Nick Clegg has shifted his stance on the right of EU migrants to receive benefits, saying for the first time that some in-work tax credits should not be available to all of them.
The deputy prime minister’s intervention comes after a speech by Rachel Reeves, the shadow work and pensions secretary, made the same argument and ahead of a long-awaited speech by the prime minister probably this week.
Clegg is in Berlin on Wednesday to hold talks on possible German support for restrictions on EU migrant benefits, but he is also making clear he does not support restrictions on the right of EU citizens to move freely within the EU and seek work.
A key test of David Cameron’s speech will be whether he proposes a form of quotas on unskilled workers entering the UK for work, something that might challenge one of the founding pillars of the EU.
The whole issue of whether EU migrants should have access to in-work tax credits is made more complex by the UK plan to integrate these tax credits into universal credit (UC) covering both in- and out-of-work benefits.
Speaking on BBC Radio 4’s Today programme, the Lib Dem justice minister Simon Hughes said: “We have argued for a long time that we need to disassociate the general freedom to move around the EU – which we support – from the argument that means benefits should automatically flow as a consequence.
“Most people think that people from the EU that come here to work to set up a business should have benefits automatically. The right to travel is one thing the right to claim benefits is another.”
On Monday Clegg said he had no detailed idea about what would appear in Cameron’s speech, but in an article in the Financial Times Clegg warned the prime minister against making “irresponsible declarations” on Europe in an attempt to quell unrest over the rise of Ukip.
He insisted the UK could find allies in Europe to support efforts to tackle so-called benefits tourism without challenging the key principle of free movement, which is regarded as non-negotiable by countries including Germany.
Clegg suggested that migrants could be prevented from claiming the new universal credit until they have worked, and contributed to the system.
He also proposed restricting access to in-work benefits like tax credits, suggesting that migrants could be required to work the equivalent of full-time hours on the minimum wage in order to qualify.
Clegg wrote that Nigel Farage, the Ukip leader, wanted to “pull up the drawbridge” and acknowledged it was a “message that has played well” in the byelections in Clacton, and Rochester and Strood.
But he said: “The bigger danger now is that a rattled Conservative party resorts to equally irresponsible declarations, in a bid to calm their own ranks.
“David Cameron will soon give his much built-up immigration speech. If the prime minister asserts that a Tory government will introduce caps or overall quotas on the number of EU migrants coming here, we will find ourselves in the worst of all worlds.
“Ukip will say it is not enough. Europe will say it is not possible. Once again the British people will be plunged into a cycle of wild overpromising and inevitable disappointment, their scepticism confirmed. And the risks to the openness of the British economy will be considerable.”
Clegg said it would be possible to work with allies in Europe to secure reform within the existing freedom of movement rules.
Clegg, who was expected to discuss the issue with the German vice-chancellor, Sigmar Gabriel, during a visit to Berlin, said: “I have already proposed that we work with other states to stop EU migrants from claiming child benefit for children who are not living here.
“As a first step, we should pay the same rate as the country in which those children reside. In the UK it is about £80 a month, whereas in Poland it is less than half that. And there are other proposals we must now explore.
“As we streamline our welfare system by combining a range of benefits in a single universal credit, we should make sure that only migrants who have worked and contributed can receive the support.
“New jobseekers should not be eligible. Applying the same principle – that support should be reserved for migrants who are paying something into the pot – we should look at increasing the earnings threshold for in-work benefits such as tax credits.
“EU migrants could, for example, be required to work the equivalent of full-time hours on the minimum wage in order to qualify.”
He said Germany was pursuing five year re-entry bans for migrants involved in identity or benefit fraud, suggesting that “we must see if we can strengthen our laws as well”.
“The choice is clear,” he said. “We can feed people ever more irresponsible claims about immigration, raising hopes only to dash them in the end. Or – far better – we can reform the rules to address people’s legitimate concerns, while safeguarding our open economy too.”
