Source: Getty Images

U.K. Wins EU Fight Over Benefits Ahead of Brexit Vote

  • Top EU court says Britain can impose restrictions on payments
  • Ruling is on one of hottest topics ahead of referendum

As the U.K. prepares to vote on whether to leave the European Union, Britain scored a victory at the bloc’s top court in its fight to restrict the access to welfare benefits for migrant workers.

“The U.K. can require recipients of child benefit and child tax credit to have a right to reside in the U.K.,” the Luxembourg-based EU Court of Justice ruled Tuesday.

The decision comes days before U.K. nationals will vote on the country’s EU membership. How the bloc deals with asylum seekers and migrant workers has become one of the most contentious points of the Brexit campaign. The biggest influx of refugees to Europe since World War II has put the region’s migration system under severe pressure.

The European Commission, the EU’s executive authority, brought the challenge against the U.K. in 2014, arguing that the conditions imposed on foreigners to get access to family benefits were discriminatory and in breach of the bloc’s rules.

‘Welcome Clarification’

The court’s decision is “an important and welcome clarification of the rights” that EU citizens have to social security benefits, commission spokesman Margaritis Schinas told reporters in Brussels Tuesday.

The case was brought by the previous commission, under then-President Jose Barroso, when “it was considered there was a legal uncertainty as to whether EU law allows member states” to impose limits based on residence, said Schinas. The ruling “vindicates” the current commission’s approach, he said.

A defeat for the U.K. government could have been a shot in the arm for the “Leave” campaign ahead of the June 23 vote.

But Professor John Curtice at Strathclyde University, one of the U.K.’s leading experts on polling, said a victory for the British government may not be something the “Remain” camp will want to shout from the rooftops.

Public ‘Reminder’

It “doesn’t want to remind people that there is the European Court of Justice in the first place,” he said ahead of the ruling.

The court’s decision “proves that Britain is stronger in Europe,” according to an e-mailed statement from the “Remain” side. The ruling “underlines the fact that Britain has been successful in arguing for an end to ‘something for nothing’ for EU citizens coming to Britain,” former Attorney-General Dominic Grieve said in the statement.

The pound and European stocks plunged on Tuesday with just nine days of campaigning left before the referendum. After a series of new polls on Monday put “Leave” ahead, the day’s final blow came when the Sun, Britain’s biggest-selling newspaper, backed a so-called Brexit on its front page.

“It’s absurd that we have to run every nut and bolt of domestic policy past Luxembourg, and then engage in lengthy and expensive court battles if they decide they don’t like what our democratically elected government is doing,” Iain Duncan Smith, former secretary of state for work and pensions, said for the “Leave” campaign in a statement.

Anthea McIntyre, a British conservative member in the European Parliament, said the decision is “a victory for the U.K. and for common sense.”

‘Numerous Complaints’

The court challenge was based on “numerous complaints” the commission had received from non-U.K. citizens residing in the country. Britain argued that imposing a condition such as the right to lawfully reside in the country was in line with EU rules, even if it meant that this made it harder for non-U.K. nationals to get access to such benefits.

While this created a situation of unequal treatment, “this difference in treatment can be justified by a legitimate objective such as the need to protect the finances” of the host country, a five-judge panel at the EU court ruled.

Tuesday’s ruling, which can’t be appealed, follows a decision at the top court on the legal rights for asylum seekers who are sent against their will to another EU nation.

It “shows that the EU’s free movement rules do not prevent member states from taking action to block access to benefits for migrants who have been in the U.K. for less than five years,” according to the Institute for Public Policy Research, a London-based think tank.

But “it is likely to also remind voters that aspects of the U.K.’s welfare system are subject to EU law,” the IPPR said.

Before it's here, it's on the Bloomberg Terminal.