Cameron's plan to block Greek immigration would break EU law

There is no legal basis for Cameron's populist promise.

While the eyes of the media were on Barclays, David Cameron casually suggested that the UK would block Greek people from entering Britain if their country left the euro. He told the Commons liaison committee:

[A]s I understand it, the legal powers are available if there are particular stresses and strains. You have to plan, you have to have contingencies, you have to be ready for anything – there is so much uncertainty in our world. But I hope those things don't become necessary.

Leaving aside Cameron's cynical populism, what "legal powers" is he referring to? The free movement of people, along with the free movement of goods, capital and services, is one of the four fundamental freedoms of the European Union. While member states have legally limited immigration from new EU countries (as we currently do in the case of Bulgaria and Romania), no country has ever restricted migration from established members. Even "in the event of war", EU law states, "Member States shall consult each other with a view to taking together the steps needed to prevent the functioning of the internal market being affected".

There is little prospect of the EU allowing Britain to unilaterally suspend migration from Greece, a member state of 31 years' standing. It was as recently as April that the EU Commission warned the UK to fully comply with European law on the free movement of people or face an EU court case. In addition, as the excellent Free Movement blog notes, since Article 18 prohibits discrimination based on nationality, any restrictions on Greek immigration would need to apply to all EU citizens.Would Cameron really be willing to see free movement suspended for UK citizens? (An event that would have deleterious consequences for his net migration target.)

Worse than the Prime Minister's feeble understanding of EU law, however, was his sinister suggestion that Greek people represent a threat to our economy. He told MPs: "I would be prepared to do whatever it takes to keep our country safe, to keep our banking system strong, to keep our economy robust. At the end of the day, as prime minister, that is your first and foremost duty." So, the biggest threat to our "robust" (recession-plagued) economy and our "strong" (crooked) banking system is posed by our fellow Europeans. Until yesterday, no country, including those that share a border with Greece, had suggested pulling up the drawbridge and abandoning the principle of free movement. How shameful that it is the UK that is the first to do so.

David Cameron said that Greek immigration could be blocked if Greece left the euro. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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A simple U-Turn may not be enough to get the Conservatives out of their tax credit mess

The Tories are in a mess over cuts to tax credits. But a mere U-Turn may not be enough to fix the problem. 

A spectre is haunting the Conservative party - the spectre of tax credit cuts. £4.4bn worth of cuts to the in-work benefits - which act as a top-up for lower-paid workers - will come into force in April 2016, the start of the next tax year - meaning around three million families will be £1,000 worse off. For most dual-earner families affected, that will be the equivalent of a one partner going without pay for an entire month.

The politics are obviously fairly toxic: as one Conservative MP remarked to me before the election, "show me 1,000 people in my constituency who would happily take a £1,000 pay cut, then we'll cut welfare". Small wonder that Boris Johnson is already making loud noises about the coming cuts, making his opposition to them a central plank of his 

Tory nerves were already jittery enough when the cuts were passed through the Commons - George Osborne had to personally reassure Conservative MPs that the cuts wouldn't result in the nightmarish picture being painted by Labour and the trades unions. Now that Johnson - and the Sun - have joined in the chorus of complaints.

There are a variety of ways the government could reverse or soften the cuts. The first is a straightforward U-Turn: but that would be politically embarrassing for Osborne, so it's highly unlikely. They could push back the implementation date - as one Conservative remarked - "whole industries have arranged their operations around tax credits now - we should give the care and hospitality sectors more time to prepare". Or they could adjust the taper rates - the point in your income  at which you start losing tax credits, taking away less from families. But the real problem for the Conservatives is that a mere U-Turn won't be enough to get them out of the mire. 

Why? Well, to offset the loss, Osborne announced the creation of a "national living wage", to be introduced at the same time as the cuts - of £7.20 an hour, up 50p from the current minimum wage.  In doing so, he effectively disbanded the Low Pay Commission -  the independent body that has been responsible for setting the national minimum wage since it was introduced by Tony Blair's government in 1998.  The LPC's board is made up of academics, trade unionists and employers - and their remit is to set a minimum wage that provides both a reasonable floor for workers without costing too many jobs.

Osborne's "living wage" fails at both counts. It is some way short of a genuine living wage - it is 70p short of where the living wage is today, and will likely be further off the pace by April 2016. But, as both business-owners and trade unionists increasingly fear, it is too high to operate as a legal minimum. (Remember that the campaign for a real Living Wage itself doesn't believe that the living wage should be the legal wage.) Trade union organisers from Usdaw - the shopworkers' union - and the GMB - which has a sizable presence in the hospitality sector -  both fear that the consequence of the wage hike will be reductions in jobs and hours as employers struggle to meet the new cost. Large shops and hotel chains will simply take the hit to their profit margins or raise prices a little. But smaller hotels and shops will cut back on hours and jobs. That will hit particularly hard in places like Cornwall, Devon, and Britain's coastal areas - all of which are, at the moment, overwhelmingly represented by Conservative MPs. 

The problem for the Conservatives is this: it's easy to work out a way of reversing the cuts to tax credits. It's not easy to see how Osborne could find a non-embarrassing way out of his erzatz living wage, which fails both as a market-friendly minimum and as a genuine living wage. A mere U-Turn may not be enough.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.