The EU could launch a trade war against the UK and would likely strip British expats of benefits in retaliation to Reform UK’s plan to ban foreign nationals from nearly all welfare payments, experts have said.
Nigel Farage was warned that Brussels would probably react with fury to his party’s plan to bar foreign nationals, including EU citizens with settled status, from claiming most benefits in the UK.
Reform has admitted its plan would probably mean British expats who lived in the EU prior to 2021 would similarly lose their benefits, as the policy would breach the Brexit withdrawal deal which guarantees equivalent rights across the border.
But Farage was warned that under the terms of Brexit, the EU could also launch economic retaliation, for example by suspending parts of the trade deal between the two sides including putting up tariffs that would hit British businesses and the economy.
Reform announced the plan to bar foreign nationals in Britain from claiming most benefits, saying it would save £21bn a year as part of an overall package to save £50bn from the welfare bill.
The ban would cover EU nationals who arrived in the UK before 2021 and have settled status, which would require a tricky renegotiation of the Brexit withdrawal agreement.
Reform admitted this could mean British expats who lived in the EU prior to 2021 losing their equivalent right to claim benefits in their host European country.
But the new proposals cover almost all welfare payments including housing benefit, pension credit, jobseeker’s allowance, child benefit, free childcare and disability benefits.
Foreign nationals in the UK would continue to receive the state pension if they qualify.
Mandy Thody, 61, lives with her mother Andria, 85, in Ourense, northern Spain, and worries that a renegotiation of the withdrawal agreement could force them to return to the UK.
Her mother has access to health and social care support from the Spanish state, including panic alarms and transport to hospital, which Mandy called “absolutely wonderful”.
She said: “They’ve arranged for us to borrow things, sent social workers round, they call us every time the alarm goes off, 24 hours a day.”
Andria has not lived in the UK since 1975, and Mandy thinks it would be “ridiculous” if a change to the post-Brexit deal meant she had to return now.
“I can’t believe that any government could do that to an 85-year-old woman,” she said.
Reform has set aside £500m of contingency funding to cover the potential cost of British citizens returning to the UK to claim benefits if their entitlement to welfare in the EU is withdrawn.
The cash would cover around 10 per cent – around 130,000 – of the 1.3 million British citizens living in the EU returning home to claim benefits.
But Reform was warned that the overall cost might be higher as the EU could ultimately be entitled to suspend parts of the UK-EU Trade and Co-operation Agreement, which guarantees zero-tariff trade, if the withdrawal agreement is broken under so-called “cross-retaliation” clauses in the process for resolving Brexit-related disputes.
Anand Menon, director of the UK In A Changing Europe think-tank, told The i Paper: “The proposals would breach the terms of the withdrawal agreement and the EU will doubtless retaliate, whether that be by making life harder for Brits in the EU or by triggering retaliatory trade measures.
“Either way, it will impact severely on UK-EU relations.”
Reform Treasury spokesman Robert Jenrick insisted the ban was necessary because “forcing British workers to pay for the benefits of foreigners is not just economically illiterate but plain immoral”.
“People are more than happy to support their neighbours in hard times, but the British taxpayer cannot afford to subsidise everyone on the planet, especially those who have not paid in,” he said.
Jenrick has already set out proposals to transform sickness and disability benefits with the aim of saving £22bn from the welfare bill and he will make further announcements on Monday.
A Labour spokesman said: “These plans would mean ripping up the UK’s withdrawal agreement with the EU, plunging the UK back into years of Brexit renegotiations and stripping support from potentially millions of people who have lawfully lived, worked and paid taxes in Britain for years, and in many cases decades.
“That includes people with settled status who are part of our communities, raising families, working and contributing to our economy.”
The spokesman said the “vast majority” of migrants had no access to benefits and the Labour Government was already reforming the welfare system.
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