EU Demands Britain Grant Permanent Residency to All EU Citizens Arriving Before 2019

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European Union leaders plan to force the UK to grant permanent residence to all EU citizens coming to live in the country before Britain officially leaves the bloc, negotiating documents have revealed.

If accepted, the policy could set immigration levels spiralling as Europeans rush to beat the deadline, nullifying the Conservative government’s ongoing pledge to reduce net immigration levels to the tens of thousands a year.

The draft negotiating guidelines, drawn up by EU leaders and seen by Reuters, details plans to insist that any EU citizen living in the UK on the day Brexit takes place must be granted the right to claim permanent residency after five years in the country, and that full rights be granted to those citizens.

The wording makes it clear that the same rights must be granted to those not yet in the country but who arrive to live in the UK right up to the day before Brexit officially takes place. Such a deadline, if accepted by the British Government, could set in motion a migration rush, particularly from the Eastern European states.

According to diplomats, some of those states, such as Poland which has more than 800,000 nationals living in the UK, fear that full rights will only be granted to those living in the UK before Article 50 was triggered – or possibly even before last June’s referendum on European Union membership.

However, in February the minister for exiting the European Union, David Davis, indicated that low skilled migration from the eastern states will continue “for years and years”, saying: “Don’t expect just because we’re changing who makes the decision on the policy, the door will suddenly shut: it won’t.”

The nine-page negotiating document also revealed tough lines on financial services and EU budgetary contributions.

In response to calls from France and others, the draft includes demands that British banks, insurers, and other financial institutions remain under EU regulations and oversight if there is to be a trade agreement.

“Any future framework should safeguard financial stability in the Union and respect its regulatory and supervisory regime and standards and their application,” the guidelines state.

The leaders are also insisting that Britain pay contributions toward the EU’s budget until the end of 2020, a year after her departure from the bloc, to cover commitments made under the Multi-annual Financial Framework (MFF) – a seven-year budget plan agreed in 2014.

European leaders are concerned that Britain’s departure in March 2019 will leave them with a €17bn black hole in their finances, the bulk of which is likely to fall to Germany to cover.

Sources in Whitehall have told The Telegraph that British negotiators are showing a willingness to meet the financial obligation as a sign of goodwill, in the hopes of negotiating a more favourable trade deal further down the line.

“Payments up to the end of this MFF is something that we could put on the table which would help them fix a big short-term problem in their budgets,” said insider said.

They added that British negotiators had not ruled out “ongoing payments” of some kind in return for a free trade deal.