UK-EU Common Understanding Negotiations

Baroness Anderson of Stoke-on-Trent Excerpts

Thursday 18th December 2025 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, we on these Benches welcome the Statement and the achievement. We regret only that the Government are moving so slowly. I note that this means we differ considerably from the Conservative Front Bench, although I was relieved that the noble Earl’s words were a little less hysterical than the front pages of the Telegraph and the Mail today. If we are going to pursue the reset further, as my party strongly supports, and move towards dynamic alignment across the board—and, therefore, closer association with the customs union, which will have to come next—the Government will need to change their language and spend more time discussing the benefits as against the costs, which my Conservative colleague, the Telegraph and the Mail have stressed so heavily this morning.

I declare an interest. I taught many students from other European Union countries in my last two jobs in universities, one of whom is the President of his country and extremely active on European security; a number of others are now in leading positions in public life in their countries and good friends of the United Kingdom. That is one of the benefits we get from exchanges. On the imbalance we had last time, an active scheme to encourage British students to spend time in other countries would be of enormous benefit to this country. It would lead to people who understand other countries, can do business with them, understand their politics and then enter public service here or elsewhere, to our mutual benefit.

I regret the language of the Statement. It is defensive and therefore wrong. It talks about only “the national interest” and “sovereignty”. I am sure the Minister will agree that the only country in the world that is fully sovereign is North Korea. In other countries, sovereignty has to be compromised by international co-operation. As the leader of Reform in effect makes clear, the alternative to membership of the European Union is not full sovereignty but dependence on the United States, which is not an easy alternative at the present time.

I suggest that the Government should be talking about shared interests, common security, the benefits as against the costs and the fact that our contributions helped save this country money in many ways. When the Conservative Government took us out of the European Union, we had to set up separate agencies and recruit additional public servants. We lost the European Medicines Agency in London, which was a great boon to our pharmaceutical industry, and a number of other things. The benefits absolutely need to be stressed and I encourage the Minister to say to her colleagues, in particular Nick Thomas-Symonds, that the sort of language they are using will not persuade the bulk of the British public that we need to be closer to the European Union.

We now know, on very strong evidence, that we have lost a lot of economic growth since we have left, which means we have also lost tax revenue. On goods and services, we know that we need to go back to closer relations. I encourage the Minister to go further.

[Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, maybe this was not the Statement to bring some Christmas good will, cheer and unanimity across your Lordships’ House. It is a good thing that my language, I hope, will be both positive for the noble Lord, Lord Wallace, and slightly more circumspect for the noble Earl, Lord Courtown. I thank both noble Lords. We will continue to rehearse these arguments, as we have done for many years since the referendum, as we seek to undertake our reset. A number of important issues have been raised, which I will address in some detail. I will also reflect on Hansard to see which questions I have missed, either intentionally or by accident—never intentionally, as I am being reminded—and will write in due course.

I would like to engage with this in a spirit of good will. This is a positive thing we are doing: £500 million of additional investment in our young people in one year. It is something to be celebrated. I will engage in the promise of positivity at this time of year and I view it as my own Hanukkah miracle. I will touch on some of the issues raised.

On the UK-EU summit, our manifesto promised to reset our relationships with our European partners to improve our diplomatic, economic and security co-operation following Brexit. Earlier this year we hosted the first annual UK-EU summit, where the Prime Minister and the European Commission President welcomed our new strategic partnership and a landmark deal that is good for bills, borders and jobs. That is what we are seeking to deliver—a partnership that enables us to tackle the shared challenges we face, to boost the prosperity, safety and security of both our peoples, and to help strengthen European-wide defences.

I turn to the core of the announcement. We have made good progress on talks with the EU since the summit, working to implement the joint commitments we made in May. I am therefore pleased to inform the House that, yesterday, the UK and the European Commission concluded negotiations for the UK’s association to Erasmus+ from 2027 for one year—with, as I said, £500 million of investment in our young people. Our association to the programme will open up opportunities for learners, educators, youth workers, sports sector professionals and communities of all ages in our education, training, youth and sport sectors, for both the professionals who work in these sectors and, crucially, our young people. Participants can travel to any European Union member state and to several countries outside it, opening doors to tens of thousands of people across the UK, renewing our people ties with Europe and beyond.

At the summit, we also agreed to work towards participation in Erasmus+ on the basis that there will be a fair balance between our financial contribution and the number of UK participants receiving funding. We are pleased that the EU has agreed financial terms—a 30% discount in 2027 compared with the default terms in the trade and co-operation agreement. This is a fair balance between our contribution and the benefits of the programme. It has also been agreed that the UK’s participation in the programme will be reviewed 10 months after our association, which will include data on the demand for funding in the UK. Any continued participation will be informed by our experience of association in 2027. The Government will now work quickly to ensure that there is maximum take-up across all sectors and groups and that the benefits of our association to Erasmus+ can be felt.

The noble Earl, Lord Courtown, raised an important issue about people’s awareness of the scheme. I live in Stoke-on-Trent, and we must make sure that people from up and down the country are able to access these schemes, so that it is not, as historically it could have been considered, a boost for middle-class children, but is accessible to everyone. Many Members of your Lordships’ House have associations with further education facilities and schools up and down the country; there is a responsibility on each of us to make sure that people are aware of this scheme. I urge all noble Lords to reach out to their communities. The funding streams open in October 2026 and we have time to make sure that people can access this. One of the things I was most delighted to see yesterday was a quotation from the Association of School and College Leaders, which was delighted about this scheme.

The Turing scheme has wider international reach since we left Erasmus, though it was not the scheme that we left. I reassure noble Lords that the Turing scheme will be operating as normal next year and that we will continue to learn lessons from it. Any future decisions on Turing will be brought forward to your Lordships’ House in due course. On international fees to the EU, I am not sure that is something that I recognise, but I will reflect on the noble Earl’s exact question and come back to him.

On today’s coverage in the Mail and Telegraph, it will not surprise noble Lords that I anticipated such a question. The reality is that the European Union has not yet determined any costings for the next scheme, so nobody recognises the numbers that were in the papers today because no such scheme has been rolled out with any such budget. We have been clear to commit to 2027. We will make sure that it works and proves to be good value for money for the United Kingdom and is of huge value to our young people. We will continue to negotiate with the European Union on next steps.

The noble Earl raised the youth experience scheme. As I have made clear in other debates in your Lordships’ House, the Government recognise the value of such schemes. One of the things I find exceptionally difficult when we discuss youth mobility schemes is that the previous Government signed a youth mobility scheme with Uruguay. I do not understand why a youth mobility scheme with the European Union is so contrary to our values that we would not want one. If we can have one with 13 other countries, we can have one with the European Union.

On the Labour Party’s red lines in our manifesto, I hate to disappoint the noble Lord but we have been very clear that we are not rejoining the customs union. Our manifesto set out exactly what we were prepared to do in our negotiations. All our negotiations are through the prism of our red lines. We will not be returning to the single market, the customs union or freedom of movement.

On whether the UK is becoming a rule-taker, we have made a choice to align in some areas where it makes sense for our national interest. The EU has accepted that there will need to be a number of areas in which we need to retain our own rules as we make alignment going forward. The details of these are all subject to negotiation. We will be involved in forming the regulations that apply to the UK at every stage, and Members of your Lordships’ House will have appropriate scrutiny arrangements in place.

I will finish on a positive. The expected financial benefits for our economy from having a closer relationship with the European Union are hugely significant. The SPS and carbon-pricing agreements which we are currently negotiating will add nearly £9 billion a year to the UK economy by 2040. The carbon-pricing deal avoids the risk of UK businesses paying tax to the EU on £7 billion-worth of trade. We are seeking to reset our relationship based on what is best in our national interest as a sovereign country. The European Union is our biggest trade partner and the biggest source of economic growth for this country. We continue to work closely with it, in a spirit of good will at this time of year.

[Baroness Coussins (CB)]

My Lords, can the Minister confirm that rejoining Erasmus+ will include schools for the purposes of trips and exchanges? If so, will His Majesty’s Government back this up by reintroducing group passports, so that we can put an end to the inordinate delays at the border when coach-loads of children have to get out of the bus to be individually checked?

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Baroness raises an important point about how important travel is for our young people. We are negotiating bilateral agreements with countries. We have done the first of these for youth travel with France and I believe ongoing conversations are happening with Germany. I will reflect on her comments, but we are seeing positive moves in this direction.

[Lord Reid of Cardowan (Lab)]

Of course we have to give scrutiny to any international agreement, but I am sure that, throughout this House, there is wide agreement that this is good news for the young people of this country—there is no question about that. In that context, will my noble friend the Minister reconfirm, in case of any confusion, that this is not confined only to universities but applies to access for further education, schools, sports, sports trainers, staff and so on? Therefore, it is, in my view, an unalloyed good move for young people. Can she confirm the next steps on this over the coming 12 months? Does she have an understanding of the timeline and the next elements in the process?

[Baroness Anderson of Stoke-on-Trent (Lab)]

I thank my noble friend. He is right that this is for young people in the round. That is why I was delighted that the chief executive of the National Youth Agency welcomed yesterday’s announcement as

“a significant moment for young people across the UK. With Erasmus+ officially back, we are reopening doors to global learning, cultural exchange, and opportunities that shape futures”.

At a time of global instability, it is incredibly important that we have close relationships with our friends and allies and that we understand that the world is more than our borders. This is for as many young people as possible, and we expect and hope to see 100,000 young people participate in this scheme in 2027. On next steps, the funding call opens in November 2026—I must correct myself, as I think I said October 2026 previously—and will be open until February 2027. There are two pots of money, the first of which will be over £400 million that will come directly to the participating organisations, and there is a £1 billion pot that individuals and institutions can bid into. This is very exciting, and I hope noble Lords will share my enthusiasm in their local communities.

[Lord Howell of Guildford (Con)]

My Lords, I will focus on the comments in the Statement on electricity co-operation trading with the European Union. Obviously, there are millions of families in this country who are wondering still how on earth to pay to keep their house warm and feed their children during the Christmas period, and indeed in any period. That is not as it should be. We should be much more concerned than we are about this totally unacceptable situation.

The Statement claims that the new co-operation plan that is being discussed will

“drive down energy costs and protect consumers”

and

“drive up investment in the North Sea and strengthen energy security”.

Can the Minister and her colleagues assure us that that really is going to happen, and that it will drive down the price from what it is now and not from the much higher price it is likely to be? This is a trick of statistics being used by the Government, which I do not like at all, and they should be much more straightforward. Is it going to make cheaper electricity for families and industry than we have now? I very much doubt it. Obviously, we want more investment in the North Sea. At the moment, we are paying the owners of wind farms literally billions of pounds not to produce electricity. The system is wrong and must be changed. I hope it will be, with the co-operation of the European market.

Those are the things on which we want some reassurance because, at present, they are not desirable. It is incredible that we are not producing competitively produced energy, in this country of all countries. We have the North Sea as a huge asset that we are not using properly—indeed, the Government are trying to slow it down. It is time we faced in another direction in this whole area, and I would like to hear more about it.

[Baroness Anderson of Stoke-on-Trent (Lab)]

Given that we have not touched on this point so far, it would be helpful to update your Lordships’ House. The UK and the European Commission have concluded exploratory talks on the UK’s participation in the EU’s internal electricity market. This closer co-operation will drive down energy costs and protect consumers against volatile fossil fuel markets. The UK and the EU will work at pace on these negotiations as we head into next year. While these are ongoing, we cannot comment on the specifics any further.

To reassure the noble Lord on how this is going to impact energy bills, joining the EU’s electricity trading platforms will lower bills by reducing trade friction. More efficient electricity trading allows us to make more efficient use of our shared infrastructure. This deal will also support investment in North Sea electricity infrastructure, allowing us to reduce exposure to volatile wholesale gas costs. This is one component of household bills among many others, but we genuinely believe it will have a direct impact. The noble Lord is right: there is nothing more important to communities, especially where I live, than the cost of living crisis, and we need to do everything we can to support families.

[Lord Grocott (Lab)]

My Lords, on Erasmus, I remind my noble friend that, as I am sure she knows, we are talking about very large sums of money. It was £570 million in the first year alone, and that is with a terrific 30% discount. When large sums of money are involved, I am interested in who the beneficiaries are going to be. I am encouraged by the part of the Statement in which the Commons Minister said,

“there will be a review of the UK’s participation in the programme 10 months after our association”.

My guess is—and it will of course be tested over time—that there will be rather more students coming from Russell group universities than from FE colleges in the Midlands and the north. To a degree, that is how it must be tested, because the evidence is pretty strong that such schemes can easily become a case of “to them that have shall more be given”, and communities such as my noble friend’s former constituency and mine do not get their fair share.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My noble friend is absolutely right that one of the tests of this success will be making sure that my former constituents and his have access to this scheme and genuinely participate. As I said, the Association of Colleges’ chief executive said yesterday that this was “brilliant news” for staff and students of all ages in further education colleges:

“For students, it widens their perspective on the world, opening their eyes to different cultures and different ways of life, and for staff, the opportunity to learn from other countries on how they deliver technical education and skills is invaluable”.


We need to make sure that this is embedded going forward, and one of the tests will be to make sure that working-class kids, too, have access to this scheme.

[Lord Kerr of Kinlochard (CB)]

My Lords, the £570 million is a gross number; the net number would take account of grants to our own people benefiting from the scheme. I hope that the Minister will not be too distracted by the ghosts of Christmas past rattling their chains and coming up with absurd estimates of the cost of this scheme. It is, as the noble Lord, Lord Reid, said, an unalloyed benefit that we are going back to Erasmus.

It is the other bits of the Statement that I would like to press the Minister on. She rightly pointed out that this is of considerable economic benefit, potentially. The Statement and what was said in the other place makes it clear that the negotiations on electricity are intended to move swiftly. If it is possible to achieve more efficient use of the interconnectors, that will be an immense benefit to the United Kingdom and to our continental friends. Obviously, it is crucial that we get the SPS agreement, and it would be good to have a firm link between the emissions trading schemes.

My understanding is that the intention is to do all that before the next summit. But the one thing that did not appear in the Statement was any indication of the date for the next summit. Can the Minister confirm that it will be, at the latest, no later than one year after the first summit—that is, by May?

[Baroness Anderson of Stoke-on-Trent (Lab)]

I was doing so well. What I have been told I can say is that it will be happening in 2026, so there will definitely be a summit next year.

We genuinely are moving at pace, and there is the reality that some of the things we are hoping to bring forward, not least SPS, require a number of contributions from Members of your Lordships’ House to get this over the line. On that basis, we will be discussing these issues in some depth. I expect to be doing so with Members of your Lordships’ House, at this Dispatch Box, next year, which suggests that we are moving—in civil service language—at pace.

[Viscount Hailsham (Con)]

My Lords, as a long-standing opponent of Brexit, I welcome the Statement. I hope it is the first of a number of steps which will improve our relations with the European Union, especially in the trading aspects of that relationship. Without this, the prospects of sustained significant growth are going to be very difficult to achieve.

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Viscount is absolutely correct. Our trade with the European Union was worth £813 billion in 2024, and it is our most significant trading partner. It is incredibly important that we have a positive relationship with it, and we have sought to do that. The fact that my right honourable friend the Prime Minister held the first EU-UK summit since Brexit earlier this year suggests that our relationship really did need to be rebuilt. We are rebuilding our relationship based on the three pillars of security, tackling migration, and SPS and ETS. I expect to be in front of your Lordships’ House on many occasions to discuss what I hope will be positive announcements.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I join the noble Lord, Lord Wallace, and others in roundly celebrating this announcement, although we should take a second to reflect on the tragedy of those who missed out in the desert years. Those affected were not only those who might have travelled, but students staying here who did not benefit from having exchange students in their classes and being trained here.

I have two specific questions. David Clarke, professor of languages at Cardiff University, noted that since we were last in the scheme, the bureaucratic hurdles such as visas have become much greater for students travelling. Are the Government working with the European nations to try to minimise those road humps? Secondly, both Scotland and Wales have introduced their own schemes. Are the Government working with the devolved Administrations and the nations to ensure that any interchange is as seamless as possible when Erasmus comes back?

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Baroness makes a very important point about visas. I will have to write to her about the detail of any changes we will need to bring forward. I remind and reassure noble Lords that these are temporary arrangements for Erasmus; people will be here for less than 12 months and will be travelling for less than 12 months.

On existing schemes in Scotland and Wales, obviously, there are ongoing conversations, but the Taith scheme in Wales is hugely respected and regarded. In terms of accessing and working with disadvantaged communities and those from working-class backgrounds, we all have a huge amount to learn from their successes. Given the nature of these schemes and that education is devolved, these decisions will be a matter for the Scottish and Welsh Governments, but, obviously, we will have ongoing conversations with them.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I warmly welcome this great initiative, which is a matter for celebration. I am especially pleased that, as my noble friend Lord Reid said, it is open to all kids. As my noble friend the Minister said, we all have a responsibility to ensure that kids in all our areas, including the Forest of Dean, which is a greatly disadvantaged area, know about this so that they can take advantage of it. At a time when we have war on our continent and people are peddling fear of the other, the way in which this can nurture understanding between young people is vital.

There is one thing that worries me slightly. Of course, we have to have robust finances, and to know that we are getting value for money and that all kids are included. Ten months is a very short amount of time. I urge my noble friend the Minister to ensure that, whatever happens in the future, there must not be a cliff edge; we must do whatever we can to ensure that such schemes are a success.

[Baroness Anderson of Stoke-on-Trent (Lab)]

I thank my noble friend for her question and, more importantly, for the work she has done over many years in this area. She raises an important point, but one of the things we need to be aware of is that we are joining the last year of the current scheme, and that the details on the priorities of the next scheme and the countries that will participate have yet to be published. Therefore, there is nothing else that we can join at the moment. I hope that our joining Erasmus+ at this point sends a message to our friends and allies in the European Union and to young people up and down the country that we are investing in their futures, that we are clear in our relationships and partnerships about how important it is that we have cross-country travel, and that we appreciate the potential for cultural exchange.

[The Earl of Clancarty (CB)]

My Lords, I congratulate the Government on getting us back into Erasmus+, something for which many of us have been asking for a long time. I add that it is a complete myth that working-class students did not make use of Erasmus when we were previously a member of Erasmus+.

I have just one question. When the new youth mobility scheme is agreed, will it be properly templated on to Erasmus so that costs, red tape and conditions are kept as low and as simple as possible to further encourage less privileged students whose career plan may want to make use of both schemes? In that sense, as the noble Baroness, Lady Royall, said, a year is surely too short a period to assess the overall interest.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, we have agreed with the European Union to work towards the establishment of a youth experience scheme with the EU, creating new opportunities for cultural exchange with the UK and the EU. It is in both our interests to conclude the negotiations quickly and to stand up the scheme so that young UK and EU nationals can take up the opportunities as soon as possible. I cannot give those assurances that it will align with the Erasmus+ scheme as we are still negotiating one of those schemes, but I look forward to discussions with the noble Earl as soon as we have the detail of both.

[Baroness Helic (Con)]

My Lords, I welcome the introduction of this scheme. What assessment have the Government made of the extent to which the enhanced EU-UK mobility will strengthen and contribute to better collaboration in defence-related research and development? Will the Government pursue further measures to deepen such mobility, particularly alongside wider defence co-operation?

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Baroness is absolutely right to raise our security and defence relationships with the European Union. We see even today why that is so important in the ongoing discussions about Ukraine. On how we ensure this is part of our wider collaboration, it is incredibly important that our young people have a shared understanding of the world with young people from across the European Union, and that they understand the threats we face, which is why there is so much to be gained from us rejoining Erasmus+. I will have to write to the noble Baroness with an update on what the specifics will look like with regard to research, but I will follow up in the new year, if she will forgive me.

[Baroness Wheatcroft (CB)]

My Lords, this is really good news and I welcome it on all counts, in particular the food and drink deal we are moving towards, because so many small businesses have simply stopped exporting to the EU. Can the Minister say how those small firms will now be encouraged to get back to work and back into selling to the EU?

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, a huge amount of effort is going into negotiating the SPS agreement, which will be incredibly important for our trade but also in reducing friction, including between Northern Ireland and GB. There are many positives to this. Those negotiations are ongoing but I look forward to discussing them with Members of your Lordships’ House once they are complete so that we can look at them in detail to make sure that everyone, including SMEs, can access them.

With that, I wish everyone a merry Christmas, chag sameach and happy new year. I look forward to seeing all noble Lords in 2026.