David Cameron’s welfare plan fails to win support

By the time European Union leaders sat down to dinner to discuss David Cameron's reform demands, the British prime minister's most contentious proposal was already off the menu. Arriving at the Justus Lipsius building in the European quarter in Brussels for their two-day summit, one leader after another rejected Mr Cameron's call to make citizens of other EU countries moving to Britain wait four years to qualify for welfare payments.

European Council president Donald Tusk, who is chairing the meeting, was bluntest of all, describing the demand as "unacceptable". The proposal, as it stands, is in breach of the EU's principle of free movement and would illegally discriminate against citizens of other EU member-states.

Outright discrimination

“We cannot bring in discrimination based on nationality. It goes without saying that the limitations to in-work benefits being requested will lead to outright discrimination.

"Abuse, where it exists, should indeed be tackled forcefully. Likewise, any ambiguities or uncertainties in our rules need to be addressed. But introducing discrimination against EU workers does not seem to be the way to achieve this," European Parliament president Martin Schulz told the EU leaders at the start of the summit.

Although the Government has sought to support Mr Cameron in his renegotiation, not least on account of the potential impact on Ireland of Britain leaving the EU, it draws a line at the proposal on migrants' benefits. Minister for European Affairs Dara Murphy said that the issue had been identified as a "red line" in the negotiations by a number of member-states.

“We don’t just understand their concerns, we share them completely,” he said. “We need to see a creative way of addressing the principles.”

Behind the scenes, senior EU officials have been doing just that, exploring alternative means by which Mr Cameron could achieve his objective of reducing the number of people moving to Britain. They include changes in EU law to limit or delay access to unemployment benefits for new arrivals from other EU countries; reducing some child benefit payments to children not resident in the UK; preventing convicted criminals from using free movement rules to avoid being expelled or returned to their home country; and making EU funding available to support public services under pressure from high inward migration.

Such proposals could involve changing EU law, but would not require a change to the EU treaties, which would almost certainly be politically impossible. Unlike Mr Cameron’s original proposal, they need not involve an explicit British opt-out but could apply to all EU member-states.

Lower payment

On child benefit, one proposal would index child benefits to the consumer price index in the country where a child is resident, so a child resident in Poland whose parent is claiming the benefit in the UK would receive a lower payment than one living in Britain.

Another plan would change the child benefit payment to a school attendance payment, which would be paid by the government of the country where a child attends school.

Net migration into the UK from other EU countries rose by 42,000 to 180,000 in the 12 months to June this year and two million citizens of other EU countries are now working in Britain, according to the Office for National Statistics. Immigration is the most important issue for voters in the EU referendum, pollsters say.

Recent polls have shown the referendum to be evenly balanced, but a new survey by Michael Ashcroft, published on Thursday, suggests many voters have yet to make up their minds and that the perceived success of Mr Cameron's renegotiation could tip the balance.