November 27, 2019

Jeremy Corbyn’s policy of continuing free movement with the EU would cost over £4 billion in benefits

New analysis has revealed that Jeremy Corbyn’s plan to continue free movement with EU countries would cost DWP over £4 billion in extra benefit costs over the next 10 years, dramatically increasing the size of the nation’s benefits bill.

The analysis shows that continuing free movement with the EU would result in a dramatic increase in the number of people coming to Britain over 10 years. This would increase the size of the benefits bill by over £4 billion over the same period. None of this is costed in Labour’s manifesto.

Commenting, Therese Coffey, Secretary of State for the Department of Work and Pensions said:

Jeremy Corbyn has no plan for Brexit. The only policy he has committed to is maintaining free movement in all circumstances. He is completely out of touch with the concerns of ordinary voters.
This analysis highlights the cost of Corbyn’s immigration policy to our public services. The shocking thing is that this is yet another line item in Labour’s long list of uncosted pledges that will mean higher taxes for all of us. The UK can’t afford the cost of Corbyn and can’t afford the chaos of another two referendums. The only way to get Brexit done and focus on people’s priorities is to vote Conservative on 12 December.”

What you need to know

Jeremy Corbyn has committed to maintaining EU free movement in all circumstances. The policy adopted at conference suggests that he would go further than this once in power

Jeremy Corbyn has no plan for Brexit and will not even say if he thinks we should leave or remain. Rather, on the biggest issue he would face as Prime Minister, Corbyn has committed to staying neutral.

The only thing Corbyn is clear about in his Brexit plan, is that he would keep free movement, whether we leave or remain - he is an advocate of the UK being subject to uncontrolled and unlimited immigration, forever. The Labour manifesto states that 'freedom of movement would continue’, either via continued EU membership or via a negotiation which ‘will seek to protect those [free movement] rights’. This would mean at least net migration of 260,000 a year, and possibly even higher.

This departs departs from the earlier promises in the Labour Party’s 2017 Manifesto, that ‘Freedom of movement will end when we leave the European Union’ and that ‘Labour accepts the result of the referendum’

Leading members of the Shadow Cabinet have confirmed that their intention is to ‘extend’ free movement:

  • Shadow Chancellor John McDonnell confirmed ahead of the finalising and release of the party’s manifesto that Labour’s policy is to have ‘as much freedom of movement as possible’\
  • Shadow Home Secretary Diane Abbott pledged on Twitter ahead of the Manifesto having been finalised that “The Labour Party is committed to maintaining & extending Freedom of Movement rights. Labour will scrap [the income requirement], and extend Freedom of Movement rights to all those legally entitled to be here”
  • Corbyn himself said that there would be a ‘great deal of movement.’

The manifesto makes makes clear that Corbyn will ‘end the minimum income requirements’ on family reunion, opening the door to a vast increase in the number of dependents coming to the UK from around the world and putting huge pressure on our NHS and other vital public services.

The Labour manifesto also commits to scrapping the Immigration Act 2014 which will severely undermine the UK’s ability to crack down on illegal immigration and investigate sham marriages

Further, the manifesto states that Labour will close the Yarl’s Wood and Brook House detention centres, which will give a green flag to people traffickers to try to bring illegal immigrants to the UK in greater numbers and risks tragedies.

Labour’s plan for unlimited and uncontrolled immigration will result in a huge benefits bill

We have modelled Jeremy Corbyn’s immigration policy using the latest publicly available government statistics and projections. In this scenario there are still no border controls with European Union and European Economic Area (EEA) countries due to Labour’s policy to ‘maintain free movement rights’. Immigration continues as set out in government projections for net migration over the next ten years.

We have modelled what the impact would be on the total cost of benefits for these migrant flows, set out below. The average cost per migrant does not assume that every migrant is a benefit claimant, but is used as a statistical tool to give an average of the total across the total migrant population. This analysis looks at the impact on the DWP budget exclusively, not at other economic impacts.

We have assumed that EEA nationals must be resident for 3 months before they are eligible for any benefits. Most benefits (UC, JSA (C), ESA (C), DLA/PIP/AA, HB, CA, State Pension, Winter Fuel Payments, and Pension Credit) are included in the figures. Child Benefit, which is the responsibility of HMRC, has not been included. This is based on the same methodology that DWP has used to calculate the benefit cost of EEA population in the UK.

Calculation for estimating the cost of per EEA migrant (current)

Total benefits paid to working age people and children (2018-19 figure) £61.1 billion (DWP, p67, link)
% of total that is EEA 5% (Migration Observatory, link)
Total EEA population in UK (2018) 3,599,000 (Migration Observatory, link)
Benefits cost per EEA migrant £848

Applying GDP deflator to the estimated cost per EEA migrant

Note: for purposes of modelling we have assumed, that beyond 2024-25, figures continue at historical trends (GDP deflator at 2%).

Table of cumulative number of migrants and related benefit bill

This analysis may be generous to Labour

This figure is likely to be an underestimate as, to be fair to Labour, we have: (i) not assumed any expansion in the EU member states; (ii) assumed that the benefits eligibility remains the same; (iii) only looked at the impact of increased EEA migration, not at how Corbyn’s policies could lead to an increase in the number of people from around the world.

In contrast, the Conservative manifesto pledges that ‘People coming into the country from the EU will only be able to access unemployment, housing, and child benefit after five years, in the way non-EEA migrants currently do’.

Additionally, the Conservatives’ Australian-style points-based system would mean that we would be able to prioritise migrants who would contribute most to our economy and support public services such as the NHS.

Region Labour's Pension Tax (£) Extra Months to Work
England 11,167 44
East Midlands 6,150 50
Greater London 12,871 45
North East 9,758 38
North West 6,835 47
South East 14,270 40
South West 7,407 45
West Midlands 10,729 41
Northern Ireland 13,718 35
Scotland 10,653 41
Wales 11,691 36
United Kingdom 11,253 43

Commenting, Therese Coffey, Secretary of State for the Department of Work and Pensions, said:

“Corbyn’s Pension Tax will see ten million savers facing a huge bill forcing them to delay their retirement for almost three and a half years.
“This is just one of the ways a Corbyn government would hammer hardworking people on top of his plans to hike up taxes by £2,400 a year, as well as the cost of his plan for unlimited immigration and the chaos of 2020 being dominated by two more referendums – one on Brexit and another on Scottish independence.
“Only Boris Johnson and the Conservative Party can get Brexit done with a deal, get parliament working again and turbocharge our economy to unleash Britain’s potential.”

Read more about how this Pension Tax will impact millions of savers (PDF)