Documents considered by the Committee on 8 January 2014 - European Scrutiny Committee Contents


12 The free movement of EU citizens

(35590)

16930/13

COM(13) 837

Commission Communication: Free movement of EU citizens and their families: Five actions to make a difference
Legal base

Document originated

Deposited in Parliament

25 November 2013

29 November 2013

DepartmentHome Office
Basis of considerationEM of 12 December 2013
Previous Committee ReportNone
Discussion in Council5 December 2013 (Justice and Home Affairs Council)
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested

Background

12.1 In April 2013, the Home Secretary (Mrs Theresa May) and her counterparts in Austria, Germany and the Netherlands wrote to the then President of the Justice and Home Affairs Council, Mr Alan Shatter, expressing concern that the right of EU citizens to move freely within the EU was placing a considerable strain on local services and social welfare systems. Whilst recognising freedom of movement as "one of the central achievements of the European integration process and one of the most visible benefits of the EU for its citizens", they suggested that the conditions governing the free movement of EU citizens and their families, set out in Directive 2004/38/EC ("the 2004 Directive"),[57] were not always respected and that Member States lacked the necessary legal tools to tackle the abuse of free movement rights effectively. The letter stated that a significant number of EU migrants were drawing social assistance in their host countries, "frequently without a genuine entitlement", and creating additional costs and burdens for host communities in terms of schooling, health care and the provision of adequate accommodation. It also highlighted the following specific concerns:

·  the fraudulent use of the right of free movement by EU citizens or third country nationals to circumvent national immigration controls;

·  the absence of effective sanctions; and

·  the need for a more consistent interpretation of the 2004 Directive, as well as a common understanding of what constitutes fraud or systematic abuse and how they can be tackled effectively (including through expulsion and re-entry bans).

12.2 The signatories to the letter suggested that it was "an affront to common sense" to allow recently arrived migrants who have never been employed or paid taxes in their host Member State to claim the same social security benefits as the host State's own citizens and called for an urgent review, alongside:

·  permanent improvements in local living conditions in the Member States from which most EU migrants originate, and better use of EU funds for this purpose; and

·  Commission proposals to counteract misuse of free movement rights.

12.3 The letter was discussed at the Justice and Home Affairs Council in June 2013. The press release issued by the Council Presidency indicated that "all Member States agreed that the free movement of persons was a core value of the European Union" and that the Council had invited the Commission to "look at the implementation of free movement rules, including guidance on fighting abuse of these rules" with a view to presenting an interim report in October and a final report by December 2013.[58]

The Commission Communication

12.4 The Communication constitutes the Commission's response to the Council's request for a report on the implementation of free movement rules. It notes that free movement of workers — along with the free movement of goods, services and capital — is one of the four "fundamental freedoms" enshrined in the EU Treaties. The Maastricht Treaty extended "the right to move and reside freely within the territory of the Member States" to all EU citizens, whether or not economically active, subject to the conditions and limitations set out in the EU Treaties and secondary legislation (notably, the 2004 Directive). This has made it easier for EU citizens to study or retire elsewhere in the EU. According to the Commission, free movement is the right most closely associated with EU citizenship, with Eurobarometer surveys indicating that 56% of EU citizens regard it as the most positive achievement of the EU and 67% recognising that it yields economic benefits for their own countries.[59] The Commission also acknowledges, however, that free movement can "create challenges for local communities faced with new inflows" and that the economic crisis has heightened concerns in some Member States about the impact on social welfare systems and on local services.[60]

12.5 The Communication first considers how likely EU citizens are to migrate to another Member State, then seeks to clarify the rights and obligations associated with the free movement of EU citizens, as well as the conditions and limitations provided for in EU law, and concludes with five actions which are intended to help national and local authorities to apply EU free movement rules effectively and to make better use of available EU funds.

How mobile are EU citizens?

12.6 The Commission estimates that around 14 million EU citizens (or 2.8% of the total eligible population) currently live in another Member State, although the rate of increase in mobility has declined in recent years as a result of the economic recession and a lower propensity to migrate from central and eastern European countries acceding to the EU in 2004. Work is the principal reason for exercising free movement rights, and is reflected in the higher employment rate for migrant EU citizens (averaging 67.7% compared to 64.6% for nationals of the host Member State). Only "a limited share" of migrant EU citizens are not in employment, and 79% live in a household in which at least one other member is in employment.[61]

12.7 The Commission cites a number of independent studies which indicate that migrant EU citizens are unlikely to place a burden on the host country's welfare system (because they pay more in tax and social security contributions than they receive in benefits) and that there is no statistical relationship between the generosity of national welfare systems and the inflow of migrant EU citizens. It says that recent data provided by Member States show that migrant EU citizens do not use welfare benefits more intensively than host country nationals, although the UK is identified as one of seven Member States unable to provide information on the proportion asking for or receiving social benefits.[62]

Rights and obligations

12.8 According to the Commission, EU law is designed to facilitate cross-border mobility "to the mutual benefit of those who move and those who stay",[63] but is subject to the conditions and limitations set out in the 2004 Directive and in Regulation 492/2011 (for EU migrant workers) and Regulations 883/2004 and 987/2009 concerning the coordination of social security systems.

12.9 All EU citizens enjoy the right to reside in another EU country (provided they have a valid identity card or passport) for an initial three month period. Thereafter, EU citizens who are not economically active, such as students or pensioners, must demonstrate that they have comprehensive health insurance and sufficient financial resources for themselves and their families to avoid becoming a burden on the host country's social assistance system. EU citizens and family members obtain a right to permanent residence after five years.[64]

12.10 Job-seekers are entitled to reside in another EU Member State for up to six months and may be able to stay for longer if they demonstrate that they are actively seeking employment and have a genuine chance of finding a job.

12.11 Once resident in another EU Member State, the Communication seeks to clarify the basis on which EU migrant citizens are entitled to social assistance benefits — described as benefits made available to those who lack the resources to meet their basic needs — and to social security benefits. The latter typically include old-age pensions, disability and sickness benefits, unemployment and family benefits, and healthcare.

12.12 EU law distinguishes between the rights of EU migrant workers, who are eligible for social assistance benefits on the same basis as workers in the host Member State, and job seekers and migrant EU citizens who are not economically active, for whom different eligibility rules apply. Member States are not required to grant social assistance to job-seekers during their initial three-month period of residence. Nor are they required to do so for migrant EU citizens who are not economically active. As this category of migrant only acquires the right to reside for longer than three months if they have "sufficient resources" — the threshold being set at a level equal to or higher than the income threshold for eligibility for social assistance — the Commission suggests that they are unlikely to be eligible for social assistance. It adds that a claim for social assistance could, in specific cases, give rise to "a reasonable doubt" that the claimant, by becoming an unreasonable burden on the host country's social assistance system, no longer fulfils the conditions for continuing residence. However, EU law requires an individual assessment to be made in each case, which takes into account the factors which have caused the claimant to seek social assistance and the overall burden that meeting the claim would place on the host country's system of social assistance. All EU migrant citizens become eligible for social assistance on the same basis as nationals of the host country after a period of five years of legal residence.

12.13 Turning to eligibility for social security benefits, EU rules on the coordination of social security seek to ensure that migrant EU citizens are able to retain rights they have already acquired, such as a State pension, when they move to another Member State. EU migrant workers and their family members pay tax and social security contributions in their host country and are covered by that country's social security system in the same way as national workers. The Commission notes, however, that rules on eligibility for social security benefits, and the type and amount of benefit that is made available, are determined at a national level and vary from one Member State to another.

12.14 Migrant EU citizens who are not economically active are only entitled to social security benefits in their host Member State if they satisfy the habitual residence test.[65] This is intended to demonstrate that they have a genuine link with the host country and is based on a number of criteria, including the duration and continuity of their stay, their family and employment situation and where their "centre of interest" is located.

Conditions and limitations provided for in EU law

12.15 The Commission suggests that EU law contains "robust safeguards" to help Member States combat the fraudulent or abusive use of free movement rights. It defines fraud as:

"deliberate deception or contrivance made to obtain the right of free movement and residence under EU law."[66]

Examples of fraud include the use of forged identity or residence documents, or making false declarations about the adequacy of resources in order to obtain a right of residence.

12.16 Abuse is defined as:

"an artificial conduct entered into solely with the purpose of obtaining the right to free movement and residence under EU law which, albeit formally observing the conditions laid down by EU rules, does not comply with the purpose of those rules."[67]

The Commission cites marriages of convenience as a prime example of abuse, but suggests that the scale of the problem varies significantly from one Member State to another. It also highlights concerns about the growing involvement of organised crime networks as a means of securing entry and residence in the EU for third country nationals.

12.17 The Commission notes that measures restricting the free movement of EU citizens must comply with the principle of proportionality and be based exclusively on the personal conduct of the individual concerned. They cannot be imposed for deterrent purposes (to prevent further migration), or for economic reasons, or as an automatic consequence of a criminal conviction. Possible restrictive measures include:

·  refusal of entry or expulsion on grounds of public order or public security — both grounds require evidence of "a present, genuine and sufficiently serious threat to one of the fundamental interests of society";[68] or

·  re-entry bans — these are only justified where it is shown that an EU citizen is likely to continue to present a serious threat to public order in the future.

12.18 Cases involving abuse of free movement rights or fraud have to be assessed against the same criteria, taking into account the gravity of any offence committed and the extent to which the offender can be considered a sufficiently serious threat to public order to warrant expulsion and, in the most serious cases, a re-entry ban. Similarly, cases of social security fraud where, for example, a legally resident migrant EU citizen has made a false declaration to obtain a benefit, are punishable in accordance with the administrative or criminal penalties applicable in the host country, but would only justify expulsion or a re-entry ban if the individual concerned could be considered a serious threat to public order.

12.19 The Communication highlights the funding available from the European Social Fund and European Regional Development Fund to develop active inclusion strategies for all marginalised communities, including migrant EU citizens, and to support social infrastructure such as housing and investment in education, health and childcare. It proposes five "concrete actions" to help local and national authorities make better use of EU funding and apply EU free movement rules more effectively by:

·  preparing a handbook to help combat marriages of convenience;

·  publishing a practical guide (available on the Commission's website by the end of 2013) to ensure the effective application of EU social security coordination rules and to clarify the habitual residence test;

·  developing the capacity of local authorities to use European Structural and Investment Funds for the period 2014-20 to combat poverty and promote the social inclusion of marginalised communities (particularly the Roma);

·  producing a study by the end of 2013 evaluating the impact of free movement in six cities (Barcelona, Dublin, Hamburg, Lille, Prague and Turin) and promoting the exchange of best practice between local and regional authorities; and

·  setting up, by the end of 2014, an online training module to improve local authorities' understanding of EU free movement rules, establishing advice and information centres for migrant EU workers in each Member State, and strengthening the role of the European network of national employment services in facilitating cross-border labour mobility.

12.20 The Communication reiterates the Commission's view that EU free movement rules contain "robust safeguards" to tackle abuse and prevent unreasonable burdens being placed on the host country, and concludes:

"It is the joint responsibility of Member States and the EU institutions to uphold the right to free movement, including by countering public perceptions that are not based on facts or economic realities."[69]

The Government's view

12.21 The Immigration Minister (Mr Mark Harper) reiterates the Government's belief that freedom of movement is "an important principle" but adds that "it cannot be a completely unqualified one." He expresses concern at the impact that abuse of free movement rights has on welfare systems and public services and underlines the importance of ensuring that people who come to the UK from other Member States "do so for the right reasons."[70] He continues:

"Our focus is on cutting out the abuse of free movement between EU Member States and addressing the factors that drive European immigration to Britain. Across Government, we are working to further tighten our controls on accessing benefits and services, including the NHS and social housing. In March 2013 and again on 27 November the Prime Minister announced a number of measures to put this principle into effect, many of which will be implemented through the Immigration (European Economic Area) (Amendment) (No. 2) Regulations 2013 which come into force on 1 January 2014. The Government have consistently raised the problem of the abuse of free movement at meetings of the Council of Ministers."[71]

12.22 The Minister suggests that the Commission Communication does not go far enough in recognising the scope and seriousness of free movement fraud and abuse, adding:

"The Commission has failed to give sufficient weight to the evidence provided by Member States. For example, the Government provided evidence of cases from Operation Golf, a joint human trafficking investigation that was run by the Metropolitan Police and the Romanian National Police, following the discovery that over 1,000 children had been trafficked by a Romanian gang from the town of Tanderai for the purpose of exploitation through forced criminality, including theft, organised begging and benefit fraud.

"We consider that the fact that such abuse is possible under current conditions is sufficient to warrant effective action. The existence of serious fraud and abuse of free movement also has a serious and negative impact on the public perception of free movement. Whilst the Communication argues that in general EU citizens do not use welfare benefits or commit fraud more intensively than host country nationals, this ignores the public perception of such abuse and the very real costs to the individual Member States."[72]

12.23 The Minister argues that the Communication gives insufficient consideration to Article 35 of the 2004 Directive which enables Member States to "adopt the necessary measures to refuse, terminate or withdraw any right conferred ... in the case of abuse of rights or fraud, such as marriages of convenience", adding nothing of substance to previous guidance issued in 2009.

12.24 Turning to the impact of EU migration on social welfare systems, the Minister says:

"the Commission must accept that fraudulent claims for welfare are a problem; and that current rules on social security coordination are preventing Member States from taking the necessary steps to ensure that only those migrating to work and contribute to a host country's economy can access welfare benefits. The Communication does however confirm that Member States do not have to grant social assistance to EU jobseekers within their first three months of residence. The Prime Minister announced on 27 November that in future EU migrants will not be entitled to claim Jobseeker's Allowance in the initial three month period."[73]

12.25 The Minister is critical of two of the five actions proposed by the Commission to help local and national authorities tackle abuse and fraud. He notes that the handbook on marriages of convenience was originally proposed in 2012 as a tool to assist operational staff. He continues:

"Member States had agreed that the handbook must provide practical guidelines on how authorities can identify and clearly prove sham marriages. But, together with a number of other countries (Germany, Austria, Denmark and The Netherlands), we have informed the Commission that we are unable to accept the current draft of this handbook which completely fails to fulfil the requirements of a practical operational handbook, as requested by the Council. The draft handbook focuses too narrowly on free movement rights and gives little indication of how sham marriages can actually be prevented. A recent draft stated that "the mere fact that a marriage is one of convenience is not sufficient to refuse, terminate or withdraw any EU right of free movement". The UK considers this directly contrary to Article 35 of Directive 2004/38/EC and has expressed this view to the Commission."[74]

12.26 The Minister notes that a draft version of the practical guide to clarify the 'habitual residence' test has already been produced and focuses principally on how to determine which Member State's social security rules apply (in accordance with Regulation 883/2004) when workers move from one Member State to another, or work in two or more Member States. He continues:

"The Government have been clear that Member States must be able to take the necessary steps to ensure that only those migrating to work and contribute to a host country's economy can access welfare benefits. The current rules do not allow Member States sufficient flexibility to manage access to benefits for migrants. This is a particular issue for Member States whose benefits systems are primarily income-related and residence based."[75]

12.27 The Minister notes that the Communication was discussed at the Justice and Home Affairs Council in December 2013. The Home Secretary expressed her disappointment that the Commission had failed to take proper account of the evidence provided by Member States and argued that the five action points proposed in the Communication would make no real difference to the problems faced by Member States. She made clear that the UK would:

"continue to press ahead with a series of domestic reforms that will tighten our implementation of the free movement rules and protect local communities, public services and our benefits system."[76]

Conclusion

12.28 The recent debate on the free movement of EU citizens has polarised opinion within the Council of Ministers. Whilst the letter signed by the Home Secretary and her counterparts in Austria, Germany and the Netherlands in April 2013 highlighted the costs and burdens for host communities, as well as the prevalence of benefit tourism, a statement issued by the Foreign Ministers of the Czech Republic, Hungary, Poland and Slovakia shortly before the December 2013 Justice and Home Affairs Council referred to data demonstrating that migrants from Central and Eastern Europe were "hugely beneficial for the British economy", with their contribution to the UK's national revenues far exceeding the social benefits they use. Where there does appear to be common ground between Member States is on the need for an effective response to tackle cases of abuse, even though the scale of abuse continues to be contested.

12.29 The publication of the Communication coincides with the lifting of transitional controls on migrants from Bulgaria and Romania on 1 January 2014 and the entry into force of domestic regulations removing entitlement to Jobseekers' Allowance for EEA nationals seeking employment in the UK (including UK nationals returning from a period of residence abroad) until they have been continuously resident in the UK for three months. We therefore consider that a debate on the challenges presented by free movement within an enlarged European Union, and the capacity of Member States to respond effectively within the existing EU legal framework, would be timely and we recommend that the Communication should be debated in European Committee B.

12.30 We note that the Minister is critical of the Commission's failure fully to recognise "the scope and seriousness of free movement fraud and abuse" and the Home Secretary's letter of April 2013 also alludes to the burden placed on welfare systems by claims for social assistance made "frequently without a genuine entitlement" by migrant EU citizens. The Commission says in its Communication that the UK was unable to provide information on the number or proportion of EU migrant citizens claiming or receiving social benefits.[77] We ask the Minister to provide us with the following information by 17 January, so that we can consider it at our meeting on 22 January:

·  the data held by the Government on the number of nationals from other EU countries claiming benefits in the UK;

·  the data sources used by the Government to determine the present scale of abuse of the UK's welfare system by migrant EU citizens; and

·  the scale and form of the most prevalent types of abuse and fraud of EU free movement rules in the UK.

12.31 In light of the information provided, we may wish to recommend a debate on the challenges presented by free movement within an enlarged European Union, and the capacity of Member States to respond effectively within the existing EU legal framework.

12.32 Finally, we note that the Home Secretary's Written Ministerial Statement on the December 2013 Justice and Home Affairs Council indicates that a number of Member States agree with the UK that the Commission has failed to take adequate and effective action to tackle abuse and fraud and would "consider working together outside the EU structures." We ask the Minister to explain what further action the Government expects the Commission to take, whether this would require changes to existing EU rules, and what type of extra-EU action he envisages if the Government remains dissatisfied with the Commission's response. Meanwhile, the Communication remains under scrutiny.


57   OJ No. L 158, 30.04.04. Back

58   See http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/jha/137407.pdf. Back

59   See p.2 of the Communication. Back

60   See p.3 of the Communication. Back

61   See p.3 of the Communication. Back

62   See footnote 21 on p.4 of the Communication. Back

63   See p.5 of the Communication.  Back

64   For further information on the application of the right to reside test in the UK, see the House of Commons Library Standard Note, EEA nationals: the 'right to reside' requirement for benefits published in December 2011. Back

65   For further information on the application of the habitual residence test in the UK, see the House of Commons Library Standard Note, The Habitual Residence Test published in May 2011. Back

66   See p.7 of the Communication. Back

67   IbidBack

68   See p.8 of the Communication. Back

69   See p.13 of the Communication. Back

70   See para 13 of the Government's Explanatory Memorandum. Back

71   See para 14 of the Minister's Explanatory Memorandum. Back

72   See paras 15 and 16 of the Minister's Explanatory Memorandum. Back

73   See para 18 of the Minister's Explanatory Memorandum. Back

74   See para 19 of the Minister's Explanatory Memorandum. Back

75   See para 20 of the Minister's Explanatory Memorandum. Back

76   See para 26 of the Minister's Explanatory Memorandum. Back

77   See footnote 21 on p.4 of the Communication. Back


 
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