The Prime Minister has rushed through a plan to introduce a three-month wait before EU migrants can claim out-of-work benefits so it coincides with the end of temporary controls tomorrow that have blocked citizens from Romania and Bulgaria moving to the UK.
But Migration Watch UK pointed out the reforms did not affect welfare payments for claimants with jobs, meaning migrants would still have more in-salary and in-work benefits than in any other major European country. Yet business leaders have made clear lifting the restrictions would help "cement our economic recovery" as well as fill the gap in the number of skilled workers companies needed.
Research by Migration Watch UK suggested some of the two million Romanians and Bulgarians already living in Spain and Italy could choose to move to northern European countries where there were "considerably greater" financial rewards.
A worker with a spouse and two children on half the average wage in Romania or Bulgaria would be three times better off in Spain or Italy but six times better off in the UK, according to its report.
The think-tank found Germany remained the "most attractive destination" with its low unemployment rate and large number of vacancies.
"This study shows how Britain's generous benefits system acts as a pull factor for migrants," said Sir Andrew Green, Migration Watch UK's chairman.