The European Commission has accused Britain of discriminating against EU nationals who have been living and working in the UK.
The Commission says tests applied to check if claimants are eligible for benefits are unfair – and has referred Britain to the EU’s Court of Justice over the matter.
In a statement on its website today, the EC said: “UK nationals have a ‘right to reside’ in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this ‘right to reside’ test.
“This means that the UK discriminates unfairly against nationals from other member states. This contravenes EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.”
Work and Pensions Secretary Iain Duncan Smith has vowed to fight the Commission “every step of the way”.
He said: “People in this country expect me to protect the benefits system from abuse and protect the money of hardworking taxpayers. So I will not stand by while the European Commission tries to water down the valuable protections we’ve put in place.
“I will fight this every step of the way, I will not cave in and I will continue to work on strengthening our benefit system in the meantime to ensure it is not open to abuse by anyone.”
The EU has a standard test, which is supposed to be applied by member states to determine a migrant’s eligibility for welfare payments.
The UK applies an extra “right-to-reside” test, which the EU says is discriminatory and may have denied thousands of migrants access to benefits like child tax credit.
Former social security secretary Peter Lilley, who introduced the habitual residence test, said the Commission was “flying in the face of its own rules” as the right-to-reside rule is based on a European directive.
The MP – now a member of David Cameron’s Tory policy board – said the Commission’s actions strengthen the case for Mr Cameron to repatriate powers from the EU.
He told BBC Radio 4’s Today programme: “It does strengthen the case for David Cameron seeking to get power back to this country to make our own laws rather than allowing this creeping competence of law-making being extended to Brussels, even in areas where every single country decided it should be reserved for itself.”
Labour’s Shadow Home Secretary Yvette Cooper backed Mr Duncan Smith’s tough stance and called on the government to strengthen UK residence tests.
She said: “The EU Commission are wrong to try to prevent member states having sensible checks like this as it will increase public concerns about migration and give member states an incentive to cut employment support for everyone, which is against everyone’s interests in Britain and across Europe.”
The legal action will cast doubt on whether the coalition will be able to move forward with plans to clamp down further on benefits claims by migrants.
Ministers have put forward plans to restrict access to legal aid and charge EU migrants for access to some elements of NHS care.
There have also been proposals to restrict benefit payments for migrants who fail to find work.
If the court case puts the brakes on those plans, MPs including eurosceptics, who already believe Brussels interferes too much with UK domestic policy, are likely to be outraged.
Britain may get backing from Germany, the Netherlands and Austria if the issue ends up in court.
The Home Secretary Theresa May co-signed a letter with her counterparts from those countries in April, complaining that the current EU regime for tackling benefits tourism was too soft on cheats. – Sky News