David Cameron seems to be painting himself into a corner. His desire to restrict the in-work benefits available to European migrants is inherently discriminatory: it would not apply to UK citizens. It runs counter to the European treaties. In recent weeks, a procession of eurocrats and politicians has lined up to denounce these proposals. Cameron knows they cannot be accepted as currently presented. Yet they are in effect the only concrete proposals in his (non-existent) “demands”. What is going on?
In our view, insufficient attention has been paid to the domestic political context. Cameron and — especially — George Osborne want to restrict the availability of in-work benefits to UK citizens. It is part of their agenda to move towards a lower-benefits, higher-wage economy. Their first attempt to reform tax credits was defeated by the House of Lords. But the introduction of Universal Credit will provide cover for a progressive limitation of in-work benefits for Britons and European migrants alike.
The way is open for another “hard-won” compromise. Cameron will get his desired benefit changes; the “colleagues” will pronounce themselves reluctantly convinced that sacred EU principles are respected; we shall be expected to applaud and acquiesce. Perhaps.