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House of Commons Hansard
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Europe: Renegotiation
10 November 2015
Volume 602

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With permission, I would like to make a statement on the Government’s EU renegotiation.

As the House knows, the Government were elected with a mandate to renegotiate the United Kingdom’s relationship with the EU, ahead of an in/out referendum to be held by the end of 2017, and since July, technical talks have taken place in Brussels to inform our analysis of the legal options for reform. Today, the Prime Minister has written to the President of the European Council to set out the changes we want, and we have laid a written ministerial statement, including a copy of that letter, hard copies of which are available in the Vote Office.

I would now like to offer the House further detail. The Prime Minister’s speech at Bloomberg three years ago set out a vision for the future of the EU. Three years on, his central argument remains more persuasive than ever: the EU needs to change. Increasingly, others, too, have recognised this. Only a fortnight ago, Chancellor Merkel said that British concerns were German concerns as well. The purpose of the Prime Minister’s letter today is not to describe the precise means, including the detailed legal amendments, for effecting our reforms—that is a matter for the renegotiation itself; what matters to us is finding solutions. The agreement must be legally binding and irreversible and, where necessary, have force in the treaties.

We are seeking reform in four main areas. The first is economic governance. Measures that the eurozone countries need to take to secure the long-term future of their currency will affect all EU members. These are real concerns, as demonstrated by the proposal we saw off this summer to bail out Greece using contributions from non-euro members. As the Prime Minister and the Chancellor have set out, any long-term solution should be underpinned by certain principles and should include a safeguard mechanism to ensure that these principles are respected and enforced. The principles should include recognition that the EU has more than one currency; that there should be no discrimination or disadvantage for any business on the basis of currency; that taxpayers in non-euro countries should never be financially liable for supporting eurozone members; that any changes the eurozone needs to make, such as the creation of a banking union, should never be compulsory for non-euro countries; that financial stability and supervision should be a key area of competence for national institutions, such as the Bank of England, for non-euro members, just as those matters have become a key area of competence for eurozone institutions, such as the European Central Bank; and that any issues affecting all member states must be discussed and decided by all member states.

Secondly, we want an even more determined focus on improving Europe’s competitiveness. Unemployment, especially youth unemployment, in Europe is still too high. Unless Europe can raise its game on competitiveness, the challenges we all face from global competition and digital technology will pose a serious risk that the next generation of Europeans will not be able to afford the living standards, social protections or public services that our citizens take for granted. We therefore welcome the European Commission’s focus on competitiveness. The number of legislative proposals has been cut by 80%, while more regulatory proposals have been taken off the table this year than ever before. Progress has been made towards a single digital market and a capital markets union, as well as in last month’s Commission trade strategy. But we need to go further. The burden from existing regulation remains too high. Just as we have secured the first-ever real-terms cut in the EU budget, so we should set a target to cut the total burden on business. This should be part of a clear strategic commitment that brings forward all the various proposals, promises and agreements on European competitiveness.

Thirdly, we come to sovereignty. As the Prime Minister said at Bloomberg and as we have stressed many times since, too many people in the UK, and in other member states too, feel that the EU is something done to them. In his letter, my right hon. Friend makes three proposals to address this. First, we want to end the United Kingdom’s obligation to work towards an ever closer union as set out in the treaties. For many British people, this simply reinforces the sense of being dragged against our will towards a political union. Secondly, we want to enable national Parliaments to work together to block unwanted European legislation, building on the arrangements already in the treaties. Thirdly, we want to see the EU’s commitment to subsidiarity fully implemented, with clear proposals to achieve that. We believe that if powers do not need to reside in Brussels, they should be returned to Westminster. As the Dutch have said, the ambition should be “Europe where necessary, but national where possible.”

Fourthly, I want to turn to the issue of welfare and immigration. As the Prime Minister made clear in his speech last November, we believe in an open economy, which includes the principle of free movement to work, and I am proud that people from every country can find their community here in the United Kingdom. But the issue is one of scale and of speed. The pressure that the current level of inward migration puts upon our public services is too great, and also has a profound effect on those member states whose most highly qualified citizens have emigrated.

The Prime Minister’s letter again sets out our proposals to address this. We need to ensure that where new countries are admitted to the EU, free movement will not apply until their economies have converged much more closely with existing member states. We need to crack down on all abuse of free movement. This includes tougher and longer re-entry bans for fraudsters and people who collude in sham marriages, and stronger powers to deport criminals to stop them coming back and to prevent them from entering in the first place. It also includes dealing with the situation whereby it is easier for an EU citizen to bring a non-EU spouse to Britain than for a British citizen to do the same.

We must also reduce the pull factor drawing migrants to the UK to take low-skilled jobs, expecting their salary to be subsidised by the state from day one. We have proposed that people coming to Britain should live here and contribute for four years before they qualify for in-work benefits or social housing, and that we should end the practice of sending child benefit overseas. The Government are open to different ways of dealing with these issues, but we do need to secure arrangements that deliver on our commitments to fair and controlled migration.

Let me say something briefly about the next steps. There will now be a process of formal negotiation with the European institutions and with all 27 European partners, leading to substantive discussion at the December European Council. The Prime Minister’s aim is to conclude an agreement at the earliest opportunity, but his priority is to ensure that the substance is right. It is progress on the substance in this renegotiation that will determine the timing of the referendum itself.

The Government fully recognise the close interest from Members on all sides of the House. We cannot provide a running commentary on an ongoing negotiation, but we will continue to engage fully with the wide range of parliamentary inquiries, now numbering, I believe, 12 across both Houses of Parliament, into the renegotiation. Documents will be submitted for scrutiny in line with normal practices, and the Foreign Secretary, other Ministers and I will continue to appear regularly before the relevant Select Committees. Of course, the European Union Referendum Bill will return to the House before long.

The Prime Minister has said and he repeated this morning that should his concerns fall on deaf ears, he rules nothing out, but he also believes that meaningful reform in the areas that I have described would benefit our economic and our national security, provide a fresh settlement for the UK’s membership of the European Union, and offer a basis on which to campaign to keep the United Kingdom as a member of a reformed European Union—and it is that which remains the Government’s objective. I commend the statement to the House.

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I thank the Minister for updating the House, and for giving me advance sight of his statement.

The decision on whether or not the United Kingdom will remain a member of the European Union is the biggest decision that the country will make for a generation. Labour Members are clear about the fact that Britain is a more powerful, prosperous and secure country as a result of its membership of the EU, and we want to see it play a full role in shaping a reformed and better Europe that deepens its single market in areas such as digital and services, offers more hope and jobs to its young people, uses its collective strength in trade with the rest of the world, and stands together to combat the urgent security problems that we face. We do not stand for the nationalism that says that we would be better off out, or for a Brexit that would see Britain weaker in power and influence, and diminished in the eyes of the world.

In his speech this morning and in the letter to the President of the European Council, the Prime Minister set out his negotiating agenda. As we have already heard in comments from his own Back Benchers, the problem that the Prime Minister faces—and, in fact, the reason he has been so reluctant to put his position down on paper until now—is that there is nothing he can renegotiate that will satisfy the large number of right hon. and hon. Members sitting behind him who want to take Britain out of the European Union at all costs. They are desperate to be disappointed, and they are here in the House today. Their only role in this debate is to push for demands that they know will not be met.

The agenda that was published today raises important issues including some that were in our own election manifesto, such as protection for the rights of non-eurozone countries and those of national Parliaments. It also includes other ideas which are already in train. May I now ask the Minister to respond to some specific questions?

It is right that we press for guarantees for non-eurozone members in the future. Our manifesto argued for that, and it is in our economic interests. Does the Minister agree, however, that it would be a mistake for Britain, in so doing, to volunteer or embrace some kind of second-class or associate membership of the EU, while still paying the full costs of membership? Would not such an outcome weaken Britain rather than strengthening our position?

Why is there so little in the agenda about jobs and growth for the future, given that the problem with which Europe has been struggling for some time has been low growth and high unemployment? The Minister has talked of reducing the burden on business. Can he guarantee that nothing in this agenda will reduce the hard-won employment rights that have been agreed at European level over the years, including rights to paid leave, rights for part-time workers, and fair pay for temporary and agency workers? Does he accept that it would be a huge mistake to try to build support for a reformed European Union on the back of a bonfire of workers’ rights?

We note the retreat from earlier statements and hints from the Prime Minister that he would seek an emergency brake or an end to the principle of free movement. Is the Prime Minister set on the four-year timescale for access to in-work benefits, or is that subject to negotiation at the European Council? Will the Minister also tell us specifically whether it would mean a change in EU legislation, or a change in the way in which the system works here in the UK?

Does the Minister agree that it is for those who wish to reject the agenda as too little—many of whom are sitting behind him, and who are determined to take Britain out of the EU—to state clearly to the British people what being out would mean for our jobs, for our trade, for our investment, for our employment rights, and for our national security?

Of course the European Union faces big challenges in recovering from the eurozone crisis, offering more hope for the future, and dealing with the urgent and immediate refugee crisis that it faces, but we believe that those challenges will be best met if Britain plays a leading role in the future of the European Union, and if we use our power and influence with others to overcome them.

There is a broader case that goes far beyond those four points about Britain’s place in the world and the EU, and that case has to be made. Our history is not the same as that of many other member states, and perhaps we will never look at these issues through precisely the same eyes, but that is not the same as wanting to leave. Reform is essential. It should be an ongoing process, not a single event, and Labour Members will keep arguing for a Britain that is engaged with the world, using its power and influence to the maximum and not walking away from a partnership that we have been members of for 40 years and which has brought many benefits to the people and the economy of this country.

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The right hon. Gentleman asked four specific questions and I will deal with them in turn.

On relations between EU and non-EU members, we do need to have, as part of this negotiation, safeguards against any risk of caucusing by eurozone countries, who if they chose to act as a caucus could command an automatic qualified majority within Council of Ministers meetings. There are clearly going to be some issues that derive directly from a currency union where eurozone countries quite legitimately will want to talk among themselves, and it is going to be important that we have a deal that allows the eurozone to do the work of integration it is going to need to do, but which properly safeguards the integrity of the single market of 28 members and decision making across the board in terms of the EU responsibilities in respect of the 28.

The right hon. Gentleman teased me a little about the views of some of my right hon. and hon. Friends. I have to say that when I have appeared before some of the Committees of this House, I have encountered Opposition Members who are equally committed to British withdrawal from the EU. The truth is that this is a matter—[Interruption.] Indeed, I am reminded that the Labour party leader, the hon. Member for Islington North (Jeremy Corbyn), has not been renowned for his enthusiasm for British membership of the EU. This issue has legitimately cut across party divisions for as long as EU membership has been a concern in the UK. People within both parties hold honourable, principled views both for and against British membership, and I think that that is likely always to be the case.

The right hon. Gentleman asked about the challenge of low growth. I think that not only what the Government are saying in this renegotiation, but what they have led and helped to shape within the EU ever since 2010, demonstrates the seriousness with which we take this issue. I know the Prime Minister was personally involved in the negotiation that clinched the deal on an EU-Korea free trade agreement, something that is now proving of immense value to British industry. It is the British Government who have helped to energise the debate towards a digital single market across Europe, something that will give small and medium-sized enterprises, as well as large companies, increased opportunities.

No Conservative Member wants to make, in the right hon. Gentleman’s words, a bonfire of workers’ rights, but we also need to have in mind the reality that other countries that have chosen to go for a much more regulated approach to the employment market have often, tragically, suffered much higher levels of unemployment than we have in the UK. Keeping the UK’s opt-out from the working time directive, for example, is something we will fight very hard to make sure is entrenched by this renegotiation.

On freedom of movement, the Prime Minister made his view very clear: our objective is to better control migration from within the EU. There are obviously different ways in which we could achieve that. We think we can do that by reducing the incentives offered by our welfare system, which is why my right hon. Friend set out proposals in November and repeated them today. Others in the EU have concerns about this, and that is why we say to them, “If that’s what you think, put forward alternative proposals that deliver the same result.” It is the outcome of the measures—controlled, fair and properly managed migration—that is the end that we seek.

Finally, on the question of what is meant by “out”, the Prime Minister said again this morning that he did not think either the Swiss or Norwegian models would be right for the UK. The question of what “out” might mean will be a key element in the forthcoming referendum debate.

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Order. A very large number of Members are seeking to catch my eye, and that was entirely to be expected. In order to have any chance of accommodating them, brevity will be of the essence.

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Does my right hon. Friend agree that the big issue that will be settled in this forthcoming referendum is how best this country is to protect its national interests and security in the modern world and how best to enhance our prosperity for the next 30 or 50 years? Will he seek to ensure that we do not lose sight of that when we address current events?

While our right hon. Friend the Prime Minister is embarking on very important negotiations—and I wish him success on competitiveness in particular—will the Minister for Europe ensure that when we are negotiating the benefit rights of those foreign nationals who work alongside British people in employment in this country, we remember the interests of the 2 million or so British nationals who live and work in the EU and do not wish to see those Governments start to discriminate against our nationals in their tax and benefits systems?

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The answer to my right hon. and learned Friend’s second point is certainly yes, the interests of British people are always at the heart of this Government’s thinking about any area of policy, and we will certainly continue to treat the national, economic and security interests of the UK as the core objective of every aspect of this European negotiation.

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I thank the Minister for making an oral statement to the House and for forward sight of his statement.

What a difference a year makes: just last year Scots were being told that if we voted yes to independence we would be getting chucked out of the EU, and now, frankly, we could not be closer to the exit.

The Minister said earlier that there would be a process of formal negotiation with the Europeans. Will he make a commitment to us today to consult the devolved Administrations as a formal part of that negotiation? He also said, quoting the Dutch:

“European where necessary, national where possible.”

Will that include devolving the powers, where appropriate, to the devolved Administrations? Finally, will the Minister tell us what on Scotland’s agenda for reform has been included in this statement today?

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Of course, we were voting to give additional devolved powers to Scotland only yesterday in this House. I can tell the hon. Gentleman that I spoke to Minister Fiona Hyslop this morning, and the question of the reform and renegotiation is now on the agenda as the first item at every meeting of the Joint Ministerial Committee on Europe which I chair and which includes Ministers from all the devolved Administrations. I am visiting Edinburgh tomorrow when I will have further conversations with the Scottish Government of the type the hon. Gentleman urges upon me, and as I said to Ms Hyslop this morning, I remain open to listen to the views of, and make sure the UK Government take full account of the interests of, all three devolved Administrations as we take this negotiation forward.

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The Minister is, if I may say so, not correct in thinking that the legal mechanisms for delivery of these proposals are not part of the solution. Does he not accept that treaty change is needed for virtually every proposal and, furthermore, that treaty change is not on offer, so how are the so-called legally irreversible changes going to be made when even the legal expert from the European Commission says that the Danish and Irish precedents are not valid? How is he going to be able to sell this pig in a poke?

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Some but not all aspects of the package of reforms that we are seeking will need treaty change. We are certainly looking at different models, including those that have been used by Denmark and Ireland in the past. The technical talks that have taken place in Brussels involving senior British officials have also involved representatives of the institutional legal services, so we are working closely alongside the current heads of the legal services of the institutions. We believe that we will be able to find an appropriate way forward on every one of the issues that I listed in my statement.

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Further to the question from the right hon. and learned Member for Rushcliffe (Mr Clarke), will the Minister acknowledge that other EU citizens living here contribute far more through their taxes than they receive in services or social security payments? The problem with social security is not the EU; it is the fact that, almost uniquely, we in the UK have lost the contributory principle from our system. The answer is to start to reintroduce that principle.

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I would certainly agree with the right hon. Gentleman that in the debate about migration controls, it is important that we do not stray into stigmatising people from elsewhere in Europe, or from any other part of the world, who are here obeying the law, working and contributing to life in this country. He mentioned the contributory principle, but that point could also apply to policy pursued under successive British Governments of all political stripes. I draw his attention back to article 153 of the treaty, which makes it clear that it is for member states, rather than the EU, to define the fundamental principles of their social security systems. I believe that it would contradict that treaty provision if we were to say that only one model for social security was compatible.

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The Minister has described different legal mechanisms for achieving our objectives. Will he tell us what they are?

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No. That is a matter for the detailed negotiations that are now under way. The technical talks have given us a menu of options to help us determine, in respect of particular reforms, whether we would be able to rely on secondary legislation, on treaty change, on protocols or on political commitment. That menu of options will now be available to the Heads of Government as they embark on the political negotiations. The purpose of the technical talks has been to ensure that leaders are informed about the legal and procedural solutions that are available, so that they do not have to start that work from scratch when they are in a leaders’ meeting.

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We believe that if powers do not need to reside in Brussels, they should be returned to Westminster. Will the Minister tell us which treaty provision he intends to use for that purpose, and if he does not have one, will he negotiate a new one?

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In my statement, I described the areas in which we are seeking change. If the right hon. Lady looks at what the Prime Minister said in his speech this morning, she will see that he spoke of making the principles of subsidiarity and proportionality more of a reality, and of establishing an agreed mechanism within the EU system to ensure that we not only look at new proposals coming out of the Commission but have a means of reviewing regularly the existing exercise of competences and deciding which competences that are currently exercised at EU level no longer need to be exercised at that level.

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Do we not have to control our own borders in order to fulfil the popular Conservative promise to cut net migration by more than two thirds during this Parliament? Should not we decide what the rules are, and apply them fairly to the whole world, rather than distinguishing between Europe and non-Europe?

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My right hon. Friend the Prime Minister has been completely consistent in saying that he accepts the basic principle of freedom of movement for workers, but that that should not become a freedom to choose the most attractive welfare system in the European Union. On our estimate, something like 40% of the people who are here from elsewhere in the EU are receiving benefits or tax credits of some kind, and action on that front will have a significant effect on the pull factor that our welfare system exercises at the moment.

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I thank the Minister for giving me advance sight of his statement. He has already set much store by treaty change, but the Council of Ministers and the European Commission constantly break their own solemn word, and their treaties, in matters that are fundamental to them, so why should we put our faith or our trust in any changes that they might agree to?

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When matters are made the subject of treaty change, they become binding in European and international law. There have been occasions, particularly in regard to the development of the single market, when British interests have been safeguarded by the existence of treaty provisions relating to discrimination against a country’s products in the single market. For example, we went through the European process in order to secure the lifting of the beef export ban. There is a stronger element of protection there than the hon. Gentleman might think.

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Further to that point, does my right hon. Friend agree that the creation of a single market for services would be a big prize for British business, and that it would create many jobs? Does he also agree that that can be achieved only by being within the European Union?

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My right hon. Friend makes a powerful point. We have a single market for goods, and it is working pretty well, but the single market for services is woefully underdeveloped, despite the fact that in every European economy, it will be the services sectors from which the new jobs and the new growth will come. We need to seek determined action in that area.

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The Prime Minister has paid the usual lip service to the EU’s crisis of competitiveness, but, rather like what happened under his predecessor, Tony Blair, 15 years ago, nothing has changed. The Minister’s own officials are growing weary of initiatives that fail to tackle Euro-sclerosis. What exactly is going to be different this time? Will the Minister spell out the details of the plans that will magically make the EU more competitive?

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If there is one thing that does not change, it is the nature of the hon. Gentleman’s interventions on this subject. The Prime Minister, the Chancellor, the Business Secretary and I have spoken frequently on the agenda on competitiveness, and I would be happy to send the hon. Gentleman a sheaf of speeches if he would like me to. Broadly, this is about three things. It is about cutting the cost of unnecessary red tape and regulation on all businesses, particularly on small and medium-sized enterprises. It is about deepening the single market, particularly in digital and in services, where it is underdeveloped at the moment. And it is about forging ambitious new trade agreements with other countries and other regions of the world, for their benefit and ours. These are the opportunities that British business has urged us to take, and this Government are determined not to follow but to lead on these matters in the European debate.

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Will my right hon. Friend avoid using up his limited bargaining power to obtain purely symbolic changes such as removing the words “ever closer union”, given that they have never been invoked by the European Court against Britain or used to require any other member state to move in an integrationist direction? They have even been dropped from the constitutional treaty. Will he instead focus on getting back any powers that are not required to run a common trading area, so that we in this Parliament can make more of our own laws and hold our lawmakers to account?

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My right hon. Friend the Prime Minister has always said that he is seeking a deal on reform that is substantive. That will be challenging to negotiate, and I do not want any Member to think that these reforms will somehow fall easily into our lap. There will be some tough negotiations ahead.

The importance of the words on “ever closer union” is that they encapsulate the fact that the EU at the moment is insufficiently flexible, still thinking of a single destination on integration for all its member states. As the Prime Minister said in his speech this morning, we need to see a much greater acceptance of the diversity of Europe at the moment. We need to see a readiness to live and let live, accepting that some countries will want to integrate more closely but others will wish to stand apart from that and that the decisions of each group should be properly respected.

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The Minister said that the agreement must be legally binding and irreversible. Will he clarify what he means by “irreversible”? Does it mean what happened in the case of the John Major opt-out on the social chapter, which was then reversed by the Tony Blair Government? Does it mean that no future democratically elected Government would be able to reverse a decision taken at this time by this Government?

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Obviously, as Parliament is sovereign, not least in the fact that EU law has direct effect in the UK only because of Acts of Parliament—decisions of this House—the irreversibility of any decision any Government take on anything is limited. To answer the hon. Gentleman’s question, we are keen to avoid a repeat of the sort of thing that happened over the European financial stabilisation mechanism earlier this year, when, in the heat of a crisis in the eurozone, a deal that had been solemnly agreed by all 28 member states in December 2010 suddenly appeared to be at risk and came up for discussion in a meeting where only 19 member Governments were gathered together. That is not the way in which we can do business in Europe in the future.

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My right hon. Friend must know that this is pretty thin gruel—it is much less than people had come to expect from the Government. It takes out a few words from the preamble but does nothing about the substance of the treaties; it deals with competition, for which the European Commission itself has a proposal; and it fails to restore control of our borders. It seems to me that its whole aim is to make Harold Wilson’s renegotiation look respectable. It needs to do more; it needs to have a full list of powers that will be restored to the United Kingdom and to this Parliament, not vacuously to Parliaments plural.

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The problem with the idea of a unilateral national parliamentary veto, which my hon. Friend advocates, is that it would mean that, for example, the most protectionist Parliament in any one member state could veto every deregulatory and every single market measure that the United Kingdom believed was profoundly in the interests of our people and our prosperity. Such a unilateral veto would be incompatible even with the arrangements that Norway and Switzerland have with the European Union. I just say to him that if he had had the privilege and responsibility of sitting at Council of Ministers meetings in Brussels, a responsibility that he may well indeed enjoy at some future stage of his career, he would be less sanguine about what he terms the unambitious nature of what we are proposing. What we are proposing is going to require some very tough negotiating indeed.

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It is ridiculous that the Prime Minister is putting the referendum to the British people but he cannot explain what the British people are voting for. If they are voting out but they are not voting for the arrangements Norway or Switzerland have, what is it that the British people are voting for?

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That will be a question for those who are campaigning for out to make clear when the referendum comes. A number of studies have been published on what various options for British engagement with Europe would look like. As for the Government, we are relentlessly focused on securing a successful outcome to this negotiation and delivering the reformed Europe that the British people want.

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Removing the commitment to “ever closer union” will be nothing more than a rhetorical gesture unless it is backed by a radical shake-up of the way the EU takes its decisions. Does the Minister agree that most EU legislation is stitched up between the Commission, the European Parliament and member states behind closed doors, in the impenetrable process known as “trilogue”, and is currently acting as an integrationist ratchet? What specific proposals do the Government have for halting and reversing that ratchet?

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As my right hon. Friend the Prime Minister said in his speech this morning, we certainly think we need a new mechanism in the EU’s system for working that guards against that ratchet and provides for the opportunity to review and reallocate powers that do not need to be exercised at a European level. The pamphlet recently published by my hon. Friend provides some constructive and imaginative suggestions as to how we might take that forward.

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The Prime Minister, in his letter, welcomes last month’s new EU trade strategy. Will the Government first carry out an assessment of how these trade deals would be affected by his wider demands for economic reform? Will the Minister confirm that it is his understanding of the recent remarks by Michael Froman, the US trade representative, that if the UK were to leave the EU, we would not be able to negotiate an independent trade deal with the United States?

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I heard what Mr Froman said. Obviously, he is a senior official in the current US Administration, so one has to take what he says seriously. On the general point the hon. Lady makes, we see further moves forward in free trade deals as an important element in securing the reformed European Union that we want. The potential deal with the US is the most ambitious and most far reaching in its consequences of any of those, but I welcome the fact that the Commission’s trade strategy is also talking about forging new trade deals with some of the emerging economies and also with our good allies and partners in Australia and New Zealand.

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In this year, as we mark the 750th anniversary of the first English Parliament—some of our continental partners are rather newcomers to this concept—may I suggest to my right hon. Friend that unless we return powers to this Parliament, this exercise will not be worth while, for it is in this Parliament that authority ultimately should reside, on behalf of the British people? Can he therefore explain to us how on earth this new arrangement, whereby groups of national Parliaments acting together can stop unwanted legislative proposals, is going to work?

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I share my hon. Friend’s love of English history, but I caution him against seeing Simon de Montfort as a true-born Englishman. The direct answer to his question is that the treaties already provide for a mechanism whereby a group of national Parliaments can demand and secure a review by the Commission of a measure the Commission is bringing forward. We think one option we should be looking at is turning such an arrangement above a certain threshold into an outright veto—a red card rather than a yellow card.

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Speaking as the chair of the parliamentary Labour party’s pro-EU group, which has more than 210 members, including the whole of the shadow Cabinet and the leader of the Labour party, I can tell the House that we are united behind staying in a Europe which is reforming and progressive. The Minister has said that if the Prime Minister does not get his own way, he rules nothing out, so if we leave Europe, what does that mean for the UK?

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Clearly, when the negotiations are over the Government will make their assessment and their recommendation clear, setting out in detail their reasons for coming to that view, including their assessment of what alternative options there might be and the Government’s view on those. I do not think therefore that the hon. Gentleman has anything to fear. Our focus remains on a successful outcome to these negotiations, which we believe will deliver a reformed Europe—that is what the British people want to see.

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The clarity and ambition of the reforms that the Minister have outlined demonstrate that there is a big job of work to do. They also remind us just how important British leadership of the European Union has been. I am referring here to the introduction of the single market in the 1980s under Margaret Thatcher and the extension of that market, hopefully soon, because of the conclusion of those reforms. Does the Minister agree that our real ambition is to restate Britain’s leadership of the European Union in conjunction with other nation states so that we can bring about an innovative, modern and responsive economy that will benefit us all?

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I agree with my hon. Friend. If we look back at the European Union’s history, we can take pride in the fact that two of its greatest achievements—building a single market across Europe and enlarging the European Union to embrace the new democracies of eastern and central Europe—were very much brought about by British leadership and, in particular, by the personal drive of Margaret Thatcher. What he says is important and the Government very much share the spirit in which he posed his question.

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I am relieved that the Prime Minister has finally outlined his negotiating stance, and I wish him every success with it, because I want him to be able to bang the drum enthusiastically for our EU membership. Will the Minister confirm that, if meaningful reform is secured, the Prime Minister and the European Union will not have to deliver fully on all the fronts set out in the Prime Minister’s letter, including on in-work benefits, for the Prime Minister to be able to campaign vigorously in favour of the UK’s continued EU membership, the benefits of which were clearly set out in the EU’s balance of competences review?

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We will need to have a satisfactory outcome that meets our requirements on all four of the areas of policies that I have described. Our position on welfare and migration remains as the Prime Minister set out in November and as he repeated this morning.

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I note the constraints suggested by the Prime Minister that the free movement of peoples is not working and will never work. Even Sweden and Germany are realising that today. Would not a visa system for all be fairer and safeguard our borders?

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The Home Office always keeps our visa arrangements under review, but I ask my hon. Friend to think about the consequences for the way in which both business and tourism operate between us and our neighbours in other democracies in Europe were there to be individual visas of the sort that he has described. It would certainly have to apply in reverse to British tourists and business visitors as well.

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Order. I am very keen to accommodate colleagues, but progress is leisurely—some might even describe it as lethargic. As I like guessing games and want to encourage Members to think, let me suggest that if they could model their contributions on those of the right hon. Members for Wokingham (John Redwood) and for Birmingham, Edgbaston (Ms Stuart), progress would be altogether speedier.

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I thank the Minister for his statement and for early sight of it. In his statement, he used the phrase “salary to be subsidised by the state.” How will the Government differentiate legally between salaries subsidised by the state for foreigners and tax credits to hand out to UK citizens?

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Those are all matters that will be addressed during the course of the negotiations.

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Does my right hon. Friend agree that ensuring full permanent access to the single market without joining the euro is a key objective for our future economic health and would be a key sign that our continued membership of a reformed European Union gives us the best of both worlds—prosperity and flexibility?

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My right hon. Friend put that very well, and getting that best of both worlds is exactly what the Prime Minister is seeking to do.

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I was very pleased to hear in the Prime Minister’s letter that he hopes to be in a position to campaign with all his “heart and soul” to keep Britain in the European Union, but any negotiation requires priorities. What are the Prime Minister’s priorities?

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The Prime Minister’s priorities are the four policy objectives that he set out this morning, and that I repeated in my statement today.

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After all the statements made by the Prime Minister, the Minister for Europe, the Foreign Secretary, and the former Foreign Secretary about being in Europe and not being run by Europe, and after all the pledges to restore the primacy of national Parliaments and to get an opt-out from the charter of fundamental rights to restore our borders, is that it? Is that the sum total of the Government’s position in this renegotiation? Is not the onus on those who advocate that we should stay in the European Union to explain why we should put up with being a second-tier country in an increasingly centralised European Union, paying more and more, and losing more and more control?

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Just on the charter of fundamental rights, the Prime Minister did refer to that in his speech this morning. It is an issue that we will be seeking to address through the forthcoming British Bill of Rights. I think that my hon. Friend underestimates how demanding and how far reaching the proposal that we have made will be. The Danish Prime Minister said this morning that what the Prime Minister proposed was

“a good basis for concrete negotiations”

but that “it will be difficult”. I hope that we succeed because we need a strong UK in the European Union.

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How will the Minister ensure that investment will not be impacted by the uncertainty that will precede an EU referendum, bearing in mind that Northern Ireland is in a unique situation, with a land border with a south of Ireland that will continue to be part of the European Union?

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The hon. Lady is right, and it is one reason why I regard it as an important responsibility on my part to keep in very close contact with what the three devolved Administrations—in this case the Northern Ireland Executive—are thinking. At the moment, there are no signs that the flow of foreign direct investment is drying up. In fact it is still the case that the United Kingdom gets a bigger share of third country direct investment into the European Union than any other member state.

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Given that my right hon. Friend has conceded that several elements of the Prime Minister’s letter will require treaty change, will he tell the House what is his best estimate of the length of time that that change will take, even if it were miraculously to be immediately agreed?

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I do not blame my right hon. Friend for asking what is a legitimate question, but that is something that we will be talking about in the context of the negotiations. Clearly, it is true—this is what I think lays behind his question—that each member state will have its own constitutional arrangements for ratifying any new treaty.

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Has the Prime Minister told the Minister of State the date by which he will make up his mind and tell us which way he will go in this referendum? If we are voting to leave the EU, why has he not set out exactly what we are voting for?

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The Prime Minister will make his position clear at the end of the negotiations. It would seem slightly odd to embark on a process of negotiations and declare at the beginning what the outcome was going to be.

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Will the Minister tell us whether we or Europe should decide on how many migrants come to the UK?

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We are seeking a situation in which we have tougher rules against the abuse of freedom of movement by criminals, fraudsters and others. We also want to reduce significantly the pull factor that our welfare system provides at present.

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The Minister referred to working together to block unwanted European legislation. Our fishing industry has been subject to some of the most unwarranted European legislation, giving us more red tape, more bureaucracy, fewer fishing boats and fewer jobs. Our fishing sector just wants control over local fishing waters; it does not want the EU to have that control. Will the Minister tell us what has been done to help our fishermen?

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I think that we have demonstrated, through our actions as well as our words, our support for the UK fishing community. I am talking about the reform of the common fisheries policy that British Ministers helped to secure last year. That has led to a ban on the practice of discarding, which is something that British Governments of all colours have been trying to achieve for decades, and a shift towards more local and regional management of fisheries than was the case in the past.

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What has not been included in the statement is far more important than what has been included. There is nothing about regaining control over our trade deals with the rest of the world, nothing about regaining control over farming, fisheries, regional aid or state aid and nothing about ending the free movement of people. Does my right hon. Friend agree that today will be looked back on as the day when it became clear that the renegotiation amounts to no more than tinkering around the edges, and fundamentally on great areas of policy this country will still finish up being told what to do by the rest of the EU?

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No, I do not, on two counts. First, my hon. Friend understates the significance of the reforms that my right hon. Friend the Prime Minister has proposed. Secondly, this is a matter in the end for the British people, not me, the Prime Minister or any other Member of the House, and if they decide to stay in a reformed European Union, the responsibility of this and any future British Government will be not to be passive but to lead the debate within Europe and secure outcomes that benefit the security and prosperity of the British people.

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As the Minister did not answer my hon. Friend the Member for North East Fife (Stephen Gethins), can I ask again what specifically from Scotland’s agenda for EU reform has been included in the Government’s negotiations?

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The last time I talked to Scottish Ministers about their proposals, they were very keen on measures to deepen the single market in services and digital, which would provide major benefits to Scotland, and to take forward new free trade deals with countries around the world. I remind the hon. Gentleman that greater access to foreign markets for the Scotch whisky industry is something that the United Kingdom Government consistently put at the forefront of our own input into the Brussels discussions.

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If the result of the EU referendum is to be enduring, it must not be on the basis of a false prospectus. Will my right hon. Friend therefore give us an assurance that any changes that are agreed will be properly legally binding and not subject to a fudge when the referendum is over?

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The Prime Minister has made it very clear that we need to have outcomes that make sure that whatever package of reforms can be achieved, assuming that the negotiations are successful, they are legally binding and irreversible, for exactly the reasons that my hon. Friend gives.

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There has been a lot of speculation about an early referendum. Without a running commentary, will the Minister set out the essential steps and the timetable necessary to make it possible to hold a referendum next year?

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We need to have the European Referendum Bill on the statute book and to have concluded the European negotiations. When both those criteria have been fulfilled, we need to allow time for secondary legislation that appoints a specific date to go through both Houses of Parliament, and after that we need to allow for a campaign period of a minimum of 10 weeks.

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Europe’s economies will eventually return to growth, so is it not in the national interest of our continental European partners to support the Prime Minister in seeking to reduce in-work benefits and in turn to reduce the brain-drain out of Europe?

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I completely agree with my hon. Friend. It is quite a tragic predicament to find many highly qualified, very well-educated young men and women who feel that they have no option but to take an unskilled, low-paid job in another European country because they cannot find work at home. The long-term answer to that challenge must in large part lie in the ability of national Governments and the European Union to generate resurgent economic growth and add to opportunities for employment.

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Can I cheer up the Minister by assuring him that pro-EU, pro-reform Members on this side of the House warmly welcome his statement today? What would be the Government’s position in the event of an out vote? Members on these Benches remember the ‘90s, and we do not want to see this Prime Minister marching out into the rose garden and inviting the right hon. Member for Wokingham (John Redwood) to put up or shut up. We want the Prime Minister to tell us where he stands; we do not want that lot dictating what happens in the event of an out vote.

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I am grateful for the hon. Gentleman’s kind thoughts, but I always strive to continue to be cheerful in this job. The result of the referendum will be regarded by the Government as binding. This is a sovereign decision for the British people as a whole to take, and I am proud that it is my party and a Conservative Government that are finally giving the British people the right to take that decision.

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It has never been a matter of no immigration; we want controlled immigration. What evidence is there that reducing access to benefits will have any real effect on the number of people coming into this country?

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A number of factors give rise to migration, but the fact that roughly 40% of people from elsewhere in the EU who live in the UK are in receipt of benefits or tax credits of some sort indicates that that is one of the major contributors to the pull factors.

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In his speech this morning the Prime Minister announced his intention to scrap Labour’s Human Rights Act. Is he opposed to the Act because it was a Labour Government who finally implemented it, or is he opposed to human rights on a more fundamental level?

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I am sorry if the hon. Lady was shocked by that sentence in the Prime Minister’s speech, but it was in the Conservative party manifesto back in May. She is obviously entitled to defend the Blair Government’s Human Rights Act, but this country enjoyed a long tradition of respect for human rights well before that legislation was enacted, and I am confident that the United Kingdom will continue to have such a tradition when it has been replaced.

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I will be proud to walk through the Division Lobby in support of the Government’s European Union Referendum Bill. Does my right hon. Friend think that most of the Opposition parties completely lack credibility, first, because they fought the right of the British people to have a say on our EU membership, and secondly because they now seem to be fighting the concept of reform?

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My hon. Friend is right. Some Opposition Members grossly underestimate the sense of resentment among many men and women in this country at having seen treaty after treaty go through, changing the balance of powers in Europe, with the British people never being asked to have their say.

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It is said that Christopher Columbus, when he set out, did not know where he was going; when he got there, he did not know where he was, and when he got back, he did not know where he had been. Is there not a serious danger of the Prime Minister facing exactly the same situation with his holographic negotiation strategy? Is the Minister not concerned that in personalising this, as he did in his statement, as the Prime Minister’s renegotiation, he creates a fundamental point of weakness in that we will have a Prime Minister’s referendum on a question that people view as somewhere between a figment and a fig leaf?

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The entire Government were elected on a manifesto of renegotiation, reform and referendum. I enjoyed the joke, but Christopher Columbus is remembered for his achievement in navigation and discovery and for symbolising the opening of a new age. I hope that this renegotiation is the start of a new age of greater flexibility, democracy and competitiveness for Europe.

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Some minutes ago I think I heard my right hon. Friend explain that the Bill of Rights would deal with our obligations under the charter of fundamental rights. Do the Government intend to legislate notwithstanding our obligations under the EU, or do they have some other plan, as yet unannounced, to deal with our voluntary subjection to the European Court of Justice?

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In many cases involving trade and the single market, the European Court of Justice has produced judgments that have been very much to the advantage of British interests. It is true that if there is a single market, some kind of independent judicial arbiter is needed to settle disputes. My hon. Friend will need to contain his understandable impatience a little longer. My right hon. Friend the Justice Secretary intends in due course to announce details of the way forward on replacing the Bill of Rights and the implications of that policy.

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I welcome the statement. The Minister has set out some very reasonable things to the House. May I assure him that there are many on the Opposition Benches who will work constructively with him and the Government to get the best for the UK and to face down some of the abuse that he has received from his own side on the statement today? There are people who would recklessly leave the EU, regardless of the cost to this country.

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For five and a half years now I have had the pleasure of vigorous and sometimes robust discussions with my right hon. and hon. Friends, as well as with Opposition Members. There are passionately and honourably held differences of view across the House in all parties about the United Kingdom’s relationship with Europe. I hope we can continue to take this debate forward in a spirit of mutual respect for people whose views may differ from our own.

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The debate on whether the British people should vote to remain in or leave the EU has been characterised by some in terms of the certainty of remaining against the uncertainty of leaving, but does my right hon. Friend agree that with the current uncertain situation in Europe, particularly on the eurozone and the impact of the migrant crisis, voting to remain is as much a leap in the dark as voting to leave?

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I advise my hon. Friend to wait until the conclusion of the negotiations, because we will then have much greater clarity over the nature of the choice that the British people will have to make.

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The Minister will be aware that the Financial Secretary promised to negotiate at EU level to achieve a zero rate of VAT on feminine hygiene products. He did not commit to a timetable, however, nor did he say that this would be placed alongside the Prime Minister’s other demands. Can the right hon. Gentleman reassure the House that women’s rights are not a second-class issue on this Government’s European agenda, by making those commitments today?

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My right hon. Friend the Financial Secretary made a very clear pledge to the House from this Dispatch Box, and the Government will pursue that.

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Part 1 of the letter on economic governance states:

“There are today effectively two sorts of members of the European Union”—

those in the euro and those outside. Does my right hon. Friend agree that many of the countries currently outside the euro other than ourselves are likely to remain in that position for many, many years to come, and that therefore it is in the wider interests of the whole EU that the European Union accepts that reality and enters into our negotiations on this point with an understanding of that fact?

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My hon. Friend makes a very important point. For as far ahead as I can see, some EU member states will be part of the single currency and a significant number, not only the United Kingdom, will be outside it. I believe that those in the eurozone will need to integrate their fiscal, economic and, to some extent, political arrangements more closely. The stability of the currency union is in the interests of the United Kingdom, even though we are not going to join it, so getting that relationship right between euro-ins and euro-outs is an important strategic challenge, and it is a central feature of our negotiation for that reason.

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The Minister’s statement understandably consisted largely of significant chunks quoted from the Prime Minister’s letter to President Tusk. One section that the Minister did not repeat, though, was the Prime Minister’s closing remarks, in which he said:

“I am ready to campaign with all my heart and soul to keep Britain inside a reformed European Union”.

Why did the Minister not include that? Is it because, instead of campaigning with his heart and soul with his own party leader, he intends to campaign with the leader of UKIP?

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Despite the challenges ahead, I remain confident of a successful outcome to these negotiations and of joining enthusiastically with my right hon. Friend the Prime Minister in favour of continued British membership of a reformed European Union on the basis that my right hon. Friend set out in his speech this morning.

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I thank my right hon. Friend for his statement to the House today. I am pleased to see that “rule nothing out” still features large in everything that is said and heard. What vexes me, and I am sure many right hon. and hon. Members, is the best way to achieve that deal and the aims that he has advanced today, which are both welcome and laudable—free trade, immigration and benefits control, sovereignty of Parliament, independent economic governance and the removal of ever closer union. Does he agree that the best way to achieve these aims is very simple—that is, to vote to leave?

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Order. I let the hon. Gentleman blurt it out because I did not wish to stop him in mid-flow, but the question, which was more a list, suffered from the disadvantage of being too long, and it would be good to avoid that in future. I say that to be helpful to the hon. Gentleman and to the House.

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No, I agree rather with the Prime Minister when he said that we would get the best of both worlds by continued membership of a reformed European Union which provided us with amplified power for our own economic and security objectives for international work, but which was also a Europe more committed in the future than now to democratic accountability, to acceptance of its own diversity and to economic competitiveness.

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Yesterday the Irish Prime Minister, the Taoiseach, was in Downing Street, where he spoke of his concerns about the impact that a UK exit would have on British-Irish relations. Does the Minister accept that those concerns are shared by many people in Britain? What do the Government propose to do to address them?

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We have a very close relationship with Ireland and it is true that the reconciliation in Northern Ireland has in part been brought about in the context of the fact that the United Kingdom and Ireland have worked very closely together as partners within the European Union. We will certainly be listening to all our friends across Europe, as well as to the views of leaders in Northern Ireland, but at the end of the day this is a matter for the people of the United Kingdom to decide, just as the Irish people have voted many times on whether or not to accept new European Union treaties.

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I thank my right hon. Friend for making the statement, and I commend him on the way he goes about making statements and engages with the House. I very much welcome the evolution of the themes and policies in the statement. My constituents will probably make up their mind based on two things—whether we can control our own borders, and the ability to trade widely with the world. With the Transatlantic Trade and Investment Partnership bogged down in a politically correct quagmire in the European Union, what is my right hon. Friend’s assessment of the ability of the European Union to conclude future free trade deals?

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It is indeed complex and challenging sometimes to get an agreed negotiating position across 28 different countries and give the mandate to the Commission to negotiate collectively on our behalf, but the weight—the leverage—that derives from negotiating as a marketplace of 500 million people is very significant indeed. It makes other Governments, even of large countries, more willing to endure the political hassle that they themselves face with their own business interests in order to bring about free trade agreements which, I believe, are a win-win for both sides.

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Given that the Government have repeatedly rejected the principle of a double majority in the referendum, will the Minister accept the result if England votes narrowly to leave, but is outvoted by the rest of the UK voting to stay in? More importantly, will his Back Benchers, who have barely asked a single supportive question, accept that result?

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It is the United Kingdom that is the member state of the European Union. I remind the hon. Gentleman that his party in May this year was against giving the people of Scotland or anywhere else in the United Kingdom the chance to vote on their future in Europe.

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I respect my right hon. Friend very much indeed, but does he seriously believe that Timmermans’ grudging enjoinder, “Europe where necessary, national where possible”, iterated in the Tusk letter and reiterated in his speech today, is a sufficiently ambitious lodestar for the UK’s negotiations?

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It is one important and significant element in the negotiation, but it is not the whole story.

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I welcome my right hon. Friend’s statement, which is an important step on the journey towards fundamental reform in the EU. Given the current unsustainable migration flows, does he agree that it is vital to ensure that visitors from the EU must first reside here and also contribute before they qualify for in-work benefits and social housing, and will he make this an urgent priority?

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Indeed; that is exactly the objective that my right hon. Friend the Prime Minister set out in his speech today.

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Does my right hon. Friend agree that it is in both our and the EU’s interests to trade more freely with the high-growth-potential Commonwealth economies, and that if the EU continues to move glacially on this issue, we should build more free trade agreements with the Commonwealth on our own?

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The Commonwealth countries, important though they are, account for only 17% of global GDP, taken all together. I agree with my hon. Friend’s emphasis on the need to forge free trade agreements with emerging economies as well as with developed economies, but I caution against thinking that it would be quicker and easier to strike such a deal if the United Kingdom, with 65 million people, were negotiating rather than the European Union, with a 500 million-strong market.

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At this time of renegotiation, those who have their minds set on what they are going to do are almost irrelevant. However, will my right hon. Friend send a message to Europhiles like the political scientist Professor Hix, who gave evidence to the European Scrutiny Committee and felt that no matter what the renegotiations achieved, the dangers lie in those who believe that this country would vote to stay in if nothing is achieved? The default position at the moment, as I read the Prime Minister’s statement, is that if nothing changes we will opt to leave.

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The Prime Minister is very clear that he believes that serious reforms are essential if the British people are to believe that their future lies in membership of the European Union.

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If we vote to leave the European Union, how long will a legally binding exit take—days, weeks, months or years?

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My hon. Friend is understandably inviting me to speculate about a post-referendum outcome when the Government are focused on what happens during a referendum. I suggest that he might like to study article 50 of the treaty on European Union, particularly subsections (2) and (3), which will give him a lot more detail on the matter.

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I am sure that it is in the Library if the hon. Gentleman is not fully conversant with it already. I expect that the Minister of State could reproduce it backwards in Sanskrit, and probably did so when he won “University Challenge”.

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I thank the Minister for his statement and the fortitude he is showing in answering so many questions. Does he agree that the crisis in the eurozone means that the eurozone countries need to move together and agree a single fiscal policy for their single currency, but the key for our negotiations has to be that for the non-euro countries, Europe needs to do less and do it better?

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My hon. Friend puts the point well and succinctly, and I agree with his comments.

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As hon. Members have said, the EU is very slow at concluding important free trade deals around the world, and that can harm our international competitiveness. Are the Government still committed to negotiating a means to fast-track important free trade deals in Europe?

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We believe that Europe needs to take forward with much greater energy and determination the work in securing free trade deals with other countries and regions of the world. The trade strategy recently published by the Commission demonstrates a new and raised level of ambition that we very much welcome, but we want this agenda to be turbocharged.

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Does the Minister agree that when we, as a sovereign Parliament, find ourselves in the position where we cannot even reduce the level of VAT on women’s sanitary products, the European Union has far too much power? Will he join me in criticising those who naively say that they would stay in Europe at any price, thereby undermining our renegotiations because without a walk-away position there can be no meaningful renegotiation?

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The Government are clear that we need some very clear agreed reforms in order to make the recommendation to the British people that the Prime Minister said that he wishes to make, but also the British people will need to see serious reforms if they are to be persuaded to vote in favour of continued British membership. Beyond that, Europe as a whole would benefit from the sort of reforms that we are advocating because there are too many jobless young people in Europe who need greater European competitiveness, and in very many European countries we are seeing a sense of dissatisfaction and alienation from the way in which decisions are currently taken in Brussels.

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My right hon. Friend rightly said at the beginning of his statement that we have a mandate to renegotiate thanks to our securing an outright Conservative victory at the general election. Does he agree that the reforms need to be permanent and irreversible as well as sufficient, because otherwise residents in my constituency and elsewhere will simply vote to leave?

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I agree with my hon. Friend.

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Does my right hon. Friend agree that the referendum at the end of these negotiations must be final and that there can be no question of second chances or further renegotiation if people choose to leave the European Union?

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Yes. The decision that the British people make will be binding. As the Prime Minister said, this is probably the most important vote for the future of this country that any of us who are of voting age will take part in during our lifetimes. The idea that one can then somehow go away and think again is at odds with reality and at odds, too, with the procedure spelled out in the treaties.

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rose—

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Time for dessert. I call Mr Peter Bone.

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Thank you, Mr Speaker.

May I thank the excellent Europe Minister for making this statement, and for his long tenure in office and the way in which he has managed to change position so many times? On occasion, I almost believe him. I thank the Prime Minister for his honesty today in coming forward with a renegotiation package that makes it clear that if the package is successful, we will still be in a political union and still have free movement. That allows Eurosceptics to say, “No longer do we have to pretend there’s going to be a substantial renegotiation—we can get on with campaigning to come out.” Will the Minister pass on my thanks to the Prime Minister?

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I am always happy to pass on compliments from my hon. Friend. I have to confess that I would have been somewhat surprised had almost anything I said been enough to satisfy him, but I am sure we will continue to have these debates in future.