Britain’s Leader in Bind of Own Making

Prime Minister David Cameron made removing ‘‘in-work’’ benefits for European Union migrants a central demand of his renegotiation of Britain’s relationship with the bloc.

Prime Minister David Cameron of Britain has boxed himself in with one of his demands for renegotiating Britain’s relationship with the European Union. If Mr. Cameron doesn’t find a way of extricating himself from this position, Britain may quit the bloc.

Mr. Cameron’s bind is entirely of his own making. A year ago, he decided that he needed to slow the flow of European Union citizens to Britain. Net migration was 180,000 in the year ended in June.

The prime minister initially wanted to put a cap on migrant numbers, but he nixed that idea after he realized that other European Union leaders would block it. Free movement of people is one of the European Union’s core principles.

Instead, Mr. Cameron decided to stop European Union migrants receiving “in-work” benefits until they had lived in Britain for four years. These payments are made to low-paid workers to top up their salaries. Mr. Cameron argued that the benefits were a big attraction to people from the rest of the European Union and made removing them the central demand of his renegotiation of Britain’s relationship with the bloc.

This demand is not economically justified. Not only are European Union migrants good for the British economy, there isn’t much evidence that cutting in-work benefits would deter many people from going to Britain to work.

But Mr. Cameron felt that the migration issue had become so hot domestically that he had to have some policy to address it. The snag is that the policy he chose is discriminatory — and nondiscrimination among citizens of different countries is an important European Union principle, even if not quite as sacrosanct as the free movement of people.

In order to make the policy legal, the European Union’s treaty would have to be changed — an elaborate process that requires the consent of all 28 countries.

Hence, the suggestion in some British newspapers in early December that Mr. Cameron would campaign to take Britain out of the European Union if other leaders didn’t immediately agree to a new treaty legalizing his demand. A referendum on whether Britain should stay in the European Union will probably be held next year but must take place by the end of 2017.

Other leaders don’t want Britain to quit the European Union, for a host of economic and strategic reasons. The timing could be hardly worse given that the European Union is buffeted by multiple crises, including the influx of refugees, jihadi terrorism, the growth of right-wing populism and the lingering economic problems in the eurozone.

Despite this, other European Union countries cannot bend over backward to accommodate Mr. Cameron. Some — like Poland, about 850,000 of whose citizens live in Britain — don’t want to sign a deal that would involve discrimination against their own people. Others are reluctant to set a precedent that any leader can get a special deal by threatening to quit the club.

Mr. Cameron’s initial idea was to bring things to a head at a summit meeting in Brussels later this week. Fortunately, Mr. Cameron changed his mind after he was persuaded that he wouldn’t get his way. Although the issue will be discussed this week, he is now targeting a final deal at the next summit meeting, in February.

A delay gives the chance for a compromise. There are three main options.

From Mr. Cameron’s perspective, the best hope is that the other leaders agree now to let him ban European Union citizens from receiving in-work benefits when the bloc’s treaty is next revised. Although that could be many years away, he could claim he had got what he asked for.

The second option would be for Mr. Cameron to impose the ban on in-work benefits in a nondiscriminatory fashion — for example, by denying them to Britons who hadn’t worked or lived in Britain for four years as well as newly arrived European Union citizens. The problem is that would hurt British youngsters or expats returning home, depending on the exact rules.

It is hard for Mr. Cameron to agree to such a proposal because his government was forced into an embarrassing U-turn on reducing tax credits received by low-paid Britons in November. But after a couple more months, maybe he could swallow this pill.

The final idea would be to abandon the ill-considered in-work benefits plan and instead get some other concessions from the European Union. Mr. Cameron is already close to securing a deal on issues that are economically more important, like protecting Britain from being marginalized by eurozone countries.

Maybe the prime minister could also get an emergency brake to control the inflow of migrants if there was a really big surge in numbers. The snag is that this would wouldn’t reduce the current flow. What’s more, Mr. Cameron has made such a big deal out of in-work benefits that he will be hard-pressed to back down.

But Mr. Cameron has to find some solution. Otherwise, he may indeed be forced to campaign to quit the European Union — something it still seems he really doesn’t want.

Hugo Dixon writes a weekly column for Reuters Breakingviews. More financial commentary at breakingviews.com.

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