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European Union: United Kingdom Renegotiation

Volume 768: debated on Thursday 4 February 2016


My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place yesterday. The Statement is as follows.

“With permission, Mr Speaker, I would like to make a Statement on progress with our renegotiation. The House has now had the chance to study the documents published by the European Council yesterday. I believe that this is an important milestone in the process of reform, renegotiation and referendum that we set out in our manifesto, and which the Government are delivering. We have now legislated for that referendum and we are holding that renegotiation.

Let me set out the problems that we are trying to fix and the progress that we have made. First, we do not want to have our country bound up in an ever closer political union in Europe. We are a proud and independent nation, with proud, independent, democratic institutions that have served us well over the centuries. For us, Europe is about working together to advance our shared prosperity and shared security; it is not about being sucked into some kind of European superstate—not now, not ever.

The draft texts set out in full the special status accorded to the UK and clearly carve us out of further political integration. They actually go further to make it clear that EU countries do not even have to aim for a common destination. This is a formal recognition of the flexible Europe that Britain has long been arguing for. In keeping Britain out of ever closer union, I also wanted to strengthen the role of this House and all national parliaments, so we now have a proposal in the texts that if Brussels comes up with legislation that we do not want, we can get together with other parliaments and block it with a red card.

We have also proposed a new mechanism to finally enforce the principle of subsidiarity—a principle dear to this House—which states that, as far as possible, powers should sit here in this Parliament, not in Brussels. Every year the European Union has to go through the powers it exercises and work out which are no longer needed and should be returned to nation states.

Secondly, I said that we wanted to make Europe more competitive and deal with the rule-making and the bureaucracy that can cost jobs here in Britain and, indeed, across the European Union. We asked for commitments on all the areas central to European competitiveness. We want international trade deals signed, the single market completed and regulation stripped back. All these things are covered in the draft texts. There is a new proposal for specific targets to reduce the burdens on business in key sectors. This will particularly help small and medium-sized businesses, and there is a new mechanism to drive these targets through and cut the level of red tape year on year.

Thirdly, we are absolutely clear that Britain is going to keep the pound—in my view, for ever—but we need to be just as clear that we can keep the pound in a European Union that will be fair to our currency. Put simply: the EU must not become a euro-only club. If it does, it would not be a club for us, so we called for a series of principles to protect the single market for Britain. We said that there must be no discrimination against the pound, no disadvantage for businesses that use our currency, wherever they are located in the EU, and no option for Britain ever again to be forced to bail out eurozone countries. All these principles are reflected in the draft text, which is legally binding, and, again, there is a mechanism. Britain has the ability to act to uphold all these principles and protect our interests. We should be clear: British jobs depend on being able to trade on a level playing field within the European single market, whether in financial services or cars or anything else, so this plan, if agreed, will provide the strongest possible protection for Britain from discrimination and unfair rules and practices. For instance, never again could the EU try its so-called “location policy”—that the settling of complex trades in euros must take place only in eurozone countries. These principles would outlaw that sort of proposal. These are protections we could not have if Britain were outside the European Union.

Fourthly, we want to deal with the pressures of immigration, which have become too great. Of course, we need to do more to control migration from outside the European Union. We are doing that and we will be announcing more measures on that front, but we need to control migration from within the EU, too. The draft texts represent the strongest package we have ever had on tackling the abuse of free movement and closing down the back-door routes to Britain. It includes greater freedoms for Britain to act against fraud and prevent those who pose a genuine and serious threat from coming into this country. It includes a new law to overturn a decision by the European Court which has allowed thousands of illegal migrants to marry other EU nationals and acquire the right to stay in our country. It has been a source of perpetual frustration that we cannot impose our own immigration rules on third-country nationals coming from the European Union, but now, after the hard work of the Home Secretary, we have a proposal to put that right.

There are also new proposals to reduce the pull factor that our benefits system exerts across Europe by allowing instant access to welfare from the day someone arrives. People said that Europe would not even recognise that we had this problem, but the text explicitly recognises that welfare systems can act as an unnatural draw to come to this country. Our manifesto set out four objectives to solve this problem. We had already delivered on two of them within months of the general election. Already EU migrants will no longer be able to claim universal credit—the new unemployment benefit— while looking for work, and if those coming from the EU have not found work within six months, they can now be required to leave. Now, in these texts, we have secured proposals for the other two areas. If someone comes from another country in Europe, leaving their family at home, they will have their child benefit paid at the local rate, not at the generous British rate, and, crucially, we have made progress on reducing the draw of our generous in-work benefits. People said that it would be impossible to end the idea of something for nothing, and that a four-year restriction on benefits was completely out of the question. But that is now what is in the text—an emergency brake that will mean people coming to Britain from within the EU will have to wait four years until they have full access to our benefits. The European Commission has said very clearly that Britain already qualifies to use this mechanism, so, with the necessary legislation, we would be able to implement it shortly after the referendum.

Finally, let me be absolutely clear about the legal status of these changes that are now on offer. People said we would never get something that was legally binding—but this plan, if agreed, will be exactly that. These changes will be binding in international law, and will be deposited at the UN. They cannot be changed without the unanimous agreement of every EU country—and that includes Britain. So, when I said I wanted change that is legally binding and irreversible, that is what I have got; and, in key areas, treaty change is envisaged in these documents.

I believe we are making real progress in all four areas—but the process is far from over. There are details that still need to be pinned down and intense negotiations will take place to try and agree the deal with 27 other countries. It will require hard work, determination and patience to see it through. But I do believe that with these draft texts, and with all the work that we have done with our European partners, Britain is getting closer to the decision point. It is, of course, right that this House should debate these issues in detail. So in addition to this Statement, and of course a Statement following the Council later this month, the Government will also make time for a full day’s debate on the Floor of the House.

As we approach this choice, let me be clear about two things. First, I am not arguing, and I never will argue, that Britain could not survive outside the European Union. We are the fifth largest economy in the world and the biggest defence player in Europe, with one of the most extensive and influential diplomatic networks on the planet. The question is not could Britain succeed outside the European Union; it is how will we be most successful? How will Britain be most prosperous? How will we create the most jobs? How will we have the most influence on the rules that shape the global economy and affect us? How will we be most secure? I have always said that the best answers to those questions can be found within a reformed European Union. But let me say again, if we cannot secure these changes, I rule nothing out.

Secondly, even if we secure these changes, you will never hear me say that this organisation is now fixed—far from it. There will be many things that remain to be reformed and Britain would continue to lead the way. We would continue to make sure that Europe works for the countries of Europe, for the businesses of Europe, for the peoples of Europe and, crucially, for the British people who want to work, have security and get on, and make the most of their lives.

So, if we stay, Britain will be in there keeping a lid on the budget, protecting our rebate, stripping away unnecessary regulation and seeing through the commitments we have secured in this renegotiation. This will ensure that Britain can truly have the best of both worlds: in the parts of Europe that work for us, and out of those that do not; in the single market; free to travel around Europe; and part of an organisation where co-operation on security and trade can make Britain and all its partners safer and more prosperous, but with guarantees that we will never be part of the euro, never be part of Schengen, never be part of a European army, never be forced to bail out the eurozone with our taxpayers’ money, and never be part of a European superstate.

That is the prize on offer—a clear path that can lead to a fresh settlement for Britain in a reformed European Union: a settlement that will offer the best future for jobs, security and the strength of our country; a settlement which, as our manifesto promised nearly a year ago, will offer families in our country security at every stage of their lives. That is what we are fighting for, and I commend this Statement to the House”.

My Lords, that concludes the Statement.

My Lords, I am grateful to the Leader of the House for repeating the Prime Minister’s Statement. I also thank the Government Chief Whip for extending the time for Back-Bench contributions. I know that the noble Lord understands the need for that and also for a more substantial debate on this matter in the near future.

Let me make it clear at the outset that we broadly welcome the Statement. I readily confess to some degree of relief that the Prime Minister is finally making at least some progress on his aim of seeking a new relationship with the European Union. I do not think I am alone in finding that the Prime Minister’s rhetoric has been, perhaps, the opposite of what one would normally expect from a good negotiator. This is not a game. This is not an issue in which internal party political divisions should have any role at all. The only objective must be the national interest: an interest that brings jobs, investment, prosperity and a continued influence in the world; greater protections for British workers and increased opportunities for our businesses; and that keeps us safer, both at home and abroad. What has been outlined so far appears to be a step in the right direction. However, as I think the Leader conceded, it is more of an agreement to agree than a detailed and finalised deal, but it is none the less welcome and we look forward to further clarification and expansion on the detail of how the proposed negotiation will work in practice.

We on these Benches welcome that important and hard-fought advances such as employment rights and improved environmental protections have not been negotiated away. They are tangible benefits for British citizens and it is right that they are protected. Whatever the future arrangements, I hope that the Prime Minister will ensure that British workers are never left behind in standards and rights at work.

I want to be clear that my party will campaign to keep the UK in the European Union, not least because we believe it is increasingly impossible for countries to be fortresses in our interconnected world. Many of the most serious challenges, including crime, terrorism and climate change, affect all countries and are best met by co-ordinated European and worldwide action.

Many noble Lords will recall the hugely informative debates we had on the coalition Government’s bizarre hokey-cokey of opting out then opting back in again on crime and criminal justice measures. It was clear then, and the Government had to concede, that meeting the challenges of serious and organised crime—drug trafficking, fraud, child abuse and paedophilia, and people trafficking—could effectively be tackled only through the EU. I remain of the view that one of the strongest cases for the European Union is the effectiveness of our co-operation on serious crime. The threats and challenges we face will not go away by voting to leave. That established co-operation means that we are better able to detect crime, bring criminals to justice and, therefore, protect our citizens.

It also illustrates one of the failures of politicians, and others, on this issue. There has been a complete inability to talk about the EU so that people outside Parliament know what we are talking about—even in the Statement today. For most people, an emergency brake is in a car. The language of EU directives, qualified majority voting and other terms that most people never normally use does not begin to explain why our membership is so important. We need to talk about the Europe-wide environmental measures that make our beaches and coastal waters cleaner and safer, about consumer protection to stop customers being ripped off, about rights at work, about jobs, about justice and about catching criminals. These are the issues that really touch people’s lives.

There is a huge challenge for all of us in this House and our colleagues in the other place, as well as our national media and opinion-formers. That challenge is illustrated by what could be described as the more colourful headlines, front pages and commentary that the Prime Minister has faced since his return. This debate is a once-in-a-generation opportunity for many millions of people, each with one equal vote, to have their say about our country’s future place in Europe and the world—although, sadly, not for the 16 and 17 year-olds whose future is dependent on the outcome of that vote. The debate should not be only one of persuasion. It should be one of education and providing straightforward, honest and accurate facts and allowing people to reach their own decisions.

Noble Lords will recall that during the passage of the European Union Referendum Bill, your Lordships’ House secured concessions from the Government on the importance of significant information provision in advance of the referendum, including agreement to report back on: the rights of individuals within the UK, including employment rights; the rights of EU citizens living in the UK; social and environmental legislation; law enforcement, security and justice; the effect of withdrawal on Gibraltar; the right to apply for financial support from EU structural funds; and support for agriculture and research—although, sadly, not our call for the Treasury to report on the financial impact of the UK voting to leave. That is such an important issue and I ask the Leader to raise this with the Prime Minister and the Chancellor in the interests of a balanced and informed debate. If I have one plea for politicians and the media, it is that this debate should provide more light than heat. As Thomas Jefferson said:

“The cornerstone of democracy rests on the foundation of an educated electorate”.

Finally, as my colleague the leader of the Opposition in the other place told MPs yesterday:

“The Labour party is committed to keeping Britain in the European Union because we believe it is the best … framework for European trade and co-operation in the 21st century, and in the best interests of people in this country”.—[Official Report, Commons, 3/2/16; col. 928.]

No doubt, many in your Lordships’ House—on all sides—are of the same view. I trust also that everyone in this House understands that, should the UK vote to leave the EU, our country, our companies, our universities and our people will still have to follow its rules when doing business with its institutions or when travelling to the remaining member states—all without any further say in making those rules.

Reform is a constant process. It is not an event. The most effective way to reform an institution is through patience, explanation, persuasion and the building of alliances—often across and outside the normal political boundaries. That is something that noble Lords understand well.

It would be helpful to your Lordships’ House if the Leader of the House could today provide some of the detail that so far is missing or set out the timetable in which that will be provided and your Lordships’ House given an opportunity to debate it. The sooner the proposed reforms are agreed and clarified, the sooner we can step up the campaign to keep Britain in Europe and end the damaging uncertainty that has been created around our continued membership.

My Lords, I, like the Leader of the Opposition, thank the Leader of the House for repeating the Prime Minister’s Statement and also for the arrangements for Back-Benchers to raise questions on this important issue. In his Statement, the Prime Minister said that a full day’s debate would take place following the Statement after the European Council later this month in government time in the other place. I hope that the noble Baroness will be able to make a similar commitment with regard to a debate in your Lordships’ House.

The draft plan before us represents meaningful reforms that can strengthen our economic co-operation with Europe, can bring jobs and growth to the United Kingdom and indeed, as the noble Baroness said in repeating the Prime Minister’s Statement, will provide strong protection for Britain from discrimination and unfair rules and practices. Indeed, the provision prohibiting discrimination on the basis of official currency or legal tender seems to be a particularly strong passage in the texts that have been released.

The Prime Minister referred to the legally binding nature of any agreement. Will the noble Baroness the Leader of the House amplify that when she responds? Would these agreements be legally binding and come into force when the United Kingdom notified the Council that there had been a decision in the United Kingdom to remain in the European Union?

While we on these Benches were somewhat sceptical of the political motives of the Prime Minister in seeking a referendum, it is nevertheless a reality. My party will use the campaign to deploy a positive case for Britain remaining within the European Union. We stand united against the idea that Britain should be isolated, sidelined or alone. We believe that, together in Europe, the United Kingdom will be a stronger and more thriving nation.

In the European Union, Britain is part of the world’s largest single market, allowing our businesses to grow and prosper. In the European Union, neighbours and allies support each other in what remains the world’s most successful project in peace. In the European Union, our citizens have more opportunities to work, to travel and to learn than ever before, ensuring that our children and grandchildren have ever greater prospects and opportunities. In the European Union, together we can protect the natural environment and tackle climate change more effectively. In the European Union, together we are stronger against terrorism and against those who despise our liberal and modern way of life, and we can together tackle more effectively the criminal gangs who peddle illegal drugs and weapons and engage in human trafficking.

These are important arguments that we need to deploy in the referendum. Does the noble Baroness the Leader of the House therefore accept that, while the reforms in this particular package are welcome, the referendum debate itself will need to go beyond the details of the renegotiation and take into account the wider benefits of European Union membership and the costs of leaving? Will the noble Baroness confirm that the Government’s message during the referendum campaign will not just be about the finer details of this package, but about the further and more important values that are at stake?

In the light of the changes made in your Lordships’ House to the European Union Referendum Bill, will the Government ensure that there is a realistic assessment of what Brexit would look like and its disadvantages for the United Kingdom? Can the noble Baroness assure your Lordships’ House that the reports on the consequences of withdrawal and alternatives to membership will provide a meaningful analysis?

My Lords, I was very pleased to repeat my right honourable friend’s Statement about this important issue of Britain’s role in, and relationship with, Europe. We were elected as a Government to lead a process of reform and renegotiation and to hold a referendum on the EU. Many said that what we had set out to do would be impossible, yet we have already legislated for that referendum and we now have a draft text on the table that puts forward significant reforms in each of the four areas that are of greatest concern to the British people. The important thing to stress is that this is about addressing their concerns and the things that they have highlighted, all too often, over a very long time about Britain’s relationship with the European Union.

Before I address some of the specific points that were raised by the noble Baroness and the noble and learned Lord, I would say that, contrary to the way in which the noble Baroness described my right honourable friend’s approach to his responsibility, he has been very careful in his approach and very diplomatic. He had a plan which he was keen to put forward, negotiate over, hopefully achieve agreement on and then implement. What he has achieved so far is something that no other British Prime Minister has yet achieved in terms of coming to this Parliament and saying that there is the chance now to bring back powers to the United Kingdom from Europe. That is incredibly important.

The noble Baroness referred to one of the things we already achieved in the coalition Government: the justice and home affairs opt-outs. That was unprecedented in terms of us renegotiating our agreement with Europe on something that was very important. Both she and the noble and learned Lord talked about the use of language and about putting forward the positive case for Britain’s membership of Europe during the referendum campaign. That is clearly an important aspect of any campaign. The Statement from the Prime Minister that I have repeated was very clear that there are real benefits to the United Kingdom being in Europe, which we would lose if we were no longer part of Europe. He was also very clear in his Statement that it would be possible for the UK to survive outside of the European Union.

The noble Baroness asked about details missing from the documents that have been published and put forward by the Commission. This is a live negotiation, and those details are still to be discussed and debated. The Prime Minister is hosting the Syria conference today, which he will take as an opportunity to talk to other Heads of Government. He is travelling to Europe at the end of this week, and there will be another European Council on 18 and 19 February. A lot of this is still very much in play and up for negotiation, so I am not able to provide more detail on anything that is missing.

However, I assure the noble Baroness and the noble and learned Lord that, after the next European Council, I will, as is customary, repeat the Prime Minister’s Statement in this House. We do not yet know whether the Prime Minister will reach an agreement at that European Council, but in his Statement yesterday he committed to a full day’s debate in the other place after an agreement is reached. I am quite confident that we will be able to secure some time, in government time, for a debate in this House to discuss whatever the Prime Minister is able to agree, although I stress that we cannot be sure that that will happen at the European Council that is taking place later on this month.

The noble and learned Lord asked me about the legal status of the documents. It is very clear, because Mr Tusk has made it clear, that these are legally binding documents; they are irreversible. If the Prime Minister reaches an agreement with the other member states that he wishes to put forward to the people of this country, for them to decide then that they want to remain in Europe, after that decision is made then they will take operational effect—they will become operative—immediately. There are some elements that will be legally binding straight away. The deal will take effect straight away.

There will be some measures that are identified in the draft deal that will require some secondary legislation, perhaps through the European Parliament, but because of the way in which the Prime Minister has approached his renegotiation with Europe, a lot of the different institutions and people involved in this process have already come out and said that they are ready to respond and to do what is necessary in this case—in that case, in the European Parliament. We are confident that we will be able to make full progress should that deal be made, should the British people decide that that is what they want, because of the way in which people have already responded.

My Lords, we are now into an extended period of Q&A of 40 minutes. I recommend to the House that we be succinct in the questions that we lay and that we go round the House in our customary fashion. This should enable everybody to make a point.

My Lords, is my noble friend aware that none of the important objectives set out in the Prime Minister’s Bloomberg speech three years ago has been achieved? He committed himself then to securing a “fundamental, far-reaching” reform of the European Union. These inconsequential scraps are certainly not that. He committed himself to the process of returning powers from the Union to the individual member states. That has not been achieved. The principle of the acquis communautaire remains in place, as does the passerelle clause of the Lisbon treaty which entrenches it.

He promised full-on treaty change. No such treaty change has been secured. On ever closer union, is my noble friend aware that the Solemn Declaration on European Union agreed in Stuttgart in 1983 explicitly commits the European Union to the ever closer union of the member states of the EU? Did the Prime Minister seek to have the Stuttgart declaration revoked, and, if not, why not?

I have huge respect for my noble friend and for his position and views on Britain’s relationship with the European Union. He has been involved in lots of negotiations in Europe over a significant period of time. From my perspective as a relative newcomer to this kind of thing and as a member of the Government, I look at what the right honourable David Cameron, our Prime Minister, has achieved. Let us not forget that it is Donald Tusk who has published this set of draft proposals, not the Prime Minister. Let us look at what he has come forward with. The Prime Minister has achieved something that nobody before him has achieved. On ever closer union, we will see for the first time institutions in Europe that we have criticised time and again for using the treaties and their preambles to try to extend the scope and power of union no longer able to do that. I think that is a massive step forward.

My Lords, as chairman of the European Union Select Committee, I shall focus on the role of national parliaments. The text proposes that the Council will discontinue consideration of draft legislation in the event that reasoned opinions are sent representing more than 55% of the votes allocated to national parliaments. That is certainly welcome, as far as it goes. How will the new procedure interact with the existing reasoned opinion procedure, which will be considered by the House in its next business today? How can it be ensured that this new tool is of practical as well as purely symbolic value? What steps will be taken to put in place an effective mechanism for national parliaments to work together?

Last week in evidence to my committee the Foreign Secretary stressed the need to establish a more effective support machinery to co-ordinate the work of national parliaments. Can the noble Baroness confirm that the Government will actively work on such developments alongside this draft agreement?

The noble Lord is right to point out that the next business of your Lordships’ House is on a reasoned opinion, using one of the mechanisms that currently exist for sovereign parliaments to make their views known. The draft text proposes that parliaments have much greater power, with a red card, than they have currently. Clearly, a lot of the detail is still to be sorted out on mechanisms that would be used and how the red card would interplay with the yellow card. I think it is safe to assume that having at parliaments’ disposal a power that they do not currently have to block legislation would be a strong incentive to them to be more active than they might have been when they had at their disposal only a yellow card. My right honourable friend the Foreign Secretary is right to suggest that there might be greater co-ordination between parliaments across Europe to ensure that they get to the minimum level to have real and dramatic effect with the use of this new power.

My Lords, does the noble Baroness accept that many of us on this side of the House welcome the progress that the Prime Minister has made towards enabling him to argue the case for remaining in Europe in the coming referendum? However, if he is to win that case, would he take advice from Members of this House that he should not spend his time, as he did yesterday in the other place, trying to rally Eurosceptics against Brexit? Rather, he should make a positive and patriotic case for Britain’s membership of the EU. This should not be a “project fear”, but a “project hope”.

I am grateful to the noble Lord for offering his support to the Prime Minister, although I do not agree with how he described the Prime Minister’s approach to this. The Prime Minister has put forward a series of changes that address real concerns of the British people—British people who see real value in being a member of the European Union, but, quite frankly, are a bit fed up with it and the way it operates. The Prime Minister set out to renegotiate some of the terms that address those matters, whether it is around welfare or powers taken away from us. If he gets an agreement that he is satisfied is a good deal for the British people, then in the course of the next few months he will want to talk to those who are uncertain, a bit unsure and a bit undecided. Being successful in trying to persuade people requires any of us who seek to influence the views of others to be respectful of those who are currently unsure which way they might want to vote. We very much hope, whatever it is that the Prime Minister is battling for, that they vote with him.

My Lords, can I ask my noble friend two precise and related questions? Yesterday the Prime Minister said in the other place that the emergency brake would be applied “shortly after the referendum”. First, does that mean that no combination of other member states can stop us applying that emergency brake in any circumstances? Secondly, he said that where benefits are paid in respect of beneficiaries not in the United Kingdom, they will be paid,

“at the local rate, not at the generous British rate”.—[Official Report, Commons, 3/2/16; col. 926.]

Will the computer at the department of pensions be up to doing that job?

I am happy to reassure my noble friend about two things on the emergency brake. First, the Commission has made it clear that in its view the emergency brake would apply immediately, assuming that the British people decide that they want to remain in Europe. It is worth reminding ourselves that not only has the Commission said that but President Juncker also said yesterday that this was a good deal in response to the failure of the previous Labour Government to protect the UK from an increase in immigration from the accession countries when they had opportunity to do so. This has been signalled as a ready-to-apply and will apply immediately if this is what the British people vote for.

Secondly, as far as benefits at local rate are concerned, the Prime Minister outlined our response and reaction to what is in the Tusk proposal. Clearly, we are confident that if that is what is in the deal and package we would be able to administer that arrangement.

My Lords, will the noble Baroness the Leader confirm that it is the United Kingdom that is the member of the European Union and that it does not matter if any principality, province or nation of the United Kingdom votes differently? It is the decision of the people of the whole of the United Kingdom that will be decisive in the referendum.

My Lords, I thank the noble Baroness the Leader of the House and the other two Front-Bench spokesmen for their statements. I agree that the Statement marks a significant shift on all four of the Government’s priorities in the renegotiation. I also welcome the noble Baroness’s statement about the legally binding nature of the package that the President of the European Council—not the Commission, by the way—has put on the table. This differentiates it very much from the Stuttgart declaration, which never was and is not legally binding nor does it have any legal force.

First, can the noble Baroness say that the use of the deposit at the United Nations of a legally binding text which was first introduced for Denmark at the time of the Maastricht treaty resulted in all the commitments in its renegotiation being honoured in the spirit and the letter? That is a very important point.

Secondly, while a good deal of mockery is sometimes unleashed on the complexity of this document, particularly in the pages of the press, it is not avoidable for a legal document of this nature not to be complex. If we look at any of the Acts passed by this House, we see that they are not light reading either. The reason is the same: they have to be legally applicable and deal with the legal complexities of the situation that they are set up to face. We should broaden the debate beyond this package when the campaign starts because there are far more important issues even than these to be discussed, but I welcome this Statement.

I am grateful to the noble Lord, both for his contribution and for picking up on my misuse of “Commission” when I should have been saying “Council”. He offers a great deal more experience of the European Union and its institutions, the European Council and indeed the United Nations. I am happy to confirm what he just said, particularly his comparison to Denmark. What is proposed in this document is very much in line with what is in place for Denmark, which has existed for over 20 years and remains absolutely legally binding.

My Lords, the Prime Minister says that we will never be part of a European superstate, but what about the acquis communautaire? It is intrinsic to the treaty and has to be addressed. What about the court, which always supports the acquis? What about the polemics of this? The draft agreement in front of us today has in it the objective of not only a single economic state but a banking centralised state, and therefore a fiscal centralised state, and therefore a federal state. The BBC hinted last night that there was a secret plan to deal with these issues, which are fundamental so would require major treaty changes. If that is true, I would be very interested to hear more about this, as I am sure the House would. Is such a plan being worked up on the side? If so, when will we hear about it?

What is recognised in the documents that have been published is that treaty change may be required in some areas but, until that treaty change occurs, the text will be legally binding; as the noble Lord, Lord Hannay, said, it will be deposited in the United Nations. This is not about avoiding treaty change but about legally binding irreversible decisions, acknowledging that, where treaty change is necessary, that will happen at the appropriate point. The decision document—the first and lengthiest of the documents published by Mr Tusk—makes clear that the European Court of Justice will be required to take account of that document when it is considering any of its judgments.

My Lords, there have been quite a number of Eurosceptics who over the past 48 hours have criticised the Prime Minister for not bringing back a provision that would enable our Parliament to opt out of any EU legislation that it wanted whenever it wanted to. We should be absolutely clear about one thing: they are entirely and bitterly opposed to our being part of the single market, whether as a member of the European Union itself or by negotiating, if that proved possible, some access to the single market from outside. The single market is a single regulatory space. If individual members of the single market could pick and choose what they wanted at any time, it would not be a single market; it would be 28 separate and very fragmented markets. If we tried to negotiate access to that market from outside, not only would we not be able to pick and choose in that way—we would have to accept all the rules and regulations—but from then on we would have no role whatever in formulating those rules and in the legislative process.

The noble Lord is certainly right to point out that if the United Kingdom was not a member of the European Union, the way in which it would access the single market would be substantially different, because other countries with a different kind of relationship with the European Union might be able to establish the advantages but do not have an opportunity to influence the rules and how they apply. However, there are people in this House, the other House and the country at large who have long-standing principled views about the European Union that I very much respect. For the first time in over 40 years, we are giving everyone the chance to have their say and decide whether they want to vote us in or out of Europe. I do not want to diminish anyone who has a different view from someone else on this. As I said to the noble Lord, Lord Liddle, during any campaign on this it will be important that we communicate fairly and effectively with those who have yet to make up their mind about the benefits and otherwise of what is proposed.

My Lords, the Government assume that our membership of the EU single market has been good for our economy and that we benefit from the foreign trade arrangements that the Commission is able to secure because of its “clout”. I therefore ask the Government whether they have read a game-changing new analysis from Civitas entitled Myth and Paradox of the Single Market by Michael Burrage. If not, will they do so? It shows that four much smaller countries—Chile, Korea, Singapore and Switzerland—have done hugely better from their free trade deals than we have with the Commission negotiating our free trade arrangements on our behalf. Of course, if we left the political construct of the European Union we would keep our free trade with the rest of the single market—which is all we need—because we are its largest client. They need our free trade much more than we need theirs so it will continue.

I do not have time to deal with the shattering uselessness of the rest of the Prime Minister’s deal, which I understand we shall debate properly soon, but I thought I would ask this question in the mean time, and I look forward to the noble Baroness’s reply.

I am confident that those who are closely involved in this process have reviewed every text, document and so forth. I personally have not; I hope that the noble Lord will forgive me. The Prime Minister has made clear in his Statement that there are great benefits to being in the European Union that include access to trade. He is also clear that the United Kingdom could survive outside the European Union, but he wants to secure Britain’s membership in a reformed Europe—to negotiate something that would stack up for the people of this country and was then, in the end, for them to decide on.

My Lords, is not the fair and sensible verdict on this deal process so far that it is so far, so good? However, will the Minister accept that the really key word in the whole of this debate, and in the processes to discuss in the European Union, is “reform”, which lies at the centre of what I understand my right honourable friend the Prime Minister to be trying to achieve? Would it therefore not be best if London and the UK became—far more than at present—a strong source of ideas for the revitalisation and fundamental reinvigoration of the deeply troubled European Union rather than just a demander of concessions? Is that not the way we now want to go?

As always, my noble friend has spoken wise words, in that this is not just about trying to get concessions. It is about starting a reform process in Europe. I disagreed with what the noble Baroness said about the way the Prime Minister had approached this because, by starting this, he has kick-started within Europe a recognition that that institution has to change for all its members to prosper. More can be done. He hopes that he can achieve an agreement that will lead to us staying in a reformed Europe and for that to be the beginning of the process, not the end.

I wonder if the noble Baroness is aware that, for those of us listening to the Statement today who were involved in the 1975 referendum, there was a strong sense of déjà vu as the same arguments went on after Prime Minister Wilson’s renegotiations? I am reminded of my great predecessor Jo Grimond saying, when we were haggling over the terms of entry into the European Community, that it was as though at the time of the Reformation people were not able to make up their minds until they knew what price the monasteries were likely to fetch. When we get to the referendum, can we operate at a slightly higher level?

My Lords, is it not clear that the European Union is incapable of dealing with the greatest challenges which face it— monetary policy and migration—and that it is in decline relative to the global economy? Is it not also evident that supranational political institutions that disregard national sentiment do not endure and that the European Union fails to command the loyalty of its constituent peoples and can therefore be expected to disintegrate, just as did the Austro-Hungarian Empire, the Soviet Union and Yugoslavia? Should not British policy accord with the march of history?

That was an interesting lesson in history, but at the moment we are concentrating on trying to get a better deal for the British people as regards their current membership of Europe, which I will focus my remarks on today.

Will my noble friend agree that there is an increasing danger—I drew attention to it on Second Reading of what is now the European Union Referendum Act—that voters will express their views as to whether the negotiations have been a success rather than on the more fundamental issues, which will otherwise get crowded out of the debate, and that we will lose the vote in favour of remaining in as a result? Also, should we not be too preoccupied with the rhetoric about ever-closer union when the two main planks of European policy, the euro single currency and free movement of people, are tearing the Union apart? We ought to try to get reform on those matters. However, having said that, the Prime Minister is making progress and I hope it will continue.

I am very grateful to my noble friend for his comments and his support. I agree that people will consider how to vote based on their view of the success of renegotiation—although I keep having to preface my remarks by saying that the Prime Minister has not yet reached an agreement with Europe; as he said in his Statement, he has not yet ruled anything out as regards the next steps. Notwithstanding the remarks of the noble Lord, Lord Steel, about a higher level, I am sure that we will see lots of debates about the detail. Some things will be of particular concern to certain people, while for many others there will be an instinctive reaction to the debate rather than attention to the detail, and we will have to cover all people’s interests in this important matter.

My Lords, whereas British membership of the European Union costs in net terms about £10 billion now, if we left, presumably we would still want to be a member of the single market. After all, half our national trade is there, but on the Norway model—the only rational basis for that membership—that would cost about £7.5 billion. Will the Government explain that over the coming weeks? Admittedly it is less, but not that much less, and we would be bound by future rules determined in Brussels, without our Ministers accountable to our Parliament and our elected parliamentarians accountable to their voters in Britain being able to influence them. That does not seem much of a bargain—we would pay but have no say. Does the Minister agree?

I agree with the noble Lord’s analysis. When we get to the campaigning stage, it will be important to help people to understand that there are most definitely alternative models, but that they come with costs and disadvantages that people will need to be aware of if those are the routes they want to pursue.

My Lords, does my noble friend agree that the fact that our Prime Minister has had to spend months going all round Europe to secure a minor change to our benefit legislation indicates just how far we have lost the ability to determine our own affairs, which should be at the heart of the referendum campaign? Does she agree with Sir Stephen Nickell, from the Office for Budget Responsibility, that even the plan to stop access to in-work benefits would have “limited impact”? How far does she expect that plan to enable the Government to meet their target of reducing overall immigration to the tens of thousands from a net figure of 380,000? What is the Government’s estimate of the reduction in immigration that will be achieved by that benefit change?

The first thing I would say to my noble friend is that the Prime Minister has spent several months in Europe, negotiating a new deal for Britain. Some of the changes we have already made to welfare benefits and how they apply to people coming from European Union countries do not require any involvement of the European Union, so much so that we have got on and put them in place. Since the election, any European Union citizen coming to this country and who seeks a job will not be able to claim jobseeker’s allowance. If, after six months, they have not found a job, they will be required to leave. These are two of the four commitments that the Prime Minister made in our manifesto.

The other changes covered by the draft proposal set out in the documents address the remaining issues by introducing a sense of fairness that people in this country feel is needed. They are about ensuring that people are not able to take out before they have put in. My noble friend mentioned evidence that was given by Sir Stephen Nickell of the OBR about the effect on immigration. The value of these welfare payments to an average family is about £6,000, so people coming to this country get £6,000 immediately. This is quite a strong incentive for some. While I might not be able to provide a figure from this Dispatch Box today as to how many might be affected if this were no longer available, I am sure it would affect some people.

My Lords, when will the Government support and promote the European Union and the single market which was a creation of this House and Lord Cockfield? We now have another finance commissioner in Brussels promoting the Capital Markets Union, which is the subject of the next debate. We could say to the British people that not only are we promoting small businesses having access to money and supporting British firms and the consumer by taking advantage of it, but we are also promoting the economy and the City of London for the benefit of all. For goodness’ sake, speak up.

I agree with everything that the noble Lord has said and I think the Prime Minister’s Statement reflects that. It reflects the fact that there is real advantage to the United Kingdom in being a member of the European Union and we will keep on saying so unless and until he gets to a point where he is not able to agree new terms with the European Union and he decides that it is not in the UK’s best interests to pursue it.

The noble Lord is right. If we are able to achieve what the Prime Minister hopes to achieve, then the noble Lord can rest assured that there will be a positive case made for the benefits of Europe.

My Lords, I, too, welcome the Statement. I believe that the Prime Minister and his fellow Heads of Government all deserve congratulations on having reached a position where the essential objectives of the United Kingdom Government are well on the way to being achieved, while the essential fabric of the European Union is maintained. This is a considerable achievement.

Does my noble friend agree that it is in the interests of the United Kingdom—whether we are in the European Union or whether we are outside—to have unrestricted access to the single market? Does she agree that this is an enduring British interest? If we are to have unrestricted access to the single market, this will have to be taken into account in relation to any agreement on free movement of capital or free movement of people. What has been achieved in relation to immigration is that a formula has been worked out which will enable Britain to do what it needs to do to restrict immigration while not undermining the essential principles of the single market.

Yes, I agree with my noble friend’s assessment. He is quite right that access to the single market is not just about access to trade. It brings with it many other benefits. To partly pick up on my answer to the noble Lord, Lord Harrison, my noble friend chaired one of the cross-party committees that reported on TTIP, which we know is ongoing. We do not have that trade agreement in place yet, but this House, cross-party, came out very much in support of TTIP. It is of huge benefit to all members of the European Union. I would point to it as a reason for us wanting to stay in the European Union and I very much hope that all sides of the House agree. I note that the leader of the Opposition in another place was very sceptical and indeed critical of TTIP, but I hope that it is something on which we can join together in promoting as a good thing for Britain.

Does the Minister agree that in main street UK this debate and the whole issue of reform will be reduced to a grubby little debate about immigration instead of what reform of this amazing group of 520 million people should be, which is how to enable southern Europe to make enough money to compete with northern Europe, and how to enable the whole lot to be globally competitive in Asia’s century? Why does not reform from the Prime Minister mean that instead of using our taxes to subsidise someone growing olives in Greece we use the same money to skill them up so that they would be welcome immigrants in our country because they would qualify for a job, or they would be qualified in their own country to attract inward investment to work there? If we continue to base southern economies in Europe on exporting olives and importing BMWs, they will go bust.

I am not sure that I agree with the noble Lord that the debate on the referendum will resort to being purely about immigration. Indeed, we all have a responsibility to ensure that it does not. In the answers that I have given to other questions already today, I hope that I have highlighted and reassured noble Lords that there is a positive case to be made, and we would have to make it if that is what we were promoting.

However, while I very much understand where the noble Lord is coming from and the arguments that he had just made, it is important that we do not diminish the concerns of people of this country about the current situation on immigration from Europe to the United Kingdom by saying that it is not something that should be addressed. It is part of the package of measures that the Prime Minister sought to negotiate because it concerns people. It concerns them for good reason, because there is a sense of unfairness and injustice about the way that the benefit system works for those who come here from other countries. At the same time, I am also clear that the people of this country are very positive about the important contribution that is made by immigrants from wherever they come.

Would the Minister agree that the debate will soon have to look at the historic aspirations of the British people? The Minister referred two or three times to the yellow and red card systems—a football metaphor. Taking that metaphor a stage further, would she not agree that the people on the terraces are not little Englanders—to take England for a moment, as opposed to Scotland, Wales and Northern Ireland? They want to be in the Champions League just as at the same time, they want to be in the Premier League. There is no contradiction between the two.

My Lords, as is clear from the exchanges today, and yesterday in another place, many parliamentarians want to play a vigorous part in the forthcoming referendum campaign. Can the Minister guarantee that the timetable of the two Houses will be arranged so that there are not impossible clashes, and there is a proper opportunity for parliamentarians on both sides to conduct an elevated and proper campaign?

We shall of course ensure what we can in providing opportunities for people to debate in this Chamber, but clearly it will be up to individuals how they use their own time during the referendum campaign.

My Lords, on the increased subsidiarity provisions that have been agreed, so that some decisions that have in the past been taken at European level will now be taken within the UK, can the Minister confirm that decisions on devolved matters will henceforward be taken in the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly?

I am afraid I shall have to write to the noble Lord on that one. It may be a bit of a technicality. Maybe we just have not got that far in the negotiations; I do not know. But if I can offer any more information in writing, of course I will.