CHILD BENEFIT

Most countries with a welfare system have some form of child benefit. Children, by definition, are judged not capable of looking after themselves, so there is broad agreement that this is a group that the state should support. Sometimes the benefit is taxed in the hands of the recipient; more often it is not. In most countries, it is paid to the mother, on the grounds that mothers more often look after children than fathers.

As I have mentioned before in this blog, Danish politicians of all stripes are terrified (or, perhaps more truthfully, pretend to be terrified) of welfare tourism, whereby workers from other countries come here simply in order to take advantage of the country's generous benefits. Child benefit is not in fact huge, by Danish standards, the maximum for a 2-year old is kr.17.616 a year; but it is quite large by (say) Romanian standards. So there need to be restrictions on who can get it, otherwise hordes of Romanians and other undesirables will come here to sponge off the state and send money back to Romania, thereby impoverishing Denmark. I have never bought this argument, not least because it ignores completely how much the Romanian worker contributes to the Danish state (all studies show that there is a net positive benefit to Denmark); but it seems to go down well with the Danish public. So from 1 January 2012 it has been the case that child benefit had to be earned over a 2-year period. Only after that time could a foreign worker have the right to 100% child benefit, before that it would be earned gradually (25% after 6 months, 50% after 1 year etc).

Into this domestic decision stepped the E.U. Commission. Last summer it wrote to the Danish Government, saying that the "earn" principle was against E.U. law. In order to protect the concept of the free movement of labour, foreign workers had to be able to have the same rights in a foreign country that they would have in their host country. So if a Romanian had the right to child benefit in Romania, then they should have the right to child benefit from day 1 in Denmark, even if the child in question remained in Romania.

On receipt of the letter, the current Government immediately changed its administrative policy, and with retrospective effect, all the way back to 1 January 2012. However, that still left Danish law out of kilter with what the Commission had said the law should be. So this week the Government tabled a change to bring Danish law back into line.

This was the equivalent of hitting a wasps' nest with a stick. For although the total amounts are quite small, a lot of people, and not just politicians, have an interest in using the "money flowing out of the country" argument to pursue another agenda. Anybody against the E.U., for instance; trade unions against foreign workers; anybody against the Government; and so on. Even more sober folk such as the opposition Venstre say that the Government should test the Commission's argument in an E.U. case, despite the legal advice's being that the Commission would win hands down. They know that such a case would take at least two years to come to a decision, by which time the next Danish general election will have been decided and they will (it is hoped) be in power.

This incident is part of a trend that is becoming increasingly prevalent in Europe; the E.U. is a good thing, but only if it brings benefits for me. The Commission is trying desperately to point out that if everybody carries out cherry-picking, then by definition the whole point of the E.U. falls apart. But in Denmark, as elsewhere, a lot of people don't appear to be listening.

Walter Blotscher