Ministers to curb benefits for EU migrants

Tough new rules on benefits designed to prevent an influx of migrants from the former Iron Curtain countries about to join the European Union were approved last night by senior cabinet ministers.

They agreed that economic migrants from the 10 "accession countries" would be banned from claiming benefits in Britain for up to two years after the EU expands on 1 May.

The clampdown followed a cabinet rift over how to respond to the expected arrival of jobseekers from countries such as Poland and the Czech Republic. Ministers were shaken by moves by other major EU economies, including France, Germany and Italy, to prevent the EU's new citizens from working. They were also stung by campaigns in right-wing newspapers warning of a flood of poverty-stricken migrants. The previous proposal on welfare payments had been to prevent new migrants from claiming housing benefit and income support for at least six months. That is understood to have been extended to two years.

But the ministers rejected calls for a "work permit" system, saying that it would only drive illegal workers underground. The idea has been fiercely opposed by David Blunkett, the Home Secretary, who is an enthusiastic advocate of managed migration, but Mr Blair has indicated support for the move twice this month.

Ministers were reserving the right to follow other EU countries by introducing new checks on migrant workers if the numbers heading for Britain outstripped forecasts.

The compromise formula - to be announced in the Commons on Monday - was agreed in Downing Street by Mr Blair, Mr Blunkett, Jack Straw, the Foreign Secretary, and Andrew Smith, the Work and Pensions Secretary. Mr Smith said: "The accession treaty specifically provides for regulations to be produced in order to set out whether and under what terms people can access our labour market. It has been clear ever since accession that such regulations would need to be brought forward and they will be brought forward. The need to produce these regulations has been intended all along. We are not having a panic.

"As the Prime Minister said in the House of Commons, of course there have been the developments in terms of decisions other countries have taken which anyone sensible would take account of in the light of those decisions and that is what we are doing." David Davis, the shadow Home Secretary, said: "The enlargement of the EU has been planned for years, yet the Government has decided to hold a crisis summit only nine weeks before the accession date.

"They are rightly worried about benefit tourism, but that is only half the problem. With average wage levels in Eastern Europe less than half the minimum wage, many of the 75 million citizens will wish to come to Britain irrespective of benefits. These crisis talks should also consider the impact on public services."

Mark Oaten, the Liberal Democrat home affairs spokesman, accused the Government of placing "populism over principle". He said: " How can the Prime Minister call himself a true European when with these measures he has ... created a two-tier Europe."

John Denham, chairman of the Commons Home Affairs Select Committee, told the BBC: "If everybody had open borders and everybody was running their work and benefits system in the same way, then any problem would be so spread around Europe it would be so small that no one would worry. The more that other countries have decided to tighten up, the more it was inevitable that Britain would have to do so."