from the 10 countries that joined the EU that year.

Managing free movement: options for the UK

1 Identity & removal

Registration

The UK is one of a minority of Member States that do not require EU citizens intending to stay more than 90 days to register with a public authority (usually the municipality or the police).⁷ Many Member States also require, following the 2004 EU directive, EU migrants to have comprehensive sickness insurance. They may also require proof from those that are not working to show that they are self-sufficient. The UK does not require registration, does not seek proof of comprehensive sickness insurance and does not ask those claiming to be self-sufficient to provide evidence to support this.

Identity cards

The UK is one of just three EU Member States that does not issue identity cards to its citizens. Requirements for identity cards do vary – for example, in some cases they are voluntary. Although the British police have said that confirming a suspect’s identity is not a major issue for them, national identity cards would make it easier for employers and public service providers to be certain that the person seeking work or benefits, or trying to access a public service, was entitled to do so.

Removal of migrants

Registration, (which in fact applies in the UK to non-EU migrants) makes it easier to enforce one of the EU’s rules: that a citizen who has not found work and cannot support themselves can be deported. The UK authorities have repeatedly had difficulties with enforcing this aspect of the 2004 directive. Yet other Member States, including Belgium, are able to deport non-working migrants who do not meet the self-sufficiency criteria without difficulty. This suggests that the defect lies in the UK’s implementation of the 2004 directive and not the directive itself.

2 Employment & social security

Migrant wages

The recently adopted reform of the Posting of Workers’ directive will help to tackle the problem of migrants taking work at wages below the market rate in the UK. But this is only one aspect of the problem; there is evidence that some British employers are paying a lower rate to staff from Eastern and Central Europe than they pay to British born workers.⁸ Not only is this a breach of the EU law (the principle of non-discrimination), it also makes EU migrants more attractive to employers. More vigorous enforcement of the law, including minimum wage legislation, would help to tackle this problem.

Employment agencies

Some employers in the UK have adopted the practice of advertising vacancies only through agencies in other Member States. This is so that the employer can bring groups of workers to Britain to fill vacancies at low pay levels without anyone resident in Britain having the opportunity to apply. This would appear to be a breach of EU rules and there seems no reason why the UK could not ban the practice.

Registration for work

It has been suggested by Gordon Brown that the Government should require employers to notify local jobcentres of all vacancies.⁹ This would be accompanied by guarantee that appropriately qualified local applicants would be guaranteed an interview with the employer. This is a version of the rules recently adopted by Switzerland (which participates in free movement) and agreed to by the EU.

Social security

There have been repeated claims that EU migrants have been improperly claiming social security benefits. In fact, there is little evidence of this and EU migrants are proportionately less likely to claim out of work benefits than British citizens.¹⁰ In recent years the criteria for claiming benefits have been tightened so as to reduce the risk of illegal claims.

Some non-resident EU citizens are entitled to receive social security benefits as they are the dependants of an EU citizen working in the UK. The benefits in question are largely child benefit and certain disability benefits.¹¹ The other EU Member States agreed in 2016 that the UK could in future pay these benefits at the rate paid in the dependant’s home country and not at the UK rate, where the UK rate is higher but this change was taken off the table after the 2016 referendum.¹²

There is a broader issue relating to UK social security policy. Over time there has been a switch from contributory benefits to those awarded on the basis of income. This has made it easier for those recently arrived to claim benefits because of the absence of any minimum period of contribution before claiming. The UK could reform its social security system to place a greater emphasis on contributory benefits, as in other Member States.

Migration Impacts Fund

In 2009 the then government established a migration impacts fund of £35 million per year to provide support to communities heavily impacted by immigration in recent years. This fund was scrapped as an economy measure after 2010 but a new version was promised by the Conservatives in their 2015 general election manifesto.

This has now been launched as the Controlling Migration Fund with two streams of funding: £100 million over four years for local authorities in England and communities heavily impacted by migration; and a smaller amount of £40 million over four years to be managed by the Home Office to enable increased enforcement action against illegal migrants in these communities.

The Labour Party had made similar promises about re-establishing a migration impacts fund in the 2017 general election and Gordon Brown has gone further and suggested that additional resources should be provided not just for local authorities but for the NHS as well.¹³

Conclusion

As this paper has demonstrated, although EU free movement rules apply across all 28 Member States, those Member States have discretion as to how they apply the rules in practice. The United Kingdom has taken an approach different from many other Member States. In particular, the absence of a requirement for the registration of citizens and of identity cards has made it more difficult to take advantage of the flexibility that exists when applying EU free movement rules in the UK. Furthermore, the nature of the UK’s social security system makes it easier for recent migrants to claim because benefits are largely unrelated to contributions paid by particular claimants.

As the UK debates its future relationship with the EU, it is clear that the British government has more levers available to it to regulate EU migration than it has chosen to utilise in the past. It remains be seen whether it will adopt a different approach in future; and whether it chooses to make a distinction between migrants from the EU and those from outside the EU.