6 October 2015

With Europe hot on the agenda at the Conservative party conference, the government will be very pleased to have scored an important victory in its row with the European Commission over the right to reside test – which determines whether EU nationals have a right to access to certain UK welfare benefits – after the ECJ’s Advocate General Pedro Cruz Villalón unexpectedly recommended in his advisory opinion that the Commission’s legal challenge should be dismissed.

Had the opinion gone the other way, it would have overshadowed the remainder of the conference, further exacerbated the perception of EU interference in UK domestic affairs, fueled discontent with EU membership, and emboldened those who want Cameron to adopt to more forceful stance in his renegotiation including the setting of some red lines. As it is, the government will now have a bit more political breathing space in the run up to December’s European Council summit.

Crucially, while Villalón acknowledged that the test, which UK nationals pass automatically by virtue of their citizenship, constitutes “indirect discrimination”, he went to on argue that this is “justified by the necessity of protecting the host member state’s public finances, as argued by the UK.” Although this is not a definitive ruling, ECJ judges tend to follow the Advocate General’s opinion in the majority of cases so it is unlikely (though not impossible) that it will be reversed.

Today’s opinion therefore reinforces the principle that in certain conditions, member states can treat their own citizens differently from other EU nationals, which the Court also highlighted in the recent Dano and Alimanovic cases. Although the case relates to existing rules, it also strengthens the basis for Cameron’s arguments that differential treatment should be extended to in-work benefits. While this will ultimately be a political decision for EU leaders, there are an increasing number of precedents the UK can point to justify its position.

The opinion also states that the UK is able to assess whether EU nationals are lawfully resident, under the terms of the EU’s 2004 Free Movement Directive, before deciding whether to grant access to benefits. This suggests that further restrictions could be achieved via amending the Directive and the parallel Social Security Regulations (we set out here how this could be done). This would be much easier than securing Treaty Change which would require unanimity and for which there is little appetite across the EU for the time being, although admittedly this remains a grey area.