The government, of both colours, has been allowing businesses to pay low wages by topping up those wages. The ideal situation for many employers is the employee working 16 hours on minimum wage, thus no need to pay employer's NI contributions, and having the employee's income topped up, depending on his/her circumstances, so that he/she can just about survive.
The problem is that this was a redesign of the welfare state by stealth. Now it might actually be a really good system, I'm not equipped to comment. But it was sneaked through and morphed into something different. How different wasn't fully understood until Gorgeous George started fiddling with it, and people who never thought they were "on benefits" realised they were.
Why companies are unable (it's axiomatic they are unwilling) to pay proper wages is the real problem. Maybe labour overheads are too much.
This applies to UK and EU citizens alike. and that's the crux of the problem. No matter how you weaseled the words, you couldn't escape that fundamental right of all EU citizens. The only way you could shit on an non-UK EU citizen was to shit on UK citizens too. (Something Dinky Dave Cameron did without hesitation by the way.)