Whitehall officials fear George Osborne’s new National Living Wage could be a “magnet” for migrants from Europe, the Standard has learned.
It comes as an exclusive poll for the newspaper shows the European referendum battle has narrowed amid growing doubts that David Cameron will get a good deal on EU reforms.
Half of Britons would vote to stay in the EU, while 38 per cent want out, Ipsos MORI found. The 12-point gap is the smallest since 2012 and compares with a 34-point lead for the In campaign last June.
Under the Government’s Living Wage plan, the new wage floor will start at £7.20 per hour in April, and is expected to rise to £9 by 2020, putting Britain near the top of the global league table for compulsory minimum pay rates.
But concern is growing that higher wages will attract more people from lower-paying EU states such as Romania and Bulgaria.
“Someone sitting in southern Italy or Romania will be thinking that Britain looks a very attractive proposition,” said one official.
There are also fears higher pay could reduce the potency of David Cameron’s plan to curb mass migration by making EU citizens wait four years for in-work benefits.
However, a No 10 official re-jected this, saying benefits could be worth up to £8,000 a year to an EU mig-rant: “If you take that away it changes the calculation considerably.”
In response to Mr Cameron’s demand for Britain to control how many EU migrants come to Britain, Brussels has put forward an “emergency brake” that would let the UK stop migrants claiming benefits for four years — but only with the permission of other EU leaders, and only as a temporary measure if the benefits system were “overwhelmed”.
Ex-Cabinet minister John Redwood, part of the Leave campaign, said: “That is an insult to the UK. It says we have to beg in extreme circumstances for the permission of the rest of the EU. It’s a bad joke.”
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No 10 made clear the idea, briefed by European Commission officials, did not meet Mr Cameron’s overall goal of curbing migrant numbers.
A Treasury spokesman said: “The National Living Wage is a key part of our plan to move the UK to a higher wage, lower tax and lower welfare economy. By 2020 the UK’s minimum wage will remain in the middle of the pack internationally as a share of average income and well below the level that France reached in 2013, and is close to Germany’s new minimum wage.
"And 40% of EU migrant workers are under 25, so not eligible for the National Living Wage. But as the Prime Minister has been clear, without changes to welfare rules, there will still be significant in-work benefits available for migrants.
"These can act as a clear pull factor, which is what the Government is seeking to address through renegotiations with the EU.”
The poll found the proportion of Britons who feel confident he will achieve a good result in negotiations has fallen from 38 per cent in June to 31 per cent now.
Gideon Skinner, head of political research at Ipsos MORI, said: “The ‘Stay’ camp are still ahead, despite the fact few on either side think the Prime Minister will achieve most of his goals.”
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