Iain Duncan Smith, the Work and Pensions Secretary, has said the Government is facing a crisis in its attempts to stop EU foreign nationals coming to the UK to claim benefits.
Mr Duncan Smith said it is too easy for migrants from the European Economic Area to pass a habitual residency test to prove they live in the UK and enable them to claim benefits.
He said the Government has met with stiff opposition from Brussels as ministers attempt to make it harder for so-called benefits tourists to abuse the system in the UK.
Ministers are currently exploring ways of limiting migrants’ access to social housing, healthcare and legal aid.
Responding to an urgent question from Labour MP Frank Field in the Commons, Mr Duncan Smith said: “I agree with you, there is somewhat of a crisis over this. I absolutely agree with you. For the last two years I have been fighting a rearguard action over what was left to me by the last government.
“The reality is that it is all right for [Labour] to moan but let’s put the facts as they are – I inherited a habitual residency test which simply isn’t fit for purpose. We are trying to tighten that up dramatically and I am being infracted at the moment by the European Union for doing that.
“But you are absolutely right, and I am with you on this, to describe this as a crisis.”
Mr Duncan Smith said that at present EU migrants must pass a habitual residency test but to do so they do not need to prove that they plan to stay here for any period of time.
It was also possible for EU migrants to claim child benefits from the UK, even if their offspring lived in their native country.
By claiming self-employed status, migrant workers could claim tax credits from the UK, he told MPs, adding that, under the Labour government, net migration stood at 2.2 million people, which is larger than the population of Birmingham.
Mr Duncan Smith said the system was “falling down” in some areas but other EU countries were angry about the problem, including Germany, which had “woken up at last” to the issue.
But the European Commission was contesting the UK’s habitual residency test, Mr Duncan Smith told MPs, adding that the Government was looking at the length of leases some migrants take out in rented housing.
The Government was trying to “lock people out” who came to the UK “solely” for the purpose of claiming benefits.
He added: “I don’t believe that this is acceptable, that we go on. I have told the European Commission that and we are going to resist it.
“What we are trying to do is to figure out the rules that allow us to prevent individuals from staying in the UK for only a short time before claiming benefits, a rule which existed under the last government.”
Mr Field said the current situation was the result of a crisis which successive governments had failed to deal with properly.
Further restrictions needed to be placed on universal credits to stop EU migrants claiming benefits, he said, telling the Commons that GPs were still taking on migrants even if they had been here for only 24 hours.
Meanwhile, local councils had a duty to publish data on whether social housing was being offered to non-British citizens, he said.
Many Romanian and Bulgarian immigrants had already come to the UK ahead of transitional arrangements being relaxed on January 1 next year, which will allow them to freely work in the country under their membership of the EU.
Mr Field said: “As there are already 150,000 Romanians and Bulgarians here quite legally, and they are arriving here at 25,000 a month or more, do you not accept that the answer you have just given us will somewhat prove ineffective against the movement that might well come after January 1?”
Shadow minister Stephen Timms said: “The system needs to be fair and to be seen to be fair. Over many decades people have come to the UK and made a huge contribution to our economy and to our society, and the Government does now need to look at the benefits and the services that will be given, given the prospect of future European migration.
“We need sensible and serious debate about credible changes. What you seem to be doing is floating some vague ideas without any sense of whether they can be delivered.”