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Last Updated: Wednesday, 17 May 2006, 07:56 GMT 08:56 UK
Caution urged over new EU workers
EU and members' flags in Strasbourg
EU enlargement exposed big gaps in living standards
Ministers have been warned not to open Britain's labour markets to Bulgarians and Romanians unless other major European Union countries do the same.

A decision on the two nations joining the EU in 2007 is being delayed.

Pressure group Migration Watch UK urged ministers to be "very cautious" after previous vast underestimates of numbers of East Europeans coming to the UK.

The Home Office said no decision on restrictions on Romanian and Bulgarians working in the UK had been made.

The European Commission has said the two countries are on track to join the EU on 1 January.

The final decision will be made in October but outstanding issues remain such as tackling corruption in Bulgaria and economic reforms in Romania.

When the EU expanded to 25 members in 2004 the UK, Ireland and Sweden were the only countries which decided not to restrict people from the new member countries - notably Poland - taking jobs.

At the time the UK government predicted 13,000 workers a year from the new EU member countries would move to the UK for work, but the actual figure was about 329,000 in 18 months.

Two years on some of the older EU states are to lift restrictions, including Finland, Spain and Portugal. But France, Germany and Austria are among the countries keeping restrictions.

Freedom of movement?

Migrationwatch's Sir Andrew Green said the government needed to be very cautious in light of the fact their predictions for immigration after the 2004 expansion were "hopeless".

"We shouldn't open our labour markets unless the other major EU countries do the same," he argued.

For the Conservatives, the shadow home secretary David Davis, said: "Last time the government... were wrong by a factor of 15 and it is quite clear that to repeat this policy would have a very large and completely uncontrolled impact on further immigration into the UK.

"It is vitally important for good community relations, decent delivery of public services and housing that we maintain proper control of our immigration policy."

But Liberal Democrat spokesman Nick Clegg said: "The entry of Bulgaria and Romania into the EU should be warmly welcomed.

"The sensible approach to the labour market question is to allow these new EU citizens to work in the UK, but monitor the impact on the domestic economy and apply restrictions where necessary.

"The experience of EU enlargement last year suggests that restrictions will not be needed."

Freedom of movement for workers is one of the key provisions of the EU treaties.

EU LABOUR MARKET
1 May 2004: Britain, Ireland, Sweden allow in workers from eight new member states, but other 12 older EU states maintain restrictions
Workers from new members Cyprus and Malta do not face restrictions
1 May 2006: Finland, Greece, Spain and Portugal lift curbs on workers from the eight new member states in Central and Eastern Europe
2011: Deadline for all EU members to remove labour restrictions.

But some member states, especially Germany and Austria, were worried that their job markets would experience an influx of cheap labour from Eastern Europe, jeopardising job opportunities for their nationals.

Of the new member states, only nationals from Malta and Cyprus can travel freely to work in other member states.

It was agreed that for the other eight states - in Central and Eastern Europe - existing members could choose either to fully open up their labour markets or apply restrictions for up to two years after enlargement.

After that, restrictions can be extended for three more years then another two after that. But for the final two years countries need to provide evidence that their labour market would be seriously disturbed.

The eight former communist states which joined in 2004 have urged the older members to lift restrictions, arguing that these amount to discrimination. Hungary, Poland and Slovenia have even imposed reciprocal restrictions.

Research published in Britain suggests that employers have gained major benefits from the influx of foreign workers since enlargement.

The research by the Joseph Rowntree Foundation found that highly-qualified workers from the new EU member states were filling many low-skilled and low-paid jobs, which British workers were not willing to accept.

Jonathan Portes, chief economist at the Department of Work and Pensions, said that although immigration as a whole would "almost certainly" continue to benefit the UK economy, the contribution of migrants from the new accession countries would probably slow in the next five to ten years.

"It's quite possible that we will not see the same sort of benefits in five years because flows will be less, people may be going back, labour market conditions there may change," he told the Commons home affairs committee on Monday.


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