Skip to main content

Europe: Renegotiation

Volume 765: debated on Tuesday 10 November 2015


My Lords, I beg leave to repeat a Statement made earlier today in the House of Commons.

“With permission, Mr Speaker, I will now make a Statement on the Government’s EU renegotiation. As the House knows, this Government were elected with a mandate to renegotiate the United Kingdom’s relationship with the European Union, ahead of an in/out referendum by the end of 2017. Since July, technical talks have taken place in Brussels to inform our analysis of the legal options for reform. The Prime Minister has today written to the President of the European Council to set out the changes we want to see. A Written Ministerial Statement with a copy of this letter was laid before the House earlier today. I would 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 European Union. Three years on, the central argument then remains more persuasive than ever. The European Union needs to change, and others have increasingly recognised this. Only two weeks ago, Chancellor Merkel said that British concerns were German concerns as well. The purpose of the Prime Minister’s letter is not to describe the precise means, including the detailed legal amendments, for bringing our reforms into effect. That is a matter for the negotiation itself. What matters to us is finding solutions. This agreement must be legally binding and irreversible—and, where necessary, have force in the treaties.

I will outline the four main areas where we seek reform. The first is economic governance. Measures which eurozone countries need to take to secure the long-term future of their currency will affect all members of the EU. These are real concerns, demonstrated by the proposal we saw off this summer to bail out Greece using contributions which also came from non-euro members. As the Prime Minister and Chancellor have set out, a number of principles should underpin any long-term solution on this, as well as a safeguard mechanism to ensure that these principles are respected and enforced.

These principles should include recognition that: the European Union has more than one currency; there should be no discrimination and no disadvantage for any business on the basis of currency; taxpayers in non-euro countries should never be financially liable for supporting eurozone members; any changes the eurozone needs to make, such as creation of a banking union, must never be compulsory for non-euro countries; 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 financial stability and supervision have become a key area of competence for eurozone institutions such as the ECB; and any issues that affect all member states must be discussed and decided by all member states.

I turn to Europe’s competitiveness. We welcome the European Commission’s focus on this. Legislative proposals have been cut by 80% and more proposals taken off the table this year than ever before. Progress has been made towards a single digital market, a capital markets union and in last month’s new trade strategy. But we must go further. The burden from existing regulation remains too high. Just as we 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 one clear commitment, bringing together all the various proposals, promises and agreements on competitiveness.

I turn now to sovereignty. As the Prime Minister said at Bloomberg, and we have stressed many times since, in the United Kingdom and in many other member states, too many people feel that the European Union is something that is done to them. In his letter, the Prime Minister 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 European Union’s commitments 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, national where possible’.

I turn now to an issue of great concern for the British people: 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. I am proud that people from every country can find their community in the United Kingdom. But the issue is one of scale and speed. The pressure which the current level of inward migration puts on our public services is simply too great, and has a profound effect on those member states whose most highly qualified citizens have departed.

The Prime Minister’s letter sets out again our proposals to address this. We need to ensure that when new countries are admitted to the European Union, free movement will not apply until their economies have converged much more closely with those of existing member states. We need to crack down on all abuse of free movement. This includes tougher and longer re-entry bans and stronger powers to deport criminals, stop them coming back and prevent them entering in the first place. It 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 United Kingdom to take low-skilled jobs, expecting their salary to be subsidised by the state from day one.

We propose that people coming to Britain should live here and contribute for four years before qualifying 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 need to secure arrangements that deliver on these commitments.

Let me say something about the next steps. There will now be a process of formal negotiation with the European institutions and all 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 the priority is to ensure that the substance is right. It is progress in this renegotiation that will determine the timing of the referendum itself.

The Government fully recognise the close interest from this House. We cannot provide a running commentary, but we will continue to engage fully with the wide range of parliamentary inquiries—currently 12 across both Houses—into the renegotiation. Documents will be submitted for scrutiny in line with normal practices. The Foreign Secretary, I and other Ministers will continue to appear regularly before Select Committees, and the referendum Bill will return to this House before long.

The Prime Minister has said that, should his concerns fall on deaf ears, he rules nothing out, but that he also believes that meaningful reform in these areas would benefit our economic and 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 EU. I commend this Statement to the House”.

My Lords, I thank the Minister for repeating the Statement on the Government’s EU renegotiation. It is disappointing that the Prime Minister did not come to Parliament to report on the negotiations and that he made his speech in front of an external organisation.

The Prime Minister was right to say this morning that the decision on whether the United Kingdom remains a member of the European Union is the biggest decision this country will take for a generation. That is one of the reasons why we will be pushing for 16 and 17 year-olds to be given a vote in the referendum when the EU referendum Bill comes before this House next week.

We want to see Britain playing a full role in shaping a better Europe that offers jobs and hope to its young people, a Europe that stands together to face urgent security problems and a Europe that uses its collective strength in trade with the rest of the world. At last, we have heard, following repeated requests—not just from people in the United Kingdom, but from leaders throughout the European Union—what the Government are looking for in their renegotiation. I am sure that, for some on the government Benches, there will never be enough to satisfy them in their desire to leave the largest single market in the world. They will want to leave the EU irrespective of the costs to the people of this nation. They are willing the Prime Minister to fail and their only role will be to push the demands that they know cannot be met.

The agenda published today raises important issues, including some that were raised in Labour’s election manifesto earlier this year. It is interesting to note that there is very little in the Prime Minister’s request list about jobs and growth. It seems to us that one of the issues that Europe has been struggling with has been low growth and high unemployment. There does not seem to be anything in his letter to President Tusk—apart from his aim to reduce the regulatory burden, which is already under way—that addresses this issue. Will the Minister explain why this is the case?

Many workers throughout the land will be relieved to see that there is no attempt to water down the hard-won employment rights that have been agreed at the European level over the years. It will be useful to know whether the Minister thinks that there will be a need for a special EU summit meeting to agree the outcome of the renegotiation or whether it will be tagged on to a prescheduled Council meeting. If so, can the Minister confirm whether the earliest possible date for an agreement is the March Council meeting, which would make it almost impossible to hold the referendum in June next year? Does the Minister agree that while Europe is trying to cope with the largest refugee crisis that it has seen since the Second World War, the British negotiation will not be top of the in-tray of most leaders in EU member states?

I always find the Prime Minister’s talk of the need for sovereignty to be quite interesting. He is willing to flog our railways off to European nationalised companies, sell our water companies off to unaccountable hedge funds and allow the Chinese to run our nuclear power stations. Does the Minister find the double standards on the issue of sovereignty as startling as I do? Can the Minister also outline whether he thinks it would be fair and necessary for those who advocate withdrawal from the EU to set out clearly what the alternative relationship with our EU partners will look like? Can he address, specifically, the likely impact on jobs, trade, investment, employment rights, agriculture and the environment, to name just a few? Finally, can the Minister give an assurance that the Foreign Office will receive substantial protection in the forthcoming budget round and will have the staff resources necessary to navigate this difficult renegotiation?

We believe that the EU does need reform and must offer its people more hope for the future, but we believe that that is best achieved by Britain playing a leading role in the future of the EU. Our history is not the same as that of many other member states, and perhaps we never look at these issues through precisely the same eyes. However, noble Lords should be clear that Labour will be campaigning to remain in the EU and will argue for a Britain engaged with the world and using its power and influence to the maximum—not walking away from a partnership we have built over a period of 40 years.

My Lords, like the noble Baroness, Lady Morgan, I welcome the Statement. I also had the good fortune—I think—to have been at the speech this morning. Having also read the letter, I feel as if I have read and seen the same thing three times, so at least there is consistency in the letter that, finally, we have seen. Members of your Lordships’ House called at Second Reading of the European Union Referendum Bill to see the letter at the same time that it was sent to President Tusk, so that is clearly very welcome.

There is probably nothing terribly surprising in the letter. When I was in Brussels at the end of September, people were saying, “Where is the letter? What does the Prime Minister want?”. Fellow leaders and members of the permanent representations in Brussels were told, “Look at the Bloomberg speech; look at the Conservative Party manifesto”. The Prime Minister was certainly very keen this morning to keep sending us back to his Bloomberg speech, as many of the issues that he raised in January 2013 have reappeared in the letter. Many of them appear to be very sensible: non-discrimination against non-eurozone countries is something that everyone in this country can welcome. The idea that the Prime Minister and the United Kingdom generally accept that there should not be a unilateral request for changes for the UK but that whatever we negotiate should benefit the European Union as a whole is clearly welcome. Several of the areas covered seem to be straightforward, and Liberal Democrats would not object to the requests or the issues for negotiation in terms of economic governance or competitiveness. Indeed, competitiveness and the digital single market are areas where we are already seeing progress on reform, even before we get to more formal renegotiation.

On the sovereignty side of things, although some of us might still quite like to be committed to ever-closer union, we recognise that the issue is totemic for some. However, for some of the Eurosceptics in another place, that already seems to be a bit of a problem in that they seem to think it does not really matter. One omission seems to be proportionality. There is a reference to subsidiarity, but can the Minister say whether the Government will also look at the issue of proportionality, which links with wider questions about the role of national parliaments?

Finally, there are questions on immigration and fairness of the system. Nobody favours abuse of the system, but can the noble Earl tell us what sort of abuses the Government seek to rectify? Can he clarify how the Government propose to address ECJ judgments that have widened the scope of free movement? I understand that he cannot get into the technicalities of negotiation, but from listening to the Prime Minister this morning and hearing the Statement, it is not wholly clear what is meant there.

I, along with other Liberal Democrats, very much look forward to campaigning with the Prime Minister to keep Britain in the European Union—which, if this renegotiation is satisfactory, I believe that he will be doing, and I hope that the noble Earl will be joining us.

My Lords, I thank both noble Baronesses for their response to the Statement. I was pleased to hear a lot of agreement over the broad thrust of much of what my right honourable friend the Prime Minister said. The noble Baroness, Lady Morgan, said how important this was and that it was a really big decision, and she is quite right. The noble Baroness, Lady Smith, agreed with her. We want Britain to play a full role in it.

The noble Baroness, Lady Morgan, mentioned jobs. We have continued to improve employment in this country, with wages rising as well. We want to ensure that that continues, and part of that will be productivity, which is one area where we may need further work to be done. That is all part of our planned EU reforms to ensure that our growth improves and that unemployment remains very low. As noble Lords will be aware, we have the greatest growth in the G7 and the best unemployment figures in the EU.

The noble Baroness also mentioned the FCO budget and the CSR. There are another couple of weeks before that will be announced, but I understand that there is also a Question on the subject the week after next. The noble Baroness, Lady Smith, mentioned proportionality and the ECJ. For any greater detail on that, I will have to write to her.

The Prime Minister is focused on this renegotiation and reforming the UK’s relationship with the European Union. He is confident that, with good will and understanding, he can and will succeed in negotiating to reform the European Union and Britain’s relationship with it. As he has said, if he succeeds, he will campaign to keep the UK in a reformed European Union—as will I—but, if he does not achieve these changes, he rules nothing out.

My Lords, the Statement we have heard runs the full gamut from the inadequate through the vague to the completely meaningless. I ask my noble friend two quick questions of elucidation. Under economic governance, the Statement concludes that any issues that affect all member states must be discussed and decided by all member states. Does it mean that legislation in this area must be agreed by all member states? If not, what on earth does it mean?

Secondly, under sovereignty, the Prime Minister’s letter to President Tusk states that he would seek a formal, legally binding and irreversible way to exempt the United Kingdom from the commitment to ever-closer union. But since the rest of the European Union is committed to ever-closer union, and since the European Union will continue to legislate to this end, what on earth does that achieve?

My Lords, my noble friend raised two questions, and in the second he talked about ever-closer union. As he is aware, we want to halt this constant flow of powers to Brussels and part of that includes ensuring a stronger role for national parliaments. The concept of ever-closer union may be what some others want but it is not for us. We also need to ensure that subsidiarity is properly implemented.

The noble Lord also mentioned the legally binding nature of any renegotiations. We have on the table at present a substantial package of changes, including treaty change, which needs to be agreed before there is a British referendum. This is exactly what has happened in other countries and on other occasions. Agreement on the package must happen before the referendum, but we would never have got all 27 other parliaments to pass treaty change before the referendum. That is not in any way strange; it is how it is usually done, as in the case of the Croatian accession treaty and the ESM treaty. What matters is getting the substantial agreement. It will be difficult to get but it is not impossible. Indeed, it is eminently resolvable.

Will the Minister cast his mind back to the Statement made by the Minister of State at the Foreign Office following the last European Council meeting? She outlined four main principles. What additional information are we given in this letter, compared with that given by the noble Baroness, Lady Anelay, in the Statement following the last European Council meeting? We were told that there would be substantial detail, yet as we get the Statement the covering letter says very clearly that,

“this letter is not to describe the precise means, or detailed legal proposals, for bringing the reforms we seek into effect”.

What is it supposed to do if it is not supposed to do that? We were promised by the Minister of State that we would get much more significant detail by the time we got the letter addressed to the President of the European Council. Can he tell us where—in either the Statement or the letter—that additional detail is?

My Lords, the noble Lord asks for more detail. As he obviously recognises, while renegotiation is still taking place we cannot give a running commentary on this issue. There are four objectives, which my noble friend mentioned briefly in the initial Statement, and more information has been given in the speech and letter by my right honourable friend the Prime Minister. One is to protect the single market for Britain and others outside the eurozone in the form of a set of binding principles that guarantee fairness between the euro countries and non-euro countries. The second is to write competitiveness into the DNA of the whole European Union, including cutting the total burden on business. The third is to exempt Britain from ever-closer union and bolster national parliaments through legally binding and irreversible changes. Then the fourth is to tackle abuses of the right to free movement and to enable us to control migration from the EU. As soon as more information is available, and at a suitable moment, the House will no doubt be informed.

My Lords I welcome the Statement and the letter to Mr Donald Tusk. I trust the contents will benefit all member states and the Union as a whole. My wish is that it should help this country to vote yes. As regards the applicant members in south-east Europe, I suggest that the brake on free movement will accelerate their entry into the EU, which is so desirable. As regards refugees and migrants now posing a great challenge to the EU, can the noble Earl confirm that negotiations on our future relationship will not prejudice effective and humane action to handle the challenge more effectively than up to now?

My Lords, the noble Lord, Lord Hylton, mentioned primarily migration and the problem hitting the whole of Europe at the moment. I see no reason why we would stop our continuing work, and particularly our DfID budget, helping those migrants—preferably upstream, where we can stop them moving towards Europe in the first place.

My Lords, as my noble friend Lady Smith said, none of us wants any abuse of free movement and benefits. Will the noble Earl confirm that the statistic much cited today, that 40% of EU migrants claim benefits, largely means tax credits and possibly child tax credits? We are not talking about scroungers on the dole but working EU migrants. That is what this is meant to be about. Could the noble Earl kindly explain a little more on this? The Prime Minister still talks about a four-year wait but there are hints that other solutions could be possible. For instance, does the Prime Minister mean codifying the very helpful recent judgments by the Court of Justice of the European Union? Could the noble Earl signpost us to an alternative to a frankly unachievable objective?

My Lords, the noble Baroness, Lady Ludford, mentioned the detail of my right honourable friend’s speech earlier today. He said:

“We now know that, at any one time, around 40% of all recent European Economic Area migrants are supported by the UK benefits system … with each family claiming on average around £6,000 a year of in-work benefits alone”.

On the noble Baroness’s other point, relating to the four-year restriction, I will read out the whole paragraph I have here, if the House allows. It says:

“Our objective is to better control migration from within the EU. There are obviously different ways in which we could achieve that. We … can do that by reducing the incentives offered by our welfare system”.

That is why we set out the proposal that you must contribute before you can claim. We understand that others across the European Union also have concerns about this. That is why we say to them: “Put forward alternative proposals that deliver the same results”. We are open to different ways of dealing with this issue, as long as we do just that and agree new measures that will reduce the numbers coming here.

My Lords, does my noble friend agree that one of the disappointments of the last 10 or 15 years has been the way the principle of subsidiarity, which was supposed to ensure that nothing was done centrally that could be properly done by member states, has been undermined by a bureaucratic process known as the yellow card system? It is most encouraging to hear that the Prime Minister intends to try to revive this principle and bring it back to what it was supposed to do. I suggest that that could be done without bringing about a treaty change. It is perfectly possible for the Commission itself to extend autonomously the period of eight weeks, which is all that national parliaments are given at the moment to consider new proposals. It is also perfectly possible for it not just to extend the time but to say that it will regard the yellow card as a red card. If those two things could be achieved, it would really enhance the role of national parliaments in the legislative process.

Picking up the point made by the noble Baroness on proportionality, I think it is now the case that qualified majority voting is population-related. Therefore, to a large extent, proportionality has already been introduced into the system.

My noble friend, with his great knowledge of this subject, explained something to me there, for which I am most grateful. If I need to write to him, I will.

My Lords, will the noble Earl assure the House that, if all four objectives are fully achieved in the negotiations, Ministers across all government departments will support a vote to stay in the European Union?

My Lords, the noble Lord, with his great parliamentary skills, asked whether, if my right honourable friend the Prime Minister is successful in all his negotiations, all Ministers will support that. I am sure they will.

I welcome the Statement and particularly the conciliatory tone of the Prime Minister’s letter. I, too, will probe the noble Earl a little about exactly what is meant by “closer union” in the phrase,

“we want to end the United Kingdom’s obligation to work towards an ‘ever closer union’”.

In his letter, the Prime Minister sets out various ways in which closer union is clearly desirable, for example steps towards a single digital market and a capital markets union. Everyone, particularly the Government, agrees that we want much more unity in our policy on immigration and refugees. I hope the Government also agree that we want a much greater coming to one mind on defence and foreign policy. If we want to work closer and closer together on all these aspects of major policy, what exactly is being rejected in this phrase?

My Lords, the noble and right reverend Lord is quite right. There are many issues that have been an advantage, but we still want to halt the constant flow of powers to Brussels, including by ensuring a stronger role for national Parliaments, dealing with the concept which the noble and right reverend Lord mentioned. It is interesting that, in late October, Frans Timmermans, the First Vice-President of the European Commission, said, on BBC Radio 4:

“If I understand correctly, what the British Government want is to say: ‘We don’t want this, others might want this and it’s up to them, but we don’t want to be forced into an ever-closer union in the sense of more and more integration’. I would say to that: ‘Fair enough, there’s nobody who will tell you that you are forced into integration with other European countries’”.

I speak as a former commissioner in Europe. This debate is outrageous. We ought to be discussing not how we are going to withdraw from Europe but how we can play a part in ensuring that our voice is heard. At the moment, it is not, because the Prime Minister is being ambiguous—we do not know where he stands. He will not say whether he is for or against. What is vital is how we make our views heard, not how we can withdraw. We should not have this attenuated debate, but a real one about the all-important issues. At the moment, that is being denied to Parliament, and that is wrong.

I am sorry that the noble Lord feels that this is an outrageous debate. As I said earlier, the Prime Minister is focusing on renegotiation. I understand how the noble Lord, with all his experience, probably wants to get more involved in the actual negotiation. However, the fact is that the negotiation in Europe is going on. We shall see if anything can be reported at the next Council meeting.

My Lords, does my noble friend agree that the distinct tone of widening the focus of this issue on to the reform of the European Union as a whole, to bring it up to date, as outlined originally three years ago in the Bloomberg speech, and developed considerably since then, is very welcome indeed? The media trick is going to be to polarise and build this up as a Punch and Judy show, with deals achieved or not. That is natural, and I suspect there will be one or two political manoeuvres of the same kind. The more we can show that we are concerned with bringing the EU model into the 21st century, the better. That is bound to require treaty change in due course, for the simple reason that the treaties, right up to Lisbon, are obsolete and out of date. They were designed in the pre-digital era and do not fit what is actually happening in Europe. The more we can do that, the better the transition—there is going to be a great transition—will be for ourselves and the whole of Europe.

I could not agree more with my noble friend. With regard to dragging the EU model into the 21st century, he is quite right. Many of these treaties are obsolete and, as he said, they were pre-digital. Life has gone on.

Can the Minister clear up this small confusion? The Prime Minster today said that if Europe did not listen to his demands he would rule nothing out. He also said, however, that,

“our membership of the EU does matter for our national security and for the security of our allies”.

Does that mean that if the Prime Minister is unsuccessful in getting Europe to listen to his demands and to respond constructively, he is prepared to recommend leaving, although leaving is against our national security?

Of course, my Lords, the security of this country is paramount, as we show in many different ways. I will have to look at that particular part, and I will write to the noble Lord if I can add anything.

My Lords, I ask the Minister how seriously the Prime Minister takes his belief, according to the Statement, that if powers do not need to reside in Brussels, they should be returned to Westminster? Does the Minister think the Prime Minister understands that this requires the breaking of the acquis communautaire, the one-way ratchet to complete union? Surely that will require unanimity. It will require treaty change. I suppose the real question is that if the others do not agree this revolutionary concept in the project of European integration, does that mean that the Prime Minister will campaign to leave?

My Lords, the noble Lord mentioned treaty change, and of course it will eventually have to be made in various areas. As for the first part of the noble Lord’s question, I will write to him.

My Lords, in these negotiations, will the Government be sure to look after the interests of the 2 million British citizens living elsewhere in the European Union? As the noble Lord, Lord Lawson, reminds us so frequently, people like him who are residents of other EU countries would be adversely affected if we were to leave, and we would naturally wish the interests of the noble Lord and others to be fully protected in these negotiations.

My Lords, this has also been debated during the course of the European Union Referendum Bill. The noble Lord is quite right, of course—the interests of 2 million citizens have to be protected.

My Lords, all three Front Benches have told us that this is a momentous decision of huge, crucial, national importance. I can only say as kindly as I can muster the words that neither the debate nor the performance of the Government so far has in any way matched up to this rhetoric. The Prime Minister did not want a referendum, but he was forced into having one. He did not know what he wanted to negotiate. We did not know what he wanted to negotiate. Our European partners did not know what he wanted to negotiate. The only thing we know for certain, and I am sure the Minister can confirm this, is that whatever he does negotiate will result in his returning to Downing Street saying that it has been a triumph, and he will then recommend a yes vote.

The noble Lord, of course, is very welcome to his opinion on this. I do not agree with him. My right honourable friend the Prime Minister is focused on renegotiating and reforming the UK’s relationship with the EU. As he has said, if he succeeds he will campaign to keep the UK in a reformed European Union, but if he does not achieve these changes he rules nothing out.