Mr Cameron proposes new powers to deport homeless migrants and cut rights to unemployment and housing benefits.
But Employment Commissioner Laszlo Andor urged the UK government not to encourage “hysteria”, claiming that people in the UK were not being told the “full truth” about the benefits of immigration.
Mr Cameron announced in an article in the Financial Times measures to tackle so-called “benefit tourism” and questioned the principle of free movement of people across the EU, saying this right could not be “unqualified”.
He suggested a future Conservative government after 2015 may press for major changes to limit the number of migrants to the UK from current and future EU members.
Transitional controls limiting Bulgarian and Romanian workers’ access to the UK labour market – in place since the two countries joined the EU in 2007 – will expire at the end of the year.
There have been warnings of an “influx” of low-skilled workers from the two countries and calls from across the political spectrum for a review of migrants’ access to the health service and welfare system.
He announced a series of measures to address what he said were public concerns about the impact of current and future immigration from eastern Europe on the UK economy and public services:
- New migrants will not get out-of-work benefits for the first three months
- Payments will be stopped after six months unless the claimant has a “genuine” chance of a job
- The “habitual residency test” to determine eligibility for benefits will be tightened up
- An earnings threshold will be introduced
- New migrants will not be able to claim housing benefit immediately
- Those not seeking work will be removed and will not able to return for 12 months
- Fines for employers not paying the minimum wage will be quadrupled
“We are changing the rules so that no-one can come to this country and expect to get out-of-work benefits immediately,” he told the newspaper.
However, Mr Andor described Mr Cameron’s proposals as “an unfortunate over-reaction”, adding that EU rules applied equally to all 28 member states and had been agreed to by the UK.
He told BBC Radio 4′s Today programme that “dismantling” the rules could lead to a “slippery slope”.
Mr Andor also said: “The point is that the British public has not been told all the truth.”
He added that there were existing EU safeguards to prevent “benefit tourism”, saying: “We would need a more accurate presentation of the reality, not under pressure, not under hysteria, as sometimes happens in the UK… I would insist on presenting the truth, not false assumptions.”
Immigration from Poland and other countries had benefited the UK economy, he said, arguing that the prime minister’s suggestions risked “presenting the UK as a kind of nasty country in the European Union”.
The Lib Dems said the “sensible” changes would “restore confidence” in the immigration system and “ensure that the right to work does not automatically mean the right to claim”.
“Other countries in the EU already have similar policies and are considering the case for going further,” said deputy prime minister Nick Clegg.
“Unfettered access to benefits across the member states does not exist.”
But shadow home secretary Yvette Cooper said the prime minister was “playing catch-up” and copying a Labour idea.
“After Labour proposed this change in March, the government said it was all fine and nothing needed to change. Yet now, rather than following a coherent plan, they are flailing around.”
UK leader Nigel Farage said the UK was “still being far too generous”.
“Under his proposal, somebody can come here on 1 January from Romania and within 12 weeks be entitled to unemployment benefit. I think that is outrageous. I wouldn’t call that tough,” he told BBC Radio 4′s Today Programme.
He added the plan would do nothing to stop an unrestricted flow of a “very large number of unskilled people” coming into Britain at a time when the country was struggling with youth unemployment.
The UK has been embroiled in a long-running legal battle with the European Commission about EU nationals’ eligibility for benefits and UKIP has said this cannot be stopped unless the UK leaves the EU.
MigrationWatch UK has said it expects 50,000 people to come from Bulgaria and Romania to the UK in each of the next five years but the Bulgarian ambassador has said he believes the figure will be much lower – predicting levels of about 8,000.
Mr Cameron said the issue would continue to fester as other countries with income levels below the EU average aspired to join the EU.
He said it was time for people to recognise that the principle of free movement, a fundamental tenet of the European Union, had “become a trigger for vast population movements” and must be recalibrated.
He suggested a future Conservative government, as part of its pledge to renegotiate EU membership, could seek more discretion over migration policy. It might introduce a cap if annual arrivals exceeded a certain level, or only allow full access if a country met a certain income threshold, he suggested.
“It is time for a new settlement which recognises that free movement is a central principle of the EU, but it cannot be a completely unqualified one,” he added.
He said the UK would work with other EU countries to “return the concept of free movement to a more sensible basis”.