First the turkey - now the baby …
Having binned the turkey, as negotiations continue, the Mail reports today (15 January) that “Germany has offered David Cameron a deal that would see EU citizens who earn only the minimum wage denied state handouts.”
How would this work? Well according to the Mail “This would see the term ‘worker’ being redefined. A person would only be classified as a worker — and therefore be eligible for handouts — once they earn a fixed sum of money.”
Now it’s true that there is a threshold below which someone isn’t considered a worker for the purposes of EU law. While it is for national courts to decide whether in any particular case someone passes the test, the question is whether the EU legal concept of a worker is met. The ECJ is clear about this.
The UK can’t simply redefine ‘worker’ in UK legislation in a way that was not compatible with the treaties, so change to the EU concept of ‘worker’ would be required. Article 39 was the bedrock of free movement and its renumbering as Article 45 in the present Treaty on the Functioning of the European Union did not change the original text.
In view of the very extensive case law on who is a ‘worker’ for all sorts of different purposes and entitlements in different member states it seems very hard to believe that this fundamental concept could be redefined as something that is both in principle and in practice completely different from what it is now without Treaty change, and which would have ramifications for a whole spectrum of rights going well beyond the ability to claim the odd benefit here or there. Indeed, as the actual right of free movement of workers is necessarily derived from the status of worker, restriction of worker status to people earning more than the minimum wage would it seems actually take away the right of free movement from people earning less than that.
This of course would have an enormously greater impact than simply reducing the benefits available in the UK to other EU nationals and bearing in mind the reported resistance of some member states to restrictions to in-work benefits it seems unimaginable that they would agree to something that might actually prevent their nationals from taking up low-paid work in the UK at all.
Other judgements of the ECJ show how far away UK minimum wage employment is from the point at which someone is presently considered not to be a worker. So it’s hard to see that other member states would agree to such a change in the EU Treaty concept of a worker.
If on the other hand the UK is merely proposing introducing changes to UK tax credits or other benefits that will apply to all claimants whether UK nationals or nationals of another member state, that isn’t a matter needing any negotiation at all, as it’s up to any country to decide on the characteristics of its own welfare system as long as everyone is treated the same.
It is possible to get a rough idea of the potential impact of restricting tax credits to people earning more than minimum wage as HMRC publish figures on the number of claimants within broad income bands. £6,420 represents 20 hours a week at NMW for someone 21 or over, and £9,999 about 30 hours a week. So a limit set at 20 hours a week could affect over 600,000 tax credits families and one at 30 hours a week could affect nearly 1.3m - that’s over 40% of ‘in-work’ families.
So having binned the turkey, this new suggestion seems to involve other member states throwing out their own babies with the bathwater by agreeing to abandon free movement for low-paid workers rather than concede to restrictions on in-work benefits, or the UK throwing out its own baby by slashing the numbers of UK nationals entitled to tax credits rather than continue paying them to a much smaller number of other EU nationals.
As both of these seem most unlikely, one can only presume that something has been lost in translation somewhere on the way back from Brussels…
