David Cameron has set out his wish list / set of demands for reform of the EU. Changes under four headings will form the basis of the deal that he wants to put to the British people in a referendum.

The headings are broadly drawn and there is no doubt that it is a very political list. The headings will also not come as any surprise to those following the debate since Cameron made his commitment to holding a referendum.

It should allow for a deal to be struck which will appeal to those who are undecided on how to vote. The 'pros' and the 'antis' are pretty firm groups but the 'undecideds' are, according to some polls, up to 70% of the electorate.

The headings will also mean that he can make a broad play to those countries who may otherwise feel uncomfortable with his approach. Who can really argue with Europe needing to be more competitive?

But it is welfare reform, a manifesto commitment, that will mean the most to the electorate. Changes to the welfare system sit at the heart of the Government's agenda domestically and action is expected. Cameron needs to be able to wave a significant policy shift if wants to demonstrate a win. It needs to be more than symbolic as any hint of a compromise will be seized on by opponents.

This will be, without doubt, the toughest challenge Cameron has faced.