Publishing proposals following months of negotiations, European Council president Donald Tusk said the changes were required to “keep the unity of the European Union”. The UK is set to hold a referendum on the new terms before the end of 2017, expected to take place in June.
The announcement came as research commissioned by the UK-based Consultative Committee of Accountancy Bodies found British business leaders believe Britain is better off in the EU where it can push for more competitive and sustainable policies from within.
Tusk said the proposals put forward today go “really far in addressing all the concerns raised by Prime Minister David Cameron”, who had called for reforms across four areas. These included restrictions on in-work benefits for EU migrants, protection for non-eurozone countries from further institutional changes, moves to boost competitiveness and greater national sovereignty.
Among the changes proposed by Tusk, which now need to be approved by all other EU member states, Britain would be able to restrict in-work benefits for a period of up to four years under “emergency brake” provisions.
For this to apply the UK, or other member states seeking these powers, would notify EU institutions that its welfare system faced an “exceptional situation” due to the scale of payments of benefits such as tax credits.
Once approved, limits could apply to in-work benefits for new arrivals for up to four years.
However, Tusk proposed that these limits be gradually removed for each individual to take account of time in work in the UK.
Other elements of the reform plan include a provision to limit the export of child benefit from the UK to other member states, which is paid to people working in the UK but whose children have not moved with them. The agreement would see such payments made to match the rate in the country of origin, no the UK.
Tusk also set out plans for “mutual respect” between eurozone states and those outside the currency zone, while he also proposed a new “red card” system to halt EU legislation if a proportion of national parliaments – likely to be set at around 55% – raised objections.
Tusk said renegotiation of Britain’s status had been “difficult” and there were still challenging negotiations ahead.
“Nothing is agreed until everything is agreed,” he stated. “I am convinced that the proposal is a good basis for a compromise.”
In a speech following Tusk’s publication of the proposals, Cameron said the changes would ensure power flows back to national parliaments where it can.
The potential four-year ban on EU migrants claiming benefits was clear in the document, he added.
However, in a statement issued by the Vote Leave group, former Conservative cabinet minister Liam Fox sad that Cameron’s “very limited set of demands” had been watered down.
“The British people want to take back control and end the supremacy of EU law over our economy, our borders and our Parliament,” he said.
“None of these changes even come close to the fundamental changes promised to the public. We are being asked to risk staying in the EU based on the back of empty promises from the EU that are not even backed up in Treaty.”
