European Council

Lord Cameron of Chipping Norton Excerpts

Monday 17th December 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

Before I make my statement, I am sure the whole House will join me in wanting to send our deepest sympathies to President Obama and the American people following the desperately tragic shootings in Connecticut on Friday. These are heartbreaking scenes. One can only imagine what the families are going through, and our hearts should go out to those families and the friends of all those involved.

Last week’s European Council discussed further economic and monetary integration for the eurozone. It endorsed new safeguards that will protect the interests of countries outside the eurozone. It also reached new conclusions on our response to the crisis in Syria, and there were discussions on growth and defence. This was the seventh European Council of the year. I would not describe it as a landmark Council, and I will try to address these points briefly.

The problems of the eurozone are driving heated discussions between its members and are leading to potentially significant changes inside the European Union. There are calls from some for greater solidarity and burden sharing, and from others insistence on tough rules for fiscal discipline. These arguments raise far-reaching questions of national sovereignty, and it is yet to be determined how far or fast the changes will go, but it seems likely that we will see a process of further integration for members of the eurozone.

Britain will not join the single currency—neither will we join the deeper integration now being contemplated—but these changes, driven by the eurozone, will alter the European Union for all of us, so they need to be done in the right way. That should mean flexibility over how Europe develops to accommodate the interests of all member states—those inside the euro, those that might one day join and those, such as Britain, that are outside, have an absolutely clear opt-out and have no intention of joining. It also means that as eurozone members make the changes they need, we in the UK will have the ability to argue for the changes that we need in our relationship with a changing European Union in order to get the best possible deal for the British people.

The banking union, elements of which were agreed last week, is a good example of that. A single currency needs a single system for supervising banks, so Britain supported the first steps agreed towards a banking union, but in return we and others demanded proper safeguards for countries that stay outside the new arrangements. The European Council therefore agreed a new voting system that means that the eurozone cannot impose rules on the countries outside the euro area, such as Britain, without our agreement. There is also an explicit clause that says that no action by the European Central Bank should directly or indirectly discriminate against those countries outside a banking union. That is vital for our financial services industry, which must continue to be able to provide financial products in any currency.

The Bank of England and the ECB will have a statutory memorandum of understanding that will ensure they work co-operatively and openly to supervise cross-border banks. The safeguards set an important new precedent in giving rights to countries that choose to stay outside the euro. In winning that argument, we have demonstrated how a change necessary for the eurozone can lead to a change for countries outside the eurozone that can help us to safeguard the things that matter to us in Britain, in particular the integrity of the single market. And as the eurozone makes further changes, I will seek every opportunity to get the best deal for Britain and for the single market as a whole.

On growth and competitiveness, this year we have already secured a proper plan, with dates and actions, for completing the single market in services, energy and digital, a commitment to exempt small businesses from new regulation, the establishment of a European patent court, with key offices in London, which will save businesses millions of pounds, and a new free trade agreement with Singapore. In addition, we have launched negotiations on a free trade agreement with Japan that could increase EU gross domestic product by €43 billion a year. The conclusions from the Council have the additional benefit of referring to Commission plans to “scrap” some of its own

“regulations that are no longer of use.”

We are taking action in Europe that will help with growth and jobs and with tackling unemployment here in the UK.

On defence, we are clear that NATO is the cornerstone of our defence and that EU co-operation should avoid costly new bureaucracy and institution-building. We will never support a European army. The focus of the Council conclusions is entirely consistent with this, referring to practical co-operation to tackle conflict and instability in places such as Kosovo and the horn of Africa. In addition, the conclusions welcome proposals to open up closed defence markets in Europe, which could be of benefit to Britain.

Finally, I turn to Syria. As a result of Assad’s brutality, a humanitarian crisis is unfolding in Syria on our watch, with more than 40,000 dead and millions in need of urgent assistance as a hard winter approaches. There is a moral imperative to act—and Britain is doing so, as the second-largest donor in terms of humanitarian aid—but there is also a strategic imperative to act. Syria is attracting and empowering a new cohort of al-Qaeda-linked extremists, and there is a growing risk of instability spreading to Syria’s neighbours and of drawing regional powers into direct conflict.

We therefore cannot go on as we are. The Council was clear, as Britain has been for many months, that Assad’s regime is illegitimate, and committed to working for a future for Syria that is democratic and inclusive, with full support for human rights and minorities. We will continue to encourage political transition from the top and to support the opposition, who are attempting to force a transition from below, and that will include looking at the arms embargo. The conclusions also make it clear that we must now explore all options to help the opposition and to enable greater support for the protection of civilians.

With progress on Syria, our objective on banking union secured and the principle established that changes in the eurozone require safeguards for those outside, I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in sending deepest condolences to President Obama and the people of the United States. The Connecticut shooting was an appalling tragedy, and all families affected are in our thoughts as they cope with their grief and their loss.

I wish to ask questions on Syria, the banking union and the wider European context. Let me associate myself with the Prime Minister’s concern about the ongoing loss of life in Syria. The international community must work together to end the atrocities immediately and speak with one voice in favour of a transition to a new Government. The Prime Minister mentioned the arms embargo, while noting that Syria is attracting “a new cohort of al-Qaeda-linked extremists.” In that context, will he go further and tell the House whether he is actively urging the EU to end its arms embargo, or merely amending its terms? Notwithstanding deep concern in the international community about the situation in Syria, does he recognise some of the dangers inherent in the approach of putting weapons into a zone in which there is already deep conflict?

On the banking union, the Opposition believe it is right for the European Central Bank to have a supervisory role in the eurozone. Does the Prime Minister agree, however, that the most important issue is not necessarily who supervises which banks, but who takes responsibility for bailing out failing banks in the euro area? That is what will deliver the firewall we need between bank and sovereign risk. Will he say whether he made the case for the urgency of agreement on that matter at the Council?

It is good that progress was made to protect the integrity of the single market. Will the Prime Minister say whether there was discussion on how the new voting system that he mentioned will cope in the event of changing circumstances, and in particular if EU members currently outside the eurozone join the banking union and the “out” group shrinks to three or four member states? Beyond questions of banking, is not the real continuing problem for Europe that of insufficient demand and lack of a proper plan for growth? In yet another Council we saw no progress on that, just as we saw no progress beyond banking union on wider eurozone political and economic integration.

All the Council did was set a timetable of June 2013 for setting a timetable. That is less than was promised—in other words, dither and delay. It is a bit like the Prime Minister’s long-awaited speech on Europe, which has been delayed again. First it was set for his party conference, then for before the EU budget negotiations. We now hear that he has delayed it again until the new year.

Of course, never knowingly undersold in his normal modest way, the Prime Minister says that it is okay because it is

“a tantric approach to policy making.”

Parliament’s answer to Sting sits before us, Mr Speaker. It is true that they have both fallen out with the police—[Interruption.] I am sorry; it is Christmas after all. I am sure I speak for the whole House when I say that none of us wants to be there to witness the tantric approach.

Perhaps the Prime Minister will answer three simple questions. First, the Foreign Secretary, who is sitting on the Front Bench, said on an in/out referendum that

“this proposition is the wrong question at the wrong time…It would create additional economic uncertainty in this country at a difficult economic time.”

I agree with the Foreign Secretary—does the Prime Minister? Secondly, the Prime Minister said last week:

“I don’t want Britain to leave the European Union.”

I agree with the Prime Minister on that, but why does he let member after member of his Cabinet brief that they are open to leaving the EU, including most recently the Education Secretary? Thirdly, as the Prime Minister will know, British business is deeply concerned that the drift in his party and the direction of his policy means that we are sleepwalking towards exit. I share that concern. Does the Prime Minister at least understand the concern of British business?

The Prime Minister ended last year with the veto that wasn’t, and he has ended this year with the speech that isn’t. In other words, he is stranded between party interest and national interest. The problem, however, is that nobody else in his party is holding back. Just in the past few days we have heard from the Immigration Minister, the former Defence Secretary, and now—always keen to help the Prime Minister out—the man on the zip wire, the Mayor of London. Is it not time to stop the dither and delay? Is it not time that he stopped following his party on Europe and started leading it?

[The Prime Minister]

Well, the jokes were better. The right hon. Gentleman has obviously spent a bit of time running through his old Police albums. Given his policy on Europe, I would recommend, “So Lonely”, and given his general approach to policy, he is going to have to get used to “I can’t stand losing”. [Interruption.] That was the best I could do given the notice. He should give me more warning next time—[Interruption.] Don’t stand so close to me—very good. The bed’s too big without you—[Laughter.] Let’s take this down.

On Syria, it is right to look at amending the arms embargo. We will be keeping the arms embargo on the regime. There are arguments on both sides, but we should have the debate and European Foreign Ministers will do so. My concern is that if the UK with others is not helping the opposition, and helping to shape and work with it, it is much more difficult to get the transition we all want to a peaceful, democratic Syria that respects the rights of minorities—including, as I have said, Christians—and human rights.

On banking union, the right hon. Gentleman rightly makes the point that the protections are set out when more than four members are outside the banking union. The new double majority voting is a big breakthrough. The idea that non-eurozone members should have a separate vote on proposals that could be damaging to us is a major breakthrough, and a lot of people said it would not be possible. If the number of countries outside the banking union falls below four, the issue returns to the European Council, where, of course, we decide things by consensus and would be able to put a stop to further progress.

The right hon. Gentleman makes his points on growth, but ignores completely that almost every country around the table has immense fiscal challenges and huge budget deficits. That is why we focus so much on the things that could help growth in Europe, such as the single market, free trade deals with other parts of the world, deregulation and getting costs down, and a good budget deal.

The right hon. Gentleman asked a series of questions on European positions. I do not think it is right to hold an immediate in/out referendum because neither of the two options is right. That is exactly what the Foreign Secretary has said.

On British business, the Conservative party and the Government are working to deliver all the things business has asked for. I note that, when the Opposition business spokesman was asked to name one single business that supported Labour, the best he could come up with was Waheed Alli, whom Labour ennobled about a decade ago.

On European policy, I will not take lectures from a party that signed up to the bail-out, gave away our veto and gave up the social chapter—on each occasion, it got absolutely nothing in return. That is the truth of the Labour policy, whereas the Conservative party and the Government have delivered. Three months ago, before the three European Councils, we were told, “You’ll have no allies on the European budget, you have no chance of amendments to the banking union, and you’ll be completely isolated on treaty change.” All three warnings given by the Leader of the Opposition and others have turned out not to be true.

[Mr William Cash (Stone) (Con)]

My right hon. Friend says that the EU changes must be done in the right way. At Prime Minister’s questions last Wednesday, he stated in reply to me that

“it is the national parliaments that provide the real democratic legitimacy within the European Union.”—[Official Report, 12 December 2012; Vol. 555, c. 291.]

However, how is it that, in the European conclusions he signed on Friday, and despite a unanimous European Scrutiny Committee report calling on him to stand firm, the national Parliaments and the European Parliament are stated as being commensurate in respect of EU competences?

[The Prime Minister]

I should again make the point I made to my hon. Friend on Wednesday. Change in Europe cannot go ahead unless it has the support of national Parliaments. Clearly, the European Parliament has a role set out in the treaties—whatever one thinks about that, one cannot ignore it. When it comes to changes in the eurozone, Angela Merkel going back to her Parliament matters; when it comes to the European budget, my coming back to this Parliament matters. That was my point. In Europe, the Parliaments that matter are the national ones—this is the Parliament that matters to me.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I agree with what the Prime Minister said about the banking union. Like so many other things coming out of the eurozone, it looks a bit half-baked at the moment. Did he get any sense of how much money the banking union will have, and where it will get it from? Did he also detect any urgency being applied to sorting out the Spanish banking problem? It looks as though all the problems that have bedevilled us in 2012 are still going to be there in 2013.

[The Prime Minister]

The right hon. Gentleman makes an extremely good point. This is not a fully fledged banking union; it is simply the first step in terms of a single supervisor. A banking union as we in the United Kingdom would know it would cover the resolution of problems in banks and deposit guarantees. If a bank in England, Scotland, Wales or Northern Ireland has problems, it does not make any difference because we have a proper banking union. They are a long way from that in the European Union. The point I was making is that these discussions are going to go on for quite some time, because they involve big issues of national sovereignty, so it will take time before they get a banking union.

[Mr John Redwood (Wokingham) (Con)]

If we are to have growth in Europe, we need to have banking reform both to recapitalise the banks and to write off the bad loans and assets. Is there any timetable for raising the huge sums that the euro area will need to capitalise its banks, and when is the ECB going to make the Spanish and other weak banks in the system write things down to a realistic level so that we can start to trade away from the disaster?

[The Prime Minister]

My right hon. Friend asks an important question, which reminds me that I did not answer the former Chancellor’s question about the Spanish banks. There will be opportunities to deal with that, but in the light of the way in which this is being structured, further progress will need to be made under the banking union proposals before the sorting out of Spanish banks can take place. Many in the eurozone would argue that all those delays are damaging to the future of the eurozone. On bank recapitalisation, stress tests have been carried out in Europe, although some people argue about their robustness, but that was not the focus of discussion on this occasion. This was not so much about banking capital as about the process of a banking union.

[Mr Jack Straw (Blackburn) (Lab)]

May I ask the Prime Minister to expand a little on his view of the process towards a democratic, inclusive Syria, given that, although probably 70% of Syrians are wholly opposed to the Assad regime, about 30%—Christians, Alawites and others—are still committed to it? What further efforts are being made with the Russians to try to secure international agreement, however difficult that might be, given that Russia’s compliance and consent will be crucial to an overall settlement?

[The Prime Minister]

The right hon. Gentleman is absolutely right about this. As I explained in my statement, there are two ways in which transition can take place in Syria. One would involve revolution from below, if you like, while the other—which could be faster if everything went according to plan—would involve a transition from the top, and for that, we need the Russians to engage. My right hon. Friend the Foreign Secretary has met and spoken to them regularly, and I have discussed the issue with President Putin. There was a report on Thursday, while we were in the European Council, that the Russian Deputy Foreign Minister had made some interesting remarks about Syria, so we will read those with care. Clearly, everything we can do at the UN and with countries such as Russia to put pressure on the Assad regime is worth while.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Is not one of the lessons from the seven summits of 2012 and the successes of the year—the banking union that keeps our financial services industry protected, the patent deal that will probably reduce the cost of getting European patents by 80%, and the trade deals with Singapore, South Korea, Latin America, Japan and the US that are in the pipeline—that constructive and pragmatic engagement with our neighbours in the European Union is good for the UK, good for Europe, good for growth and good for jobs?

[The Prime Minister]

I would agree with a lot of what my right hon. Friend says. I would add to “pragmatic engagement” the words “hard-headed”, because in order to make progress on issues such as the patent court and the single market, we need to negotiate very toughly. These are our key interests, and other countries have their own. Across the seven Councils, we have made some progress.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is it conceivable that the reason the Prime Minister cannot make his European statement that his Deputy Prime Minister thinks just the opposite of what he thinks? Is there any chance, now that they have started the practice, not only of the Prime Minister making a statement but of his allowing the Deputy Prime Minister to make one as well? I know it is nearly Christmas, but I am not against turmoil in the Tory party or in the coalition.

[The Prime Minister]

Let me wish the hon. Gentleman a happy Christmas. He is a good example of how there is not always a commonality of opinion within a party, let alone between two different parties.

[Richard Ottaway (Croydon South) (Con)]

The events of the past few months have confirmed that Britain has a number of allies in Europe and is not alone, but the case for Europe is drifting. Will the Prime Minister take an early opportunity to get on the front foot and set out his agenda before others fill the vacuum?

[The Prime Minister]

I am very happy to do that. My hon. Friend is right that we have allies in Europe. I note that in this morning’s German newspapers, the leader of the Social Democrats—Labour’s sister party—has accused me of having a Faustian pact with the German Chancellor, so there we have it. We have a very clear agenda: we have been pushing the single market, pushing for the patent court, pushing for the free trade deals, pushing for deregulation, and on every single one of those measures we have made some big progress this year in Europe.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Office for National Statistics reported last week that the GVA—gross value added—output in the communities I represent in west Wales and the valleys is only 65% of the UK average. A cut in European structural funding would therefore be disastrous for the communities I represent. Will the Prime Minister assure my constituents that the British Government will make up the shortfall in funding for them, based on the British Government’s negotiating position on the EU budget?

[The Prime Minister]

I will certainly look carefully at what the hon. Gentleman said before we return to the European budget issues in February. Frankly, however, if we want a good deal for Britain in terms of the level of payments we make, we have to accept the fact that in an enlarged European Union—and we support enlargement—we are going to see a greater percentage of those structural funds go to the relatively poorer countries of eastern and southern Europe. I think we have to understand that when we take part in the negotiations.

[Mark Field (Cities of London and Westminster) (Con)]

On the issue of banking union, I wholly endorse the Prime Minister’s view that we were able to secure in Brussels the very best deal in the circumstances. Will he confirm, however, that the double majority arrangements now set some sort of precedent for the two-speed Europe that many believe is in the UK’s national interest—on this and related matters?

[The Prime Minister]

I would make two points in response. I believe it is possible to have different countries involved in different things within the European Union. I do not particularly like the expression “two-speed”, which implies that one is racing ahead and the other is not, yet in many cases I would argue that not being in the single currency is beneficial for Britain, and not being in the no-borders agreement is right for Britain. My hon. Friend is absolutely right to say that this was a breakthrough negotiation, showing it is possible to have a new set of rules to safeguard those countries that want to stay outside some European institutions.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I am sorry, but may I press the Prime Minister on his long-awaited European speech? I really do not think he has got it clear. Is it not happening because he does not yet know what he wants to say, or because he is not allowed to say what he wants to say?

[The Prime Minister]

I will be making the speech in the middle of January—[Hon. Members: “Ah!”] I am delighted that Opposition Members are so excited and are looking forward to it. The hon. Lady might have noticed that I have had a number of other things to attend to in recent weeks, but I have a feeling—knowing her views and the moves she has been making over the years as I have watched her in the House—that she may quite like it.

[Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate the Prime Minister on the ground-breaking deal for Britain’s financial services that he struck in Europe. Does he agree that it is astonishing that Labour Members seem to think it is simply a case of “in or out, and why don’t you get on with it”, when it is far more important to negotiate a better deal for British taxpayers? My right hon. Friend is absolutely on the right track.

[The Prime Minister]

I thank my hon. Friend for her question. I should say that the banking union agreement was negotiated not by me but by the Chancellor of the Exchequer. He deserves the credit for the 5 am finish in the negotiations, which safeguarded Britain’s interests. My hon. Friend is right in what she says.

[Chris Bryant (Rhondda) (Lab)]

I warmly congratulate the Prime Minister—[Interruption]—it’s all right, don’t worry—on supporting, last week, a step change in the development of a common defence and foreign policy for the European Union, especially as we are in the run-up to the EU Russia summit on Friday. Does it not make sense for Europe to approach, in particular, the Russian Federation with a single set of core objectives, so that we can see a successful set of outcomes? When the Germans or the French have negotiated on their own, everyone has ended up with a bad deal. Now that the Americans have introduced a Magnitsky Act, is it not time that we did the same in this country?

[The Prime Minister]

What I would say to my— [Laughter.] I am sorry; there is only so much excitement that one can take in a single day. What I would say to the hon. Gentleman is that I think that one of the worthwhile aspects of our engagement in Europe is the ability to discuss issues—whether they relate to the situation in Syria or to relations with other powers—and try to reach common positions that maximise the influence that we then have. I think it important for the discussions to be held on the basis of unanimity. We do effectively have a veto in this area, but when we can agree, as we did on Syria and Iran, there can be very powerful consequences.

[Mr Edward Leigh (Gainsborough) (Con)]

When will the British people be given their democratic right, namely a choice in a referendum between being part of a customs union and being part of a European Union?

[The Prime Minister]

My hon. Friend has made a very good, very clear case. He has always held that view. I shall set out in my speech in the middle of January the path that we should take for the future, but let me say now to Members in all parts of the House that, as I tried to explain in my statement, what is happening at present in the European Union is a process of change, driven by what is happening in the eurozone. As a number of Members have pointed out, it is quite a slow process at the moment, but I believe that at some stage it will speed up radically. When we discover that we really do need greater elements of banking union, fiscal union and other co-ordination, a greater treaty change will be proposed within Europe, and I think that that will give us an opportunity to secure the fresh settlement that we want.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Is there still an EU arms embargo? It has been reported that France is already supplying equipment to some opposition groups, and at the same time this country is providing non-lethal equipment. What exactly is going to happen? What kind of equipment will we be providing? Given that Qatar and Turkey are already arming the more extreme jihadist groups, is this an argument for rebalancing within the Syrian national coalition?

[The Prime Minister]

The hon. Gentleman has made a number of important points. On the first part of his question, I have seen no evidence that any European Union powers have broken the arms embargo. We certainly would not do that; it would be wrong and illegal. I think it is worth looking at the embargo and asking how we can best work with the parts of the Syrian opposition that want a proper transition to a free and democratic Syria. The hon. Gentleman made that point in his own question.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I commend my right hon. Friend on his determination not to wreck his Christmas by trying to write a speech on the European Union at the same time?

My right hon. Friend said that we had

“agreed a new voting system that means that the eurozone cannot impose rules on the countries outside the euro area, such as Britain, without our agreement.”

Will he confirm that, in saying that, he did not mean that the treaty had been rewritten, or that the single market article was now subject to a different voting system, so that anything agreed by the banking union could still be put forward by the Commission as a single market proposal to be forced through on a single qualified majority vote?

[The Prime Minister]

I greatly respect my hon. Friend’s views on and knowledge of this issue. I was not claiming that we had changed the treaty. The point that I was making was that a number of people in the European Union, including the Commission at one stage, had said that it was impossible to write new rules to deal with circumstances in which some were in the single currency and some were outside it, but we had persevered. We said “If you want to go ahead with banking union, this really is essential”, and that is why there is effectively a new system. If more than four countries are outside the banking union, there must be a double majority in favour of a proposal: a majority of those outside, and a majority of those inside.

I am not claiming that we have rewritten the treaties, or that this is a new treaty change; it is not. However, I think that it is a step forward to deal with a deep problem that Europe will have as the single currency integrates further and those outside it want to ensure that they are properly protected.

[Kelvin Hopkins (Luton North) (Lab)]

I am one of those who very strongly take the view that Greece, Spain and Italy can recover economically only if they leave the euro and recreate their own currencies and have their own interest rates. Was there any private discussion about the effect of the imminent departure of Signor Monti and the re-entry into front-line politics of Signor Berlusconi on the future of Italy in the euro?

[The Prime Minister]

There was not any open discussion about that issue, although I understand that Signor Berlusconi was in Brussels on the day of the European Council. My view is that these are issues for the countries in question. We can all have our views about the economic position of these countries, or indeed the political choices they make, but in the end, if we believe in democracy, we have to allow the Greek, Italian and Spanish voters to elect Governments who reflect their views. That is the way it has to work.

[Mr Robert Buckland (South Swindon) (Con)]

I warmly welcome the commencement of free trade talks between the EU and Japan. That is of vital importance to Honda workers in my constituency, and does it not also demonstrate the continuing importance of our membership of the EU in extending free trade across the world?

--- Later in debate ---

[The Prime Minister]

My hon. Friend makes an important point, and I very much enjoyed visiting the Honda plant in his constituency and hearing for myself how important the people there believe a free trade agreement with Japan would be. The automotive industry in Britain is a success story. Honda, Nissan, Toyota and Jaguar Land Rover are all doing well. They are doing well because of the highly trained and motivated work force here in Britain, of course, but also because we are members of the single market and have the ability to sell into Europe. We should remember that.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Prime Minister has said his policy on Europe is modelled on the “tantric” approach. Given the different, and increasingly bizarre, positions of some members of his Government on Europe, can he confirm that his final speech will be based on the “Kama Sutra”?

[The Prime Minister]

In my defence, my remarks were spontaneous and made in an unwritten speech, whereas the hon. Gentleman actually planned those comments.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I should like to reassure the Prime Minister that for the sake of consistency we had a toast to him in Somerset at the weekend, but I am afraid there is a “but” on this occasion, which is that agreement to the single supervisory mechanism was by unanimity, but the rules for voting on the European Banking Authority can be changed by qualified majority voting. I therefore wonder whether the Prime Minister has got enough from these negotiations, and whether we ought to repatriate financial services regulation powers.

[The Prime Minister]

My hon. Friend makes an important point, but I am not sure that I agree with him. The banking union changes went through under a treaty article that requires unanimity. That was good for Britain, because it gave us the ability to insist on the changes we needed and to get the safeguards we wanted. I believe, however, that the single market, and qualified majority voting on the single market, has helped to deepen and develop that single market. That is why Margaret Thatcher passed the Single European Act through this House. We want to have an effective single market in financial services. This country has 40% of Europe’s financial services industry, and we have to fight for it and build alliances for it. There are often frustrations in doing so, but having a single market in financial services is good for Britain.

[Nia Griffith (Llanelli) (Lab)]

Some very important decisions will be taken in the EU over the next couple of years, but the Government’s review of the competences is not expected to report back in full until 2014. How will that impact on the UK’s current negotiating position?

[The Prime Minister]

The hon. Lady asks an important question, but I think the timing is relatively helpful. It is sensible for Britain to have a balance of competences review, given how long we have been a member of this organisation. Let us go through the areas of competence—those inside and those outside the European Union—and ask in each case whether we benefit, what the problems are, and what the potential opportunities are, and reach a proper view about them. That will inform the decisions we make as the EU develops. As I have just argued, I think the real changes in the EU will not come in the next year. As the Leader of the Opposition said in his response, the time-bound road map still has quite a long way to run, and such road maps have a habit of not entirely sticking to the time set.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that the explicit protection for the single market agreed at the European Council makes it easier for those countries that want to have closer integration to integrate and those that want a looser relationship with Europe to have one?

[The Prime Minister]

My hon. Friend makes an important point. What I have spotted over the past seven European Councils is that although to begin with, I was the lone voice always going on about the integrity of the single market—I have a bit of a reputation, dare I say it, for boring on about it in European Councils—a number of other European leaders, including Mario Monti, now see the importance of talking at all stages about safeguarding the integrity of the market.

[Wayne David (Caerphilly) (Lab)]

Does the Prime Minister plan any tantrums or walk-outs from European Council meetings in the near future? Or will he give a commitment to be there at all times, ensuring that he upholds the British national interest?

[The Prime Minister]

I am always there upholding the national interest. I have never walked out of a room, but I have on occasion said no and I think that is sometimes the purpose of a Prime Minister.

[Mrs Anne Main (St Albans) (Con)]

My right hon. Friend said in his statement that there are “questions of national sovereignty” and that this will “alter the European Union for all of us”. Are there any debates in public about this newly created eurozone? What animal will be created and what national sovereignties will be lost? We need to know the being of which we are part.

[The Prime Minister]

The point I would make to my hon. Friend is that there are clearly lively and vigorous debates in eurozone countries, because they are at the sharp end and can see absolutely that there is a battle over national sovereignty, how much say they will have over setting their own budgets and how much of those budgets will be determined by the European Commission. Part of what was discussed by the eurozone at the Council was effectively a set of future contracts whereby countries might have to enter into a contract with the European Commission about their future budgets. There is a very live debate in those countries. We are not in the eurozone, so we are not affected by those contracts, but my argument is that change in the eurozone has knock-on effects for the organisation of which we are a full member and that is why it is so important for us to consider these issues.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

But when will the Prime Minister ask the European Council to investigate widespread and endemic corruption in the European Union, as well as endemic fraud, the fact that billions are being thrown down the drain and that accounts have not been signed off for 18 years? What sort of organisation is that to come to us, the British people, and ask us to pay more money in to it?

[The Prime Minister]

I have a lot of sympathy with what the hon. Gentleman says. Europe has been too loose with its money: it has not been properly audited and there has been too much fraud and, as he says, potentially corruption. On the budget negotiations, the European Commission is having to accept for the first time that its ambitions for spending in Europe are completely unrealistic, not only for spending on programmes, but, as it is beginning to see, for spending on itself, too.

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate the Prime Minister on putting off his speech about Europe. It is clear to me that it is a most important speech and it is better to put it off and get it right. We had a little hint today, Mr Speaker, when he said for the first time that he was against an immediate in/out referendum and I think the British people can wait until January for their Christmas present.

[The Prime Minister]

I am not sure that I will be able satisfy my hon. Friend or, indeed, the other members of his household, but I will try my best. As I have tried to explain this afternoon, the change process in Europe requires some tactical and strategic patience in the UK to see how that change will pan out so that we can get our response to it right. That will be the time at which we will have the maximum amount of influence: when Europe is making big changes itself.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

In answer to a previous question, the Prime Minister said that he is in favour of the expansion of the European Union. How big does he want the European Union to get and what are the implications for the movement of populations across Europe?

[The Prime Minister]

I would argue in favour of, as some would put it, a Europe that extends from the Atlantic to the Urals and includes all those countries that are currently applying, such as the countries of the western Balkans—I would very much like to see Macedonia and others become members of the European Union. One of the European Union’s greatest successes has been that countries wanting to join have entrenched their democracy and their belief in open and free markets. It has been a very successful policy in that regard. Britain has always argued for enlargement and we should continue to do that. We should always put in place transitional controls, which I am afraid the last Government failed to do.

[Martin Horwood (Cheltenham) (LD)]

Many Syrians will welcome robust European support for the mainstream opposition, but will the EU, like the UK Government, urge the involvement of Kurdish as well as Alawite Christian and other minorities in opposition councils? That seems vital for future peace.

[The Prime Minister]

My hon. Friend makes a vital point; we should be encouraging an inclusive transitional authority, as we have done in all the meetings of my right hon. Friend the Foreign Secretary and the Friends of Syria group. The Kurds have now joined the Syrian national coalition.

[Mr Jim Cunningham (Coventry South) (Lab)]

I noticed that in the Prime Minister’s statement nothing was said about recent events between the Israelis and the Palestinians. Was there any discussion of that situation, particularly about sanctions, and more importantly, the two-state solution?

[The Prime Minister]

There was not a specific discussion at the Council of the middle east peace process. We were focused particularly on Syria; there was also a discussion about future enlargement. There was not a big discussion about the middle east peace process. Our position is clear, as the hon. Gentleman knows; we support the two-state solution and everything we do should be encouraging it to come about.

[Dr Julian Lewis (New Forest East) (Con)]

Talking about membership of the European Union, did the Prime Minister pick up, although no doubt it was not on the formal agenda, whether or not an independent Scotland would have to reapply to join, and if so, whether it would have to join the euro?

[The Prime Minister]

My hon. Friend makes an important point. There was no formal discussion, but the issue was discussed in the margins, as it were, because a number of countries take an interest in it. The letter from José Manuel Barroso is pretty clear: Scotland would have to apply to join the European Union. Obviously, Britain is the only country that has a legal, binding, copper-bottom opt-out from the euro. All the other countries, by and large, are committed to join the euro—[Interruption.] And Schengen, as the hon. Gentleman says. That is important for the Scottish debate.

[Paul Flynn (Newport West) (Lab)]

The Prime Minister said that Syria is attracting and empowering elements linked to al-Qaeda, presumably to help the Government side. What evidence does he have for that?

[The Prime Minister]

Tragically, the elements that are linked to al-Qaeda are actually linked to elements of the opposition. There is strong evidence that groups such as the al-Nusra front take an unacceptable view about Islamic extremism. There are very real concerns about the issue, which lead to the argument about how involved we should get with the Syrian opposition. There is a strong argument that by being more involved with like-minded allies we could try to support the elements of the Syrian opposition that most want to see a free, democratic and inclusive Syria.

[Mr John Baron (Basildon and Billericay) (Con)]

Given the push for ever-closer union in the eurozone, does the Prime Minister believe that the status quo for Britain—outside the eurozone but inside the EU—has a viable long-term future?

[The Prime Minister]

The short answer is yes. The European Union is going to have to manage with some countries that are in the eurozone, some countries that are not in the eurozone and are pretty unlikely to join for a pretty considerable time and some countries, such as Britain, that in my view will never join. When we look at opinion polls in the Czech Republic or Sweden, or in some other countries outside the eurozone, there is no sign of them joining the euro any time soon, so Europe will have to manage in that way. My argument is that it needs to be flexible now, and perhaps even more flexible in the future, so that all countries can be content with the membership they have.

[Kevin Brennan (Cardiff West) (Lab)]

When the Prime Minister finally delivers his long-delayed speech on Europe, will it be the policy of the UK Government that he sets out, or will it be the policy of part of the UK Government excluding the Education Secretary, the policy of part of the UK Government excluding the Liberal Democrats or the policy of part of the Conservative party—or will it just be his own personal opinion?

[The Prime Minister]

I am so pleased the hon. Gentleman is looking forward to my speech. He will obviously read it very closely, which will be worth while. Clearly, this country has some choices to make about Europe within this Parliament, and we have already made some big choices. We have said no to more powers being passed from Westminster to Brussels, and unlike the previous Government, there have been no powers passed. We have said let us get some powers, such as the bail-out powers, back from Brussels, and we have got those back. We have said let us get a better financial deal, and I am confident that we will get a far better financial deal than anything negotiated by the Opposition. But of course there will be a choice for all political parties, the hon. Gentleman’s included. As the eurozone changes, as Europe develops, there will be a choice to make in the run-up to the 2015 election to set out how we are going to take the British people with us to make sure that we get the best future for Britain in Europe.

[Philip Davies (Shipley) (Con)]

After the last European Council, the Prime Minister indicated that he favoured an in/in referendum. Further to the point from my hon. Friend the Member for Wellingborough (Mr Bone), in reply to which the Prime Minister seemed to oppose an immediate in/out referendum, may we take it that he now supports an in/out referendum, perhaps in the next Parliament? If he does introduce that policy, I can assure him that he will have a great deal of support from those on the Government Benches and also from the public at large.

[The Prime Minister]

I am grateful, as ever, for my hon. Friend’s advice, which is always candid and straightforward. I will make sure that he gets a copy of my speech in the middle of January and he will able to study it closely.

[Mr William Bain (Glasgow North East) (Lab)]

The Council conclusions call upon member states to pursue “growth-friendly, fiscal consolidation”. Does the Prime Minister accept that with our economy shrinking this year, the eurozone economy predicted to shrink next year, and 25 million people across the EU out of work, the plan is not working over there and it certainly is not working here?

[The Prime Minister]

I think the reference to growth-friendly consolidation is right. That is why, for instance, in the autumn statement, we have put more money into capital spending in the immediate years, and also taken some difficult decisions on welfare spending—decisions which I know the hon. Gentleman’s party is unprepared to support—to make sure that we can focus on those things that will help with growth. But when we look across Europe, we can see that because we set out a long-term plan for getting on top of the problems in our public finances, we are able to take it in reasonable stages and at a reasonable pace—one of the advantages of not being trapped in a system where we are told what to do by the European Commission.

[Richard Drax (South Dorset) (Con)]

I refer the Prime Minister to an earlier question about certain countries adopting their own currencies. He said that if we believe in democracy, the right decision will be made. Does he agree that there is no democracy in this federalist state at all? Does he also agree that true democracy can only be the repatriation of all the powers to sovereign countries?

[The Prime Minister]

The point that I was trying to make in response to the earlier question is that we have to respect the outcomes of elections in other countries. In Greece elections have been held. In Spain elections have been held. We may think that those countries have taken the wrong decisions with respect to the euro or whatever, but those are decisions for them to take, not for us to take. We in this country, through this House of Commons elected by the British people, should determine the right approach for Britain, but I do not think it is possible to say that we have a right in this House to decide the right approach for Greece, Spain or Italy. We may have strong views, but the idea that we can go to the European Council and just tell all those people that they are not listening properly to their own publics is incredible.

[Toby Perkins (Chesterfield) (Lab)]

Is it not the reality that the Prime Minister has not made his long-awaited speech because he is the head of a party that is entirely ungovernable on Europe?

[The Prime Minister]

No, I completely disagree. The Conservative party’s position is absolutely in line with the position of the British public, which is that we know we need to be in the single market because we are a trading nation and our businesses benefit and our economy benefits from that, but we are not happy with every element of our membership of the European Union. Unlike the Labour party, which just caved in, gave in on common agricultural policy reform, gave in on the rebate, gave in on the bail-out, we are prepared to stand up and get what we want.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Reform, for most EU states, seems to be focused on banking reform, but for many of us this extends to cutting waste and spending, CAP reform, and repatriation of powers—all things which will certainly be thrown into the reckoning in an in/out referendum or indeed any kind of referendum, so could my right hon. Friend explain how these wider issues are being addressed by the European Council members?

[The Prime Minister]

In terms of the UK, I think that the balance of competences review is a good exercise for looking at all our engagement with Europe and its costs and benefits. Within the European Union, all those issues are addressed and different countries come to different conclusions. We should not be frightened of standing up and saying very clearly what we think is in Britain’s interests.

[Mr Speaker]

I fear that the Annunciator is rather over-excited. I can assume only that it has not yet become accustomed, as I have not, to the spectacle of the hon. Member for Shipley (Philip Davies) using an iPad in the Chamber. It is quite a remarkable state of affairs on which he is, of course, to be congratulated.

[Huw Irranca-Davies (Ogmore) (Lab)]

I ask the Prime Minister: on actual, tangible economic growth, how is it going?

[The Prime Minister]

In the last quarter the British economy grew by 1%, the fastest growth of any major country in the European Union. Clearly, though, right across Europe there are immense growth challenges. The eurozone is back in recession. What we see with the British economy, despite all the difficulties, is that there are over 1 million extra people in private sector jobs compared with when we came into office.

[Henry Smith (Crawley) (Con)]

A few weeks ago I held a conference with my local small and medium-sized enterprises, along with UK Trade & Investment, focusing on increasing exports. Will my right hon. Friend say a little more on how he has been able to protect small and medium-sized enterprises from unnecessary and burdensome European regulation?

[The Prime Minister]

What we have managed to do is get the European Commission not only to instruct—it is quite fond of doing this—other European countries to look at deregulation, but to look at its own rules and regulations. I think that it is quite striking that the communiqué, the Council conclusions, actually uses the word “scrap” in relation to some European regulations, particularly those that are no longer of use. The Europe Minister, who is sitting next to me, is gesticulating because he knows that getting the bureaucrats in Brussels to use a word like “scrap” is an achievement.

[John Cryer (Leyton and Wanstead) (Lab)]

Will the process of increasing centralisation and integration, which the Prime Minister mentioned at the beginning of his statement, lead inevitably to a loss of democratic accountability, and what future implications will that have for the security of democracy in many western European countries?

[The Prime Minister]

I think that the hon. Gentleman makes an important point. It is for those countries that are contemplating that integration and that loss of sovereignty to answer that question. I would not be comfortable with it, as someone who believes in the importance of national Parliaments, national democracy and national decision making, but it is for Greek voters and politicians and Spanish voters and politicians to have that debate themselves. Are they content to give up that much sovereignty in return for a single currency that works? That is their decision. We can all have our views on that, but we have to allow them to make that determination. The point I would make, having attended these things for two and a half years, is that we should not underestimate the sense of mission that those European countries and leaders have about their own currency and wanting to make it work.

[Mr Julian Brazier (Canterbury) (Con)]

In supporting my right hon. Friend’s struggle for British interests and, in particular, his identification of the crisis in the eurozone as the key driver for change, may I urge him to put free movement of labour at the top of the issues for potential renegotiation because, as a number of Members on the Government Benches, including the Front Bench, have pointed out, it might not be only the recent entrants with whom we have problems if the crisis in southern Europe worsens over the next year or two?

[The Prime Minister]

I will look carefully at what my hon. Friend has said. Clearly, the freedoms of the European Union—the freedom to trade, free movement of capital and free movement of people—have all been important in trying to deliver the economic growth and success we want to see. I will make two points. First, when new members have joined we have been able to put in place transitional controls, and in my view we should always do that. Secondly—this was examined when there was a greater sense of crisis in the eurozone—there are rules that can be invoked in a time of crisis if we need to abrogate those freedoms in some way.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Can the Prime Minister ever imagine Britain leaving the EU?

[The Prime Minister]

That is not a position I support, so I do not spend my time thinking about it, but clearly all futures for Britain are imaginable—we are in charge of our own destiny and can make our own choices. I believe that the choice we should make is to stay in the European Union, to be a member of the single market and to maximise our impact in Europe, but when we are unhappy with parts of the relationship we should not be frightened of standing up and saying so. As I have said, we have got out of the bail-out power. I think that we made a mistake joining the social chapter. We should be prepared to have these discussions. The fact that we are not in the Schengen agreement is not a disaster for Britain; it is a bonus for Britain. The fact that we are not in the single currency is not a disaster for Britain; it is a bonus for Britain. That is the sort of Europe we should be pushing for.

[Mark Pritchard (The Wrekin) (Con)]

Ahead of my right hon. Friend’s speech on Europe, and given his very busy schedule to which he referred, may I, in the spirit of Christmas, offer him a helping hand on his Europe speech and say that I will be fully available all over the Christmas holidays?

[The Prime Minister]

That is an alluring prospect, and I am sure that many hands will make light work.

[Jim Shannon (Strangford) (DUP)]

I thank the Prime Minister for his statement. I refer him to the growth and competitiveness part of it and the sentence about “new safeguards that will protect the interests of those countries outside the eurozone.” The United Kingdom of Great Britain and Northern Ireland has strong economic and trading contact with the Commonwealth countries. Will he assure this House that the historic trading links with the Commonwealth will be encouraged to continue and grow within Europe?

[The Prime Minister]

The hon. Gentleman makes an important point. Half our trade is with the European Union, but the other half is with countries outside the European Union. In recent years we have obviously seen very fast growth in that trade with some of the fast-growing BRIC countries—the Brazils, the Russias, the Indias and the Chinas—but we also have very strong relations with our Commonwealth partners. We should be encouraging our trade relations with all those countries. There is also the EU-Canada free trade agreement, which is under negotiation and could bring real benefits to both sides.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Will the Prime Minister comment on reports that Turkey has made a new proposal to Russia for a transition in Syria?

[The Prime Minister]

Discussions are always under way between the leading powers who are concerned about the future of Syria. Obviously both Turkey and Russia play quite influential roles in terms of this issue, and everything we can do to encourage contact, particularly with the Russians, to encourage them to think about how we can achieve a transition in Syria is worth while.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I refer the House to my declaration of interest. Was there any discussion at the Council about co-operation with China to accelerate the reductions in cost in a transition to a low-carbon economy? Will the Prime Minister meet me and other members of GLOBE UK to discuss this issue?

[The Prime Minister]

There were no discussions about our relations with China on this occasion, nor were there discussions on energy policy, which take place at different European Councils, but I am always happy to meet my hon. Friend and hear his concerns.

[Charlie Elphicke (Dover) (Con)]

My right hon. Friend will be aware of the idea that, in future, City of London traders could deal in yen and in dollars but perhaps not in euros. Do the safeguards that he won in Europe protect the City of London from that risk?

[The Prime Minister]

My hon. Friend makes an important point. There have been moments over previous years when it looked as though, because of a location policy, it would have been possible to say that Britain could clear deals in pounds, in yen and in dollars but not in euros. As a member of the European Union, which is about free trade and a single market, this would have been a ridiculous state of affairs. The guarantee that my right hon. Friend the Chancellor secured on a no-discrimination policy takes us largely down the road we want to be on.

[Bob Stewart (Beckenham) (Con)]

Will my right hon. Friend reaffirm his position with regard to the European Union military command headquarters, particularly as five major nations in Europe want it to be established, and I do not think we do?

[The Prime Minister]

I am happy to repeat that we are against the idea of an operational headquarters. This came up again tangentially at the European Council, with some attempts to change the language about what was required, and I said that that was not acceptable. The focus of the European Council conclusions is rightly about capacity. We are all interested in European countries having greater capacity to deal with these issues, but we do not want duplication of headquarters and challenges to NATO.

[Mr Robin Walker (Worcester) (Con)]

May I welcome the Prime Minister’s very clear statement that we will never support a European army? In an increasingly multi-polar and fast-changing world, and given his answer to the question about Commonwealth trading, does he agree that it would also be against Britain’s interests as a trading nation to give up its independent foreign policy and support a full common foreign policy?

[The Prime Minister]

My hon. Friend makes an important point. I think we can have the best of both worlds, where we work with European partners to have common positions on issues such as sanctions against Iran or Syria, which can maximise our potential and our influence; but, at the same time, we are an independent power and are able to have independent policies and forge independent relations with some of the fastest-growing countries of the world, and we should continue to do that.

[Valerie Vaz (Walsall South) (Lab)]

Will the Prime Minister clarify whether, if he does not get his preferred position on renegotiation, he would consider leaving the European Union?

[The Prime Minister]

As I have said, I think that Britain will do best if we can maintain not just our access to the single market, but, crucially, our ability to help set the rules of that single market. That is where I part company with those people who want to leave altogether, because it seems to me that it is absolutely vital that a nation that is as reliant on trade and that is as open as Britain is does not just have access to those markets, but helps write the rules of those markets as well. That is the future we should seek.

[Jason McCartney (Colne Valley) (Con)]

I praise my right hon. Friend for raising the issue of the EU defence policy, because there is confusion and duplication in relation to command and control. I have seen the operations in the horn of Africa, for example, which has the EU’s Operation Atlanta and NATO’s Operation Ocean Shield. With that in mind, is he concerned, like me, about the proliferation of costly EU embassies, which are popping up all over the planet?

[The Prime Minister]

On the issue of the embassies of the European External Action Service, we in this party did not support them in the first place. We should limit them and try to make them as cost-effective as possible.

There is always a risk of potential duplication, which is why Britain and the other strong supporters of NATO should always stand up firmly and say that we do not want costly bureaucracies and new headquarters that are all about flags and politics. Obviously, however, we want other European countries to step up to the plate with greater capacity, so that in areas such as the horn of Africa or Kosovo we are able to get the effect that we need on the ground.

[Mr David Nuttall (Bury North) (Con)]

One of the many problems arising from our membership of the European Union is that UK businesses are burdened with rules and regulations from Brussels that hinder their ability to compete in the global race that my right hon. Friend rightly says we are in. To follow on from the point made by my hon. Friend the Member for Crawley (Henry Smith), paragraph 18 of the Council conclusions refers to reducing the regulatory burdens from Brussels. Realistically, however, what cuts in red tape does my right hon. Friend expect to be proposed when the matter is next brought before the Council in March next year?

[The Prime Minister]

What I hope for is that we will put pressure on the Commission between now and March to come up with a serious list of European directives and regulations that can be radically amended or cut. We are doing that in the UK through the regulatory changes being led by the Government—we have identified about 3,000 regulations to get rid of—and we want the same process to take place in Brussels. I mentioned paragraph 18 earlier. It says:

“The European Council welcomes the proposals by the Commission to reduce regulatory burdens and scrap regulations that are no longer of use”.

I do not think that the word “scrap” has ever appeared in European Council conclusions before and I am rather proud to be the person who put it there.

[Jeremy Lefroy (Stafford) (Con)]

Was my right hon. Friend able to raise with his fellow leaders the question of the fulfilment of the pledges they made to international development in 2005?

[The Prime Minister]

We did not discuss international development at this Council, because it was largely about the eurozone, but we did discuss briefly the effect of European aid, particularly in Syria, where Britain is playing a key role, as is the EU, with its aid budget, which is making sure that we ease the scale of the humanitarian crisis, and that is good and important work.

[Dr Sarah Wollaston (Totnes) (Con)]

Better tantric than premature—we have all seen where that got the Leader of the Opposition on Leveson. We are waiting breathlessly for my right hon. Friend’s speech in mid-January. Will he include in it a statement on the impact on employment in this country of an influx of Bulgarian and Romanian workers?

[The Prime Minister]

Given my hon. Friend’s medical background, I think that I will leave all such remarks to her and not make them myself. She makes an important point about the end of transitional controls. Obviously, I will look at that issue carefully.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Does the Prime Minister agree that a banking union should never be able to ride roughshod over those outside the eurozone?

[The Prime Minister]

I do agree with my hon. Friend. A banking union is necessary for the countries of the single currency. As I have said, we have a single currency in the pound and there is a banking union between England, Scotland, Wales and Northern Ireland. The countries with the single currency need a banking union, but it should not ride roughshod over others. That is why it is important not only that we are outside the banking union, but that we have secured the voting rules so that the “outs” have a say over things that could affect them.

[Andrew Bridgen (North West Leicestershire) (Con)]

In response to an earlier question, my right hon. Friend said that he believes it will take a considerable time for the eurozone countries to negotiate full fiscal union. Given the acuteness of the eurozone crisis, does he really believe that they will have the luxury of having the time that they need?

[The Prime Minister]

My hon. Friend asks a good question. Because of the success of the European Central Bank in calming the markets, there is perhaps less pressure on the eurozone countries to take the steps that many analysts believe they need to take. The reason why I think it will take time is that these are difficult issues for sovereign countries. As I have said, one issue that was discussed only in outline form at the Council was the idea of contracts between Governments and the European Commission. I do not know how such contracts will go down in other European countries, but I suspect that they would go down rather badly if we proposed them here. These are difficult issues that it will take time to discuss. We need to think about that as we calibrate our response.

[Michael Fabricant (Lichfield) (Con)]

Anders Borg, the Swedish Finance Minister, said that when the financial transaction tax was introduced in Sweden,

“between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London”.

What steps has the Prime Minister taken to ensure that we do not find that such a tax is imposed in the UK, which is what the Labour party wants, and that our traders do not all go to New York and Zurich?

[The Prime Minister]

My hon. Friend makes an important point. Anders Borg is an excellent Finance Minister. The Chancellor of the Exchequer and I work very closely with him. I believe that if a financial transactions tax is not introduced simultaneously around the world, the transactions will just go to the lowest-cost destinations. That is why it is totally self-defeating. The European Commission’s own piece of work on such a tax showed that it would cost hundreds of thousands of jobs and millions of pounds of revenue, not just in the UK, which has a large financial services industry, but in the rest of Europe.

[Mr Philip Hollobone (Kettering) (Con)]

Prior to the entry of a large number of eastern European countries to the EU a few years ago, the previous Government made the hideously inaccurate forecast that just 13,000 eastern Europeans a year would come to our shores. The total is now 1.5 million and rising. Next Christmas, the transitional controls for Bulgaria and Romania will cease, but the Home Office has refused to make an estimate—on the principle of once bitten, twice shy—of how many people will come to our shores. Have the Bulgarian or Romanian Governments apprised the Prime Minister of their estimates of how many of their citizens may be coming our way?

[The Prime Minister]

To answer my hon. Friend directly, I have not asked those Governments for an estimate. He is right to say that the transitional controls are coming off and that the previous forecasts were wrong. I will discuss this important issue with the Home Secretary in the months ahead.

[Mr Speaker]

I thank the Prime Minister, the Leader of the Opposition and all 58 Back Benchers who questioned the Prime Minister.

Patrick Finucane Report

Lord Cameron of Chipping Norton Excerpts

Wednesday 12th December 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on Sir Desmond de Silva’s report on the nature and extent of state collusion in the murder of Patrick Finucane. The murder of Patrick Finucane in his home in North Belfast on Sunday l2 February 1989 was an appalling crime. He was shot 14 times as he sat down for dinner with his wife and three children. He died in front of them. His wife was injured, and Pat Finucane died in front of his family.

In the period since the murder, there have been three full criminal investigations carried out by the former Metropolitan Police Commissioner, Lord Stevens. Taken together, they amount to the biggest criminal investigation in British history, led by the most senior police officer, and consisting of more than 1 million pages of documents and 12,000 witness statements obtained with full police powers. As a result of the third Stevens investigation, one of those responsible, Ken Barrett, was tried and convicted in 2004 for the murder of Patrick Finucane.

There was a further report by Judge Cory. Both Lord Stevens and Judge Cory made it clear that there was state collusion in the murder. This itself was a shocking conclusion, and I apologised to the family on behalf of the British Government when I met them last year. But despite these reports, some 23 years after the murder, there has still only been limited information put into the public domain. The whole country and beyond is entitled to know the extent and nature of the collusion, and the extent of the failure of our state and Government. That is why, last October, this Government asked Sir Desmond de Silva to conduct an independent review of the evidence to expose the truth as quickly as possible.

Sir Desmond has had full and unrestricted access to the Lord Stevens archive and to all Government papers. These include highly sensitive intelligence files and new and significant information that was not available to either Lord Stevens or Justice Cory, including Cabinet papers, minutes of meetings with Ministers and senior officials, and papers and guidance on agent handling. He has declassified key documents, including original intelligence material, and he has published them in volume 2 of his report today. The decision over what to publish was entirely his own—it was entirely a matter for Desmond de Silva. I believe that Sir Desmond’s report has now given us the fullest possible account of the murder of Patrick Finucane and the truth about state collusion. The extent of disclosure in today’s report is without precedent.

Nobody has more pride than me in the work of our armed forces, police and security services. I see at close hand just what they do to keep us safe. As Sir Desmond makes clear, he is looking at

“an extremely dark and violent time”

in Northern Ireland’s history. I am sure that the whole House will join me in paying tribute to the police and security forces that served in Northern Ireland, but we should be in no doubt that this report makes extremely difficult reading. The report sets out the extent of collusion in areas such as identifying, targeting and murdering Mr Finucane; supplying a weapon and facilitating its later disappearance; and deliberately obstructing subsequent investigations. It also answers questions about how high up the collusion went, including the role of Ministers at the time.

Sir Desmond is satisfied that there was not

“an over-arching State conspiracy to murder Patrick Finucane”,

but while he rejects any state conspiracy, he does find frankly shocking levels of state collusion. Most importantly, Sir Desmond says he is

“left in significant doubt as to whether Patrick Finucane would have been murdered by the UDA”—

the Ulster Defence Association—

“in February 1989 had it not been for the different strands of involvement by elements of the State.”

He finds that

“a series of positive actions by employees of the State actively furthered and facilitated his murder”.

Sir Desmond cites five specific areas of collusion. First,

“there were extensive ‘leaks’ of security force information to the UDA and other loyalist paramilitary groups.”

He finds:

“In 1985 the Security Service assessed that 85% of the UDA’s ‘intelligence’ originated from sources within the security forces.”

He is

“satisfied that this proportion would have remained largely unchanged by…the time of Patrick Finucane’s murder.”

Secondly, there was a failure by the authorities to act on threat intelligence. Sir Desmond describes

“an extraordinary state of affairs…in which both the Army and the RUC SB”—

Royal Ulster Constabulary special branch—

“had prior notice of a series of planned UDA assassinations, yet nothing was done by the RUC to seek to prevent these attacks.”

When we read some of the specific cases in the report—page after page in chapter 7—it is really shocking that this happened in our country. In the case of Patrick Finucane, Sir Desmond says that

“it should have been clear to the RUC SB from the threat intelligence that…the UDA were about to mount an imminent attack”,

but

“it is clear that they took no action whatsoever to act on the threat intelligence.”

Thirdly, Sir Desmond confirms that employees of the state and state agents played “key roles” in the murder. He finds that

“two agents who were at the time in the pay of agencies of the State were involved”—

Brian Nelson and William Stobie—

“together with another who was to become an agent of the State after his involvement in that murder”.

It cannot be argued that these were rogue agents. Indeed, Sir Desmond concludes that Army informer Brian Nelson should

“properly be considered to be acting in a position equivalent to an employee of the Ministry of Defence.”

Although Nelson is found to have withheld information from his Army handlers,

“the Army must bear a degree of responsibility for Brian Nelson's targeting activity during 1987-89, including that of Patrick Finucane.”

Most shockingly of all, Sir Desmond says that

“on the balance of probabilities…an RUC officer or officers did propose Patrick Finucane…as a UDA target when speaking to a loyalist paramilitary.”

Fourthly, there was a failure to investigate and arrest key members of the West Belfast UDA over a long period of time. As I said earlier, Ken Barrett was eventually convicted of the murder. What is extraordinary is that back in 1991, instead of prosecuting him for murder as the RUC criminal investigation department wanted, the RUC special branch decided instead to recruit him as an agent.

Fifthly, this was all part of what Sir Desmond calls a wider

“relentless attempt to defeat the ends of justice”

after the murder had taken place. Sir Desmond finds that

“senior Army officers deliberately lied to criminal investigators”

and that the RUC special branch

“were responsible for seriously obstructing the investigation.”

On the separate question of how certain Ministers were briefed, while Sir Desmond finds no political conspiracy, he is clear that Ministers were misled. He finds that

“the Army and Ministry of Defence (MoD) officials provided the Secretary of State for Defence with highly misleading and, in parts, factually inaccurate advice”

about the force research unit’s “handling of Brian Nelson.” On the comments made by Douglas Hogg, Sir Desmond agrees with Lord Stevens that the briefing he received from the RUC meant that he was “compromised”. However, Sir Desmond goes on to say that there is

“no basis for any claim that he intended his comments to provide a form of political encouragement for an attack on any solicitor.”

More broadly on the role of Ministers, Sir Desmond says that there is

“no evidence whatsoever to suggest that any Government Minister had foreknowledge of Patrick Finucane’s murder, nor that they were subsequently informed of any intelligence that any agency of the State had received about the threat to his life.”

He says that the then Attorney-General, Sir Patrick Mayhew, deserves

“significant credit for withstanding considerable political pressure designed to ensure that Brian Nelson was not prosecuted.”

As a result, of course, Nelson was prosecuted in 1992, following the first investigation by Lord Stevens.

The collusion demonstrated beyond any doubt by Sir Desmond, which included the involvement of state agencies in murder, is totally unacceptable. We do not defend our security forces, or the many who have served in them with great distinction, by trying to claim otherwise. Collusion should never, ever happen. So on behalf of the Government, and the whole country, let me say again to the Finucane family, I am deeply sorry.

It is vital that we learn the lessons of what went wrong, and for Government in particular to address Sir Desmond’s criticisms of a

“wilful and abject failure by successive Governments to provide the clear policy and legal framework necessary for agent-handling operations to take place effectively and within the law.”

Since 1989, many steps have been taken to improve the rules, procedures and oversight of intelligence work. There is now a proper legal basis for the security services, and the Regulation of Investigatory Powers Act 2000 has established a framework for the authorisation of the use and conduct of agents. In addition, the activities of individual agents are now clearly recorded, along with the parameters within which they must work. The Intelligence Services Commissioners and the Office of Surveillance Commissioners now regulate the use of agents and report publicly to this House. Taken together, those changes are designed to ensure that the failures of 1989 could not be made today.

Policing and security in Northern Ireland have been transformed, reflecting the progress that has been made in recent years. The force research unit and the special branch of the RUC have both gone, and the Police Service of Northern Ireland is today one of the most scrutinised police forces anywhere in the world. It is accountable to local Ministers and a local Policing Board. I believe that it commands widespread support across the whole community.

Through all those measures, this Government and our predecessors have shown a determination to do everything possible to ensure that no such collusion ever happens again. We will study Sir Desmond’s report in detail to see what further lessons can be learned. I have asked the Secretaries of State for Defence and for Northern Ireland and the Cabinet Secretary to report back to me on all the issues that arise from the report. I will publish their responses. Other organisations that are properly independent of Government, such as the police and prosecuting authorities, will want to read the report closely and consider their own responses.

Sir Desmond says that his conclusion

“should not be taken to impugn the reputation of the majority of RUC and UDR officers who served with distinction during what was an extraordinarily violent period”.

He goes on to say that

“it would be a serious mistake for this Report to be used to promote or reinforce a particular narrative of any of the groups involved in the Troubles in Northern Ireland.”

I am sure that those statements will have wide support in this House. We should never forget that over 3,500 people lost their lives and there were many terrible atrocities. Sir Desmond reminds us that the Provisional IRA

“was the single greatest source of violence during this period”,

and that a full account of the events of the late 1980s

“would reveal the full calculating brutality of that terrorist group.”

During the troubles over 300 RUC officers and 700 British military personnel were killed, with over 13,000 police and military injured. I pay tribute to them and to all those who defended democracy and the rule of law and created the conditions for the progress we have now seen. We must not take that progress for granted, as we have seen this week, and I pay tribute again to those in the PSNI who are once again in the front line today. We will not allow Northern Ireland to slip back to its bitter and bloody past.

The Finucane family suffered the most grievous lost in the most appalling way imaginable. I know they oppose this review process and I respect their views. However, I do respectfully disagree with them that a public inquiry would produce a fuller picture of what happened and what went wrong. Indeed, the history of public inquiries in Northern Ireland would suggest that had we gone down that route, we would not know now what we know today.

Northern Ireland has been transformed over the past 20 years but there is still more to do to build a genuinely shared future. One thing this Government can do to help is to face up honestly when things have gone wrong in the past. If we as a country want to uphold democracy and the rule of law, we must be prepared to be judged by the highest standards. We must also face up fully when we fall short. In showing once again that we are not afraid to do that, I hope that today’s report can contribute to moving Northern Ireland forward. In that spirit, I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

Let me first thank the Prime Minister for his statement and for the tone in which he delivered it. Let me also thank Sir Desmond de Silva for his work and how he went about his task. He has produced a serious and long report within the terms of reference he was set, and it will take time to absorb it. I also welcome the Prime Minister’s apology to the Finucane family; it is the right thing to do, and I am grateful to John Finucane for the conversation that I had with him.

Pat Finucane was a husband, father and brother who was murdered in his own home as he sat with his family on a Sunday evening. What makes it even worse is that 23 years after this appalling crime, his family are still searching for the truth with the utmost courage and dignity.

I agree with the Prime Minister that this report provides disturbing and uncomfortable reading for us all, because it makes it clear that there was collusion in murder and a cover-up, and furthermore that

“Agents of the State were involved in carrying out serious violations of human rights up to and including murder.”

Of course, as the Prime Minister said, this should not diminish the service of thousands of police officers, soldiers and security service personnel who are dedicated to protecting and serving people in Northern Ireland. They have my admiration and I am sure that of the whole House. They will be as appalled as we all are by the findings of the report today.

As we examine and assess the findings of this report and whether it is adequate—the Prime Minister thinks that it is—it is essential that we remember the background. An investigation into the murder of Pat Finucane in which the public had confidence was an important part of the peace process that began under Sir John Major and has continued since.

At Weston Park in 2001 both the Irish and British Governments agreed to appoint a judge of international standing to examine six cases in which there were serious allegations of collusion by the security forces. That applied in both jurisdictions—the UK and Ireland. It was agreed that in the event that a public inquiry was recommended in any of the cases, the relevant Government would implement that recommendation.

Judge Peter Cory was appointed and recommended that public inquiries were necessary in five separate cases. Three of those on the UK side have been completed and the one inquiry recommended on the Irish side is expected to report next year. The only outstanding case in which a public inquiry was recommended but has not taken place is that of Pat Finucane. The last Government could not reach consensus with the Finucane family on arrangements for such an inquiry, but towards the end of our time in office the Finucane family indicated that they would support a public inquiry under the Inquiries Act 2005, and a way forward had begun to be discussed. As the Prime Minister knows, the Opposition continue to believe that we should abide by the obligations under the Weston Park agreement. In that context, may I ask him four questions?

First, does the Prime Minister recognise the concern that the failure to hold a public inquiry is at odds with agreements that were an essential part of the peace process? Secondly, I believe it is right to say that Sir Desmond could not compel witnesses or cross-examine them in public and had to accept the assurances of state bodies that he had been given all relevant material. Does the Prime Minister therefore recognise the concern about the limits of what the de Silva inquiry could do compared with a full public inquiry?

Thirdly, the British and Irish Governments had been at one on this issue. What discussions has the Prime Minister had with the Irish Government about de Silva’s review and about what their position is likely to be today?

My fourth and final question takes me to the issue of public confidence. Continuing to build trust and confidence among the communities of Northern Ireland remains essential, as the Prime Minister said. The appalling violence that we have seen on the streets of Northern Ireland in recent days reminds us of that. Judge Cory said that a public inquiry into the murder of Pat Finucane was needed because

“without public scrutiny doubts based solely on myth and suspicion will linger long, fester and spread their malignant infection throughout the Northern Ireland community.”

Notwithstanding the good work done by Sir Desmond de Silva, can the Prime Minister really say with confidence that the whole truth has been established in the case of Pat Finucane? How can we say that when it is dismissed by the family and many in Northern Ireland?

We must, as a United Kingdom, accept that our state sometimes did not meet the high standards that we set ourselves during the Northern Ireland conflict. Anyone reading the report will believe that it describes an appalling episode in our history. Those in all parts of the House share a belief that we must establish the full and tested truth about Pat Finucane’s murder, but the Opposition continue to believe that a public inquiry is necessary for his family and for Northern Ireland.

[The Prime Minister]

I am grateful for the right hon. Gentleman’s response and the way in which he gave it. Let me say first that he is entirely right that we should take time to study and consider the report. There is a huge amount of detail in it, and lots of consequences may flow from it.

The right hon. Gentleman focused on the important question of whether there should be a public inquiry. I made the decision that it would not be right to have one for a number of reasons. First, if we look at the other inquiries that were started after the Weston Park agreement was reached—it is worth noting that that is now more than 10 years ago—we see that some of them took five or six years or longer and cost tens of millions of pounds, and I do not believe that they got closer to the truth than de Silva has in his excellent and full report. In fact, in the case of one of those inquiries, after six years and £30 million, the reaction of the family, which I can understand in some ways, was to ask for a further inquiry. To me, the real question is: what is the fastest way to get to the truth and the best way to lay out what happened and provide the security that that brings? I believe that the process we have been through is right.

On the Irish Government, I spoke this morning to Enda Kenny. The right hon. Gentleman is absolutely right that the position of the Taoiseach and the Irish Government has been in favour of a public inquiry, but I think they understand why we took our decision and respect the fact that we have been incredibly open and frank about what happened.

On the right hon. Gentleman’s question about the limits of this process compared with the public inquiry process, we have held nothing back. De Silva says in his report that he had full access to all the documents and everything he wanted, and that the decision to redact any names or information was taken by him. Of course, there is always the question of the public inquiry. We took our decision, and I said at the time of the last election that I did not think it was right to have further open-ended public inquiries following the enormous time and expense of the Saville inquiry, and I think that that remains the right position. We need to look at ways in which we can get to the truth and help people to move ahead in Northern Ireland, and this has been a good exercise in doing just that.

Obviously the last Government considered this matter, I am sure very carefully, but I would make the point that they had all the time between 2001 and 2010 to start the work of an inquiry and did not take that decision. I think that was partly because they understood, as we did, the problems, dangers and expense of open-ended inquiries.

In the end, what matters is getting to the truth, and I cannot think of many other countries anywhere in the world that would set out in so much detail and with so much clarity what went wrong. It pains me to read the report, because I am so proud of our country, our institutions such as the police and our security services and what they do to keep us safe. It is agony to read in the report what happened, but it is right that we publish it. We do not need a public inquiry with cross-examination to do that, we just need a Government who are bold enough to say, “Let’s unveil what happened, let’s publish it and then let’s see the consequences.”

[Mr Laurence Robertson (Tewkesbury) (Con)]

I join the Prime Minister in condemning the collusion of some state agents in the murder of Mr Finucane. I, too, extend my sympathies to Mr Finucane’s family.

Does the Prime Minister agree that it is important to see this action in the context of the 1980s, which he has rightly described as a very dangerous time in Northern Ireland? Was it not extremely important, as it is now, that intelligence gathering took place, and that in general terms it saved many lives? Does he further agree that any leaks from the RUC that Sir Desmond has identified ought also to be seen in the right context, because the RUC at that time, like the PSNI this week, stood between Northern Ireland and the abyss?

--- Later in debate ---

[The Prime Minister]

My hon. Friend is absolutely right to refer us back to what was happening in Northern Ireland in the 1980s and the atmosphere and pressures of that time, and to talk about the important work that agents do in countering terrorism. Of course, we should continue that work, properly regulated and dealt with, as I argued earlier. We have to be careful, though, because if we are proud of the health of our democracy, the rule of law and our system, we have to expect the highest standards when we look back. We cannot just say, “Well, bad things happened. Other people did bad things, we did bad things”. We have to be better than that, and that is what the report and our response should be about.

[Paul Murphy (Torfaen) (Lab)]

May I ask the Prime Minister which Ministers he intends to consult on the matter? He was right to point out the destruction that the Provisional IRA wreaked upon people’s lives in Northern Ireland, but there is no equivalence between what a terrorist organisation does and what a state does. It is important that the Attorney-General should be involved in looking carefully at the report, because there might well have to be prosecutions arising from it.

[The Prime Minister]

The right hon. Gentleman makes exactly the point that I was trying to make a moment ago. We cannot try to draw an equivalence between a state and a terrorist organisation. We have to have the highest standards, and it is right to ask that we live up to them.

On the right hon. Gentleman’s specific point about what others should do, it is important in our country that the prosecuting authorities and the police are independent and go where the evidence takes them. I am sure they will want to study the report carefully, because it has new information and new facts and makes some uncomfortable points about what parts of the RUC and other organisations did.

[Sir Menzies Campbell (North East Fife) (LD)]

May I support the observation that the right hon. Member for Torfaen (Paul Murphy) made about the need to consider whether prosecution is justified, which is a matter not for the Prime Minister but for the Attorney-General? In dealing with that, I have no doubt that the Attorney-General will show the same independence of mind and integrity that Sir Patrick Mayhew demonstrated in this case.

In the more than 25 years for which I have been a Member of this House, I cannot remember a statement from the Dispatch Box that has filled me with more revulsion and horror than the Prime Minister’s outlining of the events that happened. The violation of the Finucane family and the horror of the assassination were compounded by what we now know where deliberate attempts at obfuscation. If the report does anything, it surely points out the crucial fact that when dealing with terrorism, we must not descend to the terrorists’ level, because by doing so we lose the argument.

[The Prime Minister]

My right hon. and learned Friend puts the point incredibly clearly. There are some very shocking things in this report. What perhaps shocked me the most are some of the things that happened after the murder took place. The fact that someone who was effectively one of those responsible for the murder was then hired as an agent is truly shocking. The fact that the Army—it says here—did not co-operate properly with the Stevens inquiry, and effectively lied to it, is shocking. That is why it is so important that we lay this bare. The point my right hon. and learned Friend makes about never descending to that level is that whatever battle we are fighting against terror—and we are fighting battles against terror all the time—we have to maintain that we are at all times obeying the rule of law.

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I thank the Prime Minister for his efforts and his statement, which is indeed very welcome. I welcome the report, given its limitations, in so far as it takes us a little further down the road towards truth. It provides some further chilling detail for this House about what many of us already know, but in my opinion it falls far short and does not go far enough. It helps that some of the frightening details have emerged in the report, and I welcome the Prime Minister’s comments about what happened after the murder. For me, that is significant, because it is only a continuation of some things that were done before the murder, which Sir Desmond was not able to confirm, and there was a deep conspiracy running through the elements that were involved.

There was failure, obstruction and general neglect of duty—the fact that the Army was not able to co-operate with Stevens; the fact that a Minister of this House was misled and misinformed prior to the murder, and made statements to this House. Indeed, my colleague Seamus Mallon, a former Member of this House, made reference to the very point, on the day that statement was made, that this would cost lives.

The report confirms that the UDA was steered and prompted to murder Pat Finucane by members of the Royal Ulster Constabulary special branch, which should have been performing the role of questioning and putting people in prison. The UDA gunman was coached as to who might be targeted for murder—two other lawyers were targeted as well. Police files were handed to the UDA for further murder operations, involving not just those three lawyers but further people.

I was very proud to stand with the Finucane family in those desperate times at Pat’s funeral, as they buried him. The Social Democratic and Labour party and I will stand with them today—and indeed into the future—because we support their demand for a full public inquiry. We feel that we have still got only half the truth out. This report confirms why Judge Cory was right, as the family were right, to demand an open, international, independent inquiry. There are people out there who should be held to account, even though it is 23 years too late. In the light of this report, I ask the Prime Minister to reconsider and agree to the family’s request for a full inquiry and prosecutions.

Beyond that, the Finucane report confirms the case for a comprehensive truth process, which we all need. The need for such a process grows more urgent by the day. I echo the words of other colleagues. We should not set our standards by the standards of the Provisional IRA or any loyalist group, so will the Prime Minister please reconsider and allow a full inquiry?

[The Prime Minister]

I am very grateful to the hon. Gentleman for his question. I know that he speaks with real knowledge, passion and interest on this issue. First, on how we have a process in Northern Ireland of getting to the truth in more of these cases, I commend the work of the Historical Enquiries Team. It has done good work, it can continue to do good work and we should continue to fund it so that it can do so.

On whether an inquiry would find out more, I would make two points. First, if we have an inquiry process, the whole process, as we saw with Saville, would start with an enormous discussion about who had anonymity and how the case would proceed. In the case of Saville, that went on for many years before the investigation started. If we look at other public inquiries, I would argue that some of them have got less close to the truth than this report.

I would make one further point, which is that the Stevens process was an investigation with the full powers of a criminal investigation. Now it is open to the authorities, if they want, to repeat that process. That combination of having had a criminal investigation—which made some progress and led to a prosecution—having had the fullest possible disclosure of all the documents and all the evidence, and then saying to the prosecuting and other authorities that it is up to them, if they believe there is further work that can be done, is the right approach. It is faster and more effective than either starting with a public inquiry process now or, had we or a previous Government done so a few years ago, having one that would only just be getting into gear now.

[Patrick Mercer (Newark) (Con)]

Speaking as someone who has been involved in both intelligence work and counter-intelligence work at this most difficult period, may I say that I was proud to stand alongside police officers and Army officers who did their work gallantly, properly and within the law? Will the Prime Minister please ensure that if there are cases for prosecutions of those who broke the law, they will be pursued unflinchingly?

[The Prime Minister]

I think the whole House and, indeed, the country—and many people in Northern Ireland—will have listened to someone who served in our forces, reached a senior rank in our forces, served in Northern Ireland and served in intelligence matters saying that as clearly as he has. That is extremely important. It is so important for our military, our Security Service and our police that serving and previous members say that what they did was done with honour, gallantry and in a way that was right. Their good name is besmirched by the terrible things we read in this report, so my hon. Friend is absolutely right that where there should be criminal investigations, there should be such investigations.

[Mr Shaun Woodward (St Helens South and Whiston) (Lab)]

May I join the Prime Minister in extending an apology to the Finucane family, but may I also respectfully disagree with the conclusion he reaches from this report? My right hon. Friend the Member for Doncaster North (Edward Miliband) is entirely right to conclude that we should uphold the call for a full independent inquiry. I say respectfully to the Prime Minister that it might be difficult to establish the terms of reference for such a judicial inquiry, but that should never be confused with the need for such an inquiry to take place. It might be difficult, but that does not mean that we should not pursue justice.

This report is indeed shocking. If I may, I want to ask the Prime Minister about one of its findings. I share his full admiration for the security services and the forces that have undoubtedly saved many lives in Northern Ireland, but this report finds, in just one conclusion, that Ministers were misled about the flow of information from the security forces to loyalist paramilitaries. Far from, as Ministers were told at the time, there being just a few rogue individuals—a phrase known to this House on other matters—it turns out that Desmond de Silva finds that between 1987 and 1989 there were 287 instances of that flow of information, some of which compromised the most top-secret security information.

I am afraid that this report is just the beginning of a set of questions. It is not a set of answers. The Prime Minister’s statement was indeed grave. For the good reputation of the security forces, he would be wise to reconsider. They have been very badly damaged by the conclusions of this report. For their good reputation and for the Finucane family, will he reconsider having an inquiry?

[The Prime Minister]

I am grateful for the right hon. Gentleman’s question and the way he puts it. Let me be clear: the reason for not having a full public inquiry is not that it would not be possible to establish the terms of reference. My view is that it is not the right approach, because I do not think it would achieve what we need to achieve. I do not necessarily think that a long, open-ended, very expensive inquiry would actually get further than what we have in this report, which has been an exercise in opening up government, the security services and the police to the maximum extent possible. Nothing has been held back, so I do not think we will get further. Of course, a public inquiry would put a stay on any potential prosecution while it was under way. We are not having a public inquiry because I do not believe it is the right approach; I think this report is the right approach—and as I say, I cannot think of any other country in the world that would open itself up in the way that we have quite rightly done so.

The point that the right hon. Gentleman makes about Ministers being misled is absolutely right. That is why I said in my statement that the Cabinet Secretary is one of the people who will report back to me about lessons that need to be learned or problems that still need to be uncovered or dealt with. That is important. The only point I would make to the right hon. Gentleman about the role of the security services is that things have changed fundamentally since 1989. In 1987 and ’88, it was still a time when Ministers at this Dispatch Box did not even admit that we had a Security Service. It is now on a statutory basis—it is properly regulated and under the law—there are information commissioners who have to examine what is done and ministerial permission is properly sought in all the proper ways. The situation is totally transformed. That does not mean that there are not lessons to be learned, however, which is why the Defence Secretary, the Northern Ireland Secretary and the Cabinet Secretary will all be reading this report carefully and reporting back to me, and I will make those reports public.

[Bob Stewart (Beckenham) (Con)]

I, like my good friend the hon. and gallant Member for Newark (Patrick Mercer), was an intelligence officer in Northern Ireland. Will my right hon. Friend assure me that the identities of those people from all sides who gave information to the security forces—I had well over 100 people giving information to me, albeit sometimes indirectly—will be kept secret, because it would be devastating if such information were ever to get out?

[The Prime Minister]

My hon. Friend makes an important point. In the process of writing these reports, the author has to consider carefully article 2—the right to life of all those people contained in the report. It was Sir Desmond de Silva’s decision about who to identify and who not to identify. It is important to bear it in mind that although there are occasions where someone is not identified in the report because of that article 2 consideration, there are also occasions where someone cannot be identified because the report cannot be sure about who was responsible for such and such an action. It needs to be read in that way.

[Mr Nigel Dodds (Belfast North) (DUP)]

When this review was announced to this House in October last year, I said that the murder of Pat Finucane was

“an atrocious, terrible, despicable crime.”—[Official Report, 12 October 2011; Vol. 533, c. 343.]

We repeat that today. Anyone guilty in any way of involvement in his murder needs to face justice. There should be no covering up or resiling from that. With reference to the fact that some 3,500 people were murdered in the course of the troubles, with over 1,000 of them being in the security forces, as the Prime Minister referenced, does he accept that he owes it and this House owes it to all the victims on all sides to ensure that all murders are fully investigated and that there is a sense of justice for all families, no matter on what side, who find themselves victims of terrorism?

Given the problems with public inquiries, not least the expense, does the Prime Minister accept that it is now clear that such inquiries do not provide closure—despite what has been said? We have seen that in Northern Ireland with the Bloody Sunday inquiry and other inquiries. The evidence is clear that they have had the effect in the minds of many of elevating certain crimes above other crimes where there have also been failings and which are equally heinous.

Finally, does the Prime Minister agree with me about the sight of Sinn Fein leaders hypocritically lecturing people today about human rights—leaders of Sinn Fein who have been deeply and intensely involved personally in murder and terrible terrorist crimes? People need to hear a clear message from the Prime Minister that wrongdoing on all sides will be punished, but that we will never succumb to the propaganda of elevating terrorists and equating them—no matter who they are—with the tens of thousands of decent ordinary people in the security forces who have protected life and limb during 30 to 40 years of terrible violence in Northern Ireland.

[The Prime Minister]

The right hon. Gentleman makes an important point. Making sure that others in Northern Ireland can find justice is, I think, the work of the Historical Enquiries Team. As I said, it should continue with its work. As to what the right hon. Gentleman says specifically about wrongdoing by the IRA, the report could not be clearer that it bears an enormous responsibility, as I read out in my statement, for an extremely bloodthirsty campaign and for a huge amount of the suffering caused. Sir Desmond de Silva could not be more frank about that, but that does not mean that we should not do what a proper democratic state under the rule of law does, which is to explain what went wrong and how we learn lessons from it.

[Sir Tony Baldry (Banbury) (Con)]

Will my right hon. Friend confirm that Sir Desmond in his report finds that successive Governments failed to put in place proper guidelines for agents and their handlers, which resulted in agents participating in serious crime without adequate control by their handlers? Will he reassure the House that there are now proper guidelines and adequate controls?

[The Prime Minister]

My hon. Friend makes a very important point. This is one of the report’s key findings for government: successive Governments, one after another, did not crack the problem of putting in place a legal basis for the security services and agent handling, or indeed provide guidance and processes. In my experience as Prime Minister for the last two and a half years, I believe that does now exist. We have the regulation of investigatory powers; we have intelligence commissioners and intercept commissioners; we have annual reports by the heads of the services; we have the Intelligence and Security Committee, which has given an enormous amount of access and information; and we have ministerial oversight by the Foreign Secretary and the Home Secretary of the two principal services. I think the situation is transformed. Even since I have been Prime Minister we have issued quite a lot of guidance—at the time of the Guantanamo detainees issue—to try to make sure that we deal with this problem properly. I am always open to further suggestions, but the situation has been transformed over the past 20 years.

[Mr Peter Hain (Neath) (Lab)]

Notwithstanding the disagreement over an inquiry, may I commend the Prime Minister for the searing honesty of his statement, which allows the whole House to express solidarity with the Finucane family who are with us today? What this report and the Prime Minister have revealed is even worse than I thought and was informed about as Secretary of State for Northern Ireland. The fact that special branch agents and members of the Army’s force research unit were involved and up to their necks in this murder is horrendous. Does the right hon. Gentleman think it right therefore that Colonel Gordon Kerr, commanding officer of the force research unit at the time, should have been promoted subsequently to brigadier?

[The Prime Minister]

First, let me echo what the right hon. Gentleman said about the Finucane family. They have carried out a very respectful, very legitimate and perfectly fair campaign, because they want justice for the appalling wrong done to Pat and the appalling way in which he was murdered. I had a meeting with them last year, and while, obviously, we did not agree about the outcome, I hope they can see that I was sincere in saying that I would open every door, I would open every part of Whitehall and do everything I could to try to get the fullest, truest picture of what happened as quickly as possible. I profoundly believe that that is the right approach, rather than a costly, lengthy public inquiry, which might not—may well not—get as far as this report.

On what the right hon. Gentleman says about the specific individual, much information about what individual people did is in that report. As I have said, it is now open for different authorities to take the steps that they find appropriate. I have specifically asked the Defence Secretary, the Northern Ireland Secretary and the Cabinet Secretary to examine what is in the report and to give any lessons back directly to me, which I will then publish.

[Dr Julian Lewis (New Forest East) (Con)]

The Prime Minister has just made a brief reference to the work of the Intelligence and Security Committee. Does he agree with me that the proposal to give that Committee enhanced investigative powers under the forthcoming Justice and Security Bill ought to add further reassurance for the future of the power and ability of democratic bodies to investigate alleged past abuses?

[The Prime Minister]

The Intelligence and Security Committee does an important job. I found particularly our recent meeting extremely helpful and informative. The Committee is like a second set of eyes on the judgments of Ministers and others, and it has the access in order to question and call them to account. That is an important part of the picture; as important are the guidance and rules that we set for our security and intelligence services. Those were clearly wanting—they did not exist in this case—but they are now in place.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I acknowledge the sincerity of the Prime Minister’s statement and of the apology he gave, but does he accept that if Widgery had been followed by a review rather than by the Saville inquiry—for all the time and money it cost—the apology he gave in this House in June 2010 would not have carried the force that it did. Does he not accept that, if the family continue to believe that there are questions that remain unanswered, their campaign for a public inquiry will continue and one day will have to be met?

[The Prime Minister]

I listened carefully to what the right hon. Gentleman said, because I know that he was a dedicated Northern Ireland Minister. What I would say is that there is a difference between the two cases. This review followed the three Stevens investigations, which were extensive police investigations with full police powers. It seems to me that after those, what was lacking—as Stevens had talked about collusion and pointed to collusion—was a full revelation of the extent of that collusion, and I think that that is what this report provides.

If there is a need for follow-up, in terms of, for instance, a policing or a prosecution, it is now open to those agencies to arrange that. If we went into a long inquiry process, it would all have to be put off until the future, with no guarantee that we would get any further than the massive amount of detail and disclosure that is included in this report.

[Bob Blackman (Harrow East) (Con)]

Can my right hon. Friend confirm that the public inquiry into the murder of Billy Wright took some six years and cost £30 million to administer, and that in the end the family and everyone else were extremely dissatisfied with the outcome? Does he not agree that it is far better to take action now on this report, to bring those responsible to justice, and to achieve closure for the family and all who mourn Pat Finucane’s loss?

[The Prime Minister]

Let me say first that no one would want to compare Pat Finucane to Billy Wright. The report states very clearly that there was no evidence that he was a member of the IRA. However, my hon. Friend has made an important point about what happened at the end of some of those other inquiries—and the Wright inquiry is an example—after six or seven years, and after tens of millions of pounds had been spent. The Wright inquiry did not actually find the answer to the question of how the murder had taken place, and at the end of it the family said that they wanted another inquiry. My point is that the fact that an inquiry is public does not mean that we get any further than we have in the full opening process that we have now undergone, and that is why I think that this is the right answer.

[Naomi Long (Belfast East) (Alliance)]

Today will be a very emotional and distressing day for the Finucane family. I know that they were viciously robbed of a father, a husband, a brother and a son, and my thoughts and prayers are very much with them at this very difficult time. They are also with those who serve Northern Ireland with integrity, and who will find the report painful reading.

The Prime Minister has outlined the changes in the security services and policing arrangements in Northern Ireland. However, Sir Desmond said in his report that there was a

“seriously disproportionate focus by the RUC on acting upon… intelligence that related to individuals… being targeted by republican paramilitary groups”,

as opposed to loyalist groups. Can the Prime Minister assure us categorically that such a disparity will never be permitted again, and that all terrorism will be treated with equal seriousness and diligence?

The Prime Minister also acknowledged that there were many other families who had lost their relatives at the hands of republican and loyalist terrorists, and to whom no inquiries had been granted. Those families are no nearer to knowing the truth about the death of their loved ones, despite the diligent work of the Historical Enquiries Team. Will the Prime Minister now commit himself to delivering a comprehensive process to address the past and its legacy—a process that can focus on truth, on justice and, crucially, on reconciliation?

[The Prime Minister]

The hon. Lady made an important point about the disparity between investigations of loyalist terrorism and investigations of republican terrorism. She should read the report carefully, because it contains some quite interesting figures relating to the number of loyalist murderers who have been brought to justice—and to some extent it is encouraging that that did happen—but I entirely agree with the thrust of her question, and that is why I think that the establishment of the Police Service of Northern Ireland has been so important.

When I visited one of the PSNI’s training colleges some years ago, I was struck by the fact that the ethos of the organisation was all about trying to bring the community together and trying to police the community together, and by the fact that it focused on recruiting from right across the community. I think I can give an assurance that the danger of there being different levels of investigation of different parts of the community will not arise again.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I thank the Prime Minister for his robust, honest and heartfelt statement and apology. I also thank Sir Desmond for his report and the Police Service of Northern Ireland for their continuing excellent work, and associate myself and my colleagues with, in particular, the comments of the hon. Member for Belfast East (Naomi Long) in expressing sympathy for and solidarity with the Finucane family.

Given that something deeply wrong was done on a regular basis by the state and agents of the state but there are now proper legal structures in which agents can work, will the Prime Minister assure us that in future no agents of the state or members of state institutions will work with the paramilitaries under cover, other than those whose actions have been authorised and have been reported to the authorities, and who are accountable to the relevant Committee of Parliament and to him?

[The Prime Minister]

I think that what my right hon. Friend is asking is that there should be no circumstances in which there are rogue agents. These things must be done within the law, within proper guidance and within proper procedures, as is entirely right. I can therefore give him the assurance for which he has asked.

[Kate Hoey (Vauxhall) (Lab)]

I welcome the Prime Minister’s statement and his apology, and I welcome the tone of his statement. Like him, I do not think that a full new independent public inquiry into this very tragic matter would serve any purpose for anyone, but does he agree that the way in which the Government and the country can accept its failings should serve as a lesson to other countries? Does he not think that the Irish Government might consider looking into some of the rumours, and actual evidence, of collusion between the Irish police over such terrible atrocities as the Kingsmill bombing?

[The Prime Minister]

I thank the hon. Lady for her support. I hope that others can see that we are holding back nothing, but opening up and showing what happened in all its unbelievable ghastliness. I hope that the Irish Government will appreciate that, while perhaps still believing that a different path should be taken.

The House may be interested to hear the figures relating to other inquiries. The Robert Hamill inquiry began in 2004 and was completed in April 2011, but its findings have not yet been published because of live criminal proceedings. The Rosemary Nelson inquiry report was published in May 2011. The Billy Wright inquiry cost £30.5 million, the Hamill inquiry £32.6 million, and the Nelson inquiry £46.5 million. Each of those inquiries overran significantly in terms of both time and money. The Wright and Hamill inquiries were both established under the Inquiries Act 2005, so the argument that somehow all this was sorted because of a new Inquiries Act does not really hold water.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Does the Prime Minister agree that facing up to the past in this way and looking at these awful events is a crucial part of the healing process that Northern Ireland so desperately needs?

[The Prime Minister]

My hon. Friend is absolutely right. It is immensely painful to do, but I think the Government have shown that they are prepared to do it, and others must do the same in all parts. That, I think, is how we can come to terms with the past. I hear very clearly the remarks of Opposition Members about trying to create a single process, and obviously I listen to that, but in the end the best way of coming to terms with the past is to be open, frank, clear and transparent about what happened, and to apologise when that is appropriate.

[Lady Hermon (North Down) (Ind)]

I join others who have expressed condemnation of the murder of Pat Finucane. He was killed brutally in front of a devoted family, and I am deeply, deeply sorry about that. However, I must refute the widespread and unfair criticism of the RUC that I have heard in the House today.

The Prime Minister quoted Sir Desmond’s observation that nothing that he said should

“be taken to impugn the reputation of the majority of RUC…who served with distinction during what was an extraordinarily violent period”.

In the light of what Sir Desmond said, I ask the Prime Minister to take this opportunity to put on record his personal, sincere admiration for the extraordinary work done by RUC officers—men and women—of whom my late husband was enormously proud. He was Chief Constable at the time, and I am very sorry indeed that Pat Finucane died in such a brutal manner, but I should like the Prime Minister to pay warm tribute to the RUC, of whom my husband was so very proud.

[The Prime Minister]

I am happy to pay warm tribute to the RUC and the people who served in it, because they faced the most unbelievable pressure. They were dealing with the most unbelievably difficult set of circumstances. I know that the overwhelming majority of people in the Royal Ulster Constabulary served with bravery, with dedication, and with regard to the law and to truth; I know that the hon. Lady’s husband was one of those; and I know that in his report Desmond de Silva was very clear about the good work that the RUC did. That is why it is so painful to read about the bad things that happened in parts of the RUC. It is particularly striking that the RUC CID wanted to prosecute Barratt, who should originally have been prosecuted for the murder, but the Special Branch decided to recruit him. It is clear there were some very bad apples doing the wrong thing, but that does not impugn the reputation of the whole of the RUC that served our country with great dedication.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I thank my right hon. Friend for the statesman-like way he has presented this case. It cannot have been easy; indeed, I suspect it was incredibly difficult. I also pay tribute to the family, who must have gone through a very difficult time over the past 23 years, and I pay tribute, too, to the servicemen and women who did their job in a legal manner, especially the Royal Marines, as I know they lost a number of lives in Northern Ireland. If there were a review, how long does my right hon. Friend think it would take?

[The Prime Minister]

I am grateful to my hon. Friend for his remarks about those who served and those who continue to serve, including the Royal Marines. One cannot say exactly how long a public inquiry would take, but as we have learnt from experience, an enormous amount of ground clearing work would need to be done before it could even get going—the process of everyone hiring lawyers and trying to work out who is going to have anonymity and so forth. I came to office having made a promise that we were not going to have further costly open-ended inquiries. I have looked at the evidence in this case, and I have met the family, and I have seen that there is nothing the Government are holding back. I could see a stronger case for an inquiry if there was an open question about whether we were prepared to admit there was a problem with the MOD; we are. Was there a problem with parts of the RUC? There was. Were Ministers misled? I can say yes, they were. There is no argument that we are holding back on, so what matters is getting to the truth with the greatest disclosure, and I do not think that that requires an inquiry.

[Mark Durkan (Foyle) (SDLP)]

The Prime Minister must realise that many of us find it hard to leave these matters simply to the interpretations and inferences Desmond de Silva has drawn from the dreadful evidence his inquiry has produced. We are dealing with a situation where terrorism took on the form of paramilitarism and military intelligence took on the form of para-terrorism. That is what was happening. In Special Branch, the force research unit and the secret services, there was a culture of anything goes but nobody knows—and following Desmond de Silva’s report we are still being asked to accept that nobody knows. Our predecessor Social Democratic and Labour party MPs told the Ministers of the time that that was what was going on. That is why we said we needed a new beginning to policing and we needed Special Branch to go, yet in all that time we were denounced, denigrated and dismissed. The one good thing about the Prime Minister’s statement today is that others in this House can no longer be in denial about what was happening.

There were so many levels and layers of collusion—all the deadly dereliction and the deviance and the dark deployment—but we are being asked to agree that it all adds up to there being no co-ordination. The Prime Minister must know that if we are to get to the bottom of this, we have to get to the top of it, but Desmond de Silva is trying to tell us, “No, there was no top.”

[The Prime Minister]

I have great respect for the hon. Gentleman, the campaign he has fought and the points he has made. He and his predecessors in the SDLP were right about what went wrong, and this report shows that they were right. It shows the extent to which we are prepared to open up and be clear about what happened. As for the organisations he mentions, the FRU has gone, and the RUC Special Branch has gone, so the question now is whether there is anything else to discover that this report has not discovered but a public inquiry would, and I do not believe there is.

In answer to the hon. Gentleman’s specific question about how high this went, Sir Desmond de Silva is absolutely clear that Ministers were misled and briefings were given that should not have been given, but he does not find that there was a ministerial conspiracy or ministerial order for the murder of Pat Finucane. That is very important. We now have a true picture and it is for others, including the police and the prosecuting authorities, to work out whether there is anything more that can be done.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

My right hon. Friend’s statement was full of shocking and shameful revelations. Notwithstanding the dignity and good work of the vast majority of our security services in the past, can he confirm that the oversight, scrutiny and accountability of our intelligence services today is completely different?

[The Prime Minister]

I am happy to give that assurance. I would not stand here and say it is perfect in every way. There are always improvements that we can make to the arrangements, which is why we have an Intelligence and Security Committee that scrutinises what is done and an Intelligence Services Commissioner who looks into the work that is done, but the situation has been transformed. When we read this report and think about what happened and what these agents were doing, it appears that that was a completely different world, where there does not seem to have been rules, processes, the rule of law, consideration of human rights or ministerial oversight. There were not those things that there are now.

[Kevin Brennan (Cardiff West) (Lab)]

The Prime Minister has told us that the report makes it clear that Ministers were misled during this process. What does the report say about when Ministers were first made aware in briefings that this collusion was taking place?

[The Prime Minister]

I have not got that information to hand, but the advice to Ministers is covered in the report. I think one of the report’s key findings on ministerial action is to do with whether Nelson should have been prosecuted. It is argued that the advice to Ministers was misleading, and as a result a decision was made to hold a Shawcross process, which is when the Attorney-General asks Ministers for advice on whether a prosecution should go ahead. The key point is that, as de Silva says, Paddy Mayhew as Attorney-General demonstrated his independence—and, indeed, good judgment—and said a prosecution should go ahead.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Can the Prime Minister confirm that this report has provided us with the fullest possible account of what happened in this tragic case?

[The Prime Minister]

I am grateful to my hon. Friend for his question. I think the report has done that. As Desmond de Silva makes clear in the introduction to the report, he was given access to all the papers he wanted to see in every part of Government, including Cabinet papers and intelligence papers. I must not put words in his mouth, but he was not left saying that a further inquiry was necessary. He was left saying, “I got all the information I needed to set out the fullest possible picture I could.”

[Dr William McCrea (South Antrim) (DUP)]

Coming from a family that knows the pain caused by the murder of loved ones, I understand the pain experienced by the Finucane family, but in the light of the demands by Enda Kenny for a public inquiry into the death of Pat Finucane, has the Prime Minister made representations to the Irish Government to hold a public inquiry into collusion between previous Governments of the Irish Republic and the IRA, including the arming of the Provisional IRA and inflicting 30 years of murder and mayhem on the people of Northern Ireland? Should an apology not be forthcoming from the Irish Republic, and should all those guilty of murder not face the full rigours of the law, irrespective of who they are and what position they hold, whether in the Dail or Stormont?

[The Prime Minister]

Every organisation—every Government—has to face up to its own history and explain what it did and why. The British Government get all sorts of criticism, but I do not think anyone can criticise us for not being incredibly open about what happened. I would also say that British-Irish relations are better today than probably at any time in the last 25 years. Getting to the truth about the past really matters, of course, but so, too, does trying to secure a peaceful future for Northern Ireland, and those relations are very important for that, and I want to build on them.

[Chris Ruane (Vale of Clwyd) (Lab)]

I have met the family of Pat Finucane here in Parliament and I pay tribute to them for the dignity with which they have conducted themselves in their quest for justice. Public inquiries do not have to be over-long and over-expensive, as the Baha Mousa inquiry shows. If after reading the de Silva report the family of Pat Finucane still request a public inquiry, will the Prime Minister listen to their request?

[The Prime Minister]

I myself met the Finucane family and I will always listen to what they say, but I have to say that I think that what we have done—we have taken a very open approach, putting all the information out there in public—is the right approach and is the best way to get to the truth of what happened.

The hon. Gentleman says that public inquiries do not necessarily take a long time. I refer him to the fact that the other inquiries set up after 2004 ended up costing tens of millions of pounds. The Baha Mousa inquiry was about one individual and a number of hours spent in custody, whereas this is about an issue that has had the biggest police investigation in British history—involving three separate sets of investigations and millions of documents. There would be no concept of a short inquiry for this; it would be multi-year, multi-million pound, with absolutely no guarantee that it would get closer to the truth than this extremely open and truthful document we have in front of us.

[David Simpson (Upper Bann) (DUP)]

The review has now been completed, the Prime Minister has, again, come to the Dispatch Box and apologised, and, yes, the murder has to be condemned. However, may I remind the Prime Minister that there are those of us on these Benches, including my own family, who have lost loved ones to the provos over the past 25 years? My family lost four of its members, but no review and no public inquiry was offered to them. When are we going to see equality for all families?

[The Prime Minister]

Many people in this House have suffered loss because of terrorists. I remember the first Member of Parliament who ever represented me, Airey Neave, and I think of Ian Gow, for whom I once had the huge privilege of writing a speech when I was a junior researcher. I remember going to have a drink with him in this House and getting to know him a little, and then reading one day that he had been murdered by the IRA. We cannot have an inquiry into every one of those murders; we have to find a way of trying to come to terms with the past. People have suffered dreadfully, but we have to find a way of moving ahead in Northern Ireland, which the people of Northern Ireland have done, and I believe it is our job to encourage that.

[Valerie Vaz (Walsall South) (Lab)]

I thank the Prime Minister for coming to the House with this statement. Nevertheless, this remains a paper review. He has asked a number of his Departments to look at various issues and open up Whitehall to questions, so may I ask him to think again about a public inquiry? There is a Treasury Solicitor’s Department—a Government Department—which can co-ordinate a public inquiry very simply and cheaply, along the lines of the Baha Mousa inquiry. May I also ask the Prime Minister to meet the family today to ask them whether they think this paper review seeks the truth about the death of Pat Finucane?

[The Prime Minister]

I would not describe this simply as a “paper review”; Desmond de Silva did meet some people and conducted interviews. The hon. Lady should also remember that it was a review based on the fact that there had been the largest criminal investigation in British history, which had interviewed everybody and had the documentation. Alongside that—all the access to the Stevens material—Desmond de Silva also had access to all the intelligence and other material in Whitehall. On that basis, I think it is a very complete piece of work.

[Ms Margaret Ritchie (South Down) (SDLP)]

I thank the Prime Minister for his statement. I stand solidly and squarely with Geraldine Finucane, her two sons and daughter, and the wider Finucane family. I recognise that many people and many families, not least Members of this House, from Northern Ireland have also suffered as a result of more than 30 years of the troubles. Does the Prime Minister not now consider, in view of de Silva’s report, which indicated very high levels of state collusion, that there is a need for an international public inquiry that will address issues of collusion and complicity? We in the Social Democratic and Labour party—our current three Members and our predecessors—always recognised and acknowledged the deep levels of collusion in Northern Ireland that resulted in murders right across the community, whether on the loyalist or on the republican side. For that reason, we now need an international public inquiry, to investigate not only Pat Finucane’s murder but all the other murders that were a result of state collusion and state complicity.

--- Later in debate ---

[The Prime Minister]

This report is about state collusion and state complicity. I cannot think of a country anywhere else in the world that would have revealed in more detail, with no holds barred and no documents held back, the full extent of that collusion, and stood up, put its hand up and said, “This is what went wrong. This is what we apologise for. This is how we will make sure it never takes place again.” I recommend that the hon. Lady look at paragraph 113, where de Silva talks about his “Lessons for the future” and states:

“It is essential that the involvement of agents in serious criminal offences can always be reviewed and investigated and that allegations of collusion with terrorist groups are rigorously pursued. Perhaps the most obvious and significant lesson of all, however, is that it should not take over 23 years to properly examine, unravel and publish a full account of collusion in the murder of a solicitor that took place in the United Kingdom.”

I believe that Desmond de Silva is saying that that is what has been done; that is what has been laid bare. It has not taken a public inquiry; it has taken a Government to open up everything and say, “Let’s get the truth out. And here it is.”

[John McDonnell (Hayes and Harlington) (Lab)]

If the Lawrence and Hillsborough families have taught us anything, it is that the families will not go away until they see justice in their terms. In an Adjournment debate I sought in 1999, I read into the record statements made in 1989 by an Under-Secretary at the Home Office. He had said that “a number of solicitors” were “unduly sympathetic” to the cause of the IRA, adding that these statements were made on the basis of “advice” and “guidance” from people “dealing with the matters”. Pat Finucane was murdered three and a half weeks later. The inquiry has said that there is no basis for any claim that the then Under-Secretary intended his comments to provide a form of political encouragement for any attack on any solicitor, but these words were certainly unwise and they contributed to a climate in which solicitors were made vulnerable—not only Pat Finucane, but Rosemary Nelson. Because these were statements by a Government Minister, does the Prime Minister’s apology extend to an apology for those expressions by the then Under-Secretary?

[The Prime Minister]

Let me first respond to the hon. Gentleman’s point about Hillsborough. There was a public inquiry and an inquest, but they were, in effect, faulty. It took an act by Government, with the Bishop of Liverpool, to lay open all the information. The families have thus been able to see the truth and, hopefully, they will be able to get that new inquest. I would argue that in this case that is what has happened: there was this full police investigation, but instead of having a public inquiry we have opened up and given all the information that is necessary.

On Douglas Hogg, I ask the hon. Gentleman to read the report carefully. It finds that Douglas Hogg was briefed in a way that he should not have been briefed, that that compromised him and that therefore what he said was unfortunate. But the report does not find that he in any way encouraged the action that took place or in any way knew about it. I would encourage the hon. Gentleman to read the report very carefully in that regard.

[Mr Gregory Campbell (East Londonderry) (DUP)]

There has of course been widespread condemnation of the murder of Pat Finucane and of all the others in Northern Ireland. The Prime Minister alluded to trying to get at the truth of this issue. Does he accept that after a series of inquiries, reviews and reports that have cost tens of millions of pounds, if not hundreds of millions, into a small number of totally and utterly regrettable and unacceptable incidents, the problem that we have in this House is the credibility gap, because others out there caused the violence in the first instance and have never apologised, have never reviewed and have never reported? They have never said sorry for the activities that they carried out, which ensured that others responded to their activities. Will the Prime Minister indicate that they should open up and say sorry for what they have done—for 30 years of murder?

[The Prime Minister]

Everyone has to face up to what they did and what they got wrong. It is up to those people responsible for violence, for terror, for murder to do that; they should apologise for what they did. But let me repeat: we should not put ourselves in this House, in government and in a state that believes in the rule of law, democracy and human rights, on a level with those organisations. We expect higher standards and when we get it wrong, we need to explain and completely open up in the way that we have done today.

[Jim Shannon (Strangford) (DUP)]

I thank the Prime Minister for his statement, and I agree with his decision not to have a public inquiry. The Prime Minister is aware of the hurt that runs very deep among the whole of Northern Ireland—among people on both sides. Hurt is not just on one side of the community; it is universal and we all have it. I am thinking of the Darkley gospel hall massacre, when people worshipping God on a Sunday night were killed by republicans; the people killed—burnt to a cinder—and injured by republicans at the La Mon restaurant; the people who were killed and injured by republicans at the Abercorn restaurant as they were enjoying a meal; the Ballydugan killing by republicans of four Ulster Defence Regiment men, three of whom I knew personally. Some £191 million has been set aside for the Bloody Sunday inquiry into the deaths of 13 people. The Prime Minister has mentioned the Historical Enquiries Team, whose budget is £38 million to carry out 3,487 inquiries into murders. What steps has he taken to help the HET do more and get answers for people who have lost loved ones?

[The Prime Minister]

We continue to fund the Historical Enquiries team. I think it does good work and it should continue to do that. I take the hon. Gentleman’s point that whatever terrible event we are discussing, people will always bring up other terrible events and quite rightly say, “Well, what about an inquiry into that? What information can we find out about it?” What is different in this case is that it highlights the appalling level of collusion there was and brings to the surface, effectively, not just one appalling murder but a series of appalling steps that were being taken and that need to be addressed.

[Ian Paisley (North Antrim) (DUP)]

As we kick over the charred embers of Ulster’s past, an appalling and awful picture emerges, but today we are seeing only one tiny part of that. The Prime Minister is utterly correct to make it clear that there should not be a public inquiry into this matter, first because it would be wasteful, and secondly because if he grants a public inquiry in this case he knows that a chorus of hundreds of people from before Patrick Finucane was murdered and hundreds of people from after Patrick Finucane was murdered will ask, “Why not my relative? Why not me?” The Prime Minister is right to hold fast to that view and should not be swayed.

I also agree with the points made by the hon. Member for Vauxhall (Kate Hoey) and my hon. Friend the Member for South Antrim (Dr McCrea) and ask the Prime Minister to respond to them directly. They made it clear that there is more than a shred of evidence that the Republic of Ireland’s Government armed the Provisional IRA and that there should be an investigation into that and honesty about it so that we can see the whole picture.

My constituents are sick and tired of a one-sided narrative of revisionism that says that the Provisional IRA were actually quite good and the troops and police were quite bad. That, in the current circumstances in Northern Ireland, is bloody stupid—and I mean literally bloody. It will send a signal to my constituents that people have to push, kick, throw and petrol bomb to get what they want, and not abide by the law. We are trying to tell them all to abide by the law.

[The Prime Minister]

I thank the hon. Gentleman for what he said about my decision not to hold a further public inquiry. Let me be clear again that that is not because the Government want somehow to hide or run away from the truth. We could not have marched further, faster or more clearly towards the truth than we have by publishing this document today. As for his point about republican terrorism, let me read to him from paragraph 117 of the report’s executive summary, where de Silva states:

“I have no doubt, however, that PIRA was the single greatest source of violence during this period and that a holistic account of events of the late 1980s in Northern Ireland would reveal the full calculating brutality of that terrorist group.”

That is the point that he makes and he is right to make it.

[Mr Speaker]

I thank the Prime Minister and colleagues.

Bills Presented

Multinational Motor Manufacturing Companies (Duty of Care to Former Employees) Bill

Presentation and First Reading (Standing Order No. 57)

Geraint Davies, supported by Stephen Metcalfe, Mrs Siân C. James, Martin Caton, Mike Freer, Nia Griffiths, Jonathan Edwards, Dr Hywel Francis and Mr John Whittingdale presented a Bill to require multinational motor manufacturing companies to provide a duty of care to former employees in respect of pension provision.

Bill read the First time; to be read a Second time on Friday 1 February 2013, and to be printed (Bill 107).

Lords Spiritual Bill

Presentation and First Reading (Standing Order No. 57)

Mr Frank Field presented a Bill to make provision for filling vacancies among Lords Spiritual sitting and voting as Lords of Parliament.

Bill read the First time; to be read a Second time on Friday 18 January 2013, and to be printed (Bill 108).

Leveson Inquiry

Lord Cameron of Chipping Norton Excerpts

Thursday 29th November 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on today’s report from Lord Justice Leveson. As we consider the report, we should consider the victims. We should remember how the parents of Milly Dowler, at their most vulnerable moment, had their daughter’s phone hacked and were followed and photographed, how Christopher Jefferies’ reputation was destroyed by false accusations, how the mother of Madeleine McCann, Kate, had her private diary printed without her permission and how she and her husband were falsely accused of keeping their daughter’s body in their freezer. These victims, and many other innocent people who have never sought the limelight, have suffered in a way that we can barely begin to imagine.

That is why last summer I asked Lord Justice Leveson to lead an independent inquiry. It had the power to see any document and summon any witness to be examined under oath by a barrister in public. It has been, as Lord Justice Leveson says,

“the most public and the most concentrated look at the press that this country has seen.”

I would like to thank Lord Justice Leveson and his entire team for the work they have undertaken.

Lord Justice Leveson makes findings and recommendations in three areas: on the relationship between the press and the police; on the relationship between the press and politicians; and on the relationship between the press and the public. Let me take each in turn.

First, on the press and the police, Lord Justice Leveson makes it clear that he does not find a basis for challenging the integrity of the police, but he does raise a number of areas that he felt were a cause for public concern, such as tip-offs, off-the-record briefings and, more broadly, “excessive proximity” between the press and the police. He makes a number of recommendations, including: national guidance on appropriate gifts and hospitality; record-keeping of contact between very senior police officers and journalists; and a 12-month “cooling-off” period for senior police officers being employed by the press. These recommendations are designed to break the perception of an excessively cosy relationship between the press and the police, and we support them.

When I set up the inquiry, I also said that there would be a second part to investigate wrongdoing in the press and the police, including the conduct of the first police investigation. That second stage cannot go ahead until the current criminal proceedings have concluded, but we remain committed to the inquiry as it was first established.

Next, on the relationship between politicians and the media, as Lord Justice Leveson has found,

“over the last 30-35 years and probably much longer, the political parties of UK national Government and of UK official Opposition, have had or developed too close a relationship with the press in a way which has not been in the public interest.”

I made that point last summer when I set up the inquiry, and at the same time I set in train reforms to improve transparency. We are the first Government ever to publish details of meetings between senior politicians and proprietors, editors or senior executives, as Lord Justice Leveson recommends in his report. He also recommends disclosing further information on the overall level of interaction between politicians and the press. That would apply to all parties, and on the Government’s behalf I can say that we accept the recommendation.

During the course of the inquiry a number of serious allegations were made. I want to deal with them directly. First, it was alleged that my party struck a deal with News International. That allegation was repeated again and again on the Floor of this House and at the inquiry itself. Lord Justice Leveson looked at this in detail and rejected the allegation emphatically. Let me read his conclusion:

“The evidence does not, of course, establish anything resembling a ‘deal’ whereby News International’s support was traded for the expectation of policy favours.”

Those who repeatedly made these allegations, including Members of this House and the former Prime Minister, should now acknowledge that they were wrong.

Secondly, it was alleged that I gave my right hon. Friend, the then Culture Secretary, now the Health Secretary, the responsibility of handling the BSkyB bid in order to fix the outcome. Lord Justice Leveson states clearly that

“the evidence does not begin to support a conclusion that the choice of Mr Hunt was the product of improper media pressure...still less an attempt to guarantee a particular outcome to the process”—

another allegation repeatedly made, and again shown to be wrong.

Thirdly, there was the criticism that the then Culture Secretary had rigged the handling of the BSkyB bid. Again, today’s report rejects that as well. My right hon. Friend, it says,

“put in place robust systems to ensure that the remaining stages of the bid would be handled with fairness, impartiality and transparency”.

Indeed, Lord Justice Leveson goes further, concluding that my right hon. Friend’s

“extensive reliance on external advice...was a wise and effective means of helping him to keep to the statutory test”.

He concludes that

“there is no credible evidence of actual bias”.

Of course, as my right hon. Friend has said, there are lessons to learn about how quasi-judicial decisions are made, and we must learn those lessons. But let me say this: my right hon. Friend, now the Health Secretary, has endured a stream of allegations with great dignity. This report confirms something that we on this side of the House knew all along—we were right to stand by him. Let me also say this: Lord Justice Leveson finds in respect of my right hon. Friend the Business Secretary that he

“acted with scrupulous care and impartiality”.

Next, and most important of all, let me turn to what Lord Justice Leveson says about the relationship between the press and the public. As he says very clearly, even after 16 months of this inquiry, he remains

“firmly of the belief that the British press—all of it—serves the country very well for the vast majority of the time.”

But on the culture, practices and ethics of some in the press, his words are very stark. He finds that

“there have been too many times when, chasing the story, parts of the press have acted as if its own code, which it wrote, simply did not exist.”

He cites

“press behaviour that, at times, can only be described as outrageous.”

He catalogues a number of examples of such behaviour, going wider than phone hacking. He refers to

“a recklessness in prioritising sensational stories, almost irrespective of the harm that the stories may cause and the rights of those who would be affected”.

He finds that

“when the story is just too big and the public appetite too great, there has been significant and reckless disregard for accuracy.”

And he reports

“a cultural tendency within parts of the press vigorously to resist or dismiss complainants almost as a matter of course.”

In a free society, the press are subject to criminal law, civil law and requirements for data protection, but there should be a proper regulatory system as well to ensure that standards are upheld, complaints are heard, and there is proper redress for those who have been wronged. That is what the current system should have delivered. It has not. As Lord Justice Leveson says, the Press Complaints Commission is

“neither a regulator, nor fit for purpose to fulfil that responsibility.”

That is why changes are urgently needed. We welcome the fact that the press industry itself has put forward its own proposals for a new system of regulation, but we agree with Lord Justice Leveson that these proposals do not yet go far enough.

In volume IV of the report, Lord Justice Leveson sets out proposals for independent self-regulation organised by the media. He details the key “requirements” that an independent self-regulatory body should meet, including independence of appointments and funding, a standards code, an arbitration service, and a speedy complaint-handling mechanism. Crucially, it must have the power to demand up-front, prominent apologies and impose up to million-pound fines. These are the Leveson principles. They are the central recommendations of the report. If they can be put in place, we truly will have a regulatory system that delivers public confidence, justice for the victims, and a step change in the way the press is regulated in our country. I accept these principles, and I hope that the whole House will come in behind them. The onus should now be on the press to implement them—and implement them radically.

In support of this, Lord Justice Leveson makes some important proposals. First, he proposes some changes to the Data Protection Act that would reduce the special treatment that journalists are afforded when dealing with personal data. We must consider this very carefully, particularly the impact that it could have on investigative journalism. Although I have been able to make only preliminary investigations about that proposal since reading the report, I am instinctively concerned about it.

Secondly, Lord Leveson proposes changes to establish a system of incentives for each newspaper to take part in the system of independent regulation. I agree that there should be incentives and believe that those he sets out, such as the award of costs and exemplary damages in litigation, could be effective. He goes on to propose legislation that would help to deliver those incentives and, crucially, that would provide

“an independent process to recognise the new self-regulatory body”.

That would, he says,

“reassure the public that the basic requirements of independence and effectiveness were met and continue to be met.”

I have some serious concerns and misgivings on that recommendation. They break down into issues of principle, practicality and necessity.

The issue of principle is that, for the first time, we would have crossed the Rubicon of writing elements of press regulation into the law of the land. We should be wary of any legislation that has the potential to infringe free speech and a free press. In this House, which has been a bulwark of democracy for centuries, we should think very, very carefully before crossing that line.

On the grounds of practicality, no matter how simple the intention of the new law, the legislation required to underpin the regulatory body would be more complicated. Paragraphs 71 and 72 of the executive summary begin to set out what would be needed in the legislation, which would, for example, validate the standards code and recognise the powers of the new body. Page 1772 in volume IV of the full report says that the new law

“must identify those legitimate requirements and provide a mechanism to recognise and certify that a new body meets them.”

The danger is that that would create a vehicle for politicians, whether today or some time in the future, to impose regulation and obligations on the press—something that Lord Justice Leveson himself wishes to avoid.

Thirdly, on the grounds of necessity, I am not convinced at this stage that statute is necessary to achieve Lord Justice Leveson’s objectives. I believe that there may be alternative options for putting in place incentives, providing reassurance to the public and ensuring that the Leveson principles of regulation are put in place. Those options should be explored.

These questions, including those about data protection, are fundamental questions that we must resolve. I have therefore invited the Deputy Prime Minister and the Leader of the Opposition to join me in cross-party talks, starting immediately after this statement. But let me be clear: a regulatory system that complies with the Leveson principles should be put in place rapidly. I favour giving the press a limited period of time in which to do that. They do not need to wait for all the other elements of Lord Justice Leveson’s report to be implemented. While no one wants to see full statutory regulation, let me stress that the status quo is not an option. Be in no doubt: we should be determined to see Lord Justice Leveson’s principles implemented.

There is much that we in this country can be proud of: the oldest democracy in the world; freedom of speech; a free press; frank and healthy public debate. But this report lays bare that the system of press regulation that we have is badly broken and has let down victims badly. Our responsibility is to fix it. The task for us now is to build a new system of press regulation that supports our great traditions of investigative journalism and free speech, that protects the rights of the vulnerable and the innocent, and that commands the confidence of the whole country. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

May I start by thanking the Prime Minister for his statement? May I say straight away that in the days and weeks ahead I will seek to convince him and this House of Commons that we should put our faith in the recommendations of Lord Justice Leveson that were delivered to us today? I am sorry that the Prime Minister is not yet there, but I hope to convince him over the days ahead that that is where we should go. We should put our trust in Lord Justice Leveson’s recommendations.

Let me begin by paying tribute to and thanking Lord Justice Leveson and his team for the painstaking, impartial and comprehensive way in which they conducted the inquiry. I thank Lord Justice Leveson for the clarity with which he has explained his report today.

Most of all, I want to join the Prime Minister in paying tribute to the innocent victims who gave evidence to the inquiry: people who did not seek to be in the public eye, who suffered deep loss and grief, and who then faced further trauma at the hands of the press. It is easy to forget, but without the revelations last July about what happened to Bob and Sally Dowler, and to their daughter, and their courage in speaking out, we would not be here today. Gerry and Kate McCann suffered so much and showed much courage. Kate McCann, whose daughter remains missing, saw her private diary published by the News of the World for the sake of a story. Those people gave evidence to the inquiry to serve the wider public interest, and I am sure the whole House pays tribute to their courage. They must be at the forefront of our minds today.

Much has been written about the reasons for this inquiry. A free press is essential to a functioning democracy, and the press must be able to hold the powerful—especially us politicians—to account without fear or favour. That is part of the character of our country. At the same time, however, I do not want to live in a country where innocent families such as the McCanns and the Dowlers can see their lives torn apart simply for the sake of profit, and where powerful interests in the press know they will not be held to account. This is about the character of our country.

It turns out that there never was just one “rogue reporter”. Lord Justice Leveson concludes that a whole range of practices, from phone hacking to covert surveillance, harassment and other wrongful behaviour were widespread and in breach of the code by which the press was supposed to abide. I recognise the many decent people who work for our country’s newspapers, and not every newspaper did wrong. However, Lord Justice Leveson concludes that

“it is argued that these are aberrations and do not reflect on the culture, practices or ethics of the press as a whole. I wholly reject this analysis.”

That will not come as a surprise to many people, including Members of this House. Lord Justice Leveson also concludes that there has been by politicians

“a persistent failure to respond...to public concern about the culture, practices and ethics of the press”.

We must all take responsibility for that, and the publication of this report marks the moment we must put that right by upholding the freedom of the press and guaranteeing protection and redress for the citizen. As the Prime Minister himself rightly said at the Leveson inquiry:

“If the families like the Dowlers feel this has really changed the way they would have been treated, we would have done our job properly.”

I agree.

Let us be clear about Lord Justice Leveson’s proposals, why they differ from the present system, and why I believe they should be accepted in their entirety. He proposes:

“A genuinely independent regulator, with effective powers to protect and provide redress for the victims of abuse.”

He also gives responsibility for establishing that system to the press, as now. That is why statute is important.

Lord Justice Leveson provides a crucial new guarantee that we have never had before. He recommends that the media regulator, Ofcom, ensure that any system that is established passes the test we would all want applied—that it is truly independent and provides effective protection for people such as the McCanns and the Dowlers. To make that guarantee real, he recommends that both Ofcom’s role and the criteria of independence and effectiveness be set out in statute—a law of this Parliament. That is why we can get to truly independent regulation of the press, guaranteed by law.

I believe that Lord Justice Leveson’s proposals are measured, reasonable and proportionate, and Labour Members unequivocally endorse the principles set out and his central recommendations. We support the view that Ofcom is the right body for the task of recognition of the new regulator, and the proposal that the House should lay the role of Ofcom down in statute. We endorse the proposal that the criteria any new regulatory body must meet should be set out in statute. Without that, there cannot be the change we need. Lord Justice Leveson is 100% clear on that in his report.

Lord Justice Leveson has, I believe, made every effort to meet the concerns of the industry. Some people will say that this report does not go far enough or that the reforms will not work because the press will not co-operate. I believe that the press has a major responsibility to come forward and show it will co-operate with this system—a comprehensive reform of the kind proposed by Lord Justice Leveson.

Lord Justice Leveson also says that if we cannot achieve a comprehensive system involving all major newspapers, we should go to the necessary alternative: direct statutory regulation. I believe that Lord Justice Leveson has genuinely listened to what the press has said, and acted with the utmost responsibility. Editors and proprietors should now do the same. I believe that Lord Justice Leveson has genuinely listened to what the press has said and acted with the utmost responsibility. Editors and proprietors should now do the same.

Let me also say—the Prime Minister did not touch on this—that Lord Justice Leveson also reaches important conclusions on the need to prevent too much influence in the media from ending up in one pair of hands. He proposes that there should be continuous scrutiny of the degree of media plurality and a lower cap than that currently provided by competition law. When the Prime Minister gets up to reply, will he take that forward?

As the Prime Minister said, Lord Justice Leveson makes specific suggestions on greater transparency on meetings and contacts between politicians and the press. He says that that should be considered as an immediate need. I agree, and endorse the proposals, as the Prime Minister did.

I welcome the Prime Minister’s offer of immediate cross-party talks on the implementation of the recommendations, and I am grateful for the conversations we have already had, but the talks must be about implementing the recommendations, not whether we implement them. In the talks, I want to agree a swift timetable for the implementation of the proposals. I want us to agree to legislate in the next Session of Parliament, starting in May 2013, and to have a new system up and running by the end of this Parliament—meaning 2015 at the latest. By the end of January next year, we should have an opportunity—the Opposition will make this happen if necessary—for the House to endorse and proceed with the Leveson proposals.

We should and we can move forward together—wholeheartedly, now. We have 70 years and seven reports that have gone nowhere. Now is the time to act. Let me remind the House what David Waddington, then Home Secretary, said 20 years ago:

“This is positively the last chance for the industry to establish an effective non-statutory system of regulation”.—[Official Report, 21 June 1990; Vol. 174, c. 1126.]

The case is compelling and the evidence is overwhelming. This is a once-in-a-generation opportunity to make change that the public can trust. There can be no more last-chance saloons.

In acting, let us remember the words of Bob and Sally Dowler at Leveson:

“there is nothing that can rectify the damage that has been done to our family. All that we can hope for is a positive outcome from this Inquiry so that other families are not affected in the way we have been”.

On behalf of every decent British citizen who wants protection for people such as the Dowlers and a truly free press—a press that can expose abuse of power without abusing its own—we must act.

[The Prime Minister]

I thank the right hon. Gentleman for his response. He is absolutely right to thank Leveson for the work he has done and the report he has produced. The right hon. Gentleman is also right to talk about the innocent victims and the enormous courage they have shown by appearing in front of the inquiry and telling their stories. He was also right to mention Leveson’s finding that all politicians, going back over decades, must take responsibility for a relationship between politicians and the press that got too close.

Let me make a couple of points on some of the things the right hon. Gentleman said. I note he said he strongly supports Ofcom carrying out the test of whether the regulatory system is compliant. That is something we need to look at in the cross-party discussions, because, however we go about this, it is important that we demonstrate the real independence of this regulatory system. Of course, the chair of Ofcom is appointed by my right hon. Friend the Secretary of State. We have to think about that, but we also have to consider that Ofcom is already a very powerful regulatory body. We should be trying to reduce concentrations of power rather than increase them. That is something we might want to discuss.

One issue the right hon. Gentleman did not address—I hope we can address it in the cross-party conversations—is data protection law changes. We should not respond too rapidly to something as complex as that. We do not want to put in place something that wrecks proper investigative journalism in our country.

On statutory regulation, I would make the point to the right hon. Gentleman that Leveson rightly rejects statutory regulation and says that we must move from the status quo and implement the principles of the report. I agree—that is absolutely vital. We do not want to be left in the position of having only statutory regulation as the alternative to the proposals he sets out. I completely agree with the right hon. Gentleman that the talks should be business-like and that we should get on with them, but where I disagree with him is that we do not have to wait until those discussions are had to implement the report. The report needs to be implemented by the press taking the steps set out in the report to put in place the independent regulation that Leveson speaks about. They could start that right now.

[Several hon. Members]

rose—

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Did Lord Justice Leveson make any comments on the proprietorship of newspapers? Surely, one factor in the depression of press standards is that some owners of national newspapers have been bad men and sometimes foreigners with an ingrained hostility towards Britain, and their editors know that they can keep their jobs only by achieving the required levels of readership and advertising revenue by populist sensationalism, however immoral. Should ownership of British newspapers be confined to British nationals who are judged to be fit and proper for that role, as with television?

[The Prime Minister]

The report goes into enormous detail about the history and ownership of the press. Part of one of the volumes goes into immense detail, which my right hon. Friend can study, and perhaps that is the best answer to him. This point was raised by the Leader of the Opposition. Lord Justice Leveson does address concerns about plurality and media ownership and does say we need to make sure there is more plurality than would otherwise be guaranteed simply by competition policy. That is important, because we want to have not just a vigorous press, but a press that is in different—in wide—ownership as well.

[Mr Jack Straw (Blackburn) (Lab)]

Does the Prime Minister not, however, appreciate that the argument made by Lord Leveson is not, as he says, for statutory regulation, which is not there, but to enforce and give backing to the proposals of the press? The fundamental flaw with the proposals of the press, as Lord Leveson clearly sets out, is not their intention, which I acknowledge is now an honourable one, but that it is impossible to deliver the independence proposed by the press themselves and the enforcement—for example, not least on penalties on legal costs—without some overarching form of statutory backing? It is not regulation—it is statutory backing. I plead with the Prime Minister to recognise the force of the argument, not that I am making, but that Lord Leveson makes.

--- Later in debate ---

[The Prime Minister]

The right hon. Gentleman is entirely right that Lord Justice Leveson is not recommending statutory regulation of the press. He wants to take steps so that we avoid statutory regulation of the press—I fully respect that. But in answer to his point, the system Lord Justice Leveson recommends is not a compulsory system. It does not guarantee that everyone takes part; it is still a voluntary system. Where we are in complete agreement is that Lord Justice Leveson does not want statutory regulation—neither do I. Lord Justice Leveson wants strong, independent regulation—that is what I want. He sets out the principles of strong, independent regulation—that is what we have got to put in place, and that is what the press should start to put in place straight away.

[Sir Malcolm Rifkind (Kensington) (Con)]

The central requirement is a press complaints procedure that will not only be fully independent, but will restore public confidence. I ask the Prime Minister to look very objectively at whether an Act of Parliament would indeed enhance that credibility. I refer him in particular to paragraph 72 of the executive summary of the report, where Lord Leveson states that an Act of Parliament would

“reassure the public that the basic requirements of independence and effectiveness were met and continued to be met”.

I believe that that is a very powerful argument, and I ask my right hon. Friend to consider it with all force.

[The Prime Minister]

My right hon. and learned Friend is absolutely right—paragraphs 70, 71 and 72 are the absolutely key paragraphs of the report. But let me explain why I have misgivings about leaping straight to that conclusion. Once we start writing a piece of legislation that backs up an independent regulator, we have to write into that legislation what is its composition, what are its powers, what is its make-up, and we find pretty soon—I would worry—that we have a piece of law that really is a piece of press regulatory law. Now, that is an enormous step for us in this House of Commons to take, and we have to think about it very carefully before we leap into this new approach.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Does the Prime Minister not accept that, if he wants people to accept the report’s recommendations and conclusions generally, particularly the ones he likes, he cannot pick and choose, but should accept all the recommendations?

[The Prime Minister]

This is where I part company with the right hon. Gentleman: it is the job of the House of Commons to consider a report and what is right for this country to introduce. I highlighted the changes to the Data Protection Act because I was advised that they could have a serious effect on investigative journalism. It would be quite wrong, if we received a report of this magnitude and said in five minutes flat, “We’re going to implement every last piece of it”, without considering the consequences. A responsible Government will think about the consequences. I am absolutely clear, however, that the clear principles of Leveson-style regulation—on what the independent press regulator needs—are right.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Is the Prime Minister as clear as I am, reading paragraphs 70 to 76, that Lord Justice Leveson makes two things absolutely central—that there should not be legislation to establish a body to regulate the press, but that

“it is essential that there should be legislation to underpin the independent self-regulatory system”?

The word “essential” is a clear word. Does he accept it?

[The Prime Minister]

This is absolutely the key argument that has to be had in our cross-party discussions. Lord Leveson is saying that the statutory underpinning is necessary properly to give effect to this independent body. Of course, he intends it to be a very neat, very small piece of statute, but paragraph 71, for instance, states that the law would not

“give any rights to these entities…except insofar as it would require the recognised self-regulatory body to have the power to direct the placement and prominence or corrections and apologies.”

Once we try—and we have tried it—writing a law that provides for statutory underpinning that describes what the regulatory authority does, what powers it has and how it is made up, we soon find we have quite a big piece of law. That is the concern. We need to think very carefully before crossing that Rubicon.

[Mr Ben Bradshaw (Exeter) (Lab)]

How, without the statutory underpinning that Lord Leveson says is essential, does the Prime Minister think a new body could prevent a newspaper group simply from walking away or ignoring the new body’s findings?

[The Prime Minister]

Lord Leveson does not himself have an answer to the question of what happens if a newspaper walks away. His system is a voluntary system, so the same question applies to his system too.

[Mr John Whittingdale (Maldon) (Con)]

Does my right hon. Friend agree that there is now almost universal agreement that we must have a strong new regulator, that it must be seen to be independent and that it must be established as quickly as possible? I strongly welcome his statement, however, that the question of whether the regulator should have statutory underpinning is something that Parliament needs to consider carefully, perhaps through a regular assessment of its effectiveness by the Culture, Media and Sport Committee, and that we should proceed to legislate only if it becomes absolutely clear that it will not function properly without it.

[The Prime Minister]

My hon. Friend makes an important point. He has probably spent more time looking at this issue than almost any other Member of the House of Commons. As he said, what matters is the enormous consensus about what independent regulation should consist of, including the powers that are necessary. We all know we need million-pound fines, proper investigations, editors held to account and prominent apologies. That is what victims deserve and what we must put in place, but he is right that we need to think carefully before we pass legislation in the House.

[Dame Joan Ruddock (Lewisham, Deptford) (Lab)]

In his responses so far, the Prime Minister is splitting the House. This is not what the public expect of us. It would be a dereliction of our duty as politicians if we did not establish the legal framework recommended by Lord Leveson, and I ask him to reconsider his position.

--- Later in debate ---

[The Prime Minister]

I think it would be a dereliction of our duty in the House of Commons, which has stood up for freedom and a free press, year after year, century after century, to cross the Rubicon by legislating on the press without thinking about it carefully first. That is why it is right to have cross-party talks, why it is right to have a debate in the House and why it is right to listen to people such as the Chairman of the Culture, Media and Sport Committee.

[Mr David Davis (Haltemprice and Howden) (Con)]

May I for one welcome wholeheartedly the Prime Minister’s caution about using statute in this matter? I remind him that it was not a policeman, a regulator or even a judge who highlighted the hacking scandal; it was a member of our free press. As such, one of our highest priorities is to ensure that whatever we do preserves the independence and freedom of our press from Government intervention, because that is the best bastion of our freedoms.

[The Prime Minister]

My right hon. Friend makes an important point. We have to get this right. It is very important that the regulation is put in place rapidly. That above all is the pressure that needs to be put on the media, but it is an important step we should consider before moving to statutory regulation.

[Mr Nigel Dodds (Belfast North) (DUP)]

We cannot forget the victims in all this: the Dowler family, the McCann family, Christopher Jefferies and the other innocent victims who have suffered terribly. We absolutely support the absolute freedom of the press—there can be no statutory regulation of the press—but there needs to be proper redress for those who are wronged. The Prime Minister says he wants to think again about Leveson’s recommendations on statutory legislation. He talks about alternative options. Can he give us a flavour of what those options might be? There is a feeling among some that this may be more to do with party management than really dealing with the problems.

[The Prime Minister]

There is a variety of opinions right across the House. We have to be frank about this. I think it is important to consider the very big step of effectively passing statute on the press in this country. There are many independent non-statutory bodies in this country of very long standing. The real test is not whether this body is backed by statute or not; the real test is: can it fine newspapers? Can it call editors to account? Can it get front-page apologies? That is what people want to know and that is what we need to deliver.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Does the Prime Minister accept that what we need is a rational and balanced approach to this, not an hysterical one? We are not being asked by Leveson to cross a Rubicon—barely even a brook. Perhaps the Prime Minister ought to consider the fact that the Irish system—Leveson proposes something similar—is already signed up to by The Times, the Daily Mail and The Sun.

[The Prime Minister]

My hon. Friend makes an important point. I have got the Irish Defamation Act of 2009 in front of me. It runs to many, many pages, setting out many, many powers of the Irish Press Council. It is worth Members of the House studying the Irish situation and asking whether we want to have legislation of that extent on our statute book—which of course could then be amended at any moment, by any politician at any future point. That is an important consideration.

[Chris Bryant (Rhondda) (Lab)]

I draw Members’ attention to my entry in the Register of Members’ Interests—but that is rather the point: we all share an interest in this. Lord Leveson reserves his strongest condemnation for the political class in this country, because he believes that over years—because we have been too compromised, too craven or too cowardly—we have refused to act. We now have an independent figure telling us what to do. Surely if we do not do what he says, which is to provide a change in the law, there will be more Millie Dowlers, and that will be our fault.

[The Prime Minister]

I would also argue that one of the other problems with the political class is never saying sorry when they get it wrong. On 13 November 2012, the hon. Gentleman spoke about the

“deal…secured between the Conservative party and News International”.—[Official Report, 13 November 2012; Vol. 32, c. 553WH.]

We have heard not a word of regret from him. What matters most about this is putting in place a regulatory system that can make the victims proud. That is what is necessary. The fines, the apologies, the proper investigations—that needs to be done and it can be done right away.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I welcome my right hon. Friend’s statement today. There is a lot in the Leveson report that is to be welcomed. I share my right hon. Friend’s caution, but does not another important part of the evidence presented by Lord Leveson show that some of the smears against my right hon. Friend the Member for South West Surrey (Mr Hunt) were absolutely outrageous, including the Leader of the Opposition saying that he was a back channel for Murdoch?

[The Prime Minister]

My hon. Friend makes an important point. Time after time we were told that my right hon. Friend the Member for South West Surrey (Mr Hunt) was backing the bid, not adjudicating on the bid. All sorts of allegations and smears were made. It is important that colleagues can read the report and see that he took the right decisions in the right way.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

I declare an interest as someone who was a Fleet street staff journalist for 10 years. As such, I am instinctively opposed to statutory regulation of the press. Does the right hon. Gentleman agree that if that Rubicon, as he says, is not to be crossed, it will be up to the press to accept the recommendations of Leveson, to do that in full, to do that fast and to do that with all the proprietors involved? What happens next will of course be a matter for this House and the political parties, but above all it is a matter for the press.

[The Prime Minister]

The right hon. Gentleman is absolutely right. The pressure should be on the press to take the steps that everybody now knows are necessary and that are set out in huge detail in the report. That is the best way to avoid the statutory regulation that Leveson does not want to see, that no one in this House should want to see, and that would make our country less free. He speaks very clearly about that issue.

[Mr Rob Wilson (Reading East) (Con)]

After two and a half years of working closely with the former Culture Secretary, I know him to be a man of the highest integrity. Does the Prime Minister think that the Labour party should apologise in this House for making disgraceful and unfounded accusations which the Leveson report shows to be absolutely false?

[The Prime Minister]

My hon. Friend makes an important point. We had to listen to allegation after allegation, conspiracy after conspiracy, smear after smear. Each one is put to bed comprehensively by the report.

[Keith Vaz (Leicester East) (Lab)]

I welcome the report and I accept all its conclusions. May I also welcome the Prime Minister’s commitment to part 2 of the inquiry? I accept that we have to wait for the outcome of the criminal investigations, but the operations being conducted by the Metropolitan police, including Operation Weeting, could take up to three years to conclude. Will he give a commitment today to give them whatever resources they need to conclude the matter once and for all?

[The Prime Minister]

The right hon. Gentleman is entirely right. One of the things that the victims have been most concerned about is that part 2 of the investigation should go ahead—because of the concerns about that first police investigation and about improper relationships between journalists and police officers. It is right that it should go ahead, and that is fully our intention.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

The two scandals that gave rise to this inquiry were phone hacking and bribing the police, both of which are against the criminal law. Now, some 90 arrests have been made. Strangely, however, Lord Leveson concludes:

“More rigorous application of the criminal law…does not and will not provide the solution.”

Instead he goes off on building proposals for what would ultimately be statutorily underpinned regulation, which is largely irrelevant to what has happened. I congratulate my right hon. Friend on not going down that route, as that would not solve the problems that gave rise to the inquiry.

[The Prime Minister]

I am grateful for my right hon. Friend’s support. I would, however, make the point that, while the press must always act within the law—it is subject to the criminal law, the civil law and the laws on data protection, and that is vitally important—there is also a role for strong, independent regulation. Those victims should not have had to wait for action through civil litigation, and they should not have had to wait until the criminal actions were taken. A proper regulatory system could have protected more of those people and prevented many more of them from becoming victims in the first place.

[Angus Robertson (Moray) (SNP)]

The Prime Minister will be aware that many of the aspects of any future press regulation, and related features such as criminal prosecution, defamation and policing, are devolved matters in Scotland. Will he take this opportunity to welcome the proposal by the First Minister that, in addition to a full debate on this question in the Scottish Parliament, there should be cross-party discussions and an independent implementation group, chaired by a Court of Session judge, which should consider how best to implement Lord Leveson’s proposals in the context of Scots law and the devolved responsibilities of the Scottish Parliament?

[The Prime Minister]

I will look carefully at what the First Minister says and at the proposals that he is making in this area. I also recommend that the hon. Gentleman have a look at what the report says about the First Minister.

[Philip Davies (Shipley) (Con)]

Does my right hon. Friend agree that we cannot simply farm out these important decisions, along with a blank cheque, to someone who is wholly unelected and unaccountable? Does he further agree that having the Government say to the press, “These are the specific steps that we need you to take; otherwise, we will either legislate or regulate” is a pretty rum form of self-regulation?

[The Prime Minister]

I agree with some of what my hon. Friend says, but it is important that we lay down very clearly what is expected of the press in terms of the independent regulatory system that needs to be put in place. What we cannot have is a continuation of the status quo; we need a proper investigative arm of a regulatory body, which needs to be able to levy fines, to insist on apologies and to be far more independent than it has been up to now. Frankly, on behalf of the victims and the public, this House is perfectly entitled to ask for those things. We should do, and if they were not put in place, we would have to take further action. That is the key to the Leveson approach, and it is one that I want to follow.

[John McDonnell (Hayes and Harlington) (Lab)]

I wonder whether we could achieve consensus on one of the recommendations in the report, where Leveson recommends the consideration by proprietors of the introduction of a conscience clause to protect journalists who refuse in any way to go against the code of practice. Will the Prime Minister join me in urging proprietors to meet the National Union of Journalists and whoever else to start working on introducing a conscience clause in contracts?

[The Prime Minister]

I am very happy to agree to that. There are many sensible recommendations that can be put into place, I would hope, as quickly as possible—some of the recommendations about the police and the Association of Chief Police Officers, and many of the recommendations about politicians and our relationship with the press. Those do not have to wait for anything, and as I have said, the press do not have to wait for any further discussions; they can start putting this regulation in place straight away.

[Conor Burns (Bournemouth West) (Con)]

One of Lord Leveson’s recommendations is that we should legislate to introduce

“a legal duty on the government to protect the freedom of the press”.

Does my right hon. Friend agree that such a Bill would be utterly alien to our traditions in this country? Will he join me in encouraging Lords Hunt and Black to look at the Leveson recommendations, to see if there are things within them that they could add to their recommendations, and to get on with the job so that we can restore robust confidence in a free press that is the cornerstone of a free society?

[The Prime Minister]

Frankly, I think we have to be tougher on Hunt and Black than that. We need to say very clearly that what has been proposed so far is progress on the Press Complaints Commission, but that it is not good enough. We need more changes; the public want more changes; the victims want more changes. It is not yet the sort of independent regulation that we can say is right or of which we can be proud. Leveson points out the weaknesses in the system, and we need to plug those gaps. The press needs to plug those gaps, and as I say, there is nothing to stop it getting on with that straight away.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Does the Prime Minister believe that the press should be able to appoint or veto the appointment of the chairman of the press regulator? Many of his colleagues and a handful of colleagues in my party signed up to that model, with closed minds, even before Leveson reported.

[The Prime Minister]

One of the points that Leveson makes about the Hunt-Black model is that it needs to be more independent. The Press Complaints Commission was ineffective not only in not being able to investigate or in not having clear enough powers; it was not independent enough. This form of regulation needs to be independent regulation, as set out by Leveson.

[Andrew George (St Ives) (LD)]

The Prime Minister began his statement by praising the courage of the victims of press intrusion. Does he also respect the wishes of those victims about the outcome of this inquiry?

[The Prime Minister]

Yes, of course. What is absolutely vital is that we put in place a regulatory system that they can see has got real teeth. They want to know that it is independent; they want to know that it can achieve big fines; they want to know that it can call editors to account. We could, of course, completely obsess about the issue of statutory underpinning. That is one issue; there are many other issues about what makes for good, strong, robust and independent regulation. That is what we should focus on.

[Mr John Denham (Southampton, Itchen) (Lab)]

The Prime Minister has asked the House to reject Leveson’s central and essential recommendation of legislation on the grounds, he says, that it would be too difficult to do well. Would it not have shown more respect for the work of Lord Leveson and for the victims for the Prime Minister to have sat down on a cross-party basis to examine how the recommendations in paragraph 70 could be implemented, instead of rejecting them within 24 hours of receiving the report?

[The Prime Minister]

I have great respect for the right hon. Gentleman, but I do not think that that is right at all. The central recommendation of Lord Leveson is to put in place the principles of independent regulation so as to avoid statutory regulation. Frankly, I do not think I would be doing my duty if I came to the House and said that every single aspect is absolutely fine without any changes. I am proud of the fact that we have managed to last for hundreds of years in this country without statutory regulation or mention of the press. If we can continue with that, we should. That seems the minimum that this House of Commons should consider in defending the freedom of our country.

[Harriett Baldwin (West Worcestershire) (Con)]

The Prime Minister rightly started with the victims, many of whom were victims of the News of the World. We should bear it in mind that the News of the World no longer exists, and that not all newspapers are like the News of the World. I am thinking of, for example, my local paper, the Worcester News, and the Malvern Gazette.

What paragraph 135 of the executive summary effectively says is that, in the constituency of Witney, were the Prime Minister’s agent to have a personal dinner with someone who happened to work for the local paper, it would have to be recorded. What does the Prime Minister think of that particular recommendation?

[The Prime Minister]

Let me begin by responding to what my hon. Friend said first. In paragraph 19 of the summary, Lord Leveson makes a special point about Britain’s regional newspapers. He says that

“their contribution to local life is truly without parallel.”

He praises their role, and says how little they have been involved in the sort of damaging culture and practices to which the rest of the report refers.

As for my hon. Friend’s second point, we must look very carefully at the recommendations for increased transparency. I think, frankly, that transparency is important. The public want to know what is the relationship between politicians on the one hand and the press on the other. If they can see how often you are meeting and whom you meet, they can see whether you have a balanced, proper, sensible relationship with the press or not. We have put transparency in place. I hear murmurings from Labour Members, but in 13 years they did not do a single thing about it.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Lord Justice Leveson is very clear about the importance of maintaining a plural media. Specifically, in paragraph 140 of the summary, he says:

“There is no current option for the Government or regulators to step in to protect plurality if it is threatened by organic change in the market.”

What plans has the Prime Minister to protect media plurality?

[The Prime Minister]

That is an excellent point, which was brought out in the debates when my right hon. Friend the Member for South West Surrey (Mr Hunt) was Culture Secretary. We need to look at this very carefully, because there is a gap in the law: Ofcom can only consider problems of plurality at the time of a merger or takeover. I think that the recommendations make a lot of sense, and that we should study them carefully.

[Mr Peter Bone (Wellingborough) (Con)]

The Prime Minister must be congratulated on his courage in not doing the popular thing, and standing up for the freedom of the press. Will he respond to one specific small point? He referred to how close the Government, and politicians, have got to the press. Will he give an assurance now that, from tomorrow, the Government will not leak statements to the press in advance?

[The Prime Minister]

I think that in the last week we have seen two notable successes in that regard. In two cases, there has not been a bat’s squeak outside the House of Commons. I refer to the announcement of the new Governor of the Bank of England, Mr Mark Carney, and to the report that was published today. There has been not a leak, not a sentence, not a word. How different things were in the past.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Lord Leveson states that the selection of the key appointment panel which selects the chair and members of the crucial governing board should itself be independent of both the Government and the industry. Who would the Prime Minister expect to draw up a list of nominations, and who would make the final choice?

[The Prime Minister]

That is a very important question. In his report, Lord Justice Leveson gives a number of alternatives. He clearly prefers his model, but I think that the independence of those either judging an independent regulatory system or appointing people to it is absolutely vital. That is why I am concerned about the role that he puts forward for Ofcom. As I said earlier, the chair of Ofcom is appointed by the Secretary of State, and in my view that makes the two of them too close. In everything that we do, whether via legislation or by means of other backstops, we need to ensure that the people involved in this and the people judging this are properly independent.

[Bob Blackman (Harrow East) (Con)]

Before coming to this place, I spent 12 years working in regulatory compliance for BT. I remember the shockwave that went through the organisation when Ofcom told BT that it regarded it as a non-compliant company. After that, a culture of compliance swept through the organisation. Does my right hon. Friend agree that the press should regard this as their moment to ensure that a culture of compliance is brought into our press?

[The Prime Minister]

My hon. Friend makes an excellent point. That, I hope, started as the Leveson inquiry got under way. Some of the things that were revealed during the inquiry about practices and culture in parts of the press were deeply disturbing. I think that quite a lot has already been done to address those, and to clean up the press’s act, but clearly more needs to be done. As I have said, the Hunt-Black regulatory alternative is not sufficient; more needs to be done to ensure that this culture change is driven through the press itself.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Lord Justice Leveson suggests that this new body should have strong powers to investigate a suspected breach of the code. Many of our country’s best investigative journalists are freelancers, however, so will the Prime Minister carefully consider the potential impact of such investigations on individuals who do a great deal to shine a light on areas that others do not want illuminated, and will he ensure that this issue is discussed in cross-party talks?

[The Prime Minister]

The hon. Lady makes an important point, and I am sure it will be covered in cross-party negotiations. I will just make the point again about the concerns expressed to me about the potential reforms to the Data Protection Act. If we were to try to treat journalists exactly the same as everybody else for the purposes of data protection, I think newspapers, programmes such as “Panorama” and others would make very strong representations about what that could mean for investigative journalism. That shows why we must think carefully about some of these recommendations; otherwise we could get something badly wrong.

[Mark Reckless (Rochester and Strood) (Con)]

The Prime Minister extended the inquiry’s terms of reference in response to the Home Affairs Committee’s concern that the Crown Prosecution Service had got the law wrong on phone hacking. Does the Prime Minister recognise that there are lessons for the CPS even in part 1 of the report, since while it exonerates the Director of Public Prosecutions, it criticises David Perry QC for failing to reacquaint himself with the relevant facts in law before advising him?

[The Prime Minister]

My hon. Friend makes an important point. From what I have seen in the report, Lord Justice Leveson is relatively complimentary about the work of the CPS and the decisions it took, but some of its workings do bear careful study.

[Barry Gardiner (Brent North) (Lab)]

The Prime Minister is on record as saying he would implement Leveson as long as it was not “bonkers”. It now appears that he regards Leveson’s recommendation of statutory underpinning as bonkers. Can the Prime Minister therefore explain why Lord Leveson said that was essential?

[The Prime Minister]

What I have said is that the principles set out by Leveson of what independent regulation needs to include and what it needs to look like are absolutely right and should be put in place, but, frankly, we do not do our duty in this House if we do not examine these proposals properly and ask the relevant questions, and instead just wave through a change that will make a very big difference to our country. If we were to do that, we would not be operating properly.

[Dr Julian Huppert (Cambridge) (LD)]

One issue that arose is that data protection law is simply not taken seriously enough, because the sanctions are too light. The report recommends that sections 77 and 78 of the Criminal Justice and Immigration Act 2008 should be commenced. That has been recommended by the Justice Committee, the Home Affairs Committee and now Justice Leveson. Will the Prime Minister agree to do that promptly?

[The Prime Minister]

I think we need to look at this very carefully. Lord Justice Leveson is incredibly tough about what he sees as the failures to act on the Information Commissioner’s report. We need to look very carefully at that, as well as at my hon. Friend’s point.

[Sheila Gilmore (Edinburgh East) (Lab)]

Many of my constituents had grave concerns about the BSkyB takeover and the fact that it nearly happened. It did not happen, but not because of anything in our law or practices that would have stopped it. Will the Prime Minister undertake to act on that promptly?

[The Prime Minister]

On the issue of whether politicians should be taken out of media merger decisions, Lord Justice Leveson finds that that should not happen. He says this is an issue about which someone has to be the decision-maker, and he believes that a politician acting correctly in a quasi-judicial capacity is the right person. The findings about how my right hon. Friend the Member for South West Surrey (Mr Hunt), the then Culture Secretary, acted bear good reading.

[Andrew Bridgen (North West Leicestershire) (Con)]

The report’s executive summary makes it clear that

“successive Labour administrations, in power for 13 years…made no more progress than their predecessors in addressing problems in the culture, practices and ethics of the press”.

Does my right hon. Friend agree? Also, given all the noise the hon. Member for West Bromwich East (Mr Watson) has produced on this topic, does my right hon. Friend share my surprise that he is not present in the Chamber?

[The Prime Minister]

My hon. Friend makes an important point. We have made more progress on addressing these issues in the last two and a half years than was made during the previous 13.

[Simon Danczuk (Rochdale) (Lab)]

Does the Prime Minister really, genuinely believe that the victims will be satisfied with his statement today?

[The Prime Minister]

What I would say to all the victims is that the true test of this is whether, in four or six months’ time, we have in place proper independent regulation that we can be proud of in this country. That, in the end, is the test and that is what they want to know about. Will there be fines? Will there be proper apologies? Will there be proper investigations? That is what defines independent regulation and that is what we need.

[Mr John Baron (Basildon and Billericay) (Con)]

The Prime Minister’s instinct against statutory regulation is absolutely right, but does he also accept that a key part of the problem is that many people in this country feel that they cannot gain access to justice because of a legal system that is too complex and too costly? What can the Government do to put that right?

[The Prime Minister]

My hon. Friend is right. Access to justice is one of the issues that needs to be addressed. At the same time, as I have said before, it should not be that the only way to get redress from the press is to sue them or find a policeman because a law has been broken. There should be a proper, independent regulatory system where complaints can be investigated. With the Press Complaints Commission, people had a sense that even if they got their complaint investigated, nothing would actually happen. That is what needs to change because in my view just relying on the civil and criminal law is not enough.

[Paul Flynn (Newport West) (Lab)]

Lord Leveson says that he regrets that former Deputy Commissioner John Yates did not reflect on his close friendship with the deputy editor of the News of the World before he decided in 2009-10 not to reopen the hacking inquiries. Is not the great shock of this report the revelations of the very close relationships between press, police and politicians? What is the right hon. Gentleman going to do, personally and as a Prime Minister, to ensure that the corrosive effects of cronyism are reduced?

[The Prime Minister]

On the relationship between the press and politicians, this Government have taken unprecedented action to publicise and make transparent all the meetings between politicians and editors, and politicians and proprietors. All that is now declared on a quarterly basis and that is how it should be. That did not happen in the past. The report recommends that that should also apply between senior officers and members of the press and that, to try to end excessively close relationships, there should be a cooling-off period before police officers go and work for newspapers. Lord Leveson does address those issues. We have not waited for the report; we have gone on and put those things in place.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my right hon. Friend agree that we may be missing something rather important this afternoon? More and more people are getting their news from digital media, which remains way outside any kind of regulation. It in many ways is going to be a longer-term threat to the health of our newspaper industry.

[The Prime Minister]

My hon. Friend makes a good point. The issue is brought out in the early parts of this large, four-volume report, about the nature of change in the media industry. That does mean that we need to have a system of regulation for newspapers that is sensible and proportionate and recognises the change that is taking place.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The main concentration of power is, of course, in media and press ownership, which is made up of so few people. Does the Prime Minister agree with the 75% of people in opinion polls who want that concentration to be broken up? Does he believe that legislation is required to do that? Will he use the communications Bill, for example, to deal with some of the new media that have been referred to?

[The Prime Minister]

What matters is that we have the proper application of competition policy, that Ofcom is able to look at plurality and that we make decisions on that basis.

[Mr John Leech (Manchester, Withington) (LD)]

This afternoon, Lord Justice Leveson has called time at the last-chance saloon. I welcome his commitment to a free press and a regulator independent of both press and politicians. However, does the Prime Minister accept that for that to work effectively, a careful balance needs to be struck between incentives and disincentives so that all the press sign up?

--- Later in debate ---

[The Prime Minister]

My hon. Friend’s words are extremely wise. What Lord Justice Leveson has effectively said is, “Here is an opportunity to put in place independent regulation.” He says in the report that if that is not done, regrettably, full-on statutory regulation will have to be introduced because we cannot maintain the status quo. I think that that is the right approach. The only difference that I am putting forward is that, as well as putting in place these principles, we need to look very carefully at one or two of the recommendations that he makes about how that should be done.

[Jeremy Corbyn (Islington North) (Lab)]

May I take the Prime Minister back to the multiplicity of media ownership and the extreme concentration in the hands of a very small number of companies of not only the print media, but the control of the distribution system of the print media, which often means that small-circulation papers cannot get to a wider public because of the stranglehold of the distribution system? That fetters the ability of all of us to access a wide variety of the press.

[The Prime Minister]

As I said, the press, like every other industry, should be fully subject to competition policy and fully competitive. I part company with the hon. Gentleman on one issue—because of the growth of the digital media, the costs of distributing opinion, fact and newspapers online have come radically down.

[Alun Cairns (Vale of Glamorgan) (Con)]

Does the Prime Minister agree that statutory underpinning in the wrong hands, possibly in the future, could lead to statutory regulation by the back door?

[The Prime Minister]

My hon. Friend is right to raise this issue. The point I am making is that putting in place underpinning may well turn out to be not as simple as having a one or two-clause Bill. We would have to start defining what the body is, what the body does, what powers it has and what the extent of it is, rather as there is in the Irish system. Once we have done that, we would be in danger of finding that we have put in place a statutory Act on the press that is then very, very easy to amend. My point is that this House of Commons should pause, stop and think before taking a step of that magnitude.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

I would have some sympathy with the point the Prime Minister makes about the Data Protection Act if that was all Leveson said about that Act. However, he goes on to talk about creating a commission which would have a broader base, including people from the media. Does that not counterbalance some of the Prime Minister’s legitimate concerns about the Data Protection Act recommendations? Perhaps there is an argument for doing the same thing with Ofcom, too.

[The Prime Minister]

I am grateful for the hon. Gentleman’s points. My reading of this is that what is being recommended is to stop some of the exemptions from data protection that journalists currently have but to put in place a public interest defence at the end. I am advised that that could have a very bad effect on investigative journalism. Again, I think that, instead of just waving through what could be a very profound change, it is worth stopping, talking and having cross-party discussions about this. That is why I do not think anyone, by rights, really can stand up today and say, “I accept the Leveson inquiry in full.” They would not be doing their duty as legislators and as politicians if they did not actually have a look at what this means.

[John Hemming (Birmingham, Yardley) (LD)]

Does the Prime Minister think that the Leader of the Opposition, in his enthusiasm for putting the Government in a strong position in respect of the regulator, forgot to call for the renaming of the Department for Culture, Media and Sport as the ministry of truth?

[The Prime Minister]

Well, we certainly have got a long way to the truth about the DCMS in this report, and I hope that colleagues will look at that very closely.

[Mr William Bain (Glasgow North East) (Lab)]

The Prime Minister will recall that my constituents the Watson family gave evidence to the inquiry that they have had their lives devastated for the past 21 years by grossly inaccurate reporting of the murder of their daughter Diane, reports that led to their son taking his own life. Do not they and the other victims deserve us, as parliamentarians, to put in place a powerful independent regulator whose role and functions are underpinned by statute?

[The Prime Minister]

I think that they, as all victims do, deserve a really tough, independent regulatory system that can really hold the press to account, that can fine those editors, that can call them to account, that can insist on proper apologies and that can take up complainants’ cases and deal with them properly. That is the absolute key. Of course there is a debate to be had about statutory underpinning, yes or no. But the real debate is: is this regulatory body going to be powerful enough to get to the truth and do what needs to be done?

[George Eustice (Camborne and Redruth) (Con)]

The Defamation Bill is currently going through Parliament with the support of all parties and even of the press. Does the Prime Minister agree that this is a good example of successful statute being introduced by this House—perhaps the idea is not quite as revolutionary as he said? Does he think it is wrong for newspapers to support statutes which are in their interests but oppose statutes which might protect civil society? Just as he has an open mind to a regulatory model without statute, does he agree that editors should keep an open mind to using some statute?

[The Prime Minister]

I hope everyone will have an open mind as they read this report and the conclusions about some of the terrible things that have happened in the press, but above all what I want editors to do is engage properly with what Leveson has said needs to happen to the regulatory system. As I say, there is no need to wait for long conversations about that. He sets out what is wrong with Hunt-Black and what needs to be put in place. That work should start straight away.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

The Opposition have called for genuine cross-party discussions. I note that the Secretary of State for Education does not appear to be in his seat, so will the Prime Minister confirm that there will be no smearing of Lord Leveson while those talks are taking place?

[The Prime Minister]

He is not Gordon Brown.

[Mr Robert Buckland (South Swindon) (Con)]

I welcome my right hon. Friend’s statement. Particular attention should be paid to paragraphs 74 and 75 of the document, in which Lord Justice Leveson does not come to a specific conclusion about what to do if particular newspapers do not choose to sign up to any system of regulation. Does my right hon. Friend agree that it is for this place to debate not only the principle of underpinning, which I support, but, for example, whether Ofcom is the most appropriate regulator or whether there should be a separate regulator for the print media?

[The Prime Minister]

My hon. Friend makes an important point, which is referred to in paragraph 75 of the summary document, but he needs then to go away and look at the bit of the very long report to which it refers. In paragraph 75, Lord Justice Leveson states:

“For the sake of completeness I have…set out in the Report the options that…would be open to the Government to pursue… in that regrettable event”—

that is, if the press do not agree to the principles of self-regulation. That would include pretty full-on statutory regulation, which is something we all want to avoid and Lord Leveson wants to avoid. Separately, my hon. Friend’s point about Ofcom is well made and I hope that the Leader of the Opposition will think carefully about that specific issue, because it requires further thought.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The Prime Minister alluded to what Lord Justice Leveson says about Alex Salmond’s attempt at intervention on behalf of Rupert Murdoch. Is he aware of Leveson’s conclusion that Mr Salmond

“stood ready to lobby first Dr Cable and later Mr Hunt”,

and that

“Acceding to Mr Salmond’s argument would have rendered the decision unlawful”?

[The Prime Minister]

I am afraid that in the time available I have not been able to get to that point—I think it is page 1312—but from memory, I would say that the issue with respect to the First Minister is that he was apparently having a conversation about the bid at the same time as asking for support at the election. The Scottish National party might want to reflect on that.

[James Morris (Halesowen and Rowley Regis) (Con)]

A free press is fundamental to a free society, but that freedom is dependent on a responsible press. Does the Prime Minister agree that self-regulation of the press has not had an auspicious history and that whatever conclusions are reached on independent regulation it should enshrine a new culture of responsibility in the British media?

[The Prime Minister]

My hon. Friend is entirely right. What needs to take place is not just a change in regulation but a change in culture within the press. The whole Leveson report has rightly engendered a big debate in the press about the culture, the practices and what needs to change. That needs to happen, but we must also put in place the regulatory system.

[Mr Speaker]

Last but never forgotten, I call Mr Jacob Rees-Mogg.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Thank you, Mr Speaker. May I thank the Prime Minister for standing up for our ancient liberties and refer him to the rather ominous phrase on page 1781 of the report, which states:

“In order to give effect to those incentives I have recommended legislation”?

It is very hard to see how giving incentives by legislation is not licensing. Does the Prime Minister agree with me that it is better ultimately to have an irresponsible but free press than to have a responsible but state-controlled press?

[The Prime Minister]

First, may I commend my hon. Friend for his extraordinary powers of speed-reading in getting to page 1781 quite so quickly? He might also want to look at page 1780, which sets out the first part of the statutory underpinning recommended by Lord Justice Leveson, which is a guarantee of media freedom. It is an attractive idea to write a guarantee of media freedom into the law, but even that needs to be qualified. It is worth while looking at subsection 3 of the suggested example, which states:

“Interference with the activities of the media shall be lawful only insofar as it is for a legitimate purpose”.

We might start writing into the law qualifications and issues that people in this House might want to consider carefully.

[Mr Speaker]

I thank the Prime Minister and all colleagues for their succinctness, which meant that all 52 Back Benchers who wished to contribute in the 50 minutes of exclusively Back-Bench time were able to do so.

National Security Strategy and Strategic Defence and Security Review

Lord Cameron of Chipping Norton Excerpts

Thursday 29th November 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

On behalf of the Deputy Prime Minister and other members of the National Security Council, I am pleased to present the second annual report of progress in implementing the national security strategy and strategic defence and security review. Copies are today being placed in the Library of the House.

Over the last year, the United Kingdom has played a central role in global affairs, defending our national security interests.

As we set out in the 2010 national security strategy and strategic defence and security review, our national security depends on our economic security and vice versa. In that context, the economic crisis in the Eurozone, the wider global economic slowdown and the parlous state of the UK’s finances in 2010 have had significant implications. The Government have responded by redirecting our overseas effort further to support trade and investment, especially with the most rapidly growing economies of the world, and by taking action to help British business compete and thrive in the global race. British exports to China, Russia and Brazil are already increasing rapidly. And we will continue to take steps to secure greater access for British companies in other emerging markets.

The combined effects of the economic situation, a decade of financial mismanagement and a 12-year gap since the last strategic defence review meant that this Government had to make extremely tough choices on defence. Investment was re-directed towards the capabilities we will need for the future and not those designed for the past. And critically, we had to ensure that future defence plans were affordable so that the MOD could break free from the vicious circle of planning to buy more equipment than it could afford, necessitating delays to programmes to make them affordable, which in turn increased costs and left our armed forces ill-equipped to face the demands of modern conflict.

The benefits of those tough but necessary decisions are now clear. We have committed to buying new Chinook helicopters, additional strategic airlift aircraft, and new and upgraded armoured vehicles for the army. The aircraft carrier programme is now progressing well, with the first aircraft due to fly from HMS Queen Elizabeth in 2018. We have invested £700 million in design work on the new Trident submarines, to prepare for the main gate decision in 2016, and £1 billion in a new facility to build reactor cores for our future submarine fleet. And we have now taken the first steps to resuscitate our reserve forces after a decade of neglect and underfunding, so that in future they can play a central role at home and overseas in protecting our national security interests.

Domestically, the Olympic and Paralympic games passed without significant security incidents, reflecting the careful preparation and professionalism shown by all involved. Our success underlines the need to stay ahead of the significant threats facing the UK from terrorism, organised crime and hostile action by other states. In line with our broader, risk-based approach to national security, we will continue to prioritise responding to these malicious threats, and to ensure a secure and resilient UK.

Afghanistan remains the UK’s largest overseas military commitment. The threat to global security from the al-Qaeda presence in the region has been significantly reduced. And as a result of the daily heroism of our remarkable armed forces, and those of our allies, we remain on track to complete security transition to the Afghan security forces as planned, which will enable our troops to end their combat mission by the end of 2014. We are committed to ensuring that Afghanistan cannot again be used as a haven for terrorists to attack the UK. We continue to work hard with the Governments of Afghanistan and Pakistan in an effort to find a long-term political settlement to the conflict.

People across the middle east and north Africa have been calling for greater freedom and democracy and greater economic opportunity. We have responded to those aspirations in order to help them achieve a better future by working with the countries in the region to put in place the building blocks of modern democracies: a fair and transparent criminal justice system, democratic accountability, the rule of law, open media and freedom of speech. More open, accountable and representative states in the middle east and north Africa will build more durable stability and security, both for the region and the UK.

The 2012 London conference provided the stimulus for political change in Somalia, triggering a renewed international effort to defeat extremism and to build and sustain Somali-led political and governance structures after decades of conflict. In Libya, Yemen, Egypt and Tunisia we have worked closely with our international partners to support the process of transition from oppressive dictatorship towards democracy and freedom. And in Syria, we are working to help the Syrian people to bring an end to the violence, to make progress on genuine political transition and to end the appalling humanitarian suffering.

Instability and conflict in developing countries directly threaten our national security. They also fatally undermine development and poverty reduction; no fragile or conflict-affected country has met a single millennium development goal. Preventing and resolving conflict are central to this Government’s approach to development. We have intensified our work on conflict prevention through the cross-Government building stability overseas strategy—tackling the causes of conflict at an early stage and preventing crises from escalating. Our leadership in standing by our aid commitments has allowed us to increase our untied, poverty-focused support to countries such as Afghanistan, Pakistan and Somalia which are critical to national security. A £20 million early action facility will enable us to respond more quickly to new causes of instability. The Government remain committed to spend 30% of UK official development assistance in fragile and conflict-affected states by 2014-15, and to work towards an ambitious international arms trade treaty. And we will look to ensure that the vital importance of conflict prevention and personal security for the world’s poorest people is properly covered in the post-2015 international development framework.

Review Body on Senior Salaries (New Appointments)

Lord Cameron of Chipping Norton Excerpts

Thursday 29th November 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

I have appointed the following people as members of the Review Body on Senior Salaries (SSRB):

Margaret Edwards

Professor Dame Hazel Genn

They have taken up their appointments on 1 September and 1 November 2012 respectively, initially for three-year terms. They have joined the other members of the SSRB who are:

Bill Cockburn, CBE TD - Chairman

Professor Richard Disney

Martin Fish

Professor David Metcalf CBE

Professor Alasdair Smith

Bruce Warman

Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 28th November 2012 Commons Chamber

[Henry Smith (Crawley) (Con)]

Q1. If he will list his official engagements for Wednesday 28 November.

[The Prime Minister (Mr David Cameron)]

Before I answer, I am sure that the whole House will wish to join me in expressing our sympathies to the victims of the appalling flooding that we have seen across our country in recent days, and in giving support and praise to our emergency services—the police, fire and ambulance services—and to the Environment Agency, local councils, voluntary bodies and good neighbours, who have all done extraordinary things to help those in distress.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall have further such meetings later today.

[Henry Smith]

The whole House will of course endorse the words of the Prime Minister in paying tribute to our fantastic emergency services in responding to the terrible floods, and those who have been victims of them.

Tomorrow sees the publication of the Leveson report. Does my right hon. Friend agree that those who should be uppermost in our minds are the victims, unfairly, of previous media intrusion? Does he also agree that the status quo needs updating?

[The Prime Minister]

My hon. Friend is absolutely right in what he says. The status quo, I would argue, does not just need updating; the status quo is unacceptable and needs to change. This Government set up Leveson because of unacceptable practices in parts of the media and because of a failed regulatory system. I am looking forward to reading the report carefully, and I am sure that all Members will want to consider it carefully. I think we should try to work across party lines on this issue. It is right to meet other party leaders about this issue, and I will do so. What matters most, I believe, is that we end up with an independent regulatory system that can deliver and in which the public will have confidence.

[Edward Miliband (Doncaster North) (Lab)]

Let me associate myself entirely with the Prime Minister’s remarks about the victims of flooding. All my sympathies and the sympathies of Labour Members go to those victims, and our thanks go to the emergency services and the Environment Agency for the fantastic job that they do.

Let me also associate myself with the Prime Minister’s remarks about the Leveson report, which will be published tomorrow. I hope that we can work on this on an all-party basis. This is a once-in-a-generation opportunity for real change, and I hope that this House can make it happen.

When the Work programme was launched in June 2011, the Prime Minister described it as

“the biggest and boldest programme since the great depression.”

Eighteen months on, can he update the House on how it is going?

[The Prime Minister]

Yes, I can update the House. Over 800,000 people have taken part in the Work programme, over half of whom came off benefits. Over 200,000 people have got into work because of the Work programme. It is worth remembering that the Work programme is dealing with the hardest to employ cases in our country; these are adults who have been out of work for over a year and young people who have been out of work for over nine months. On that basis, yes, we need to make further progress, but it is the right programme.

[Edward Miliband]

But the scheme is supposed to create sustained jobs for people, and in a whole year of the programme just two out of every 100 people got a job—that is a success rate of 2%. The Government estimate—[Interruption.] I do not know why the part-time Chancellor is chuntering—yesterday in Cabinet he was telling off the Work and Pensions Secretary for the failure of the Work programme.

The Government estimate that without the Work programme—this is the basis on which they did the tender—five out of every 100 people would get a job. Is it an historic first to have designed a welfare-to-work programme in which someone is more likely to get a job if they are not on that programme?

[The Prime Minister]

I have to say to the Leader of the Opposition that I listened very carefully to what he said, and what he said was wrong. He said that only 2% of people on this programme got a job. That is not correct. More than 800,000 people have taken part, and more than 200,000 have got into work. The specific figure that he referred to concerned people continuously in work for six months—but of course, he is only looking at a programme that has been going for a year, and the figure is 19,000 people. He should listen to the CBI, which said that

“the Work Programme has already helped to turn around the lives of thousands of people”.

Those are people who Labour left on the scrap heap. The right hon. Gentleman should be apologising, not attacking the Work programme.

[Edward Miliband]

I think that is as close as we get to an admission that I was right and he was wrong.

The Prime Minister boasted that his flagship policy, the Work programme, was about tackling the scourge of long-term unemployment. Will he confirm that since the Work programme was introduced in June 2011, long-term unemployment has risen by 96%?

[The Prime Minister]

Let me give the right hon. Gentleman the employment numbers: a million more private sector jobs over the past two years; since the last election, 190,000 fewer people on out-of-work benefits; in the last quarter, employment up by 100,000 people and unemployment down by 49,000. While we are at it, let us remember Labour’s poisonous legacy: youth unemployment up by 40%; unemployment among women up by 24%; and 5 million people on out-of-work benefits. That is the legacy we are dealing with, and we are getting the country back to work.

[Edward Miliband]

I wish for once that the Prime Minister would just answer the question. I asked him a very simple question about whether long-term unemployment has gone up by 96% since the Work programme was introduced, and the answer is yes. While he is talking about Labour’s programmes, let us talk about the future jobs fund. Last Friday, the Government issued a very interesting document. The Prime Minister spent two years rubbishing the future jobs fund but what did this document say? It said that the scheme provided

“net benefit to participants, their employers and society as a whole.”

In other words, it was a success. The Prime Minister rubbished the programme yet it helped 120,000 young people into work. His Work programme has helped only 3,000—[Hon. Members: “What does it cost?”] They shout, “What does it cost?”, but we cannot afford not to have young people in work. Is the truth that the Prime Minister got rid of a Labour programme that was working, and replaced it with a Tory one that is not?

[The Prime Minister]

Once again the right hon. Gentleman is completely wrong so let me give him the figures. The Government’s work experience programme sees half of the young people who take part get into work. That is the same result as for the future jobs fund, and it costs 20 times less. That is the truth: our programme is good value for taxpayers’ money and it is getting people into work. The right hon. Gentleman wasted money and left people on the dole.

[Edward Miliband]

The more the Prime Minister blusters, the redder he gets and the less convincing he is. That is the reality. We know in real time what happened at yesterday’s Cabinet—they were at each other like rats in a sack. The Chancellor blames the Work and Pensions Secretary; the Work and Pensions Secretary blames the Chancellor for the lack of growth. The Prime Minister is doing what he does best and blaming everyone else for the failure. Is the reality that the Government’s failure on the Work programme is a product of their failure to get growth, and the failure of their whole economic strategy?

[The Prime Minister]

The right hon. Gentleman worked in a Government where the Prime Minister and the Chancellor could not be in the same room as each other—rats in a sack does not even cover it.

Why not have a look at what the right hon. Gentleman has achieved on welfare this week? Once again this week, Labour voted against the welfare cap. Today, the Opposition are asking us to vote on a motion in the House on welfare. Last night, the motion specifically said they wanted further reform of welfare, but today the motion mentions nothing about it. The truth is that they are against the benefit cap, against the housing benefit cap and against the Work programme. They are officially the party of something for nothing.

[Edward Miliband]

I will tell the Prime Minister the reality. His welfare reform programme is failing because there is not the work, and his economic strategy is failing. That is the reality. He has a Work programme that is not working, a growth strategy that is not delivering, and a deficit that is rising. The Government are failing, the Prime Minister is failing and the British people—

[The Prime Minister]

rose—

[Edward Miliband]

Calm down, calm down. The Prime Minister just cannot keep his cool when he knows he is losing the argument, and it is the British people who are paying the price for his failure.

[The Prime Minister]

I think what we can see is a leadership that is drowning. This Government have cut corporation tax, scrapped the jobs tax, introduced enterprise zones, backed the regional growth fund, and funded 1 million apprenticeships, and we are rebuilding our economy so that we see 1 million more people in private sector work. We are putting the country back to work; Labour wrecked it.

[Iain Stewart (Milton Keynes South) (Con)]

Q2. Will the Prime Minister join me in congratulating the Milton Keynes-based Red Bull Formula 1 team on winning the world championship for three years in a row? They are another fine example of British technological innovation.

[The Prime Minister]

I am delighted to praise and pay tribute to the Formula 1 team based in my hon. Friend’s constituency, which sadly beat the Formula 1 team—Lotus Renault—based in mine. It is a remarkable fact that almost all of the Formula 1 cars, wherever they are racing in the world, are built, designed and engineered here in Britain. It is an industry in which we lead the world, and we should be very proud of it.

[Jonathan Ashworth (Leicester South) (Lab)]

Q3. The Prime Minister must have studied his Government’s own report that shows that the future jobs fund had a net benefit to participants, employers and society. Given that report, and that youth unemployment is now higher in Leicester than it was at the general election, why did he tell me in questions a year ago that the future jobs fund provided only “phoney jobs”?

[The Prime Minister]

The hon. Gentleman needs first to explain why youth unemployment went up 40% under the Labour Government. The facts of the future jobs fund are these: the figures show that 2% of the placements in Birmingham under the future jobs fund were in the private sector, but the rest were in the public sector. The cost of the scheme was 20 times higher than the work experience placement, which is doing just as well.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

My right hon. Friend—[Interruption.]

--- Later in debate ---

[Mrs Gillan]

My right hon. Friend is aware that the Government are consulting on the compensation people will receive if High Speed 2 goes ahead. This is critical for people in my constituency. Will he give me a personal undertaking that he will study the proposals for the final packages for compensation and ensure that those people whose homes, businesses and lives will be totally disrupted by the scheme if it goes ahead are both fairly and generously compensated?

[The Prime Minister]

I absolutely give that undertaking that I will look carefully at the scheme. As my right hon. Friend knows, we are consulting at the moment. The proposals we have put forward are as good as the scheme for HS1 and better than the compensation scheme for previous motorway developments. As she also knows, there is an advance purchase scheme for property purchase to simplify the process for property owners in the safeguarded area. There is also a voluntary purchase scheme to allow home owners outside the area to have their homes purchased. I am very happy to discuss with her and others how we can ensure that the scheme works properly for people.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Q4. On Monday, the police and crime commissioner, Bob Jones, and Chief Constable Chris Sims, called for a fair deal for policing for Birmingham and the west midlands, which arguably has the highest policing needs outside London. How can the Prime Minister hope to build one nation if areas such as Birmingham and the west midlands lose 800 front-line police officers while low-crime areas such as Surrey get an extra 250 bobbies on the beat? Do not we all deserve to live in safe communities?

[The Prime Minister]

The point I would make to the hon. Lady is that yes, we have asked the police to make funding reductions. They have been able to do that, keeping a higher proportion of bobbies on the front line, which has been effective, and taking people out of back-office jobs. At the same time, crime has fallen and public confidence in the police has risen. Yes, we are asking the police to take difficult decisions, but they are doing it and they are delivering.

[Roger Williams (Brecon and Radnorshire) (LD)]

Q5. I congratulate the coalition Government on introducing regulations to protect the welfare of wild animals performing in travelling circuses. This House voted overwhelmingly for a complete ban in 2011. While we wait for a draft Bill to be published, will the Prime Minister commit to introducing legislation so that this ban can be introduced in this Parliament?

[The Prime Minister]

It is our intention to do just that. My hon. Friend is absolutely right to raise the fact that we have changed the regulations in advance of legislation, so that the clearly expressed will of this House can be met.

[Mr Nigel Dodds (Belfast North) (DUP)]

Petrol prices in this country are among the very highest in the EU, and diesel prices are the very highest. Given that the Prime Minister is introducing minimum limits on alcohol pricing, can he turn his mind to maximum limits on fuel duty and start reducing the price of petrol and diesel for hard-pressed families and businesses across the UK?

[The Prime Minister]

The right hon. Gentleman makes an important point. Because of the changes we have made, petrol and diesel are 10p less a litre than they otherwise would have been if we had kept the tax increases that were put in place by the Opposition. That is the effect of this Government and we want to go on making that progress.

[Mel Stride (Central Devon) (Con)]

Q6. I thank my right hon. Friend for visiting Buckfastleigh with me yesterday, a town in my constituency severely affected by flooding. What the people of Buckfastleigh wish to know is how they are now going to get flooding insurance at affordable rates, particularly given that many homes have been blighted. Will he join me in pressing the Association of British Insurers to stop grandstanding in its negotiations with the Government, to get down to the table and thrash out a deal so that my constituents can get the insurance they need?

[The Prime Minister]

My hon. Friend makes an important point. I very much enjoyed visiting his constituency with him yesterday, seeing at first hand the appalling damage done by the floods and speaking with local people, the emergency services and the Environment Agency about all the work that is being done to protect more houses in future. We need to address the insurance issue and negotiations are under way. The Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin) is leading for the Government. I want us to get a resolution so that insurance companies provide what they are meant to provide, which is insurance for people living in their homes who want proper protection.

[Chris Ruane (Vale of Clwyd) (Lab)]

I thank the Prime Minister for his expressions of sympathy for the family of my elderly constituent who died in the floods. I join him in expressing sympathy to the families of all those—I think four people—who have died in the floods. Will the Prime Minister immediately reverse the 30% cuts he has made to flood defences in the past two years? What part will he play in the issue of flood insurance for those who live in flood risk areas?

[The Prime Minister]

Let me join the hon. Gentleman in paying tribute to his constituents, who have had to bear some truly terrible floods. The pictures of floods in St Asaph were of biblical scenes. The emergency services have performed extraordinary feats to rescue people and to help people at what is a very difficult time. On flood defence spending, the Government are planning to spend more than £2 billion in the next four years. That is 6% less than in the previous four years, but we believe that by spending the money better, and by leveraging money from private and other sectors, we can increase the level of flood defence spending. The spending that is already under way will protect an additional 145,000 homes between now and 2015, but if we can go further then of course we should.

[Caroline Nokes (Romsey and Southampton North) (Con)]

Q7. More than 3 million people a year fall victim to postal scams, telephone calls and e-mails making false promises of lottery wins, windfalls and inheritances. Is my right hon. aware that £3.5 billion a year is lost by UK consumers? Will he commit to working with the Home Office to amend existing legislation to protect the predominantly elderly and vulnerable victims?

[The Prime Minister]

I think my hon. Friend makes an important point. This is a growing area of crime and criminality that takes advantage of people using the internet and often those who are vulnerable. That is why, as part of the National Crime Agency, we are setting up a new unit dedicated to tackling this problem that will work across agencies to catch criminals and take the steps she rightly speaks about.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Q8. A moment ago, the Leader of the Opposition asked whether long-term unemployment had risen by 96% since the introduction of the Work programme, but he did not receive an answer. I ask the Prime Minister again: has long-term unemployment risen by 96% since the Work programme was introduced?

[The Prime Minister]

I have given the figures for the Work programme: 800,000 people taking part and 200,000 people getting work. That is against a background where, over the last quarter, unemployment and the rate of youth unemployment have been falling and there have been more people in work. That is a record we can build on.

[Dr Liam Fox (North Somerset) (Con)]

A free press is a necessary counterbalance to a strong state and the British people also have an inherent sense of fairness, so we do not need to restrict the press; we need to focus on redress when the press cross an unacceptable line. With that in mind, will my right hon. Friend look at access to justice in this country to ensure that the libel and defamation laws we already have are available to everyone, not just the rich and famous?

[The Prime Minister]

My right hon. Friend makes an important point about access to justice, but one of the key things that the Leveson inquiry is trying to get to the bottom of is: how can we have a strong and independent regulatory system, so that we do not have to wait for the wheels of the criminal justice system or the libel system to work? People should be able to rely on a good regulatory system as well in order to get the redress they want, whether prominent apologies, fines for newspapers or the other things that are clearly so necessary.

[Derek Twigg (Halton) (Lab)]

Q9. The Department for Education is proposing to close its Runcorn site, with the loss of at least 220 jobs. It is in the 27th most-deprived borough in the country. How will that help with unemployment and social deprivation in my constituency? It is a pity that the Education Secretary has refused to meet me to discuss this matter.

[The Prime Minister]

I know that the hon. Gentleman has met the permanent secretary at the Department for Education to discuss the matter, and I will certainly discuss it with the Secretary of State as well. Of course, there will be consultation with affected staff and other local MPs, but let me make this important point: we all know that we have to try and find savings in departmental overhead budgets in order to maximise the money going into the schools. The Government have managed to maintain the per-pupil funding, and I am sure that hon. Members who think about it will consider that the most important thing for our schools, our children and our education system.

[George Freeman (Mid Norfolk) (Con)]

Last year, more than 10,000 men in Britain died from prostate cancer, the silent killer. Survival rates have increased from 20% to 70%, because of earlier diagnosis and better drugs. I pay tribute to the Prime Minister’s commitment to the NHS cancer drugs fund. Will he join me in welcoming the Movember campaign’s work to raise male health awareness and champion British leadership in cancer research?

[The Prime Minister]

I not only join my hon. Friend in praising the Movember campaign but praise his efforts lurking tentatively under his nose. This is an important campaign, because it raises awareness of cancers, including cancers such as the one he mentioned, which people are sometimes worried about mentioning and talking about. Raising awareness is important, as too are things, such as the cancer drugs fund, that ensure we get the drugs to the people who need them.

[Ian Lucas (Wrexham) (Lab)]

Q10. I once represented a seriously injured car-crash victim who was hounded and hurt further by an irresponsible press. When he set up the Leveson inquiry, the Prime Minister said: “I accept we can’t say it is the last chance saloon all over again. We’ve done that.”For the victims—for the McCanns, the Dowlers—will he keep his word?

[The Prime Minister]

The hon. Gentleman is absolutely right, as is my hon. Friend the Member for Crawley (Henry Smith), in saying that uppermost in our minds, as we consider the report, should be the victims of press intrusion and invasion of privacy, and the appalling things, in some cases, written about them and their families. We owe them a regulatory system that will work for them and which the public will have confidence in, and that is what we hope Leveson will produce.

[Jake Berry (Rossendale and Darwen) (Con)]

Leaving home before it is light and returning from work when it is dark, hard-working families in my constituency have a gross household income of just £25,000. Does my right hon. Friend think it right that their neighbours living on benefits currently earn more?

[The Prime Minister]

My hon. Friend makes an important point. Only this week we have yet again had a vote on our welfare benefits cap—which most people would see as generous at £26,000—and once again Labour has voted for unlimited welfare. We have long memories: we can remember that under Labour, some families were getting £70,000, £80,000, £90,000 or £100,000 of housing benefit. Labour did nothing about it because it believes in something for nothing.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Q11. Since the Prime Minister denounced aggressive tax avoidance as “morally repugnant”, why are his Government now actively promoting aggressive tax avoidance by cutting the tax on multinationals that open a finance company in a tax haven from the current 23% to just 5%? How can we be one nation when the Government are on the side of the tax dodgers?

[The Prime Minister]

I think the right hon. Gentleman has misunderstood what we are doing. We are introducing a general anti-avoidance rule—something that he, in 13 years of Labour Government, never managed to do. We will do it in three.

[Greg Mulholland (Leeds North West) (LD)]

We were all inspired by the amazing London 2012 Olympic and Paralympic games, in an incredible summer of sport, but it is so important to get people involved in grass-roots community sport. Will the Prime Minister meet me, the Sport and Recreation Alliance, the county sports partnership network and Sport England to discuss the “Be Inspired, Get Involved” initiative, the first fair of which is this evening in my constituency?

[The Prime Minister]

I am happy to meet my hon. Friend about this issue. It is important that we take the legacy of the Olympics and turn it into increased rates of participation. That means, yes, working with the organisations that he spoke about, but also recognising the many heroes and heroines right around our country who run the Saturday morning football clubs, rugby clubs and cricket clubs. It is those clubs that provide so much of the answer for getting more sport into our communities and more sport into our schools as well.

[Jeremy Corbyn (Islington North) (Lab)]

Q12. Will the Prime Minister, like me, welcome the ceasefire in Gaza last week and regret all those who died as a result of the conflict, but also recognise that, fundamentally, the future of the middle east lies with peace and justice for the Palestinian people, be they in Gaza, the west bank or refugee camps? We have to recognise the Palestinian people, so tomorrow, will the British Government accordingly cast our vote at the United Nations in favour of Palestinian recognition without any preconditions—such as suggesting they should not have access to the International Criminal Court—as an independent, recognised nation?

[The Prime Minister]

I certainly join the hon. Gentleman in welcoming the fact that there is a ceasefire and that that conflict has ceased. I do not go all the way with him on the rest of his question, but my right hon. Friend the Foreign Secretary will be making a statement about this from the Dispatch Box in a few moments. I do not want to steal his thunder, but I think it is important that we use our vote to try to say to both sides in this conflict: “We need talks without preconditions.” In the end, as I said on Monday, the only way we are going to see a peace process that works is when Israelis and Palestinians come to the table and talk through the final status issues, including Jerusalem, including refugees and including borders—when they do it themselves. We can wish for all we want at the United Nations; in the end, you have got to have direct talks between the direct parties to get the two-state solution we want.

[Mr Shailesh Vara (North West Cambridgeshire) (Con)]

The Prime Minister will be aware that tomorrow’s business on the Order Paper includes a debate in my name to mark the 40th anniversary of the expulsion of Asians by Idi Amin from Uganda and their arrival in the UK. However, because of the need for a statement on the Leveson inquiry, it is likely that my debate may not now take place. [Hon. Members: “Oh!”] I and the community at large fully appreciate the circumstances. However, does the Prime Minister acknowledge the need for and the importance of such a debate, and will he also do whatever he can to ensure that I am given another debate as soon as possible?

[The Prime Minister]

The reaction of colleagues from right across the House shows that my hon. Friend speaks for the whole House—and I believe the whole country—in wanting to speak up for the Ugandan Asians who came to our country in the 1970s, who have made the most fantastic contribution to our national life. It is very good to see. I remember meeting my hon. Friend’s parents and how proud they are of him—second generation, coming to this country, sitting in the House of Commons and speaking up so well on these and other issues. Although I do not have control of the House of Commons agenda—sadly—I very much hope that the people who do will listen carefully to the point he made and reschedule his debate as fast as possible.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Q13. Will the Prime Minister confirm that, as a result of his cutting the 50p tax rate, 8,000 people earning over £1million will next year gain an average of £107,500? Whose side is he on?

[The Prime Minister]

What I can confirm is that, at 45p, the top rate of tax will be higher under this Government than it was in any of the 13 years of the last Government. That is a fact. The richest in our country will actually be paying more in income tax in every year of this Government than in any year of that Government.

[Robert Halfon (Harlow) (Con)]

In Harlow, Comet has made 80 home delivery and shop staff redundant, and the jobs of at least 65 transport and logistics staff are now at risk. Many of the redundant workers are suggesting that there has been malpractice. Will my right hon. Friend ask the Business Secretary to investigate this, to ensure that anyone who has lost their job gets the proper support and help that they are entitled to?

[The Prime Minister]

I am very happy to look carefully at what my hon. Friend has said. Clearly, what has happened at Comet is a tragedy for those who work for that business. I will talk to the Business Secretary about this, and see what can be done in the way that my hon. Friend suggests.

[Mr Tom Harris (Glasgow South) (Lab)]

Q14. Last week, the Prime Minister told me and the House that the Government were investing an extra £900 million to combat tax avoidance. In fact, as Her Majesty’s Revenue and Customs will confirm, no such investment is taking place, and HMRC is facing a 15% cut in its budget. So is the Prime Minister guilty of fact avoidance or fact evasion?

[The Prime Minister]

The truth is that this Government have put £900 million into the specific measures of getting hold of tax avoidance. All these schemes grew up under years and years of the Labour Government, but they never did a general anti-tax avoidance. They presided over a system where people in the City were paying less tax than their cleaners, and it took this Government to sort it out.

[Philip Davies (Shipley) (Con)]

May I warn my right hon. Friend not to be remembered as the Prime Minister who introduced state regulation of the press? A free press is an essential part of a free democracy. Does he agree that state regulation of the press is like pregnancy? Just as someone is either pregnant or they are not, so we can either have state regulation or not. There is no alternative third way.

[The Prime Minister]

Where I would agree with my hon. Friend is that a free press is absolutely vital for a healthy democracy. We should recognise all that the press has done, and should continue to do, to uncover wrongdoing and to stand up to the powerful. That is vitally important and, whatever the changes we make, we want a robust and free press in our country.

[John McDonnell (Hayes and Harlington) (Lab)]

Q15. Research by the charity Save the Children reveals, shockingly, that one in seven children in our country do not have a warm coat this winter. The Government are now cutting child benefit support to 100,000 families who look after disabled children—[Interruption.] Whatever our views on how our economic problems were brought about, surely it cannot be right that children, the poorest and the most vulnerable pay the most for this economic crisis.

[The Prime Minister]

I listened carefully to the hon. Gentleman, and the point that I would make is that we are removing child benefit from people earning over £60,000 a year. We think that that is the right step to take, because those with the broadest backs should be bearing the greatest burden. We have frozen child benefit for other families, but we have increased the child tax credit that goes to the poorest families.

European Council

Lord Cameron of Chipping Norton Excerpts

Monday 26th November 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on the European Union Council last week.

Last week’s Council was unable to reach agreement on a seven-year budget framework. This Government rejected a proposal that would have risked UK taxpayers paying for unaffordable increases in the EU’s annual budgets. We did so together with like-minded allies from a number of countries. As net contributors to the EU, those countries, like Britain, write the cheques and together we had a very clear message: we are not going to be tough on budgets at home and then sign up to big increases in European spending in Brussels.

Let me explain to the House the proposal we rejected, why a deal is still doable, why it is still in our interests to work to achieve that deal and why throughout these negotiations I will continue to protect the UK’s rebate. Our objective for EU spending in the seven years to 2020 is clear: we want to see spending reduced and will insist on at least a real-terms freeze. As the House knows, the actual EU budget is negotiated annually. What we were negotiating in Brussels last week, and will return to again next year, is the overall framework for the next seven years, which includes the overall ceilings on what can be spent. During the last negotiation, which covered the period 2007 to 2013, the last Government increased the payments ceiling by 8%. The commitments ceiling was effectively set at €994 billion, well above the level of actual spending. It was a bit like having a credit card limit far above what one can afford and it was an open invitation to the EU’s big spenders to push for higher and higher spending every year. We are still paying the price for that decision.

This year, 2013, the Commission and the European Parliament are attempting to grow the annual budget by another 6.8%. I am determined to get the ceilings down in line with what we can afford. Prior to the Council, the Commission produced a ludicrous proposal to increase the commitments ceiling still further to more than €1 trillion. We said no. The Cypriot presidency produced a slightly lower total, and going into this Council, the President of the Council, Herman Van Rompuy, produced a new proposal, this time with a ceiling of €973 billion.

As you can see, Mr Speaker, we were making progress in getting the ceilings down, but as I and other leaders made clear, it was not enough. We set out a number of very reasonable ways in which the seven-year ceiling could be reduced even further, by tens of billions more. What was disappointing at the Council was that having heard those proposals, the presidency offered a new proposal that failed to reduce significantly the previous total and simply redistributed money to buy off different countries. In a seven-year budget of almost €1 trillion, the idea that there are no real savings to be found is simply not credible. For example, when it came to the bureaucratic costs of the European Commission, not a single euro in administrative savings was offered—not one euro. We need to cut unaffordable spending. The deal on the table was not good enough and that is why we and others rejected it.

But we do believe that a deal is still doable. There is absolutely no reason why we should not be able to reduce the seven-year ceilings down to the level needed. There is plenty of scope for significant savings in the common agricultural policy and the structural and cohesion funds, but there are also savings to be had in the rest of the budget. For example, freezing the ceilings for security, justice and external spending would allow €7.5 billion of additional savings. There are some programmes, such as Connecting Europe, which have enormous proposed increases in their budgets that could be radically scaled back.

As I have said before, there is simply no excuse for not taking a much tougher approach towards the EU’s administrative costs. The EU institutions have simply got to adjust to the real world. A 10% cut in the overall pay bill would save almost €3 billion. Relaxing the rules on automatic promotion, which they have at the EU Commission, would save €1.5 billion. Reducing the extraordinary generosity of the special tax rules for Brussels staff—the levy—could save around another €1 billion, and changes to pension rights could save another €1.5 billion. All these are perfectly reasonable proposals. That is why a deal is still doable. We will push hard for these reductions when negotiations resume next year.

Let me briefly be clear about why we want a deal. If no deal is reached, the existing ceilings are simply rolled over and annual budgets are negotiated on a year-by year-basis, taking account of those ceilings. Crucially, we would not get the reduction we need in the seven-year budget ceilings negotiated by the last Government. The credit card limit would stay beyond what is affordable, tens of billions of euros higher even than the deal we rejected at this Council. It is therefore in our interests to get a deal, but it must not come at any cost. We must not lock in unaffordable ceilings for the next seven years, so if necessary we may have to galvanise a coalition of like-minded countries to deliver budgetary restraint through annual budget negotiations each year.

Finally, let me say a word about the UK’s rebate. As well as ensuring fairness in the overall size of the EU budget, it is also essential to ensure fairness in the net contribution that each country makes to that budget. At this Council, we faced, as ever, determined pressure from many sides for our rebate to be slashed. The changes on the table, in the proposal in front of us, would have cost the UK more than €1 billion every year. I was clear that all of that was completely unacceptable. Britain more than pays its way in Europe. On a per capita basis, Britain is the eleventh richest nation, yet as a share of our national income we are the third largest contributor, and that is with the rebate—or what remains of it after so much was given away by the last Government. Without the rebate, we would have the largest contribution in the European Union, double that of France and almost one and a half times as large as Italy’s or Germany’s. That would be completely unfair. It is why Margaret Thatcher was right to fight so hard to win the British rebate, why the last Labour Government did this country such a disservice by agreeing to give part of it away and why no Government I lead will ever put the British rebate back up for negotiation.

We put down a marker at this Council. We stood up for the taxpayer. Together with like-minded allies, we rejected unacceptable increases in European spending, and we protected the UK’s rebate. We are fighting hard for the best deal for Britain, and that is what we will continue to do. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement. Clearly, this is not the first EU budget negotiation to go into a second round, and no doubt it will not be the last. The real question remains what deal will eventually be delivered. I want to ask about the budget level, what the budget will be spent on and the Government’s negotiating position.

On the budget level, I was surprised by one omission in the Prime Minister’s statement. Somehow, he forgot to thank this House for sending him into the talks with the strongest possible mandate in the negotiations: a vote supported by Members on both the Government and Opposition sides. At the time of the vote, the Deputy Prime Minister, who I notice is absent, said that what was voted on was a completely unrealistic position and that there was no hope of getting a deal—a tell-tale sign that the opposite might be true.

Given that the Prime Minister now says that there is widespread support in Europe for a tough settlement, can he say what prospects there are for meeting the call of this House of Commons for a real-terms cut in the EU budget? Does he now regret not seeking to build alliances for a real-terms cut in spending at the outset of negotiations?

Looking ahead to the deal that still needs to be done, can the Prime Minister confirm in precise terms what he means by a real-terms freeze? There are obviously many different definitions around, but we have the Government’s definition set out by the then Economic Secretary in her memo of 16 July 2011. That was for a European budget of €885 billion in actual payments over the seven-year commitment period. The Prime Minister has been somewhat coy on this point, so can he confirm that that remains the position as set out by the former Economic Secretary to the Treasury?

Next, may I ask the Prime Minister about the composition of the budget, which is as important as the budget level itself? We need to reshape the budget so that it supports jobs and growth with investment in infrastructure, energy and research and development. He said as he arrived in Brussels that

“it is not a time for tinkering”,

and at his press conference on Friday he said:

“Already being contemplated is a big cut in agricultural spending”—

something that is supported in all parts of this House. However, what is the big cut in agricultural spending that he is talking about? Will he confirm that the proposal on the table sees agriculture spending remaining on average at 38.3% of the European budget—almost exactly the same level as it is now? Does he really believe that that is the major reform that is required in the spending of the European budget? Does he agree that what is even worse is that to keep the subsidies high, money is being taken from much-needed investment in energy and other infrastructure? I think that part of that comes from the Connecting Europe budget. Did he object to this part of the proposal?

As we anticipate the further negotiations in the months ahead, the wider stance of the Government towards the EU will also have an impact. The Prime Minister has said repeatedly that he is in favour of Britain remaining a member of the European Union. Why, therefore, is he allowing his colleagues to take the opposite position? Last month, the Education Secretary briefed that he is open to leaving the European Union. On Saturday, the chairman of the Conservative party said that we should threaten to leave if we did not get a good deal. Now we have the new vice-chair of the Conservative party—we think it is great to see him in his place—touring the studios, talking not about a budget deal but about a deal with the UK Independence party. Does the Prime Minister believe that such divisions help or hinder our national interest in delivering a good budget deal? Why, at a time of continuing negotiations over the budget, is he allowing members of his Cabinet openly to undermine his position on membership of the EU? It is no wonder that everyone, from British business to our European allies, believes that we are drifting towards the exit door.

As we look ahead to the next round of budget negotiations, is not the reality of the situation that the Prime Minister has a divided party on Europe? Instead of confronting the issue—[Interruption.] They say that they are not divided, but half of them want to leave the EU, and that is not the position of the Prime Minister—so we gather. He has a divided party on Europe, and instead of confronting the issue he is just letting the problem get worse. He spent his statement talking about the deal that he did not do; what matters is what he delivers for Britain. For as long as he allows his party to drag him towards the exit door, he will find it far harder to build lasting alliances and far harder to deliver for the national interest.

[The Prime Minister]

First, let me answer on the right hon. Gentleman’s specific points about figures. He asked about the scale of the cut that was envisaged for the common agricultural policy. In terms of tier 1 of the CAP, the proposal, to be fair to pillar one—to be fair to the Council and to the Commission—was to cut it from €336 billion to about €270 billion. So a cut was proposed for the CAP, but we made the point that even with that, we could go ahead and reach a good budget settlement. We said that without doing even more on the CAP we could reach a deal by looking at administrative savings and Commission savings, and also by looking at some of the programmes that are, quite rightly, being expanded, but expanded far too much. For example, Europe spent €8 billion on the Connecting Europe proposal in the last financial period, and it was proposed that that was increased to some €36 billion, so we could make significant cuts in that proposal and still land a sensible deal.

The right hon. Gentleman referred to the memorandum that we put in front of this House, which referred to the 2011 situation and the 2011 budget. What I have said is that, yes, we want a cut, but we should settle, at worst, for a real-terms freeze—and of course that freeze would be across the period 2013 to 2020.

The right hon. Gentleman asked why we had not built any alliances. I am happy to tell him that the Dutch, the Swedes, the Danes, the Finns and the Germans all very much backed our position. I might ask him about his alliance, as he is in alliance with the socialists in the European Parliament, whose position was to favour a 5% increase in the ceilings, not a cut. They wanted to end all rebates and to introduce a financial transactions tax of up to €200 billion. If he does not believe that, he should listen to the leader of the European socialists and democrats, Mr Hannes Swoboda, who said:

“Regarding the additional cuts, it is unacceptable that the majority of member countries are letting themselves be blackmailed by David Cameron”.

That is the view of the socialists.

The right hon. Gentleman has made his approach in this Parliament, but if he had been at the Council he would have heard a lecture by the socialist head of the European Parliament, who told the whole Council that anything that was a cut to what was being proposed would be completely opposed by everyone in the socialist group in the European Parliament, including his MPs. If the right hon. Gentleman wants to get a good deal for Britain, he might start by talking some sense to his socialist friends.

[Mr William Cash (Stone) (Con)]

Given the fact that, over the past 20 months, we have had about as many economic summits, and they have gone nowhere, given that Mrs Merkel is now saying that she wants the European Commission to be the European government and given the statements that have been made by Mr Barroso about a federal union, does my right hon. Friend not think that the time has now come to establish a lead on the question of a fundamental change in our relationship with the European Union and to do what the British people want, and get on with it as soon as possible, before it is too late?

[The Prime Minister]

I agree with my hon. Friend about the number of European Councils. That is undeniable; there has been a huge quantity.

I agree with my hon. Friend that there is an opportunity for a change in Britain’s relationship with the European Union. That is why I have talked about a new settlement and fresh consent for that settlement. Where I think I disagree with him is that we need to show some patience while the eurozone sorts itself out, and as the eurozone integrates I think there will be opportunities for that. As for his comments about the Germans, I hope that he is a regular reader of Der Spiegel online, because after the Council it said:

“Danke Grossbritannien…you’ve given hope to many people suffering under the terror of EU bureaucracy”.

[Keith Vaz (Leicester East) (Lab)]

A hundred thousand Syrian refugees have entered Turkey in the past year and 16,000 have applied for asylum in the EU, having crossed the border between Greece and Turkey. No matter what the Prime Minister’s negotiation position is in respect of the overall budget, will he give an assurance that he will protect the budget for Frontex, which protects the external limits of the EU, which must be in Britain’s best interests?

[The Prime Minister]

The right hon. Gentleman makes an important point. Frontex does good work and we have supported its budget, but like any Government, what we are asking the European Commission and European Council to do is attempt to do more for less. They have to look across each budget area, work out where the pressures are and, obviously, direct resources in that way, but they also have to try to find savings elsewhere, as every Department of Government has had to do.

[Sir Menzies Campbell (North East Fife) (LD)]

As someone who supported my right hon. Friend in the Lobby a fortnight ago out of conviction, may I offer my congratulations to him on the alliances that he appears to have formed in Europe? Is that not an eloquent illustration of the principle that engagement is always more effective than detachment?

[The Prime Minister]

I am very grateful for my right hon. and learned Friend’s support. It has been important to have these alliances on behalf of countries that want a sensible settlement. We now have to work very hard to keep that alliance together so that we can land a deal that is in the interests of British taxpayers and, I would argue, taxpayers across Europe.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister said that he wanted to galvanise a coalition of like-minded countries and referred in another answer to the Netherlands, Sweden, Denmark, Finland and Germany. Is it not a fact that, while they may have tactically agreed in this summit, there are very large differences between all those countries and his party’s position?

[The Prime Minister]

Actually, I think that the hon. Gentleman is wrong about that. The countries on the list that I read out are our classic allies that we put together in almost every year’s budget negotiations to try to ensure a reasonable outcome. The problem is that annual budgets are decided on a qualified majority basis, so we can be outvoted. The multi-annual financial framework is subject to unanimity, so we can put our case vigorously. The point that I made in my statement is that if we do not achieve a new framework, we will need even more than today to keep the tough budget discipline together for the annual budget negotiations that follow.

[Richard Ottaway (Croydon South) (Con)]

Far from being isolated, I congratulate my right hon. Friend on consolidating the alliance with Germany, Sweden, Holland and Denmark. Are there any signs that that new grouping will work with us on further reforms and, in particular, on reform of the single market?

[The Prime Minister]

The countries on the list that I read out tend to be fairly strong allies on much of the single market agenda. We are also joined in our support of the single market by the Italians and, to an extent, with the Spanish now that Mariano Rajoy is Prime Minister. We need to try to win the argument with large net contributors, such as Italy, that the best way to protect the interests of their taxpayers is to restrain the overall budget, rather than simply to measure their receipts under the CAP or the cohesion policy.

[Mr Dennis Skinner (Bolsover) (Lab)]

Isn’t this scenario getting a bit boring? When the Prime Minister went to Europe fighting alone, he came back with nothing. He has now formed alliances with all the dodgy people he referred to and he has still brought nothing back. Even John Major came back with two opt-outs—even John Major.

[The Prime Minister]

I will tell the hon. Gentleman what I have managed. The last Government put us into the bail-out fund; I got us out of the bail-out fund. The last Government gave away part of our rebate; I am keeping our rebate. We are making progress, but obviously we will have to do a little more to satisfy him.

[Michael Ellis (Northampton North) (Con)]

Does my right hon. Friend agree that the bloated Brussels bureaucrats are talking balderdash when they refuse to offer a single cut, despite the fact that more than 200 Commission staff earn more than he does and that they apparently have up to 93 holiday days a year?

[The Prime Minister]

I think that it is perfectly possible to save money in the Commission’s budget. Its staff have things such as automatic promotions, very generous pension arrangements and expatriation allowances for living in Brussels, even if they have been there for 30 years. It is time to have a clear-out of such things and the Commission needs to be convinced of that. Part of the point of building the alliance is to say to the Commission, “You really have to look at your own budget.” That is not the whole answer, because administration makes up only 6% of the total, but it can make a contribution.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I am concerned that the Prime Minister says that there are savings to be made in cohesion and structural funds. He is aware that many areas of the UK, such as west Wales and the valleys, enjoy receiving such payments. Is he saying that he can foresee a cut in that support?

[The Prime Minister]

There is a need for cuts in the overall cohesion and structural funds budget of the European Union, given the fiscal constraints that the net contributors are operating under. We should be frank and honest as a country in saying that, although there are regions of the UK that still benefit and should go on benefiting from structural funds, such funds should, on the whole, be for the poorest regions of the poorest countries. Britain’s negotiating position is different from that of many countries in that we do not go to Brussels and simply defend every penny that we receive; we try to seek an outcome that is right for the whole European Union. We cannot for ever argue for restraining the budget if we want to keep hold of structural funds for countries that are better off than most.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The Prime Minister will know that he is supported by those on the Liberal Democrat Benches in being robust in Brussels and in ensuring that the European Union understands that we live in a time of austerity in which it has to restrain its spending, as we are restraining ours. Although he is working satisfactorily with our allies on this matter, will he confirm that there is no truth in the rumour that we are trying to get an opt-out on the common market for financial services? If we are to prevent tax evaders, criminals and terrorists from using our country or any other to hide their assets, we need a common market for financial services. Will he confirm that we will lead in arguing for that objective?

[The Prime Minister]

We support the single market in all its forms. We are trying to ensure that when the banking union proposals, which include a proposal for a single supervisor under the European Central Bank, come through, they do not damage the interests of those countries that are in the single market but not the single currency. As I have already said, part of our G8 presidency next year will be targeted on cracking down on tax evasion, tax avoidance and the rest of it.

[Kate Hoey (Vauxhall) (Lab)]

What will the Prime Minister do if he does not get a real-terms freeze? Is he prepared to use his veto? Will he also make it clear that he is quite happy for decent, respectable people in my constituency to be members of UKIP?

[The Prime Minister]

I am very happy for anyone to join any political party—it is a free country. On the budget, we have a clear position. We are trying to get the ceilings down and cuts are already proposed. We want the ceilings down to such an extent that we achieve the real-terms freeze at worst, or a cut at best. I am convinced that we should achieve that if we keep the force of our arguments and keep the coalition of like-minded countries together.

[Nicholas Soames (Mid Sussex) (Con)]

My right hon. Friend the Prime Minister will have been fortified by the solid alliances he built in the interests of dealing with the budget. Does he agree that those alliances are particularly serviceable when it comes to driving ahead with the growth agenda in Europe? Will he not allow that to slip below the radar?

[The Prime Minister]

My right hon. Friend is absolutely right. We will keep pushing forward the growth agenda, based on completing the single market in digital, services and energy. It is also important to recognise that the budget, even with the reductions I propose, would still be a growth budget, because it would transfer funds from agriculture into growth areas such as supporting research and investment, from which Britain is quite well placed to benefit.

[John Cryer (Leyton and Wanstead) (Lab)]

Does the Prime Minister believe that the rising tide of unemployment and poverty across western Europe is a price worth paying in order to save the euro?

[The Prime Minister]

The rising tide of unemployment across Europe is clearly a tragedy, but we need to look across Europe and ask why some countries are doing so much better than others at tackling unemployment, and particularly youth unemployment. Youth unemployment is far lower in, for instance, Holland and Germany than in Spain, Italy and—yes—the UK. There is more to learn about welfare reform, apprenticeships and education standards. We can apply those lessons here to ensure that we keep unemployment falling.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I hope the Prime Minister will be pleased to know that he is once again the toast of Somerset for returning from the European summit so successfully, and we look forward to his further success. For as Sir Francis Drake said, it is not the beginning but the continuing of the same until it is thoroughly finished that yieldeth the true glory. We look forward to the true glory of the Prime Minister when he comes back next time with a cut.

[The Prime Minister]

I am grateful to my hon. Friend for his remarks and his support, but I commiserate with him and many in Somerset who will not be toasting anyone today because they are suffering from the appalling floods over the weekend.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

As my right hon. Friend the Leader of the Opposition has said, we need to reshape the EU budget to support jobs and growth rather than cut investment in R and D, as this Government have done by 7% in one year. Will the Prime Minister say specifically what he is doing to support R and D investment within an overall budget cut?

[The Prime Minister]

I can; the hon. Lady makes a very good point. If she looks at budget heading 1a, which includes all research, university and other spending—out of which Britain, with high-quality universities, does quite well—she will see that, in the last period, 2007 to 2013, the EU spent about €83.5 billion. The proposal on the table on 22 November was to spend €108 billion. That is quite a significant 20% increase. I would argue that we could take that increase back a little in order to help to get an overall deal without harming the fact that this is a growth budget that wants to support research and jobs.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I join my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) in commending engagement rather than detachment, but does the Prime Minister agree that this is not about submitting to European demands, but about staking out our own national interest and building alliances around that? Is not that a lesson for the future?

[The Prime Minister]

I do not want to come between this great friendship that is opening up across our Benches. It is important to form alliances to try to get deals that are in our national interest, but as in all these things we have to have a bottom line, and sometimes that means that we will have to go it alone.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Does the Prime Minister agree with his party chairman that we should leave open the option of exiting the EU?

[The Prime Minister]

As the hon. Gentleman knows, my view is that the problem with an in/out referendum is that both the options are not really what I would want or what the British people would want. I do not think that keeping our membership as it is under the status quo is acceptable: nor do I think that walking away from Europe would be a sensible idea. That is why we need a new settlement—and new consent for that settlement —and that is what we will set out.

[Mr Edward Leigh (Gainsborough) (Con)]

At an appropriate moment of the Prime Minister’s choosing—say, around the next general election—will he grant the British people a referendum on our relationship with the EU?

[The Prime Minister]

I will be saying a bit more about that later this year. As I have said, I think that opportunities are opening up. As Europe changes—and the changes are coming because of the single currency and what it is doing to the European Union—options are opening up to form a different, better relationship that the British people would back. We will then have to work out exactly how to get the consent for that relationship that the British people deserve.

[Paul Blomfield (Sheffield Central) (Lab)]

Following the Prime Minister’s earlier answer, he will know that the draft research and innovation budget in Horizon 2020 includes a number of elements that were not part of FP7 and therefore the growth is misleading. Will he reassure the House that he will fight unambiguously to protect the research and innovation budget?

[The Prime Minister]

The hon. Gentleman makes a good point. The figures I read out are the correct ones—€83.5 billion in the last period and a proposal for more than €108 billion in the last negotiating box. I can reassure him that the like-minded group of countries that came together to argue for further tens of billions of cuts in this proposal were looking for only a very small reduction in that heading in the European budget. We can get down to the sort of figures we need without fundamentally changing that budget heading.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend will know that I am rather keen on pacts. Does he recall that Opposition Front Benchers said that he would be in utter isolation when he went to negotiate in Europe? Does he agree with me that working with other countries, such as the five that he has mentioned, actually delivers results for the British taxpayer?

[The Prime Minister]

I absolutely agree with my hon. Friend. He is completely right to talk about the importance of working with other countries. I commend him on all the very good joint working that he managed to do in encouraging colleagues to go and campaign in the Corby by-election.

[Kelvin Hopkins (Luton North) (Lab)]

The Prime Minister and my right hon. Friend the Leader of the Opposition made much talk of agriculture today. Is it not time to call for the abolition of the common agricultural policy and the restoration of agricultural subsidies to national Governments, not the European Union?

[The Prime Minister]

The hon. Gentleman makes a very interesting submission to the balance of competences review that this Government are carrying out, and I urge him to engage fully with that process.

[Mr James Clappison (Hertsmere) (Con)]

I commend my right hon. Friend for doing all that can humanly be done to defend our national interest on this, but is not the most important alliance that he has formed the one with public opinion in Europe, which no doubt finds it astonishing that this profoundly undemocratic organisation is seeking a large increase at a time when the whole of the rest of Europe faces fiscal pressure and, in some cases, grave economic crisis—in no small measure due to the euro itself?

[The Prime Minister]

My hon. Friend makes a good point. While it is disappointing not to get a budget deal at the first time of asking, this will give European leaders further time to reflect on public opinion in their own countries. I think that many people across Europe in all those countries that are significant contributors to the EU—and maybe even some that are not net contributors —will agree that it is right that when difficult reductions are being made in budgets at home, the same should happen in Brussels.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does the Prime Minister agree that his negotiating hand in Europe would be stronger if there was not constant debate here, particularly among his own Back Benchers, about an in/out referendum?

[The Prime Minister]

I think what matters is that we need to explain very clearly to our European partners that we are committed members of the European Union. We think the single market is vital for Britain’s national interest. We stand behind, and have helped to arrange, some of the key successes for the European Union in recent years, such as the oil embargo against Iran, the enlargement of the EU and the completion of the single market—those are all British initiatives. But I think it is perfectly acceptable to explain to partners in Europe that we are not satisfied with every aspect of our relationship —we are prepared to stand up and defend Britain’s national interest.

[Mr Peter Bone (Wellingborough) (Con)]

Does the Prime Minister notice the difference between coming back from this European summit and coming back from some of the others? There is hardly anyone on the Opposition Benches to support their leader, but on the Government Benches, the Conservative party is united in supporting the Prime Minister.

[The Prime Minister]

I take it from that that even Mrs Bone is satisfied by the weekend’s activities, and that makes me a happy man.

[Nick Smith (Blaenau Gwent) (Lab)]

Voters in Blaenau Gwent support the EU, but do not want us to be a soft touch. They want investment in infrastructure projects in Wales and in research spending, and they want a big reduction in farm subsidies. Will the Prime Minister support continued investment in infrastructure projects in Wales?

[The Prime Minister]

Yes, I do support infrastructure investment in Wales and I do support the EU having cohesion and structural funds, but those funds have to be affordable. As I have said, I think that the better-off countries have to be honest about those countries that joined the EU as part of enlargement with a realistic expectation that some of their infrastructure was going to be brought up to scratch and, crucially, that they were going to be connected with the rest of the EU, when, of course, some of them have had previous economic connections heading in other directions. We should stand by those commitments.

[Mark Pritchard (The Wrekin) (Con)]

I congratulate the Prime Minister on standing firm on round one of the negotiations, but the budget talks underline how, over nearly four decades, the United Kingdom has lost its independence and the House of Commons has lost its sovereignty, given that any subsequent budget deal proposed by Her Majesty’s Government can be effectively vetoed by 26 other member states.

[The Prime Minister]

Where I agree with my hon. Friend is that I think there have been too many occasions where issues have gone to qualified majority voting rather than majority voting, and so the veto, as it were, has been given away in too many areas. Where I would not agree with my hon. Friend is that I think that Britain does benefit from our membership of the single market. It is important, in our national interests as a trading nation, that we do not only have access to that market, but help write the rules of that market. In that regard, I think the single market is very important for the UK.

[Mr William Bain (Glasgow North East) (Lab)]

Can the Prime Minister tell us whether his coalition of allies on Europe includes both the Mayor of London, who believes that an in/out referendum on EU membership would be a bad idea, and his Education Secretary, who believes we should be quitting the EU altogether?

[The Prime Minister]

The hon. Gentleman is a little bit out of date, as the Mayor of London has chosen a visit to India to make it clear how much he supports my policy.

[Mr Robert Buckland (South Swindon) (Con)]

As an enthusiastic European, may I congratulate my right hon. Friend on continuing to engage closely and constructively with our colleagues, and on building coalitions and consensus? May I urge him, in the months ahead, to carry on working particularly closely with the German Government to make sure that the progress made this weekend can be consolidated?

[The Prime Minister]

I will certainly continue to do that work. On the issue of the EU budget, I think there is a good reason why that coalition should stick together and push hard for a budget that, yes, is about growth, but comes in far lower than where it is today. I will work very hard to try to make that happen.

[Helen Goodman (Bishop Auckland) (Lab)]

I am afraid that I am still not quite clear what the Prime Minister’s view on a referendum is. Is it that he thinks it is not a good time now because of the problems in the eurozone, or does he take the view that it would never be right to have an in/out referendum?

[The Prime Minister]

My view is that Britain should be looking for a different and better settlement between Britain and the EU. That is something we can push for, because Europe is changing. The single currency is driving change in Europe. When we have achieved that new settlement, we should seek fresh consent for it—and, yes of course, that could include a referendum.

[Chris Heaton-Harris (Daventry) (Con)]

I also congratulate the Prime Minister on gaining so much support in these negotiations—this, not signing off the accounts of the Commission recently and other negotiations have shown to those living in the Brussels bubble that it is not business as usual when they deal with Britain. May I urge him to continue pushing for reductions in the various headings and especially to look at the EU quangos being set up?

[The Prime Minister]

I thank my hon. Friend for his remarks. He makes a good point. Given what we have done in the UK, such as abolishing or merging about 200 quangos and cutting central Government Departments’ own spending by about 30% in some cases, there is clearly room in the EU—not just in the Commission but in the other institutions—to find proper savings in cost and bureaucracy. We should continue pushing at that. The seven-year multi-annual financial framework provides the one moment when we really have the opportunity to drive home the advantage and make those cuts.

[Bill Esterson (Sefton Central) (Lab)]

One more time, then: does the Prime Minister agree with those in his party who want a referendum, or does he agree with those in his party who do not want a referendum?

[The Prime Minister]

I think I have already made the position clear.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents are appalled that the European Commission should propose a budget with no administrative savings whatsoever, at a time when every Government in Europe are trying to cut back on unnecessary expenditure. Given that these people are clearly living in a parallel universe, what chance is there that they will advance administrative savings before the next budget round?

[The Prime Minister]

I am afraid it is worse than my hon. Friend says. According to so-called heading 5 —administrative costs—between 2007 and 2013 the EU was spending €56.5 billion under that heading, but the proposals from the Commission and the presidency of the Council were to increase that figure to €62.6 billion. Far from just freezing the figures, they were looking to increase them. That is one reason why I think it is perfectly possible to make a cut in their proposal. That is not unrealistic or tokenistic, or just some populist urge; it is a proper way of saving several billion euros and getting an affordable budget.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Prime Minister cannot even galvanise a coalition of opinion in his own party, so I am not sure how he expects to galvanise a coalition of countries. Given that his own opinion is as clear as mud, how will he deal with the constant debate on his own Benches about an in/out referendum?

[The Prime Minister]

This Government are not frightened of standing up for Britain in Brussels. The last Government gave away part of the rebate and got absolutely nothing in return; they joined up to the bail-out fund for absolutely no reason; and they gave away our opt-out from the social chapter and got nothing in return. They just turn up in Brussels, give in and show absolutely no backbone.

[Martin Horwood (Cheltenham) (LD)]

I, too, commend the Prime Minister for his statement. Does not his commitment to negotiation and building alliances with other Governments demonstrate real British leadership in Europe, in contrast to the tub-thumping opportunism from the Labour Front Bench?

[The Prime Minister]

I agree with my hon. Friend. It was an extraordinary performance from the Leader of the Opposition to come here one day and tell us he was one of Britain’s leading Eurosceptics, only to go to the CBI and say that he was more pro-European than Tony Blair. He has been shown up as a complete opportunist.

[Mr John Baron (Basildon and Billericay) (Con)]

Our letter in June, signed by 100 Conservative Back Benchers, called on the Prime Minister to legislate in this Parliament for a referendum in the next Parliament on our membership of the EU. The Prime Minister declined but said that he wished to continue discussions. In congratulating the Prime Minister on standing up for Britain, may I ask if he would allow us to have a meeting to discuss this matter, further to our letter?

[The Prime Minister]

I am always happy to meet my hon. Friend, who I know has strong views on this issue. He favours an in/out referendum and voting out, which is where he and I do not agree. I am happy to have that conversation with him, but I think it makes much more sense to look at the new settlement we would like to achieve within the EU before seeking consent for it. I do not think that legislating in advance is the right way forward, but I am happy to discuss it with him.

[George Eustice (Camborne and Redruth) (Con)]

I welcome the statement. The Prime Minister has been absolutely consistent on this issue for two years. Rather than walking away from our allies, as some urged him, he stuck with them and expanded the alliance for a real-terms freeze. Does he agree that if we were to limit the scope of structural funds and reduce the deadweight costs of recycling between richer countries, we could not only reduce the EU budget, but allow countries such as Britain to have more money to spend on their own independent regional policy?

[The Prime Minister]

My hon. Friend makes an extremely important point. If we can encourage the better-off countries in Europe to take that approach, we can do exactly as he says and restrict the EU budget, but ensure that those countries that joined the EU with an expectation that they would get structural and cohesion funds to update their infrastructure can get those funds. That is important.

[Chris Kelly (Dudley South) (Con)]

I congratulate my right hon. Friend on once again doing the right thing by the hard-working taxpayers of Dudley South, unlike Labour. Is bamboozling and attempting to bully Heads of Government during such negotiations while depriving them of food and sleep for days at a time really any way to run a union of nation states?

[The Prime Minister]

I thank my hon. Friend for his support. He makes an important point about the working methods of the European Union, where meetings seem to be held at extremely late hours—although I have to say that, having gone to European Councils for two and a half years, there is certainly no experience of being starved of either food or drink.

[Margot James (Stourbridge) (Con)]

I congratulate the Prime Minister on the excellent progress he has made in forming an alliance of net contributors both in the run-up to and during the budget negotiations. Does he welcome, as I do, the closer relationship with Germany, which Der Spiegel has aptly dubbed “Merkeron”?

[The Prime Minister]

I am grateful for my hon. Friend’s support. I think it is a bit premature to raise this new spectre, as it were, but I certainly enjoy working closely with the German Chancellor, and there are many areas—not just the EU budget—where we agree very forcefully.

[Mrs Anne Main (St Albans) (Con)]

I do not think I have a particularly odd postbag, but I have never had one letter, e-mail, conversation or text that has encouraged me to ensure that we keep up the EU wine budget, ensure that the bureaucrats have a comfy lifestyle and increase their budget left, right and centre. The Brussels sprouts and turkeys of Europe will not be voting for Christmas. I congratulate my right hon. Friend on his firm stance and say more power to his elbow. I believe that my constituents are typical.

[The Prime Minister]

I am grateful for my hon. Friend’s support. On this side of the House at least we will go on arguing for a tough settlement.

[Christopher Pincher (Tamworth) (Con)]

Does my right hon. Friend recall the warning given by Aneurin Bevan—one Labour figure who knew how to stand up in Britain’s interest—who said that it is dangerous to send a British Foreign Secretary

“naked into the conference chamber”?

With respect to retaining our veto as a weapon in our negotiating armoury, does the Prime Minister think the Leader of Opposition could benefit from a bit of Bevan?

[The Prime Minister]

I think the Leader of the Opposition could benefit from a little bit of time with his socialist colleagues in the European Parliament, because they have done so much to try to undermine all of us who want to see a tough budget settlement. They are calling for a 5% increase, getting rid of all the rebates and having a financial transactions tax. That is what the socialists stand for in Europe and if the Opposition do not agree, they should have the courage to do what we did and leave their group.

[Gavin Williamson (South Staffordshire) (Con)]

I want to know from the Prime Minister whether he thinks we would have given away all our rebate or just most of it if the Leader of the Opposition had been in charge of our negotiations.

[The Prime Minister]

I do not think our rebate would last long with the Labour party. Tony Blair—the last Labour Government—gave away the rebate, in return for which they thought they had secured a promise for reform of the CAP, but they got absolutely nothing in return. It was a terrible piece of negotiation, and one, I am afraid, for which we are still paying the price.

[Dr Sarah Wollaston (Totnes) (Con)]

Far from being isolated in Europe, the Prime Minister has plenty of allies. Does he feel it was at all helpful to be able to go to Europe and demonstrate the strength of feeling of this House? Will he set out when this House—and more importantly the British people—will be able to see his proposals for a new settlement on our relationship with Europe and when the British people will be able to give their consent?

[The Prime Minister]

I do not think that anybody in the EU doubts the very strong views of this House of Commons and of the British public about our relationship with Europe and the fact that we should not be having big increases in the EU budget. That is well understood and this Government reflect that very clearly, unlike the last Government, who endlessly gave away our money. I have explained that I will be saying more this year about the new settlement that we are seeking in Europe.

[Guy Opperman (Hexham) (Con)]

People in Northumberland will be delighted that it is this Government who are keeping the rebate, stopping the budget rise and working with the fiscal sensibles in Sweden, Holland and Germany. Does the Prime Minister agree that fiscal restraint and constraint are gradually becoming the prevailing argument in Europe?

[The Prime Minister]

My hon. Friend makes an important point. We must work hard to keep this alliance together, because there are many countries and parties in Europe that want to see an even bigger EU budget. Sadly, that includes the socialist party, which Labour belongs to. It is campaigning and fighting for an increase in the budget. This is what the leader of the European socialists says:

“If the EU budget is decided on the basis of Van Rompuy’s latest proposal—or an even worse compromise—it will be a budget of broken promises.”

That is the policy that Labour is signed up to, and it is only this Government who are preventing it from happening.

[David Rutley (Macclesfield) (Con)]

I congratulate the Prime Minister on taking a strong lead, on putting the spotlight firmly on economic growth and on placing trade on the EU agenda. Will he tell the House what steps the EU is taking to tackle the burden of Brussels-backed bureaucracy, just as this Government are doing here in the UK in relation to historical home-grown regulations?

[The Prime Minister]

I am afraid that the answer to that is not nearly enough. There is some good news, which is that, at the last European Council before this one, we secured a commitment from the European Commission to examine existing regulations and to try to remove the most burdensome of them. It was disappointing, however, that at this Council, the European Commission would not brook any idea of reducing its bureaucracy or its budget. As I have said, the proposals being put forward were to increase the budget of the central administration, not to reduce it.

[Neil Parish (Tiverton and Honiton) (Con)]

I congratulate the Prime Minister on standing up for Britain and on having strong allies in Europe. The Council of Europe is beginning to see the light in regard to expenditure, but the culture of the European Commission is always to spend more and more. If it is good enough for this Government to cut back on Whitehall, why is it not good enough to cut back on the European Commission?

[The Prime Minister]

My hon. Friend makes an important point. That point was made not just by me but by a number of other leaders of Governments. We were talking about the tough pension changes, budget changes, administration changes and cuts that we have had to make, and it is just not acceptable for Brussels to continue as though nothing has changed.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Before the European Council, the shadow Chancellor kept going on about the Prime Minister being weak and isolated. Following the Prime Minister’s strong leadership on budget reform, in alliance with countries such as Germany, Holland and Sweden, who in this House does my right hon. Friend now think is weak and isolated on Europe?

[The Prime Minister]

First, may I congratulate my hon. Friend on his absolutely superb piece of Movember fundraising? He would not look out of place in a spaghetti western, and I am sure that a number of film studios near Enfield will want to call on his services. So excited was I by his facial hair, however, that I have forgotten his question—[Laughter.] Ah, yes! He is absolutely right. The last Labour Government gave away our rebate, and if they got back in again, they would give away the other half.

[Jane Ellison (Battersea) (Con)]

May I congratulate the Prime Minister on the important work that he did this weekend, particularly the alliance building? It is clearly absurd of the EU to say that there can be no cuts in the central administrative budgets when, up and down this country, councils such as mine in Wandsworth are finding ways of doing it at local government level. Surely it is inconceivable that it cannot be done at EU level.

[The Prime Minister]

My hon. Friend is absolutely right. I have set out in my statement and also at the European Council a number of specific steps that could be taken on pay bills, on pensions and on automatic promotion. Frankly, however, perhaps the best way of getting the Commission to engage in the reality is to give it a cut that it has to achieve and then challenge it to do so. That is what we have done with some Government Departments. We have said to them, “Okay, you know your Department and your departmental spending better than anyone. Here is the sort of reduction you need to achieve.” There is not an organisation or business in the world that has not had to budget for a 10% or 20% reduction over the past few years, and we should ask the Commission to do that.

[Neil Carmichael (Stroud) (Con)]

This statement certainly demonstrates that the building of an effective alliance on the European Council really can deliver some results. Through good leadership, that is clearly benefiting this country. Does the Prime Minister agree that the next big thing to do is to make sure that we have a truly competitive Europe and that the alliance that he has created should be used as a powerful mechanism to demonstrate what we need and how to get it?

--- Later in debate ---

[The Prime Minister]

My hon. Friend is entirely right. That is why we spent so much time putting together the so-called like-minded group, particularly over single market issues where we have not only the traditional allies of Denmark, Holland and Germany, but the Baltic states, the Nordic states and now the Italians and the Spanish, along with others including the Hungarians and the Czechs. They all support single-market and growth-oriented measures, which is very encouraging.

[Mr Marcus Jones (Nuneaton) (Con)]

Can my right hon. Friend reassure us that he will never agree to any new EU taxes, particularly to an EU-wide financial transaction tax?

[The Prime Minister]

I can certainly give my hon. Friend the assurance that we do not support new EU taxes. One of the ways in which particularly the left in Europe has endlessly tried to argue for higher budgets for more spending is by altering the so-called “own resources” and coming up with new taxes. We oppose a financial transactions tax. Some countries may well go ahead and introduce it in any case. If they do, as far as I am concerned, that is their own decision and we will not take part in it.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

The current multi-annual financial framework has a commitment of €994 billion; the van Rompuy proposal cuts that to €973 billion. Does my right hon. Friend agree that this is progress, but still not good enough?

[The Prime Minister]

My hon. Friend is entirely right. The Commission initially came up with a proposal that was over a trillion euros. One problem has been the need to argue against a proposal that is clearly wrong and wrong-headed and bring it back to some sort of sanity before it becomes possible to argue about getting a proper outcome for the budget. It is not often that we hear politicians say this, but what is lacking in some cases is a Treasury approach of going through these budgets rather than having people like the permanent staff all sitting around in the Commission and in the Council protecting their own budgets rather than looking at the savings that should be made.

[Andrew Bridgen (North West Leicestershire) (Con)]

Did my right hon. Friend see the headline in last Friday’s Der Spiegel online, which read “Cameron leads revolt of the net contributors”? Of particular interest was the second online comment, which read “Wir sind heute alle Engländer! Danke Herr Cameron”—today we are all British; thank you, Mr Cameron. I do not think that we are at all isolated in Europe.

[The Prime Minister]

It is impressive to see Conservative MPs speaking German in the House of Commons. I am impressed by my hon. Friend and I take what he said as a compliment.

[Jason McCartney (Colne Valley) (Con)]

I praise the Prime Minister’s tough and principled stance at the EU summit. Those are not just my words—they are the words of some of my constituents who e-mailed me over the weekend. They had just been on a cruise around the Baltic, where they spoke to many citizens who were also fed up with being fleeced by the EU. As the Prime Minister goes back to the summit in the future to negotiate and get control over this bloated EU budget, will he realise that he has the full support not only of the British people, but of hard-pressed taxpayers in the EU, too?

[The Prime Minister]

I am grateful for my hon. Friend’s comments. He makes an important point—that we should use the time between now and the resumption of this European Council to try to make sure that the voice of people in Europe who want a tougher budget is actually heard, not just in Britain, but in other countries, particularly the net contributors.

[Jessica Lee (Erewash) (Con)]

My constituents, the good people of Erewash, are keen to know that the great British rebate, initially secured under Margaret Thatcher, remains safe in the Government’s hands. Can my right hon. Friend offer some reassurance that this important aspect of the budget remains a priority at the negotiating table?

[The Prime Minister]

My hon. Friend is absolutely right. It must remain a priority for Britain to make sure that there cannot be changes to our rebate. What happened at this European Council is that the disagreement about the spending figures dominated the discussions, so we did not really get on to the whole conversation about rebates and the so-called own resources and income side. I was very clear, however, that when we get to that discussion, there cannot be changes to the UK rebate.

[Stephen Mosley (City of Chester) (Con)]

The Commission and many EU countries have a vested interest in always increasing EU budgets. Has the Prime Minister given any consideration to whether there might be a better way of agreeing EU budgets in future?

[The Prime Minister]

My hon. Friend makes an important point, to which I referred to earlier. When a rotating president was responsible for trying to put the budget deal together, at least we felt that European taxpayers were getting more of a look-in than we do now that it is being done by the European Council and the European Commission. I think we need to make sure that the voice of the people of Europe, who want to see tough budgets, is properly heard. There may be more that Parliaments can do in scrutinising European spending and helping to come up with some sensible savings, which we can then take to the Council table and get agreed.

[Mr Speaker]

Order. I am extremely grateful to the Prime Minister, the Leader of the Opposition and other colleagues. The fact that 53 Back Benchers were able to take part in 44 minutes of exclusively Back-Bench time is a comment on succinctness.

Intelligence and Security Committee Annual Report (Government Response)

Lord Cameron of Chipping Norton Excerpts

Tuesday 6th November 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

The annual report of the Intelligence and Security Committee was laid before Parliament on 12 July 2012 (Cm. 8403). The Government have considered the Committee’s many useful conclusions and recommendations. I have today laid the Government’s response before the House (Cm. 8455).

Copies of the response have been placed in the Libraries of both Houses.

European Council

Lord Cameron of Chipping Norton Excerpts

Monday 22nd October 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I shall make a statement on last week’s European Council.

The European Union faces important choices in the coming months in order to meet tough economic challenges and deal with problems in the eurozone. There were no landmark decisions at this Council, but there was some limited progress on both issues.

As I have said, we are in a global economic race, and all European economies need to become more competitive. That means taking steps such as expanding their private sectors, reforming welfare and improving education. In terms of action at European Union level, we believe that it means lifting the burdens on businesses, completing the single market, and taking forward trade deals with the biggest economies and the fastest-growing countries and regions in the world. I have consistently promoted those solutions, and at the Council we made some progress.

On deregulation, I joined others to secure a new agreement that specifically refers to withdrawing legislative proposals from Brussels that stifle our businesses. Of course, we now need to see specific actions, but it is worth noting that the conclusions refer to the

“intention to withdraw a number of pending proposals and to identify possible areas where the regulatory burden could be lightened”.

On completion of the single market, as I reported in June, there is now a proper plan with dates and actions for completing the market in energy, services and digital, but once again it is important for that to be followed through in order to secure jobs and growth.

On trade, the Council agreed on an ambitious agenda to create 2 million jobs across Europe. That includes completing free trade deals with Canada and Singapore in the coming months, and starting negotiations with the United States next year on a comprehensive transatlantic trade and investment agreement. We made some new progress on launching negotiations with Japan “in the coming months.” That deal alone could increase European Union GDP by €42 billion.

Let me now turn to the eurozone. Britain is not in the eurozone and we will not be joining the eurozone, but it is in our national interest for the uncertainty surrounding the eurozone to end. I have argued for some time that a working eurozone needs a working banking union. It is one of the features that a successful single currency needs. Obviously you do not need a banking union because you have a single market; you need it because you have a single currency—so Britain should not, and will not, be part of that banking union.

Britain’s banks will be supervised by the Bank of England, not by the European Central Bank, and British taxpayers will not be guaranteeing or rescuing eurozone banks, but we do need eurozone members to get on with forming a banking union. At the Council, I joined those who were arguing for progress to be made on the plan that had been announced in June. To put it simply, I believe that it is not enough to have a banking union that is stripped of the very elements—such as mutualised deposit guarantees, a common fiscal backstop and a framework for rescuing banks—that are needed to break the dangerous link in the eurozone between sovereign debt problems and the stability of eurozone banks. But because not all countries outside the eurozone—like Britain—will want to join such a banking union, it is also essential that the unity and integrity of the single market is fully respected. The organisation that currently ensures a level playing field for banking within the single market is the European Banking Authority. We need to make sure that it will continue to function properly, ensuring fair and effective decision making. This, again, is specifically recognised in the conclusions. More broadly, as eurozone countries take steps to deepen their economic and monetary union—as they will—it is important that we secure, as I did, an explicit commitment in the conclusions that the final report and road map in December will include “concrete proposals” to ensure that the integrity of the single market is respected.

Finally, the next Council in November will discuss the financial framework for Europe between 2014 and 2020. We have not put in place tough settlements in Britain in order to go to Brussels and sign up to big increases in European spending. I do not believe that German voters want that any more than British voters, and that is why our Governments have led the argument in Europe for fiscal restraint, so I put down a marker that we need a rigorous settlement. As the letter signed in December 2010 by a number of European leaders said, given the tough spending settlements that all member states have had to pursue in their own countries,

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives”.

On foreign affairs, the Council, led by Britain, once again discussed further restrictive measures on the Syrian regime, and made clear to Iran that we will increase the pressure if there is no progress on the nuclear dossier.

Making our economies competitive, dealing with uncertainty in the eurozone, keeping the EU budget under proper control, and making sure the EU speaks with a strong and united voice on the key international challenges: this is our agenda, and I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement and associate myself entirely with the summit’s conclusions in particular on Iran and Syria. The dangers of the civil war in Syria spilling over into the wider region are now all too apparent, and we strongly support the EU playing its part to seek to prevent this from happening.

The backdrop to this summit is that across Europe there is low or no growth. I am afraid on this fundamental issue the Prime Minister has yet again returned from a European summit with nothing to offer. So, first, can he tell us whether he had any responses to the proposals on the immediate growth crisis facing Europe that he took to the summit? Europe urgently needs co-ordinated action to boost demand, with those countries with the scope to do so taking action, but yet again there was nothing from the summit.

Secondly, on the single market—which the Prime Minister makes great play of—he admitted that this summit simply reaffirmed what was agreed in June, but will he agree that the situation is actually slightly different from then? On energy, will he confirm that the conclusions were exactly the same as the Council’s conclusions 18 months ago? On digital, they sounded familiar to me, too, and there is a reason: they were exactly the same as they were in October 2011—a year ago. So when he said at his summit press conference, with characteristic humility:

“Who is driving that agenda”—

on energy, on digital—

“which has made so much progress this year? It’s Britain”,

what did he mean by that, because there has been no progress over the last year?

Thirdly, on banking, there are big issues facing financial services as others move towards a banking union, but the summit conclusions are vague at this stage. So can the Prime Minister clarify for us what his key demands are in relation to the crucial issue of voting rights, as banking union goes ahead? Can he tell us what specific safeguards he will be seeking, and can he tell us how he will be building support for his position among our allies—using his enormous popularity, which he has built up over the past two and a half years?

That takes me to the real problem the Prime Minister faced at this summit. At home last week, he was starring in his own version of “The Thick of It”. In Europe he was offering another chapter in his handbook of “How to Lose Friends and Influence”. This is what Finland’s Europe Minister said—[Interruption.] Those on the Government Benches do not like to hear about their lack of influence in Europe. This is what Finland’s Europe Minister said at the summit:

“Britain is…putting itself in the margins...the boat is pulling away and one of our best friends is somehow saying ‘bye bye’ and there’s not really that much we can do about it.”

[Interruption.] Some on the Government Benches are saying, “Hear, hear,” about leaving Europe; there is the problem for the Prime Minister.

That is not the French or the Germans talking—it is Finland. Even the Prime Minister cannot be glorying in fisticuffs with Finland. It is the land of the Helsinki accords, reindeer and the Moomins. Its Europe Minister is an anglophile; he is one of Britain’s friends. The Prime Minister does not seem to realise that all his bluster about fighting for Britain is meaningless if he alienates our natural supporters. Will he confirm that he really has become the guy who goes to Europe and picks a fight in an empty room? That is just as well, because he normally finds himself in an empty room.

The Prime Minister was asked about his isolation, and this is what he had to say:

“We are actually a very, very important and influential player…right there in the vanguard.”

If he thinks that, the problem is not that he is isolated, it is that he is completely deluded about the arguments going on in Europe. Last October, he said:

“This is not the time to argue about walking away”.—[Official Report, 24 October 2011; Vol. 534, c. 27.]

But that is exactly what his Cabinet is now doing. [Interruption.] The Education Secretary has chosen to walk away from this statement, but the Eurosceptic beauty contest has begun, with the Education Secretary, the party chairman and others joining the fray. The reality is that the Prime Minister has lost control of his party on Europe. We have a Prime Minister who is outside the room looking in at Britain’s empty seat at the table. There is one thing that our allies in Europe and the British people can agree on—his Government are a shambles and it is Britain that suffers.

[The Prime Minister]

I am sure that there was a question in there somewhere. Frankly, I am not going to take any lectures on Europe from a party that gave up part of Britain’s rebate and got nothing in return; that gave up the social chapter and got nothing in return; and that joined the EU bail-out fund and got absolutely nothing in return. It is this Government who introduced the referendum lock, who got us out of the bail-out mechanism and who will always stand up for Britain in Europe.

I think that the right hon. Gentleman did ask a question somewhere at the beginning: what did Britain bring to Europe’s growth crisis? We brought, last week, falling unemployment, falling inflation and a million more people in work. He asks what we want in terms of banking union safeguards. We want single market safeguards, but I note that he had absolutely nothing positive to suggest on any of these agendas at all.

The right hon. Gentleman talks about Britain’s influence in Europe. The single market in digital, in energy and in services is a British agenda that we are driving forward. He says that there has been no progress. There were never, under his Government, dates and specific actions for completing these markets, but there are now. Oil sanctions on Iran is a British agenda that we have succeeded in driving forward; pressure on Syria and support for the Arab spring countries is a British agenda; and trade deals with the US and with Japan, not just with Canada and Singapore, is a British agenda.

What else did we get from the right hon. Gentleman? He talked about what I was doing at the European Council, but it is worth remembering that when I was there he was, of course, preparing for his great trade union sponsored march. I thought that the House might welcome an update on how the sponsored walk went: Unite union—£6 million; Unison—£3.2 million; and the GMB—£3.2 million. That is what he was doing—calling for general strikes and disruption—when we are fighting for Britain.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

When the Prime Minister made it admirably clear to Chancellor Merkel that Britain would not permit the European Banking Authority or the European Central Bank to have any control or oversight of the Bank of England, what was her response?

[The Prime Minister]

The point I would make to Chancellor Merkel—we do not actually fundamentally disagree about this—is that the single currency needs a banking union. At the heart of that banking union will be the ECB, with a new role as a banking regulator. But clearly as this country is not in the single currency our banking regulator will continue to be the Bank of England, and there will not be any question of the ECB having a say over the Bank of England—that is not the situation. Strangely enough, in a way the challenge is to persuade countries of the eurozone to go far enough in having a banking union that will help to break the link between banks that are in difficulty and sovereigns that are in difficulty. Just as we have a solid banking union for our single currency in the United Kingdom, they need a solid banking union for their single currency in the eurozone.

[Kate Hoey (Vauxhall) (Lab)]

Did the Prime Minister make it clear—by the way, his use of “United Kingdom” versus “Britain” is improving, but it is not yet good enough—to the other European leaders that we would not contribute towards any of the millions of pounds that the European Commission wishes to spend to tell every European Union citizen how wonderful the EU is? Is that not a ridiculous waste of money?

[The Prime Minister]

I am very grateful to the hon. Lady for her school report and I shall continue to try to improve on my use of “United Kingdom” rather than anything else. On the issue of what the European Commission and European Union spend, as we get into this budget debate we should still look at the 6% of the money spent on the EU’s central costs and the fact that, as I said at the weekend, some 16% of Commission officials are paid more than €100,000 a year. Okay, 6% is a small percentage of the total but it is still meaningful in getting a good budget deal.

[Mr William Cash (Stone) (Con)]

I commend my right hon. Friend and the Financial Secretary for so far complying with the European scrutiny rules on these banking proposals. Now my Committee has been able to recommend them for debate, and an early debate at that. However, given the reported advice of the Council’s legal adviser and the inherent impact of the proposals on our national interest, will he veto the proposals, not least because the proposed voting changes would expose the City of London to qualified majority voting, which would be very damaging to it?

[The Prime Minister]

The European Union is going about this change to banking union through a treaty base that requires unanimity, so Britain has a full part in the discussions; but I do not want us to veto proposals for a banking union for the eurozone because I think the eurozone needs a banking union. We should be putting our negotiating heft, as it were, towards ensuring that those of us remaining outside the banking union have proper safeguards. Let me make one last point: I am sure that my hon. Friend knows that a lot of financial services regulation in the European Union is already done by qualified majority voting.

[Mr Denis MacShane (Rotherham) (Lab)]

If a referendum were held tomorrow, the Prime Minister would be in my camp in voting to stay in the European Union. According to one of Lord Rothermere’s organs, the Secretary of State for Education said that if there were a referendum today on whether the UK should cut its ties with Brussels, he would vote to leave. What is the Cabinet position? Is it that of the Secretary of State, who is an out-er, or that of the Prime Minister, who, like me, is an in-er?

[The Prime Minister]

I hate to disappoint the right hon. Gentleman, but we are not having an in-or-out referendum on the European Union tomorrow. I want us to achieve a new settlement between Britain—the United Kingdom—and the European Union and to put that new settlement to fresh consent. That is what should happen. I think that the idea of an in/out referendum is wrong, because I neither support the status quo nor think that leaving is the right answer.

[Mr John Redwood (Wokingham) (Con)]

I warmly welcome the Prime Minister’s wish to have a new settlement with the European Union and encourage him to negotiate just that. Is not our veto over a six-year budget perspective for which the others want a huge expansion of spending the opportunity to negotiate that new settlement?

[The Prime Minister]

The point about the European budget is that we need to maximise our negotiation leverage on that specific issue, as we are part of this union and we want it to have a sustainable budget. As I wrote in the letter of 18 December 2010,

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives”—[Interruption.]

The shadow Chancellor asks from a sedentary position what our leverage is, and it is very simple. The decision must be agreed by unanimity. Tony Blair, when he sat in that seat, gave up our rebate without any need, but we will not do that.

[Keith Vaz (Leicester East) (Lab)]

Were there any discussions, either at the summit or in the margins, about the acute immigration crisis facing Greece? As the Prime Minister knows, last year 100,000 illegal migrants crossed from Turkey to Greece. This year, 100,000 Syrians have moved into Turkey. Would the Prime Minister be prepared to contribute to additional rapid border intervention team—RABIT—forces on the border between Greece and Turkey to try to ease that crisis?

[The Prime Minister]

The Greek Prime Minister, attending his first European Council, raised that issue, which is clearly putting pressure on Greece. As the right hon. Gentleman knows, the British Government’s position is that we should continue to support the organisations that deal with these issues, such as Frontex. If there is pressure for more resources, we can consider that. We should always bear in mind, however, that when it comes to migration into Europe it is the countries of the north, including Britain, that face the greatest pressure from asylum claims.

[Martin Horwood (Cheltenham) (LD)]

Since the Government have raised the possibility of opting out of the European arrest warrant, which is vital for tackling human trafficking, organised crime and terrorism, did any of our European partners at the summit express the worry that Euroscepticism might make the UK go soft on crime?

[The Prime Minister]

No one mentioned that to me, no.

[Mr Dennis Skinner (Bolsover) (Lab)]

Has the Prime Minister not realised yet why those others in Europe do not take very much notice of what he has to say? Does he not realise that they work it out that this Prime Minister is being constantly undermined by the antics of his Chancellor of the Exchequer, the ex-Chief Whip, Boris Johnson—it goes on for ever? This heir to Blair has suddenly become like John Major all over again.

[The Prime Minister]

rose—

[Mr Speaker]

Order. I know the Prime Minister will reply with very specific and focused reference to the deliberations of the European Council.

[The Prime Minister]

Those are all subjects that were not discussed in any great depth at the European Council.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am sorry not to be able to follow the humorous line that we had from the hon. Member for Bolsover (Mr Skinner), but in the unanimous negotiations required for a European banking union, will the Prime Minister try and repatriate powers that are currently subject to qualified majority voting?

[The Prime Minister]

My hon. Friend asks an important question. We need to see how the banking union proposals develop. We do not yet know whether it will be a full-on banking union or a restricted banking union. We do not know for certain the treaty base that will be pursued. If it is pursued on a basis of unanimity, it is absolutely key to make sure we safeguard the single market. I am very conscious of the fact, sitting round that table, that I am responsible for 40% of the European Union’s financial services industry. That, I think, must be our focus during these negotiations.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Could the Prime Minister clarify whether he intends to opt in or out, or out and back into the European arrest warrant, bearing in mind that it was recently used to bring Jeremy Forrest, the maths teacher who disappeared with Megan Stammers, back to the UK?

[The Prime Minister]

This issue has been discussed at great length by the Home Secretary, who set out in great detail in the House of Commons recently that we are minded to exercise the opt-out that the previous Government put in place, but there are safeguards that we want to seek for the arrest warrant.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Does my right hon. Friend share my concern that the development of a eurozone banking union demonstrates how the UK is increasingly finding itself in the worst of all possible worlds—bound and directed by a qualified majority that is solid in the eurozone? May I remind him that we already have a European Banking Authority which is based in London and operates by qualified majority vote?

[The Prime Minister]

I go a certain way with my hon. Friend, but the point is that the proposals for banking union have to be agreed by unanimity, so that is an important safeguard for Britain. But I do not think it would be in our interests to stop the eurozone putting in place something that a single currency needs in order to function. Our economy is suffering today because of uncertainty in the eurozone. Those high interest rates in Spain, Italy, Greece and Portugal affect us too, and they need action, including a banking union. We in the United Kingdom have a single currency—the pound sterling—and we are going to keep it. It works—and it works partly because we have a banking union. The countries of the eurozone need one too, so blocking it just for the sake of it does not make sense.

[Wayne David (Caerphilly) (Lab)]

On completing the single European market in energy and digitalisation, there has been no change. Is that what the Prime Minister considers progress?

[The Prime Minister]

I think the hon. Gentleman is wrong, in that for the first time there is a series of actions and dates that have to be completed by a specific time. If he reads the growth pact, it is all set out in huge detail. In previous Council conclusions, there have just been warm words, rather than the dates and the actions, and that will make a difference.

[Conor Burns (Bournemouth West) (Con)]

My right hon. Friend will be aware that the biggest issue confronting families in Britain and across the European Union is the cost of living, with rising fuel and food prices and utility bills. In that context, he will have the strong support of Government Members in making it clear to our European partners that large increases in the EU budget would be utterly unacceptable to the British people.

[The Prime Minister]

I am very grateful for my hon. Friend’s support. If anything, since December, when Chancellor Merkel and the French, Finnish and Dutch leaders all signed the letter, along with me, the debt situation—the deficit situation—has got worse, so the pressure to make sure that we deliver a sensible settlement for the European budget has got even greater. That is why we will be sticking to our guns.

[Kevin Brennan (Cardiff West) (Lab)]

Did the EU deserve the Nobel peace prize?

[The Prime Minister]

There is a case for saying that the institutions that Europe put in place after the second world war—and I would include NATO as well as the European Union—have played a role in making sure that we settle our problems around conference tables rather than on the fields of Flanders. To that extent, yes, I think that it is right. [Interruption.] Someone says, “Why not go?” We already have three of the five European Presidents going to Oslo to collect this prize, and I suggested that alongside them should be 27 schoolchildren —one from each country.

[Mr James Clappison (Hertsmere) (Con)]

I welcome my right hon. Friend’s statement. When there is a danger of eurozone members taking a common position or, indeed, being required to do so, as is the case with the European Central Bank regulation, is it not absolutely essential that he stands up for Britain’s interests and insists on the safeguards that we need to protect our position in the face of a Europe that is increasingly divided between eurozone and non-eurozone countries?

[The Prime Minister]

My hon. Friend has absolutely hit the nail on the head. We want the eurozone banking to go ahead, but there are dangers, because if the ECB members voted en bloc in the European Banking Authority, they would automatically have qualified majority voting—that is the problem. That is why the conclusions of the summit include these words:

“An acceptable and balanced solution is needed regarding changes to voting modalities and decisions under the European Banking Authority…Regulation.”

That is very important conclusions language that we fought quite a battle to secure. My point is that I do not want to veto the banking union, but unless this problem is properly sorted—and Britain has a totally legitimate argument about why it needs to be sorted—we cannot allow it to go ahead.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The Prime Minister has said before that he brings something significant to the EU growth party. Can he inform the House what it is?

[The Prime Minister]

Among the most important things that Europe can do for growth are trade deals with the fastest growing parts of the world, completing the single market, and deregulating and cutting costs. All those are the agendas that Britain is driving forward and having greater success with than we have had for many years.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

On maximising British influence within Europe, in the early days of this Administration the Foreign Secretary gave voice to the aim and ambition of seeing more UK citizens secure positions within the European Commission. Can the Prime Minister give us an update as to how that strategy is working?

[The Prime Minister]

We are making some progress on this issue. I discussed it specifically with Martin Schulz, the President of the European Parliament, who wants to see more British people involved in the Commission. I do not believe that it has to do with issues about pay; as I pointed out, Commission officials are rather better paid than members of our own Foreign and Commonwealth Office. However, we are looking at all the potential barriers to make sure that Britain is punching its weight in the Commission and elsewhere.

[Toby Perkins (Chesterfield) (Lab)]

As the Prime Minister said goodbye to his Chief Whip, did it occur to him that he might have some difficulty persuading the rest of Europe to listen to what he was saying if he could not even convince his own Back Benchers?

[The Prime Minister]

This, obviously, was all discussed at great length at the European Council in all sorts of forums. I am delighted to welcome the new Chief Whip, who is in his place and is already doing a great job.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does my right hon. Friend agree that the Leader of the Opposition’s remarks show how completely hopeless he would be at negotiating anything with the EU since he has no policies and his only strategy is to be best mates with them? Does he also agree that it will be essential, with European banking union, that we put in place safeguards against any financial transactions tax for British banks?

[The Prime Minister]

My hon. Friend makes a good point. Do we know where the leader of the Labour party stands on the EU fiscal treaty? We do not know. Do we know where he stands on the financial transactions tax? We have not got a clue. Do we know what he would do about the banking union? We have absolutely no idea. The Opposition have no positive message, but I know what they are up to in Europe. They are members of the European Socialists party, whose president is a Bulgarian who opposes gay pride marches. They have also signed up to scrapping the UK rebate—that is your official policy—and to increasing substantially the EU budget and introducing new EU taxes. They are your mates and that is your policy.

[Mr Speaker]

Order. I remind the House and the Prime Minister that I do not have any policy on these matters, so I would be very grateful if he did not involve me in this exchange. Secondly, I gently and politely make the point that we are here to talk about the policies of the Government.

[Nic Dakin (Scunthorpe) (Lab)]

Talking about mates, which parties from Latvia did the Prime Minister meet at the Council?

[The Prime Minister]

I can certainly give a list of people I did not meet—the parties of the European Socialists party, which include the Polish communists, whom the Opposition sit alongside. They also sit alongside Romanian holocaust deniers, and, as I have said, the party’s Bulgarian president opposes gay pride marches. I will not refer to your mates again, Mr Speaker; they are the hon. Gentleman’s mates.

[Mr Peter Bone (Wellingborough) (Con)]

The whole country will be grateful for what the Prime Minister has done, especially because he has said, if I have understood him correctly, that when he is returned as Prime Minister, without the pesky Liberal Democrats in coalition, he will renegotiate with the European Union and put a referendum to the people in which they can vote yes for the renegotiation or no to come out.

[The Prime Minister]

As I was at the European Council meeting, I am afraid that I missed my hon. Friend’s 60th birthday. I am extremely sorry about that, but I hope that he and Mrs Bone got my belated card.

I think that Europe is changing. The deepening of the eurozone, which will inevitably happen as a result of the problems of the single currency, will open up opportunities for a different and better settlement between countries such as Britain and the European Union. We should pursue that. I have said that we should have both strategic and tactical patience, because the priority right now is dealing with the problems of the eurozone and the firefighting that has to take place, but I think it will be possible to draw up that new settlement and then, as I have said, seek fresh consent for that settlement.

[Huw Irranca-Davies (Ogmore) (Lab)]

On the subject of how to win friends and influence people, there were 15 Heads of State present at a European People’s Party meeting on Thursday night. Having walked away from that group, how many heads of nations did the Prime Minister seek to influence at his dinner later the same evening?

[The Prime Minister]

I did not have a dinner that evening, so the hon. Gentleman’s question was wrong. [Interruption.] The dinner was all 27 Heads of State and Heads of Government, and I can inform him that it started at 6 o’clock and went on until 3 am. I remind the hon. Gentleman that, when it comes to mates, he has to explain why his mates want to scrap the UK rebate, increase the EU budget and introduce new EU taxes. If they are your dinner companions, I would rather not turn up.

[Philip Davies (Shipley) (Con)]

Did the Prime Minister discuss his plans for an EU referendum at the European Council? He may find an in/out referendum undesirable, but I find his in/in referendum equally unacceptable. Only an in/out referendum will do for the British people and it would be very much in the Prime Minister’s best interests if he stopped resisting it.

[The Prime Minister]

I agree with my hon. Friend about many things, but on this one we do not agree. The problem with an in/out referendum is that it would put two options to the British people, which I do not think really complies with what people want. Many people, me included, are not satisfied with the status quo, which is why the “in” option is not acceptable; but many people—also like me—do not want us to leave altogether, because of the importance of the single market to Britain, a trading nation, so they do not want to be out. That is why I think that an in/out referendum is not the right answer.

[Paul Blomfield (Sheffield Central) (Lab)]

Even before the budget negotiations have begun, the Prime Minister has threatened to veto them. Does that not say volumes about even his lack of confidence in his own powers of persuasion?

[The Prime Minister]

What I have done before these budget negotiations is work together with other European leaders to set out what I think is acceptable. In the letter that we published on 18 December 2010, we said that

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives.”

In these negotiations we are dealing with taxpayers’ money and we are already a massive net contributor to the European Union. It is right to set out your position and stick to it, knowing that you have a veto if you need to use it.

[George Eustice (Camborne and Redruth) (Con)]

May I commend the Prime Minister’s decision to stick to his guns and show consistency over the budget by insisting on a real-terms freeze? Does he agree that we will never drive reform in the EU if we continue to give it a blank cheque and allow it to spend whatever it likes?

[The Prime Minister]

My hon. Friend is absolutely right. Even if there is tough control over the European budget, as I say there should be, there is plenty of room to ensure that the cohesion countries receive the support that they need as their economies develop, to crack down on the administrative central costs, and to continue to reform the common agricultural policy and reduce the agriculture budget, which still makes up about a third of EU spending. There is plenty that can be done to get more money out of what is already spent and to use it more wisely.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Surely the Prime Minister must be aware that the vast majority of his Back Benchers are clamouring for a referendum. Why does he not get the money from Ashcroft to pay for it? He gives them millions.

--- Later in debate ---

[The Prime Minister]

I have explained the position on a referendum. I do not think that an in/out referendum is the answer. The vast majority of the British people want us to be in Europe, but to have a better deal in Europe. That is what we stand for.

[Mark Reckless (Rochester and Strood) (Con)]

So, the Prime Minister wants to renegotiate our membership of the EU and put the new terms to a referendum. However, will that be an in/in referendum or will a no vote end Britain’s membership of the EU?

[The Prime Minister]

We are getting slightly ahead of ourselves. We need to use the development of the European Union to seek a fresh settlement. There must then be fresh consent for the fresh settlement. There is time to elapse before that can happen because of the immediate firefighting in the European Union, and we can go on discussing it between now and the next election.

[Alex Cunningham (Stockton North) (Lab)]

We have heard a lot today about protecting British interests, but will the Prime Minister set out how he expects to protect those interests from being harmed by closer European fiscal integration, when he did not even guarantee us a seat at the table for the negotiations?

[The Prime Minister]

My view is that it is inevitable that the eurozone countries will have to integrate further. As a country that is not a member of the eurozone, we must recognise that if those countries are to have a working single currency, they will have to make some changes. I therefore do not think that it would be right to stand in the way of everything that they need to do to build a currency that works. However, as that goes ahead, it is important that we safeguard our interests as a member of the European Union and, as I have said, seek a better settlement for the future.

[Sir Tony Baldry (Banbury) (Con)]

Has my right hon. Friend had the opportunity to see today’s edition of Le Figaro? Its front page declares that punitive taxation has killed the little attractiveness that remained for Paris as a financial centre against the City of London. Will my right hon. Friend continue to be a champion for London?

[The Prime Minister]

I have not seen that front page, but given all the other front pages that there have been recently, I think that I should go away and read it at once. It is important that Britain remains attractive for investment, business, enterprise and start-ups. We are in a global race—a competition—and that gives us a head start.

[Mr William Bain (Glasgow North East) (Lab)]

What advice did the Prime Minister seek from the Education Secretary and the third of the Cabinet whose policy it is to withdraw from the European Union before he attended the Council? Is it not the case that if we became the new Norway or Switzerland and had their policies, we would still be net contributors to the EU budget, but have little say over how it was spent, and we would still be bound by the rules of the single market, but have no influence over what those rules said?

--- Later in debate ---

[The Prime Minister]

I always listen carefully to all my Cabinet colleagues, especially the Education Secretary. However, the Leader of the Opposition has to answer the question himself. The shadow Defence Secretary has said that it is time for a referendum. Is that Labour policy or not?

[Edward Miliband]

indicated dissent.

[The Prime Minister]

No, it is not. Well, the right hon. Gentleman has clarified one thing this afternoon. That is very good.

[Neil Carmichael (Stroud) (Con)]

Does the Prime Minister agree that the best way to protect British interests is to strengthen the single market? By doing so, we might find some allies who are interested in a competitive and powerful single market monitored, ironically, by the European Commission.

[The Prime Minister]

My hon. Friend is entirely right. In today’s European Union, it is not just the northern countries—the Dutch, the Danes and the British—that are fighting for the single market. Italy is now run by Mario Monti, who is very pro completing the single market; the Spanish, under Mariano Rajoy, support the single market; and the former Baltic states in the east of Europe back this agenda. The balance within the European Council has shifted more in favour of single-market and competitive measures, which is good news for Britain.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Prime Minister says that he wants a freeze on the EU budget. Does he think his chances of achieving that are greater when he is in the room negotiating or after he has stormed out in a huff?

[The Prime Minister]

I have never stormed out of any European negotiations, but what I have done is that when a treaty was on the table that was not in British interests, I vetoed it.

When it comes to the future financing framework, I have studied very closely what the last Labour Prime Minister who went through the process did, in 2005. To start with, he said, “I’m not going to sign up to this new financial framework, because it means losing the British rebate.” But then they gave him a bit of pressure, and he completely backed down and gave up almost half the rebate. In return, he got a promise of a discussion on reforming the common agricultural policy, and that discussion never even properly happened.

[Mr Robert Buckland (South Swindon) (Con)]

Motor manufacturers such as Honda will be very pleased to hear that progress is being made on negotiations with Japan. Does my right hon. Friend agree that only through Britain’s positive engagement in and continuing membership of the EU will we negotiate effective and comprehensive trade agreements?

[The Prime Minister]

My hon. Friend is entirely right. If Britain was not at the table, I do not believe a free trade agreement would have much chance at all. There are countries alongside us that are in favour of it, but we are probably one of the most enthusiastic. I met the Japanese equivalent of the CBI last week at No. 10 Downing street with the Business Secretary, and I said that I would push hard for a free trade agreement with Japan. We have got a change in the language of the conclusions to talk about starting the negotiations in the coming months. However, it is hard work pushing and driving that agenda, because many countries would rather not see that happen. We think it is good for Britain. One of our selling points is being the most open trading economy in Europe, and we need to keep that up.

[Chris Bryant (Rhondda) (Lab)]

The Prime Minister has said a lot about mates this afternoon. Was there any discussion about the relations between the EU and Russia? Russia’s activities, or intransigence, on Syria have made the situation immensely worse there and infected the situation in the Lebanon. If there was any such discussion, can he explain why his mates—not just the members of Putin’s party but his own Conservative Members of Parliament and two Conservative peers—voted against the resolution at the Parliamentary Assembly of the Council of Europe condemning Russia’s human rights activities?

[The Prime Minister]

I am afraid we did not get the apology that we were waiting for. We will have to be very patient.

I am afraid that the hon. Gentleman is wrong on a key detail. The Conservative representatives at the Council did vote for the report to which he refers.

[Henry Smith (Crawley) (Con)]

I very much congratulate my right hon. Friend on his work on expanding trade with non-EU countries, but does he share my concern about the EU’s procrastination on completing free trade agreements with countries such as Canada and Singapore?

[The Prime Minister]

Good progress is being made on Canada and Singapore, and I believe that as the conclusions of the Council say, the negotiations will be completed “in the coming months”. The bigger challenges will be getting properly started on Japan and the US, which, as two of the world’s biggest economies, have the greatest potential of all.

[Andrew Bridgen (North West Leicestershire) (Con)]

The Government are committed to resisting the transfer of any further powers to Europe. Given that money is power, will my right hon. Friend commit to resisting any attempts to increase the size of the EU budget and therefore the UK contribution to it?

[The Prime Minister]

We are one of the countries in Europe that stand up for fiscal discipline and restrictions on the EU budget. I remind my hon. Friend that the annual budget negotiations are carried out under qualified majority voting. Last year we achieved a real-terms freeze in the European budget, and the year before we did not. Discussions and negotiations are under way for the 2013 budget, but the multi-year framework, which will control the budgets between 2014 and 2020, requires unanimity. That is where we can insist on the greatest possible discipline.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

On that point, will the Prime Minister assure the House that he will get the toughest possible deal, particularly on farming policy, given the poor deal for farmers from the revisiting of the Fontainebleau agreement and the review of the budget rebate? We need to ensure that our farmers, who are already greening our economy, get the best possible financial outcome for the next six years.

[The Prime Minister]

Obviously we will look carefully at this issue and at how it will affect our farmers. As my hon. Friend knows, the last Government basically disapplied the rebate from the spending on cohesion countries, which had some perverse effects as far as our farmers are concerned. What matters is that we do a good deal for Britain in the round, including our farmers.

[Charlotte Leslie (Bristol North West) (Con)]

As the Prime Minister will know, I wrote to him over the weekend about the European Parliament’s extraordinary two-seat operation between Strasbourg and Brussels, which costs over £1 billion of taxpayers’ money and emits 100,000 tonnes of CO₂. Does he agree that the so-called Strasbourg circus is an enormous waste of resources, and at the next Council of Ministers meeting in November will he push for an end to the farce, as in our coalition agreement?

[The Prime Minister]

I am grateful to my hon. Friend for raising that issue. It has long been our position that that system should cease and that we should have one seat for the European Parliament, and we continue to make that point.

[Gavin Williamson (South Staffordshire) (Con)]

Labour Members of the European Parliament want my constituents to pay more taxes so that the European Union can spend more of our money. Will my right hon. Friend assure the House that such crackpot ideas from the Labour party will be kicked into touch?

[The Prime Minister]

My hon. Friend is absolutely right, and Labour Members who say that that is not the case clearly have not read the policy document of the European Socialists party to which they belong, which calls for scrapping the UK rebate, increasing the budget, and imposing new EU taxes. That is what the Labour Members’ group stands for.

[Mr Julian Brazier (Canterbury) (Con)]

On the subject of influence within the EU, does my right hon. Friend agree that quite a number of countries in the eurozone might benefit from talking to a country that has generated 1 million private sector jobs over the past three or four years?

[The Prime Minister]

My hon. Friend makes an important point: there is a big range across Europe in how effectively our labour markets function, and if we look at unemployment rates—particularly youth unemployment— we see that the contrast between some of the best performing countries such as Holland, and the worst such as Spain and Italy, is very marked. The UK is not, I am afraid, among the best performing countries, but we should aim to be.

[John Glen (Salisbury) (Con)]

Many of my constituents tell me that they wish to see the future of this country far less closely tied to that of continental Europe, but they are increasingly cynical about how that will take shape. Will the Prime Minister reassure my constituents that he will lead us in the right direction?

--- Later in debate ---

[The Prime Minister]

I would say to my hon. Friend’s constituents, as I would say to everybody, that I think Britain benefits from having a positive and strong relationship with our European allies and partners. We are a trading nation and have been throughout our history. Some 50% of our exports go to European countries and we need not only those markets to be open, but to have a say in how the rules of those markets are written. That is in Britain’s interest. As the European Union changes, and particularly as the eurozone becomes a tighter bloc with its own banking and fiscal union, the relationship between those outside the single currency and those inside is clearly going to change. We as a country should be thinking about how we can maximise the interests of the United Kingdom as that happens.

[Christopher Pincher (Tamworth) (Con)]

The German Chancellor, Angela Merkel, is reported to have said that there is little point in holding the next EU summit if Britain wields its veto on the budget. Does my right hon. Friend agree that there is also little point in holding a summit if all the countries of Europe voluntarily surrender their vetoes? Is it not right to negotiate with our competitors from a position of strength, and use the tools of influence rather than the tools of effluence favoured by the Leader of the Opposition?

[The Prime Minister]

My hon. Friend makes an important point. We obviously need an agreement over time about the future funding of the European Union, and it makes sense to have a discussion about that. I am very clear about where that discussion needs to lead, and my view on that is not going to change. If we can come to an agreement in November, so be it, and if we cannot, so be it—happy to talk, but not happy to spend a lot of money.

[Michael Ellis (Northampton North) (Con)]

The French press are today criticising their own Government, and talking about a financial exile because of punitive tax rates. Does the Prime Minister agree that it would be a good idea for Labour Front Benchers to take out a subscription for some of the French press, so that they understand how significantly poor punitive tax rates are for the economy?

[The Prime Minister]

That is an absolutely excellent suggestion. Labour Front Benchers also ought to consider the effect of a financial transactions tax, because that will be pushed ahead by some EU members. It would be a great mistake to start piling on extra taxes—[Interruption.] “Is that our policy?” I have no idea what the policy is of the right hon. Member for Morley and Outwood (Ed Balls). The real problem is that neither does he.

[Stephen Mosley (City of Chester) (Con)]

One area that has been missed in the Punch and Judy show that we have seen in the Chamber is the impact on foreign affairs. The Prime Minister spoke about additional measures on Syria. What additional measures is he planning?

[The Prime Minister]

A very successful Foreign Affairs Council met before the European Union Council. As I have said, the language on Iran was very tough—if there was not movement on the nuclear issue, the sanctions would be tightened up; and the language and conclusions on Syria were about further steps to put restrictions on the regime. Whether in discussing Syria or Iran, or indeed EU relationships with countries such as India and China, Britain is making a lot of the policy and a lot of the approaches.

[Bob Stewart (Beckenham) (Con)]

All EU members are having to take cuts in their spending domestically. When possible, can we insist that further payments from this country to the EU should be proportionate to the cuts we are taking domestically?

[The Prime Minister]

This is an ingenious idea that others are also pursuing. It is a complex picture, because Britain is one of the few net contributor nations. We need to look at the starting point. We are the second largest net contributor, which is why our rebate and our tough position on that policy is completely justified.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

The Prime Minister is being accused of being an isolationist, when, in fact, we do not need to be part of the banking union discussions because we are never going to enter the currency. Will he confirm that, on a lot of other points, we are at the heart of the discussion, including on keeping the European budget down?

[The Prime Minister]

My hon. Friend makes an extremely intelligent point. The creation of the single currency has created a different dynamic in Europe. Inevitably, if countries are not in and do not want to join the single currency, they will not be involved in every single discussion about the future of the single currency. That is what has created different pathways in the European Union. We must be mature about and accept that fact, and think, “Now we know it, how can we best protect and defend the British interest in the EU?” She makes a very important point.

[David Mowat (Warrington South) (Con)]

Much of the discussion this afternoon has been on the need to protect our banking industry from regulation. For the avoidance of doubt, will the Prime Minister confirm that all our other exporting industries, such as pharmaceuticals, energy and oil, will be given the same respect in our negotiating position?

[The Prime Minister]

Of course—my hon. Friend makes an important point. I am not saying that we should stand up just for financial services and not for other industries. The industries he mentions are extremely important. However, we account for around 40% of the EU’s financial services, so it is an important industry. I am not a mercantilist, but it is one industry segment in which we have a substantial positive trade balance with the EU. A British Prime Minister, Foreign Secretary or Business Secretary would not be doing their duty if they did not speak up and point out some of the dangers of not having reasonable outcomes on those issues, but my hon. Friend is absolutely right that many other industries benefit from being members of the EU and from ensuring that we are writing fair rules for the single market.

[Mr Marcus Jones (Nuneaton) (Con)]

My constituents will be horrified at any suggestion to increase the EU budget or the UK’s contribution to it at a time of such austerity here. I can assure my right hon. Friend that the vast majority of my constituents want him to stick to his guns on the multi-year settlement, to get a good deal for the UK, and to do what is best for the UK. Will he assure my constituents that they will be pleased with the outcome when the time comes?

[The Prime Minister]

I can certainly give my hon. Friend the assurance that we will stick to our position on that. I cannot tell him when a deal will be done—it does not have to be done this November. The important point is that the British position on not wanting real-terms increases will stay in place whether the deal is done in 2012, 2013, 2014 or at any point in future. That is the key thing that everyone needs to know.

[Mr Speaker]

The moment has arrived for the good doctor.

[Dr Julian Lewis (New Forest East) (Con)]

Thank you, Mr Speaker. Can the eurozone have a banking union that works without that leading to economic and political union too?

[The Prime Minister]

I think that the short answer to that question is no. Over time, the more there is a banking union and a fiscal union, the tighter the political union will be drawn, because—for instance—German voters having to stand behind Greek deposits, or French voters having to pay for the restructuring of a Spanish bank are deeply political questions. In my view, as the eurozone deepens its commitments, as is inevitable for a working single currency, there will be pressures for further political union, and for further treaties and treaty changes. That is why I believe it is possible for Britain to seek a new settlement and seek fresh consent on that settlement, but we have to show some patience, because right now the issue in Europe is how to firefight the problems of the eurozone—get down interest rates and get the eurozone economy moving—rather than thinking through all the consequences of banking union and fiscal union in the way that my hon. Friend suggests.

[Mr Speaker]

I thank the Prime Minister and all colleagues for their succinctness, which enabled all 49 Back Benchers to contribute in well under an hour.

Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 17th October 2012 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

Q1. If he will list his official engagements for Wednesday 17 October.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to the servicemen who have tragically fallen since we last met for Prime Minister’s questions: Lance Corporal Duane Groom of 1st Battalion Grenadier Guards; Sergeant Gareth Thursby and Private Thomas Wroe of 3rd Battalion the Yorkshire Regiment; Sergeant Jonathan Kups of the Royal Electrical and Mechanical Engineers; Captain James Townley of the Royal Engineers; and Captain Carl Manley of the Royal Marines. Once again we are reminded of the immense danger our armed forces operate in to uphold our safety and our security. Their families and the whole country should rightly be proud of their heroic service, and we will always remember them.

I am sure that the House will also wish to join me in paying tribute to PC Fiona Bone and PC Nicola Hughes, who were killed—brutally murdered—in the line of duty on 18 September. The whole country has been deeply shocked and saddened by the loss of these two young, dedicated, exceptional officers. Our thoughts are with their families and with their colleagues at what must be a very, very difficult time.

I also know that the House would wish to join me in sending our heartfelt condolences to the family of Malcolm Wicks, who sadly passed away on 29 September. Those in all parts of this House will remember Malcolm as a real gentleman—a man of great integrity and compassion who put his constituents first, who worked across party lines, and who was a thoroughly decent man. He served the House with great distinction for 20 years, and I know he will be missed by all who knew him.

We must also pay tribute to another of Parliament’s great characters—it is hard to believe that he is not sitting right there in front of me—Sir Stuart Bell. Sir Stuart was hugely popular across the House and was honoured for his services to Parliament. We will always remember him as a passionate, dedicated Member of the House whose kindness, again, transcended the political divide. We send our sincere sympathies to his wife and family at this difficult time.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall have further such meetings later today.

[Mr Bain]

May I associate all right hon. and hon. Members with the Prime Minister’s tribute to the members of the armed forces and the police who died in the service of our country, and to their families; and also say how much we in this House, and the people of Middlesbrough and Croydon North, will miss Sir Stuart Bell and Malcolm Wicks?

Last week the Prime Minister promised that work would always pay, but this morning Baroness Grey-Thompson and the Children’s Society have revealed that his current plans for universal credit next year will mean that up to 116,000 disabled people in work could lose as much as £40 a week. Does not that say everything about how this divisive Prime Minister always stands up for the wrong people? At the same time as handing huge tax cuts to 8,000 people earning over £1 million a year he is going to penalise some of the bravest strivers in our country.

[The Prime Minister]

The hon. Gentleman raises an extremely serious issue; let me try to deal with it as fully as I can. The money that is going into disability benefit will not go down under universal credit; it will go up. The overall amount of money will go from £1.35 billion last year to £1.45 billion in 2015. Under the plans, no recipients will lose out, unless their circumstances change. All current recipients are fully cash-protected by a transitional scheme. On future recipients, we have made an important decision and choice to increase the amount that we give to the most severely disabled children, and there will be a new lower amount for less disabled people. That is a choice that we are making. As I have said, we are increasing the overall amount of money and focusing on the most disabled. That shows the right values and the right approach.

[Andrew George (St Ives) (LD)]

Q2. I congratulate the Government on the early introduction of the Groceries Code Adjudicator Bill. Farmers and third-world, developing-country producers desperately need protection from what the Competition Commission has described as the “bully-boy tactics” of some of the supermarket buyers. The Bill is welcome, but how quickly will the Government introduce this vital measure?

[The Prime Minister]

We are making progress with introducing the measure, which, as my hon. Friend says, is important. It is very important that we stand up for farmers and that they get a fair deal from supermarkets. On occasion, there have been unfair practices, such as the in-year retrospective discounts that have sometimes been proposed. I think that the Bill will be a major step forward.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to the six servicemen who have died since the House last met: Lance Corporal Duane Groom of 1st Battalion Grenadier Guards; Sergeant Gareth Thursby and Private Thomas Wroe of 3rd Battalion the Yorkshire Regiment; Sergeant Jonathan Kups of the Royal Electrical and Mechanical Engineers; Captain James Tanley of the Corps of Royal Engineers; and Captain Carl Manley of the Royal Marines. They all died heroically serving our country and showed the upmost bravery and sacrifice, and our condolences go to their families and friends.

I also join the Prime Minister in paying tribute to PCs Fiona Bone and Nicola Hughes. They remind us of the dangerous work that our police officers do day in, day out in the line of duty. Their death is a great loss to the Greater Manchester police, the communities they served and, most of all, of course, their families.

I also thank the Prime Minister for his very generous comments about the two Labour colleagues whom we have lost since we last met. Stuart Bell was the son of a miner and a long-standing Member of this House. He was passionate about European issues and served with distinction as a Church Commissioner. His death was incredibly sudden: his illness was diagnosed just a matter of days before he died. The condolences of Labour Members and, I know, the whole House go to his family.

Malcolm Wicks was one of the deepest thinkers in this House. He was a brilliant Minister. I know from my time as the Energy Secretary what a brilliant Energy Minister he was. He faced his illness with the utmost bravery. He knew what was going to happen to him, but he carried on writing, thinking, talking and, indeed, engaging with the work of this House. My last conversation with him was just before our party conference and he talked passionately about politics, as he always did. Our condolences go to his whole family.

Today’s unemployment figures are welcome, particularly the fall in youth unemployment. I am sure that we will all agree that too many people are still looking for work. The number of people out of work for a long period—over a year—remains stubbornly high. Will the Prime Minister tell us why he believes that the fall this quarter in unemployment is not yet being matched by the figures for long-term unemployment?

[The Prime Minister]

First, I thank the right hon. Gentleman for his generous remarks about those who have fallen, the brave police officers and the colleagues that we in the House have lost.

The unemployment figures are a good piece of news that should be properly welcomed and looked at, because a number of different things are happening: employment is up by 212,000 this quarter; unemployment is down by 50,000 this quarter; the claimant count has actually fallen by 4,000; and what that means is that since the election some 170,000 fewer people are on out-of-work benefits. What is remarkable about the figures is that they show that there are more women in work than at any time in our history and that the overall level of employment is now above where it was before the crash in 2008. We still have huge economic challenges to meet, we are in a global race, and we need to make a whole set of reforms in our country to education and welfare and to help grow the private sector, but this is positive news today.

Long-term unemployment is still too high. That is partly because of the big increase in unemployment at the time of the crash. We need to do more to deal with long-term unemployment. That is why the Work programme has helped 693,000 people already. We are prepared to spend up to £14,000 on an individual long-term unemployed person to get them back into work. We do have the measures in place to tackle this scourge.

[Edward Miliband]

Notwithstanding that, unemployment, youth unemployment, long-term unemployment and long-term youth unemployment are all higher than when the Prime Minister came to office. I do not think that he can attribute the issue with long-term youth unemployment to the crash that happened four years ago, because it has been rising steadily over the past year or 18 months, and it remains a big concern. The number of people out of work for more than a year is continuing to rise. Does he agree that the longer young people remain out of work, the greater the damage not just now, but to their long-term prospects and to our economy?

[The Prime Minister]

Of course the right hon. Gentleman is right. The longer that people are out of work, the worse it is for them and for our economy. That is why we have the youth contract and the Work programme, which is the biggest back-to-work programme since the war. He mentions the problem of long-term unemployment. I just remind him that in the last two years of the Labour Government, long-term unemployment almost doubled. We should hear about that before we get a lecture. On helping young people, it is noticeable that under this Government, 900,000 people have started apprenticeships. We are backing apprenticeship schemes and reforming our schools and welfare system, so that it pays for people to get jobs.

We face enormous economic challenges in this country. Nobody doubts that. We have to rebalance our economy because the state sector was too big and the private sector was too small. Since the election, there have been 1 million new private sector jobs, which more than make up for the inevitable loss of jobs in the state sector. We have a huge amount more to do, but reform welfare, reform our schools, boost our private sector, and Britain can be a winner in the global race.

[Edward Miliband]

On long-term unemployment, I just say to the Prime Minister that there are more people out of work for longer than at any time for two decades. That is happening on his watch.

I want to turn to one group in particular who are losing their jobs directly as a result of the Government’s policy. A year ago, the Prime Minister told me at the Dispatch Box:

“There is no reason for there to be fewer front-line officers.”—[Official Report, 30 March 2011; Vol. 526, c. 335.]

Will he tell the House how many front-line police officers have lost their jobs since the election?

[The Prime Minister]

The percentage of police officers on front-line duties has gone up. That is the key. Frankly, whoever won the last election would have had to reduce police budgets. Labour was committed to reducing police budgets and we had to reduce police budgets. We have been able to increase the percentage because we have cut the paperwork and taken difficult decisions about pay and allowances. What is remarkable is that while the percentage of officers on the front line is up, crime is down.

[Edward Miliband]

I had really hoped that, just for once, we would get a straight answer to a straight question. All the Prime Minister needs to do—Government Members will like this—is to take a leaf out of the police Minister’s book, because on Monday he told the House the truth. He said that there are 6,778 fewer front-line police officers than when they came to power. Why not just admit—[Interruption.] I do not think that the part-time Chancellor is going to help, but perhaps he is taking over the Home Office. This is another promise broken.

The Government are not just breaking their promises; it is their conduct as well. This is what the Mayor of London said—[Interruption.]

[Edward Miliband]

This is what the Mayor of London, the Prime Minister’s new best mate, said last year at the Conservative party conference:

“I reckon we need to…make it clear that if people swear at the police then they must expect to be arrested.”—[Interruption.]

The Chief Whip from a sedentary position says that he did not. Maybe he will tell us what he actually did say, which he has failed to do.

Yet according to the official police report,

“a man claiming to be the Chief Whip”

called the police “plebs”, told them they should know their place and used other abusive language. Can the Prime Minister now tell us: did the Chief Whip use those words?

[The Prime Minister]

What the Chief Whip did and what the Chief Whip said were wrong. I am absolutely clear about that, and I have been clear throughout. That is why it is important that the Chief Whip apologised. That apology has been accepted by the officer—[Interruption.]

[Mr Speaker]

Order. I said a moment ago that the Leader of the Opposition must and would be heard. The same goes for the Prime Minister. He must and will be heard.

[The Prime Minister]

What the Chief Whip did and said was wrong, and that is why it is important that he apologised, and apologised properly. That apology has been accepted by the officer concerned, and it has been accepted by the head of the Metropolitan police. That is why this Government will get on with the big issues of helping Britain compete and succeed in the world.

[Edward Miliband]

No straight answers on police numbers, and no straight answers on the Chief Whip. [Interruption.] The Under-Secretary of State for Wales says that we need real issues, but I think abusing police officers is a real issue. Just because a police officer has better manners than the Chief Whip, it does not mean that the Chief Whip should keep his job.

If a yob in a city centre on a Saturday night abused a police officer, ranting and raving, the chances are that they would be arrested and placed in the back of a police van, and rightly so. The Prime Minister would be the first in the queue to say that it was right. But while it is a night in the cell for the yobs, it is a night at the Carlton club for the Chief Whip. Is that not the clearest case there could be of total double standards?

[The Prime Minister]

This apology has been accepted by the police officer, and it has been accepted by the head of the Metropolitan police. It is clearly not going to be accepted by the Leader of the Opposition, who does not want to talk about what we need to do in this country to get our deficit down because he has got no plans. He does not want to talk about how we build on our record in employment, because he has got no plans. He does not want to talk about how we reform welfare, because he is opposed to welfare caps. That is the truth—he wants to discuss these issues because he has nothing serious to say about the country.

[Edward Miliband]

Here is the most extraordinary thing: the Government say that I practise class war, and they go around calling people plebs. Can you believe it? I have to say, it is good to see the Cabinet in their place supporting the Chief Whip in public, but from the newspapers, what are they saying in private? That he is “completely undermined” and that his position is untenable. In other words, he’s toast. That is the reality. Here is the truth about this Government: while everybody else loses their jobs, the Chief Whip keeps his. If you are a millionaire you get a tax cut, if you are everybody else you get a tax rise. [Interruption.]

[Edward Miliband]

Maybe he will tell us whether he is getting the tax cut.

The Government are totally out of touch. With this Government, it is one rule for those at the top, another rule for everybody else.

[The Prime Minister]

Now we know that the right hon. Gentleman wrote those questions yesterday, before unemployment fell. Because he obviously was not listening earlier, let me remind him that employment is up by 212,000—that is a success. Unemployment is down 50,000 this quarter—that is a success. The claimant count is down 4,000—that is a success. Typical! He comes to this House and he has written out his clever political questions, but he does not care what is really happening in our economy.

[Glyn Davies (Montgomeryshire) (Con)]

Over two weeks ago, April Jones, a five-year-old little girl, was abducted when playing with her friends in Machynlleth in my constituency, a very quiet, always well-behaved town. Will my right hon. Friend the Prime Minister join me in paying tribute to the truly amazing way in which the people of Machynlleth, the Dyfed-Powys police and the mountain rescue teams have come together and committed to the ongoing search for April?

[The Prime Minister]

I will certainly join my hon. Friend in doing that. I think the whole country has not only been shocked by these appalling events, but that frankly it has been lifted and incredibly impressed by the response of the community in Machynlleth, and everything that everybody has done to help the police and the emergency services. We have seen a whole community come together, not just in grief but in action to help this family, and it is a huge credit to everyone involved.

[Chris Williamson (Derby North) (Lab)]

Q3. At the Prime Minister’s energy summit last year, he promised faithfully that he would take action to help people reduce their energy bills. Will he tell the House and the country: how is it going?

[The Prime Minister]

We have encouraged people to switch, which is one of the best ways to get energy bills down. I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers—something that Labour did not do in 13 years, even though the Leader of the Labour party could have done it because he had the job.

[Several hon. Members]

rose—

[Dr Julian Lewis (New Forest East) (Con)]

Q4. Whether he remains committed to the continuation of the UK’s Trident nuclear deterrent after the Vanguard submarines are withdrawn from service.

[The Prime Minister]

My hon. Friend will be delighted to know that the answer is yes, we are committed to retaining an independent nuclear deterrent based on the Trident missile system. That is why we have continued with the programme to replace the Vanguard class submarines, including placing initial design contracts with BAE Systems.

[Dr Lewis]

That is indeed an excellent answer. Given that a part-time nuclear deterrent would be dangerously destabilising, will the Prime Minister confirm that the British Trident successor submarines must and will operate on the basis of continuous at-sea deterrence?

[The Prime Minister]

My hon. Friend is absolutely right to raise this issue. One of the key elements of the credibility of our deterrent has been that it is continuously at sea, and the Royal Navy takes immense pride in having been able to deliver that without a break over so many years. I have met some of the crews and visited some of the submarines. What they do is incredibly impressive and I pay tribute to them for the service that they provide. Yes, being continuously at sea is a key part of our deterrent.

[Kevin Brennan (Cardiff West) (Lab)]

Q5. In a parliamentary answer to my hon. Friend the Member for Wrexham (Ian Lucas) yesterday, the Government said: “we remain very concerned by continuing reports of Rwandan support for the M23 rebels”—[Official Report, 15 October 2012; Vol. 551, c. 74W.]who are killing, maiming and raping in eastern Congo. Why then did the Government Chief Whip authorise the payment of £16 million of British taxpayers’ money to Rwanda, as his parting shot on his last day as International Development Secretary?

[The Prime Minister]

First, may I wish the hon. Gentleman happy birthday for yesterday? He was seen celebrating it, and I would like to join in that— [Interruption.] I am sorry I was not invited.

The hon. Gentleman raises a very important point. I am clear: Rwanda has been, and continues to be, a success story of a country that has gone from genocide and disaster to being a role model for development and lifting people out of poverty in Africa. I am proud of the fact that the last Government, and this Government, have continued to invest in that success. But I am equally clear that we should be very frank and firm with President Kagame and the Rwandan regime that we do not accept that they should be supporting militias in the Congo or elsewhere. I have raised that issue personally with the President, but I continue to believe that investing in Rwanda’s success, as one of those countries in Africa that is showing that the cycle of poverty can be broken and that conditions for its people can be improved, is something we are right to do.

[John Glen (Salisbury) (Con)]

Q6. Today, unemployment figures show a reduction of 62,000 in the number of 16 to 24-year-olds who were out of work in the three months to August, and that employment is now at its highest level since records began in 1971. I am sure the Prime Minister will want to commend this Government’s economic policies to the whole House, rather than having more borrowing and spending from the Opposition.

[The Prime Minister]

My hon. Friend makes an important point. What we need is a rebalancing of the economy. We need growth in our private sector, and it is notable that we have a million new private sector jobs since the last election. That has more than made up for the job losses in the public sector. There is more we need to do to tackle youth and long-term unemployment, but today’s figures should be welcomed.

[Julie Hilling (Bolton West) (Lab)]

Q7. My constituent Aaron Moon lost his leg in Afghanistan. He then lost his disability living allowance. The Prime Minister promised to look after ex-servicemen and women. What has happened?

[The Prime Minister]

I have insisted on a specific carve-out from the new personal independence payment for limbless ex-servicemen, and they will be separately looked after through the Ministry of Defence.

[Andrew Bridgen (North West Leicestershire) (Con)]

Q8. The House agrees that negative campaigning deliberately designed to scare vulnerable people demeans politics. A campaign to “Save Our Hospital” when the hospital is not closing is possibly the worst example that I have ever seen. Does my right hon. Friend agree that Labour’s campaign in Corby and east Northamptonshire is an absolute disgrace?

[The Prime Minister]

My hon. Friend is entirely right. Labour MP after Labour MP is trooping up to Corby and claiming that the hospital is not safe when they know that that it is simply not true. The local newspaper is now backing up the fact that the hospital is being invested in by this Government, because unlike the party opposite—[Interruption.] Yes, the right hon. Member for Morley and Outwood (Ed Balls) is over there on the Opposition Benches. You know what? He is going to stay there for a very, very long time. The reason he will stay there is the reason why this country is in a mess—it is because of the borrowing, the spending and the debt that he delivered. His answer is more borrowing, more spending and more debt, so he should get himself comfortable.

[Chris Bryant (Rhondda) (Lab)]

Q9. Why will the Prime Minister not—[Interruption.] I am over here. Why will the Prime Minister not publish all the texts, e-mails and other forms of correspondence between himself and his office and Rebekah Brooks, Andy Coulson and News International, so that we can judge whether they are relevant? Is it because they are too salacious and embarrassing for the Prime Minister? [Interruption.] I would not smile if I was him; when the truth comes out, he will not be smiling. Or will he not publish the correspondence because there is one rule for him and another for the rest of us?

[The Prime Minister]

Mr Speaker, before answering this question, I would like hon. Members to recall that the hon. Gentleman stood up in the House and read out a whole lot of Leveson information that was under embargo and that he was not meant to read out, much of which about me turned out to be untrue, and he has never apologised. Do you know what? Until he apologises, I am not going to answer his questions—[Interruption.]

[Mr Speaker]

Order. I hope the House will have the self-restraint and courtesy to hear Mr Bebb.

[Guto Bebb (Aberconwy) (Con)]

Q10. Thank you, Mr Speaker. Employment levels in Wales have increased by 40,000 in the last quarter, not least because of the contribution of self-employment. Will the Prime Minister therefore join me in welcoming the extension of the new enterprise allowance, which has already resulted in the creation of more than 8,000 new businesses?

[The Prime Minister]

I will certainly join my hon. Friend in that. This is an important announcement, because the new enterprise allowance gives people who become unemployed the chance to set up their own business and enterprise. Under the current rules, people must wait three months before being able to access that programme, but under our plans, they will be able to access it from day one of becoming unemployed. I want to see many more new businesses started up in our country to build on the record of last year, when more businesses were established in Britain than in any year in our recent history.

[Chris Ruane (Vale of Clwyd) (Lab)]

Q11. When in opposition, the Prime Minister said:“all too often, when you put the questions to the Minister, the answer is pretty much a ‘not me guv’ shrug of the shoulders…There is a serious accountability problem with our political system.”Which of his Cabinet Ministers will take responsibility for the fiasco of the west coast main line?

[The Prime Minister]

The Transport Secretary came to the House and made a full statement and gave a full apology for what had happened. I must ask the House this: can we remember a Labour Minister ever apologising for anything? Anyone? None! [Interruption.]

[Mr Speaker]

Order. I call Sir Nick Harvey.

[Sir Nick Harvey (North Devon) (LD)]

Returning to the Trident issue, has the Prime Minister looked at the severe cost pressures facing defence at the very moment the Trident replacement has to be paid for? Joint strike fighter airplanes, Type 26 frigates, unmanned aircraft and Army vehicles all need paying for at much the same time. This has to come out of the defence budget, and austerity will be with us for some time yet, so will he keep an open mind about how exactly to replace our nuclear deterrent?

[The Prime Minister]

All the things that my hon. Friend lists are programmes that are fully funded and will be properly invested in, because, as he well knows—because he played a major role in it—the Government have sorted out the defence budget. Having carefully considered the issue of the nuclear deterrent, I do not believe that we would save money by adopting an alternative nuclear deterrent posture. Also, if we are to have a nuclear deterrent, it makes sense to ensure we have something that is credible and believable; otherwise there is no point in having one at all.

[Ian Paisley (North Antrim) (DUP)]

Q12. There are record levels of support for the British Union. The Prime Minister will know that according to a recent poll only 7% of the populace of Northern Ireland want a united Ireland, and that only rises to 32% in 20 years, if the question is asked then. Does he agree that, following the agreement he signed up to this week to ensure that a single, decisive question is asked on the Scottish and British Union, it is now up to him and the House to unite in a campaign to maintain, sustain and support the Union, and keep MacNeil and Wishart with us forever?

[The Prime Minister]

I am delighted to answer the hon. Gentleman’s question in the most positive way I can. I am pleased that we have reached an agreement with the Scottish Government to have a single, simple question in a referendum that must be held before the end of 2014, so that we can put beyond doubt the future of the United Kingdom. I hope that everyone will vote to keep the UK together. I know that it will have cross-party support, and I hope that politicians of all parties will agree to share platforms. I have always wanted to share a platform with Ian Paisley. Maybe I will get my chance.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Recently, a lap-dancing club in Ampthill, a rural market town in my constituency, has been granted a licence. The one thing that residents of Mid Bedfordshire have learned is that it does not matter whether it is a Wembley-sized incinerator or a lap-dancing club in a beautiful market town, the wishes of local people have absolutely no weight in planning law. Does the Prime Minister agree that it is time we amended planning law, so that, when catastrophic applications come forward that blight the environment people live in and which greatly distress them, their views and voice are heard?

[The Prime Minister]

My hon. Friend speaks for many people about the frustration that the planning system can sometimes deliver. I would make two points about where we are making progress. First, we have changed the licensing laws to give the planners greater power to alter licences, and I believe that that can apply to the sorts of premises to which she refers. Secondly, of course, under our plans, people can write neighbourhood plans, which give far greater control to residents over the shape of their future community. I encourage her, however, to take up the specific issue with the Department for Communities and Local Government, to see whether there is more that we can do.

[Tony Lloyd (Manchester Central) (Lab)]

Q13. I thank both Front Benches for their tributes to Fiona Bone and Nicola Hughes, who were murdered in Greater Manchester recently. On the theme of policing, as the House has heard, the Home Office admits that nearly 7,000 front-line police personnel have now disappeared from our system. The Prime Minister promised that that would not be the case, and the public do not want it, so will he give a straightforward answer to what I think will be my last question to him in the House and give a commitment that there will be no more cuts to policing in England and Wales, whatever happens in the budgetary process?

[The Prime Minister]

Of course, no one wants to prejudge the wisdom of the Greater Manchester electorate, but I wish the hon. Gentleman well, if he is successful. I make to him the point that I hope the chief constable of his own force will make to him. It was made very effectively when Chief Constable Fahy of Greater Manchester police said that

“the effectiveness of policing cannot be measured by the number of officers…but by reductions in crime”.

Crime in Greater Manchester is down 12%. We need to recognise that there are difficult decisions. Frankly, the Labour party was committed to even greater cuts in police budgets than we have delivered. The key is this: can we crack down on paperwork, can we help get the police out on the beat, can we help them do the job they do and can we cut crime? The answer, in this case, is, “Yes, we can.”

[Gavin Barwell (Croydon Central) (Con)]

Q14. May I join the Prime Minister and the Leader of the Opposition in paying tribute to Malcolm Wicks, whose memorial service is at Croydon minster this Friday? He was an outstanding local MP, a thoughtful, decent man and a good friend. Is not one way in which we can honour his memory to continue to improve our national health service, so that more and more people beat cancer and do not have their lives so tragically cut short?

[The Prime Minister]

My hon. Friend speaks for the whole House in what he says about Malcolm Wicks. I understand that he often used to drive Malcolm home to Croydon after the vote—I think Malcolm referred to his car as “the cab”. The fare apparently was a bottle of wine at Christmas time—we will make sure the Inland Revenue lays off that, but it was a very good arrangement between Members.

My hon. Friend is absolutely right: one of the greatest things we can do to remember Malcolm is to ensure the continued success of the cancer drugs fund, which has helped over 20,000 people, and make sure that people can get urgent treatments, as well as urgent drugs.

[Natascha Engel (North East Derbyshire) (Lab)]

The Secretary of State for Education said this weekend that if there were a referendum on Britain’s continued membership of the EU, he would vote to leave. A third of the Cabinet agree with him. How would the Prime Minister vote?

[The Prime Minister]

As I said, I do not want an in/out referendum, because I am not happy with our leaving the European Union, but I am not happy with the status quo either. I think what the vast majority of this country wants is a new settlement with Europe and then that settlement being put to fresh consent. That is what will be going in our manifesto, and I think it will get a ringing endorsement from the British people.

[Mr Speaker]

Last but not least, Sir Tony Baldry.

[Sir Tony Baldry (Banbury) (Con)]

Q15. Does my right hon. Friend agree that there was no structural deficit at the top of the boom, as claimed by the shadow Chancellor?

[The Prime Minister]

My hon. Friend makes an important point, which is this. The IMF report out this week shows that the structural deficit in 2007, at the height of the boom, was 5% of our GDP, or £73 billion. The shadow Chancellor said there was no structural deficit. I think this really demonstrates just how little Labour has learnt. We have talked about our plans for the British economy—how we are going to help it compete and succeed. We know Labour’s plans for this weekend: to go on a giant march with its trade union paymasters. That is how the Leader of the Opposition is going to be spending his weekend—on the most lucrative sponsored walk in history.