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Welcome to the U.K., Sort Of

Marc Champion writes editorials on international affairs. He was previously Istanbul bureau chief for the Wall Street Journal. He was also an editor at the Financial Times, the editor-in-chief of the Moscow Times and a correspondent for the Independent in Washington, the Balkans and Moscow. He is based in London.
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U.K. Prime Minister David Cameron made a good speech on immigration this morning, but it was too late and relied on a fundamental misunderstanding of how Europe works.

The speech was good because Cameron tried to make the case for keeping the U.K. open to migrants: He even asked Britons to recognize that their country's attractiveness is primarily a reflection of its success in generating jobs that native Britons often lack the skills or desire to take.

The speech was good, too, because it might have been so much worse. In recent weeks he came close enough to proposing emergency caps on the number of European Union nationals who can come to live and work in Britain that German Chancellor Angela Merkel warned she would rather see the U.K. leave the bloc than undermine its most popular feature. Promising to negotiate such limits with the rest of the EU would have sent the U.K. on a direct path to leaving the union.

I would like to have seen him go further, to recognize for example that migrants are net contributors to the economy and public purse. But that would have meant admitting that when Britons find their local school or hospital is overcrowded, that's the fault of his government: Migrants contribute more than enough in tax receipts to meet the extra demand, but the expansion required isn't happening.

Cameron is betting he can tamp down anti-immigrant feeling through a series of reforms aimed at reducing so-called benefit tourism, which, according to populist politicians and newspapers, is allowing the U.K. to be swamped by immigrants who come because they can sign on to a nirvana of state handouts.

Focusing on the benefits system may also help shift attention away from the foolish numerical target he set himself of reducing annual net immigration to below 100,000 by 2015. Net immigration has instead risen since he made that pledge, to 260,000 in the year to June, according to figures released this week. The anti-Europe UK Independence Party has leaped on this failure to claim that the only way to control immigration is for the U.K. to leave the EU.

U.K. benefits are not generous by EU standards, but they are unusual in that many of them don't require claimants to have worked and paid into the system -- so migrants are entitled to ask for state support from the day they arrive.

In his speech, Cameron proposed a delay of four years before immigrants can start claiming welfare and low-income housing subsidies. Nor would migrants be able to get unemployment payments until they have worked. He also proposed measures to improve the skills and employability of native workers, and to make it harder for employers to get away with employing migrants illegally. These are all reasonable ideas that should have been pursued long ago, on their own merits. When pressed, even Cameron said he wished he had made this speech earlier.

The problem is that benefit tourism is largely a myth: EU migrants are substantially less likely to claim support from the state than native Britons. Creating a system that can't be gamed is a good idea and should create a better sense of fair play, which is important to Brits. But you can't use a marginal issue to eliminate a big one. If the problem Cameron is trying to solve is excessive immigration from EU economies that are currently growing much more slowly than the U.K.'s, eliminating a few benefit tourists won't help.

No doubt that's why he also made some proposals that would limit the EU's free-movement principle and might therefore require agreement from the bloc's other 27 member states. So EU migrants who want to come to the U.K. to work would be required to have a job offer already lined up, Cameron said. And if immigrants don't have a job after six months of looking, they would have to leave the country.

Perhaps understanding that some of his demands may, as he put it, "fall on deaf ears" in Europe, Cameron said all options would then be on the table, in essence threatening to lead the U.K. out of the EU if he doesn't get what he wants.

And that is the problem. Cameron has added new hostages to fortune to the many he has incurred already as he tries to satisfy the UKIP and the Conservative Party base on the EU and immigration. That's also why he promised to hold a referendum by 2017 on whether to leave the EU, in which he would campaign to stay in a "reformed" union. Threatening to leave unless other EU leaders agree to British demands is a game he is likely to lose.

Cameron needs to go on making the case for immigration, and to persuade business leaders to make it with him, while building an alliance in Europe for plausible reforms. Otherwise he will always be outflanked by his opponents and isolated in Europe. 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Marc Champion at mchampion7@bloomberg.net

To contact the editor on this story:
Brooke Sample at bsample1@bloomberg.net