Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 8th February 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

Before I list my engagements, I am sure the whole House will wish to join me in paying tribute to Her Majesty the Queen—[Hon. Members: “Hear, hear.”]—in this historic week marking the 60th anniversary of her accession to the throne. Her Majesty’s 60 years of remarkable leadership and dedicated public service are an inspiration to us all and something that the whole country and the whole Commonwealth can be immensely proud of. Members will have the opportunity to pay individual tributes during debate on the humble address on 7 March.

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

[Mr Slaughter]

I am sure the whole House, and not least myself, will wish to join the Prime Minister in his warm tribute to Her Majesty. [Hon. Members: “Hear, hear.”]

In March last year the Prime Minister said:

“There is no reason for there to be fewer front-line police officers.”—[Official Report, 30 March 2011; Vol. 526, c. 335.]

Will he confirm that front-line officer numbers have been cut in 40 out of 43 police forces?

[The Prime Minister]

The proportion of officers on the front line is up, and I am sure the hon. Gentleman will want to join me in congratulating Mayor Boris Johnson on his excellent record on crime in our capital. Total crime is down, violent crime is down on buses and tubes, 11,000 knives and guns have been taken off our streets, and there are 1,000 more officers on the streets of London at the end of his term than at the beginning. That, together with his reminder of the rule on the dangers of tweeting, is a good start to the day.

[Mr David Amess (Southend West) (Con)]

Does my right hon. Friend share my disappointment at the overthrow yesterday of the first democratically elected President of the Maldives in a coup d’état? Given our historical links with the islands, will the Government, by way of a message, do all they can to ensure that no violence results and that the democratic institutions remain?

[The Prime Minister]

My hon. Friend is right. This country does have strong links with the Maldives and a good relationship with President Nasheed, but we have to be clear. President Nasheed has resigned, and we have a strong interest in the well-being of several thousand British tourists and in a stable and democratic Government in the Maldives. Our high commissioner is in the capital now and meeting all the political leaders. We call on the new Government to demonstrate their respect for the rights of all political parties and their members, and to ensure that the constitution is upheld. We advise British tourists to avoid non-essential travel to Malé island, and those using Malé airport and the tourist resorts should exercise caution.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Her Majesty the Queen as we celebrate her diamond jubilee. Her dedication to the country and to public service is an inspiration and an example to us all, and we all look forward to the official celebrations later this year, which will enable us to celebrate both Her Majesty and our country.

On the day the Prime Minister completed his NHS listening exercise, he said:

“some of the people who worked in our NHS were sceptical of our changes. Today, we are taking people with us. It’s in this spirit of unity that we want to continue.”

Why does he think he has failed?

[The Prime Minister]

Today, 95% of the country is covered by general practitioners who are not actually supporting our reforms; they are implementing them. Just today—[Interruption.]

[Mr Speaker]

Order. The House must calm down. There is a long way to go, so let us hear the answers. There will be plenty of time. Calm.

[The Prime Minister]

Thank you, Mr Speaker. Just today, 50 foundation trusts have written to the newspapers in support of our reforms and objecting to what Labour is proposing, and the signature at the top of the list, which the right hon. Gentleman might not have noticed, is that of one Anne Campbell, the former Labour MP for Cambridge. She, running her local foundation trust, supports the reforms. That is what happens: Labour MPs leave this House and start implementing coalition policy.

[Edward Miliband]

Even the right hon. Gentleman does not believe that nonsense he just came out with. Last Friday the Royal College of General Practitioners said that his health Bill would

“cause irreparable damage to patient care and jeopardise the NHS.”

[Interruption.] The Health Secretary is shouting from a sedentary position—from some distance away, I notice. It is nice to see him here. The Prime Minister says that he wants the voice of doctors to be heard in the NHS. Why does he not listen to them?

[The Prime Minister]

It is always good to get a lecture on happy families from the right hon. Gentleman. I care passionately about our NHS, not least because of what it has done for my family and because of the amazing service I have received. I want to see that excellent service implemented for everyone, and that means two things: we have to put more money into the NHS, which we are doing, but we also have to reform the NHS. He used to be in favour of reform. Let me read him something. Who said:

“to safeguard the NHS in tougher fiscal times, we need sustained reform.”?

That was in the Labour manifesto at the last election. Because the NHS is important, we are committed to £12.5 billion in this Parliament, yet his health spokesman, who is sitting right there, said that it would be “irresponsible” to spend more money on the NHS. The Opposition are not in favour of the money. They are not in favour of the reform. They are just a bunch of opportunists.

[Edward Miliband]

Isn’t this interesting? The Prime Minister says that this is all about reform, but the Tory Reform Group has come out against these proposals. It comes to something when even the Tories do not trust the Tories on the NHS. Let us hear what Clare Gerada, chair of the Royal College of General Practitioners—[Hon. Members: “Oh!”] So when the people Government Members want to put at the heart of the NHS say things about their Bill, they just groan. That says it all about those on the Government Benches. Clare Gerada said:

“This bill is a burden. It makes no sense, it is incoherent… It won’t deal with the big issues… and it will also result in a health service that certainly will never match the health service that we… had 12 months ago.”

Which part of that does the right hon. Gentleman not understand?

[The Prime Minister]

Let us look at what has happened to the NHS over the past 18 months—[Interruption.] Yes, let us look at the figures: 100,000 more patients treated every month; 4,000 extra doctors since the election; the number of clinical staff up; the level of hospital-acquired infections down; the number of people who are in mixed-sex wards down by 94%. That is what is happening, because there is a combination of money going in and reform.

Now, we know what happens if we do not put in the money and do not undertake the reform, because there is one part of the NHS which is run by Labour, and that is in Wales. Let us have a look at what is happening to the NHS in Wales. Labour has cut the money, and one third of people are waiting longer than 18 weeks. That is what is happening in Labour’s NHS, and if we did not put the money in and did not have the reform, it would happen right here, too.

[Edward Miliband]

I am not surprised that the right hon. Gentleman is getting so agitated, because he thought that the NHS was his way to modernise the Conservative party, and I am afraid that it is coming apart. I will tell him why: it is because the promises he made before the election are coming back to haunt him. We all remember the promise of no more top-down reorganisation. Now he says that he knows better than the doctors, better than the nurses, better than the midwives and better than the patients associations—people who day in, day out rely on and devote their lives to the health service. This is a matter of trust in the Prime Minister. Can he honestly look people in the health service in the eye and say that he has kept his promise of no more top-down reorganisation?

[The Prime Minister]

What we are doing is cutting the bureaucracy in the NHS. We are taking out £4.5 billion of bureaucracy which will be ploughed into patient care. If you don’t support the reform, you won’t see that money go into operations, doctors, nurses, hospitals, health care assistants. That is what is actually happening in the NHS, but there is one group of people I will not listen to, and that is the people who ran the NHS under Labour. This is what they did: £6 billion wasted on the NHS computer; £250 million spent on private sector operations that were never carried out. We still have private finance initiative agreements whereby we pay £300 every time someone changes a light bulb. That is what we got from Labour. We are putting the money in, we are putting the reform in, the number of operations is up, the waiting times are down, the NHS is improving, and that is the way it is going to stay.

[Edward Miliband]

I shall tell the right hon. Gentleman about our record on the NHS: the shortest waiting times in NHS history; more doctors and nurses than ever before; the highest level of patient satisfaction ever in the health service.

But everyone will have heard a Prime Minister unable to defend the promise that he made: the promise of no more top-down reorganisation—a Prime Minister who has broken his word. The reality is this: all his attention is on this pointless, top-down reorganisation, and the front line is suffering: the number of people waiting more than 18 weeks—up, under him; A and E targets being missed; cancelled operations. Why will he not just give up, stop wasting billions and drop his Bill?

[The Prime Minister]

If the Opposition’s record was so good, why were they thrown out at the last election?

Now, let me just—[Interruption.] Let me— [Interruption.]

[Mr Speaker]

Order. I am worried about Opposition Members. They must calm themselves and do so straight away.

[The Prime Minister]

Let me remind the right hon. Gentleman of the clear test that he set for the reforms and for the Government. He said that the test was whether waiting times and waiting lists would come down. Let me now give him the figures: in-patient waiting times, down; out-patient waiting times, down; the number of people waiting more than a year, down to its lowest ever level; the number of people waiting for six months, down to its lowest ever level; and, indeed, the number of people on the waiting list—what he said was the clear test—is down. This is what it proves about the Labour leader: even when he moves the goalposts, he can’t put it in the back of the net.

[Edward Miliband]

The person who is moving the goalposts is the Prime Minister. The reality is that the key test that was set for the health service was the number of people waiting more than 18 weeks, and that number is up 43% since the general election. However much he twists and turns, that is the reality.

In his heart of hearts, the Prime Minister knows that the Bill is a complete disaster. That is why his aides are saying that the Health Secretary should be taken out and shot, because they know it is a disaster. The reality about the Bill is this: the doctors know that it is bad for the NHS; the nurses know that it is bad for the NHS; and patients know that it is bad for the NHS. Every day the Prime Minister fights for the Bill, every day trust in him on the NHS ebbs away and every day it becomes clearer that the health service is not safe in his hands.

[The Prime Minister]

Let me tell the right hon. Gentleman that the career prospects of my right hon. Friend the Health Secretary are a lot better than his. That is what this is about. This is not a campaign to save the NHS; this is a campaign to try to save the right hon. Gentleman’s leadership. I make this prediction: the NHS will go on getting better and his prospects will go on getting worse.

[Gordon Birtwistle (Burnley) (LD)]

When the Work programme was introduced in Burnley in October 2010, 66% of people there were economically active; since then, the figure has climbed to 75%. Would the Prime Minister like to congratulate the people of Burnley—and in particular, Vedas Recruitment—for that success?

[The Prime Minister]

I certainly join my hon. Friend in congratulating not only the people in Burnley but the people conducting the Work programme and our welfare reforms. What we are seeing is more people becoming able to work and therefore able to enter the work force and raise not only the country’s living standards but their own, too.

[Mark Hendrick (Preston) (Lab/Co-op)]

Q2. The people of Preston are furious that the Indian Government have selected a French company as their preferred bidder for the Indian air force jet contract. The Prime Minister repeatedly talks about rebalancing the British economy, but this is a major blow to manufacturing in this country. Other European leaders go to help their companies get major contracts. Why is this weak Prime Minister not doing that and why have we not got the contract with the Indian Government?

[The Prime Minister]

The hon. Gentleman ought to think about the fact that all European leaders are backing the Eurofighter project—it is a German project, an Italian project, a Spanish project and a British project, and that is how it should be. I am very disappointed by what has happened in India, but Eurofighter is not out of the contest and we need to re-engage as hard as we can to make sure that we get the best deal for all those workers in Britain who make Eurofighters. [Interruption.] The hon. Gentleman is shouting from a sedentary position, but this is something that ought to unite parties in this House—getting behind our great defence producers.

[Penny Mordaunt (Portsmouth North) (Con)]

In order that a constituent of mine could access the drugs and treatment that she was entitled to under the NHS constitution, her GP, her consultant, her specialist oncologist, the Secretary of State for Health and I had to write a total of 70 appeal letters. When will health care professionals be able to decide what treatments their patients get?

[The Prime Minister]

My hon. Friend raises an important point. Since the introduction of the cancer drugs fund under this Government, 10,000 more people have been able to get cancer drugs, which are so essential. Let me tell the House one thing that would really damage cancer treatment in this country—it is the proposal from the Labour party to cap at 5% any private sector involvement in our hospitals. The Royal Marsden, one of the best cancer hospitals in the country, would have to cut by a quarter the services that it delivers. What a crazy, left-wing plan, which only the Leader of the Opposition could come up with.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Q3. In three months’ time, just before the Olympics, Abu Qatada, a truly dangerous man, will be roaming the streets of London with his mobile phone and internet access, thanks to the Prime Minister’s having abolished control orders and house arrest provisions. How can the Prime Minister justify putting the public’s right to life at risk to give over to the Liberal Democrats on their demands to abolish control orders? It is disgusting.

[The Prime Minister]

The situation with Abu Qatada is completely unacceptable. As I said when I went to Strasbourg to make a speech to the Council of Europe about this issue, it is not acceptable that we end up with a situation where we cannot try, detain or deport someone in our country who threatens to do us harm. That is why the Government will do everything they can, working with our Jordanian friends and allies, to make sure that he can be deported. Again, instead of the hon. Gentleman sniping about this, the whole House ought to unite to help sort this out.

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

As recently as last September, only a tiny handful of the 165 acute mental health adult in-patient beds in Hampshire were vacant, yet the trust concerned proposes to cut those 165 beds to 107, replacing them with something called a hospital at home, or a virtual ward. Given my belief that the statistics on which that decision is based are inconsistent and unreliable, will the Prime Minister support my call for independent experts from the Audit Commission to look at those figures before those beds are closed?

[The Prime Minister]

My hon. Friend makes an important point. Of course, we are putting extra resources into the NHS, but there needs to be a clear series of tests—as there is now under our plans—before any facilities are changed or closed. That is about ensuring that there is GP backing for what is proposed, and ensuring that any such changes will improve the health of the area. I will happily look at the issue that my hon. Friend raises, and ensure that the Department of Health engages on it with him.

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

Q4. Four police authorities, including one that I share with the Chancellor, have just started buying Hyundai cars imported from Korea. Add to that the Thameslink fiasco and that of the Olympic tickets—when will we see some leadership from the Prime Minister on public procurement in this country?

[The Prime Minister]

The most important thing in police procurement is that police forces get together and procure together to cut their costs. We have all lost count of the times spent wandering through police stations and seeing countless different types of vehicle, all costing a large amount of money. What the public want is police on the streets, not money spent on unnecessary procurement.

[Andrew Stephenson (Pendle) (Con)]

Q5. The Prime Minister will have seen this morning’s Defence Committee report on Libya. What steps is he taking to ensure that the UK will be fully able to evacuate all UK nationals from conflict zones, and reduce our reliance on civil charter aircraft?

[The Prime Minister]

My hon. Friend raises an important point. I think that the Libya evacuation, and other potential evacuations in a dangerous and unstable world, have brought home to us the importance of having transport aircraft in the Ministry of Defence and the RAF. I can announce today that because the MOD’s finances are now better run and better managed, and because we have found savings, we will be able to purchase an additional C-17 for the RAF. This aircraft is becoming an absolutely brilliant workhorse for the RAF, bringing men and material into a war zone such as Afghanistan, and evacuating civilians in times of need. It is an important investment for the country, and I am glad to announce that we can make it today.

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

May I first associate myself with the tributes to Her Majesty the Queen?

Yesterday, the all-party independent group on stalking published its report. The Prime Minister knows of my interest in that subject, and the Government consultation concluded yesterday. Will he please meet me and a small group of members of that all-party group to discuss the urgent need for a stalking law?

[The Prime Minister]

We take this issue seriously, and I would be happy to meet with the right hon. Gentleman and discuss it. I know that he has had conversations with the Home Office. We all want to get the issue right, and if there is a need for legislative changes, there may well be opportunities in the next Session for that sort of criminal justice legislation. I will happily meet the right hon. Gentleman and talk with him about it.

[David Rutley (Macclesfield) (Con)]

Q6. During apprenticeship week I am proud to highlight the fact that Macclesfield college has increased its number of apprenticeships from nine to 160 over the past three years, and that the Government have increased the number of apprenticeships by 177,000 in the past year alone. Does my right hon. Friend agree that achievements such as those illustrate the importance of apprenticeships, and the commitment that is required to give them the focus, attention and recognition that they deserve?

[The Prime Minister]

My hon. Friend is entirely right. One of the most important investments that we can make in the future industrial base of this country and in helping young people is in apprenticeships. The number of apprenticeships has increased by a staggering 60% over the past year, and 457,000 people are starting apprenticeships. In apprenticeship week, it is important to stress what we are doing to get over the objections that people have had in the past, and to ensure that apprenticeships are more easily taken up by small businesses through the payment of a simple fee. We must ensure that we have more higher-level apprenticeships to show that apprenticeships are every bit as good as having a university degree, and often involve a university degree. We must also cut bureaucracy by allowing big businesses to run apprenticeship schemes themselves, rather than doing it via a training provider. All those things will make a big difference.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Q7. Why have the Government not lodged an appeal against the Abu Qatada judgment? Aren’t you being dangerously complacent, Prime Minister?

[The Prime Minister]

We are doing everything we can to get this man out of the country. The absolutely key thing is to get an agreement with Jordan about the way he will be treated, because the European Court of Human Rights has made a very clear judgment. I happen to think it is the wrong judgment, and I regret that judgment. This guy should have been deported years ago. Nevertheless, if we can get that agreement with Jordan, he can be on his way.

[Julian Smith (Skipton and Ripon) (Con)]

Q8. Complex employment law makes small businesses nervous about hiring new staff. Does the Prime Minister agree that we need a simpler alternative for our smallest firms on dismissal rules?

[The Prime Minister]

My hon. Friend is right to raise this issue. If every small business in the country hired an additional worker, that would go a long way to curing both long-term youth unemployment and total unemployment at one stroke. We have got to make it easier for businesses to take people on. One of the key considerations for businesses is how difficult it is to let someone go if it does not work out. That is why extending to two years the amount of time that someone has to work before they get access to a tribunal will make a real difference in small business employment.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

We have heard from the Prime Minister how the Italian and German Governments are out there fighting for British jobs. Will he tell us exactly how many phone conversations he had directly with the Indian Prime Minister about the Typhoon bid, and when the last conversation took place?

[The Prime Minister]

I raised this issue with the Indian Prime Minister repeatedly on my visit to India, and indeed at the G20 in Cannes, but let me remind the hon. Lady of one important fact. When I loaded up an aeroplane with British business people, including from businesses like Rolls-Royce, and took them around the Gulf to sell our defence equipment, who was it that attacked me? Who was it that put out press releases? Who is it that does not stand up for British industry, British defence companies and British jobs? It is Labour.

[Steve Baker (Wycombe) (Con)]

Q9. On Monday I visited the offices of the Bucks Free Press to hear what my constituents have been saying about proposed changes to health services at Wycombe hospital. I can tell the Prime Minister that Labour’s tragic legacy in my constituency is distrust and despair. Does he agree with me that the right way to deliver local accountability in health care in our constituencies is clinical commissioning and foundation trust status?

[The Prime Minister]

I think my hon. Friend is entirely right. The whole point of the reforms is to put the power in the hands of local doctors, so that they make decisions on behalf of patients and based on what is good for health care in their local area. We may well find that the community hospitals that were repeatedly undermined by Labour will actually get a great boost, because local people and local doctors want to see them succeed. That is what our reforms are all about.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

The PIP implant saga has left 40,000 women sick with anxiety because of faulty medical products, and now they are being failed by private clinics and by an NHS that is dithering about what to do with them. In this saga we can see the future of a privatised NHS, so will the Prime Minister pledge to support those women in the NHS now and claim against the clinics later, and will he drop the Health and Social Care Bill so that we do not have this happening again across the NHS?

[The Prime Minister]

Let me take the hon. Lady’s question in two halves. She is entirely right about the scandal of the PIP implants. The Government have made it absolutely clear that we will offer every one of those women a free consultation and ensure that we do everything we can on the NHS to help them. It is an absolute scandal, and the private clinics that carried out those operations should feel the maximum pressure to undo the harm that they have done.

On the issue of greater competition and choice within the NHS, I think the hon. Lady should listen to past Labour politicians who have themselves said that actually, greater choice, greater competition and the involvement of the private sector can help to raise standards in our NHS system. That is why we should support it.

[Caroline Dinenage (Gosport) (Con)]

Q10. The threat to shipbuilding jobs at Portsmouth dockyard places a question mark over not only 1,500 livelihoods at BAE Systems but 32,000 jobs in the wider regional supply chain. I know that the Prime Minister shares my concerns about that, but will he commit to do all he can to protect that site, where they have been building warships for more than 500 years?

[The Prime Minister]

My hon. Friend is absolutely right to speak up for Portsmouth, for her constituents and for shipbuilding. BAE Systems has not approached the Government with any proposal to rationalise shipbuilding in the UK. As far as I am aware, no decisions have yet been taken by the company. On this Government’s commitment to the Royal Navy, we are building the new frigates, the global combat ship and the hunter-killer submarines. We have plans for replacing Trident, and plans for aircraft carriers are well under way. That is a major punch for the Royal Navy, which I strongly support.

[Mrs Mary Glindon (North Tyneside) (Lab)]

Q11. Treasury tax raids on North sea oil and gas are putting 1,500 jobs at Offshore Group Newcastle in North Tyneside at risk. I ask the Prime Minister not to be complacent about north-east jobs, but to incentivise offshore development and guarantee tax relief on platform decommissioning in the Budget, and to meet me and others about the job situation in the north-east.

[The Prime Minister]

The hon. Lady raises an extremely important point. I saw for myself when I went to Aberdeen how vital this industry is and how much investment is taking place in the North sea. Let me remind her, however, that the reason we put up the tax on the North sea was to cut petrol duty for families up and down the country, but we will make sure—[Interruption.]

[Mr Speaker]

Order. I do not know why Members are falling about unable to contain themselves. I want to hear the Prime Minister’s answer.

[The Prime Minister]

We will make sure there is a good tax regime for the North sea, whether that is servicing jobs in England or, indeed, in Scotland.

[Mr Speaker]

Order. We want to hear the Prime Minister’s verdict on the hon. Member for Brent Central, and we will not if there is too much noise.

[The Prime Minister]

I thought my hon. Friend was going to say that he was not a Government Minister “yet”. The hon. Lady is a Government Minister and supports Government policy, as all Ministers do.

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

Q13. Fifteen thousand young disabled people will be affected by the changes to contributory employment support allowance. The worst 10%—1,500 new claimants —will lose £4,900 a year. Is this the Government of values that the Prime Minister spoke about in May 2010?

[The Prime Minister]

The important value with respect to employment support allowance is that we are saying that there are two groups. The first group—the support group—is for people who are not able to work, who deserve to get that support over and above jobseeker’s allowance, for as long as they need it, without any element of means-testing. The second group—the work-related activity group—is for people who need help to get work but who will be able to work. That is why they are in that group. They will get tailored help and support under the Work programme to get them into work. I know the Labour party has set its face against all welfare reform, but it is making a massive mistake in doing so.

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

What confidence can we have that unilateral intervention by Russia will put an end to the terrible violence in Syria?

[The Prime Minister]

I think we can have very little confidence in that. Frankly, Russia and China set themselves against Arab opinion and world opinion when they set themselves against passing what would have been a strong and good UN resolution. My right hon. Friend the Foreign Secretary was absolutely right to push for that resolution.

What we now need—Britain will play a big part in this—is real engagement with the opposition groups both inside and outside Syria, bringing together the strongest possible international alliance through a contact group, so that we can co-ordinate our efforts with respect to getting rid of that dreadful regime. We should make sure, through the EU and other bodies, that we continue the sanctions and pressure.

The bloodshed in Syria is absolutely appalling. The Russians have to look at their consciences and realise what they have done, but the rest of the world will keep fighting as hard as we can to give the Syrian people a chance to choose their own future.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

Q14. Yesterday, I heard a health expert who is visiting the UK say that the NHS remains a beacon for care and effectiveness in the world, and that it needs to be improved and perfected, not changed. Will the Prime Minister accept that advice and abandon the health Bill?

[The Prime Minister]

What needs to be abandoned is Labour’s approach to the NHS in Wales.

[Alun Michael]

indicated dissent.

[The Prime Minister]

The right hon. Gentleman shakes his head, but I will tell him what Labour is doing in Wales. It has cut health spending in Wales by £400 million, which is a 6.5% cut; and 27% of people in Wales wait more than six weeks for diagnostic services, whereas the figure for England is just 1%. As I said earlier, one third of people wait more than 18 weeks for an operation in Wales. That is what we get from Labour: no money, no reform, no good health service.

[Martin Vickers (Cleethorpes) (Con)]

Thank you, Mr Speaker. Many of my constituents are among the 337 redundancies announced by Kerry Foods, based at Europarc industrial estate, which straddles the Cleethorpes and Great Grimsby constituencies. The hon. Member for Great Grimsby (Austin Mitchell) and I have approached various Departments for support, which I am sure will be forthcoming. One possibility is the extension of the recently announced enterprise zone. Will the Prime Minister give some comfort to my constituents by considering the proposal sympathetically?

[The Prime Minister]

I am grateful for my hon. Friend’s question. He is right to speak up for his constituents in this way. My right hon. Friend the Chancellor is happy to consider expanding the enterprise zone and see what else we can do to help my hon. Friend’s constituents and ensure that they can get into work.

[Mr Speaker]

We now come to the ten-minute rule motion. As always, I appeal to hon. and right hon. Members leaving the Chamber to do so quickly and quietly so that the hon. Member for Liverpool, Wavertree (Luciana Berger) can be respectfully heard by all who remain in the Chamber.

Queen's Diamond Jubilee

Lord Cameron of Chipping Norton Excerpts

Monday 6th February 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

I would like to make a brief statement about Her Majesty the Queen’s diamond jubilee.

Today marks the beginning of the Queen’s 60th year on the throne and the start of Her Majesty’s diamond jubilee. It is therefore a truly historic day for our nation.

I know that the House will want to join me in paying tribute to the Queen today and thanking Her Majesty for 60 years of dedicated service and inspirational leadership to all the countries of the United Kingdom, the Realms, Overseas Territories and the Commonwealth.

We expect this to be a year full of celebrations and reflections on the Queen’s remarkable achievements. During the diamond jubilee weekend in June we will enjoy a river pageant on the Thames, featuring a new specially designed royal barge and a flotilla of 1,000 other vessels. There will be a Big Jubilee Lunch up and down the country, a concert at Buckingham palace and a chain of 2012 beacons will be lit throughout the Commonwealth. We will also see the more traditional ceremonial events, including a national service of thanksgiving at St Paul’s Cathedral, a carriage procession, and an appearance on the balcony at Buckingham palace on Tuesday 5 June.

In addition, the Queen and the Duke of Edinburgh, supported by other members of the royal family, will undertake a series of regional visits and engagements throughout the United Kingdom. Members of the royal family will also travel overseas representing the Queen in visiting every realm as well as a number of Commonwealth countries, Crown dependencies and British Overseas Territories.

There will be many more special diamond jubilee events taking place throughout the year, including Her Majesty’s address to both Houses in March.

The Government and devolved Administrations are working closely with the royal household to ensure it has the best possible support in this important year and that we play our part in the celebrations.

We have, in partnership with the devolved Administrations, commissioned the diamond jubilee medal. It is being manufactured by the Worcestershire medal service and is being delivered in time for all recipients to wear during the ceremonial events of the central weekend.

At the end of this month, we will be launching a new diamond jubilee category for the Queen’s award for voluntary service, which will celebrate its 10th anniversary in jubilee year, and we will also be announcing the winners of the two civic honours competitions in March.

At the Commonwealth Heads of Government meeting in Perth last October, I was delighted to welcome the establishment of the Queen Elizabeth Diamond Jubilee Trust under the chairmanship of Sir John Major. Today, Sir John has officially launched the trust. He has also announced that the Commonwealth Secretary-General, Mr Kamalesh Sharma, will be one of its trustees.

I am pleased to confirm that the British Government will make a significant contribution to the trust of up to £50 million. This will help the trust undertake activities to transform the lives of the Commonwealth’s poorest citizens, and we hope it will attract other contributions from other Governments and members of the public across the Commonwealth. The arrangements for the UK Government’s support, which will be made through the UK’s Department for International Development from its official development assistance budget, will be finalised soon.

The Government will also be providing operational support to the key events over the diamond jubilee weekend, including policing, crowd control, and transport management, as well as support for the ceremonial events.

Further details of these events and other plans for the diamond jubilee are available online at: www.direct.gov.uk/diamondjubilee, as well as from the official diamond jubilee website, www.thediamondjubilee.org, which launches today.

Above all this will be a year when each and every one of us can come together in our communities to celebrate our gracious Queen’s long and glorious reign.

Informal European Council

Lord Cameron of Chipping Norton Excerpts

Tuesday 31st January 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I should like to make a statement on yesterday’s informal European Council.

Countries right across Europe need bold action to recover their economic dynamism, to get to grips with their debts and to secure growth and jobs for the future, and that was rightly the focus of this Council. So, first, we agreed important measures needed to restore Europe’s competitiveness; next, we discussed the separate intergovernmental treaty on fiscal discipline in the eurozone; and, finally, we issued a statement on Iran, Syria and Burma. I am going to take each in turn.

Britain’s agenda in Europe is to promote growth, competitiveness and jobs. We have said repeatedly that the best way in which the EU can drive growth and create jobs is to complete the single market, establish trade deals with the fastest growing parts of the world and cut the regulatory burdens on business. At this Council we made important progress on all those issues.

We agreed to establish a fully functioning single market in services, where there are still 4,700 professions across Europe for which access is regulated by Government, and in digital, where there are more than a dozen copyright regimes in what should be one single market. We will take action to secure what should be a fast-growing area right across Europe. The changes on services and digital alone could add more than 6% to EU GDP within a decade. We also agreed to complete the energy single market, which has the potential to cut costs for businesses and consumers across Europe.

On free trade, we said that 2012 should be a “decisive year” in which to move ahead on trade agreements with major partners such as Japan, India, Canada and the United States. On regulation, we agreed to a growth test, for the first time, to ensure

“that all actions at the European Union level fully support economic growth and job creation.”

We also agreed to reduce regulatory burdens, especially for small and medium-sized enterprises and micro-enterprises, and to complete a patent package to support innovation. That has been discussed in Europe for more than a decade and finally we are making decisive progress.

We want the eurozone to sort out its problems, which are having a chilling effect on our economy. Tackling them is one of the best ways in which we can help to secure growth in Britain and right across Europe. As I have said repeatedly, short-term steps—the so-called October package—must be taken, and taken properly. Europe’s banks must be recapitalised properly, the uncertainty in Greece must be brought to a decisive end, and the firewall that needs to be constructed must be big enough to deal with the full scale of the crisis and the potential contagion. In the longer term, proper fiscal discipline in the eurozone is clearly an important part of the solution. Britain recognises that that is necessary. The question has never been whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.

I went to the European Council last December prepared to agree a treaty of all 27 countries, but only if there were proper safeguards for Britain. I did not get those safeguards, so I vetoed the treaty. As a result, eurozone countries and others are now making separate arrangements outside the EU treaties for strengthening budgetary discipline, including by ensuring that there are much tougher rules on deficits. At this Council, 25 EU member states agreed a new treaty outside the EU. Britain and the Czech Republic have not signed up and we will not be taking part.

Let me deal directly with the issue of the institutions. The new agreement sets out roles for the European Commission and the European Court of Justice. Although some of those roles are permitted through existing treaties, there are legal questions about what is planned. As I have said, it is in Britain’s interests that the eurozone sorts out its problems. It is also in our interests that the new agreement outside the EU is restricted to issues of fiscal union and does not encroach on the single market. The new intergovernmental agreement is absolutely explicit and clear that it cannot encroach on the competences of the European Union and that measures must not be taken that in any way undermine the EU single market. Nevertheless, I made it clear that we will watch this matter closely and that, if necessary, we will take action, including legal action, if our national interests are threatened by the misuse of the institutions. [Interruption.]

[Mr Speaker]

Order. There is a fine line between jollity and hysteria. I fear that the hon. Member for Rhondda (Chris Bryant) is in danger of having crossed it. He must calm himself, by whatever means necessary.

[The Prime Minister]

The principle that the EU institutions should act only with the explicit authorisation of all member states remains. Let me be clear: this is a treaty outside the EU. We are not signing it, we are not ratifying it, we are not part of it and it places no obligations on the UK. It does not have the force of EU law for us, nor does it for the EU institutions or for the countries that have signed it, and there will be no inner group of European countries distorting the single market from inside the EU treaty. That is the fundamental protection that we secured with our veto in December, and that protection remains.

We also made an important statement on developments in Iran, Burma and Syria. Britain has played a leading role in getting Europe to act together on each of those issues. On Iran, last week all EU countries agreed an unprecedented oil embargo, which shows our determination to keep up the pressure on the regime to turn away from any plans to develop nuclear weapons.

In Burma, for years Aung Sang Suu Kyi has been an inspiration to her people and to the world. Britain has supported her at every stage and has been at the forefront of EU sanctions. Now there are signs of a new moment of opportunity for democracy, and we should be prepared to relax those sanctions, but only in stages and only in response to reforms. When I spoke to Aung Sang Suu Kyi on Saturday, she emphasised the importance of credible and free by-elections in April. I can assure the House we will be watching that very closely.

On Syria, the Council condemned the continuing violence and the repression of the Syrian people. Reports suggest that more than 60 people were killed on the streets of Syria last week alone. In total, more than 5,000 people have been killed, 400 children murdered and tens of thousands of people detained. Today, the Foreign Secretary is in New York to support the Arab League’s call for Security Council action condemning repression and supporting a transition of power. All 27 EU member states backed that call for UN action, and if the violence does not end, we agreed that we would tighten EU sanctions further. Our message is clear: we will stand with the Syrian people. It is time for all members of the UN Security Council to live up to their responsibilities instead of shielding those who have blood on their hands. The killing must stop, and President Assad must stand aside.

This was an important Council for Britain. On competitiveness, the single market and trade, Britain is setting the agenda. On action to face down dictators and dangerous regimes in Iran and Syria, Britain is leading the way, and by saying no to a new EU treaty we have protected Britain’s interests. I commend this statement to the House.

--- Later in debate ---

[The Prime Minister]

I tell you what: I will deal with my Back Benchers, you deal with yours. [Interruption.]

[Mr Speaker]

Order. Mr Ellis, you were apologising to me yesterday for losing your cool. You should not be a recidivist. I want to hear the Prime Minister even if you do not.

[The Prime Minister]

Thank you, Mr Speaker.

Let me say to the Leader of the Opposition that there are two problems with the approach he is taking. The first is that he cannot actually tell us whether he is in favour of this treaty or against it. The Government are clear: we are not signing it and we do not agree with it. That is why we vetoed it being within the EU treaties. That is our position. What is his position? He has had all of his Christmas to make up his mind about whether he would sign the treaty or not.

Last night—[Interruption.] This is very important, so let me explain. Last night at the meeting of the European Council, every European country had to say whether it would sign up to the treaty or not. Britain and the Czech Republic said we would not. Everyone has to make a decision, but the right hon. Gentleman cannot do so. He has had 53 days to make up his mind.

The right hon. Gentleman’s second problem is that he keeps saying this is an EU treaty, but it is not an EU treaty. There was a treaty of Maastricht, a treaty of Nice, a treaty of Amsterdam and a treaty of Lisbon. On each occasion, the Labour party was in favour. There will be no EU treaty of Brussels because we vetoed it.

The right hon. Gentleman asked specifically what effect this treaty could have on the EU single market. The treaty is clear. Article 2 states:

“The provisions of this Treaty shall apply”

only “insofar”—[Interruption.]

[Mr Speaker]

Order. The House must now calm itself. With all that gesticulation and hand-waving from the shadow Chancellor, I thought he was playing with his cooking utensils—[Interruption.] Well, he was pointing somewhere. Like the House and the country, I genuinely want to hear the Prime Minister, as I hope they also wanted to hear the Leader of the Opposition. Let us hear the Prime Minister.

[The Prime Minister]

Thank you, Mr Speaker. We know why the Opposition Benches are so depleted—Opposition Members have been eating the shadow Chancellor’s lasagne and are recovering. The point is absolutely clear in article 2, which states that the provisions

“shall not encroach upon the competences of the Union to act in the area of the economic union.”

The fact is that Labour always fails to stand up for Britain. That is what we know. The previous Labour Government gave away the EU rebate. What did they get in return? Nothing. They signed up to the bail-out mechanism. What did they get in return? [Hon. Members: “Nothing.”] They signed up to the social chapter. What did we get for that? [Hon. Members: “Nothing.”] The Opposition opposed our referendum lock, and even now they are telling us that Brussels does not have too much power, and that if the Leader of the Opposition were Prime Minister for long enough, he would join the single currency. He has had 53 days to make up his mind whether he wants to sign this treaty or not. As usual, he cannot make up his mind whether he is muddled or weak. The fact is he is both.

[Several hon. Members]

rose—

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

We will see whether your prediction is justified, Mr Speaker.

I begin by praising the pragmatism of the Prime Minister, although I confess to being somewhat surprised that my support for it is not shared throughout the Government Benches. It is especially welcome that he pursued over the weekend a policy of re-engagement with our European partners, which is essential to his long-term objectives of the promotion of growth and the extension of the single market.

[The Prime Minister]

My right hon. and learned Friend is entirely right. We must ask a simple question: what is in the interests of the UK? It is in our interests to let the eurozone get on with the job of sorting out its problems, and to ensure that this new treaty is restricted to the issues of fiscal union. It is therefore in our interests to use leverage over the institutions and the legal issues to keep them focused on fiscal union. That is the approach we have taken and it is entirely right.

[Mr Jack Straw (Blackburn) (Lab)]

Every single article bar one of the treaty, which I have read, refers to institutions of the European Union, including the Commission and the Court of Justice. Leaving aside its form, how can the Prime Minister possibly say that, in substance, the treaty is not equivalent to a European Union treaty? Given the provisions of article 12—it provides for non-euro contracting parties to participate in discussions on competitiveness, but not those outside the treaty—what has been achieved by his veto except that we are outside the door?

[The Prime Minister]

It is not an EU treaty, because it does not amend EU law; it is not a treaty within all of the treaties of the EU, and that is very important, because it would have been wrong to sign up for that without the safeguards for the single market, financial services and the other things that I set out. Let me just explain how important article 2 is in this agreement of the other countries. Let me read it in full:

“The provisions of this Treaty shall apply insofar as they are compatible with the Treaties on which the Union is founded and with European Union law. They shall not encroach upon the competences of the Union to act in the area of the economic union”—

that is, this treaty is outside EU law. Why is it outside EU law? It is because I made it outside EU law.

[Mr William Cash (Stone) (Con)]

My right hon. Friend will know that the European Scrutiny Committee is making an inquiry into the nature and lawfulness of the agreement otherwise known as this non-EU treaty. Will he accept that the problem we have in European policy making is that it is on a slippery slope towards a more coercive, more federal and less democratic Europe? Will he give us his assurance that never, while he is Prime Minister, will we fold this non-EU treaty into the treaties as a whole?

[The Prime Minister]

To answer my hon. Friend’s second question first, obviously this treaty cannot be folded back into the EU without the agreement of every EU member state. We did not sign this treaty, because we did not get the safeguards that we wanted, and that position absolutely remains. My hon. Friend is right to make the point about the danger of a slippery slope that can be created by signing EU treaties and the use of the EU institutions. The whole point is that because this is not an EU treaty—because it is outside EU law—we are not in danger of that happening.

[Chris Bryant (Rhondda) (Lab)]

So, basically, the Prime Minister was afraid that if he went to the European Court of Justice and asked the European Court of Justice whether the European Court of Justice should have power to adjudicate on the so-called non-EU treaty, he would lose? That is basically the sum and total of it, is it not?

[The Prime Minister]

Let me explain again, because I know the hon. Gentleman takes great interest in European affairs. The point is that it is in our interest that these eurozone countries get on with the job they need to do. It is absolutely important that they stick to the fiscal union and do not encroach on the single market. Clearly, there are uses for the institutions they have set out in this treaty, some of which are legal under existing EU law and some of which are highly questionable. We are going to use that leverage and that legal position to make them stick to the position of sticking to the fiscal union. That is the most sensible thing to do, and I would have thought that, with all his experience in European politics, he understood that.

[Richard Ottaway (Croydon South) (Con)]

May I welcome the Prime Minister’s confirmation that there is no provision in the treaty that allows the single market to be undermined? However, he will be aware that the President of France has been driven to impose a financial transaction tax on France alone. Does he agree that the dismay with which that was met by the financial services sector in Paris illustrates exactly why such a tax is a bad idea?

[The Prime Minister]

One does not need to look any further than the European Commission itself, which actually carried out an investigation into a financial transactions tax and found that it could cost 500,000 jobs in the European Union. That is why the whole idea of pursuing this at the moment is completely wrong. Of course, it would be different if the whole world was going to accept a financial transactions tax, but that is extremely unlikely to happen. That is why I do not think it is the right approach. But let us be clear: in this country, we do get our financial services to make a proper contribution. For instance, we have stamp duty on share transactions, which actually raises considerably more than the French are planning to raise with their early foray into this area.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Prime Minister confirm what I think the Chancellor has said over the past couple of days, which is that when more money is required by the IMF, Britain will not fall short?

--- Later in debate ---

[The Prime Minister]

The Chancellor said that we are founder members of the IMF and strong supporters of it as an institution, but that the IMF must always lend to countries, not currencies; that we would not be part of an EU bail-out fund; that we would take part only if other countries came forward too; and that that would happen only after eurozone countries and eurozone institutions had done what they needed to do to stand up and support their currency. That is the position, and I think that it is right.

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

Will the Prime Minister say something about the nature of the EU of which we are now a member, given that a subset of member states can bypass a veto and hijack the institutions for their own purposes without the consent of the dissenting member states? He is entirely right to maintain a reservation to ensure that that does not happen.

[The Prime Minister]

The point is that, as my hon. Friend knows, there are organisations within the EU, such as the eurozone group and the Schengen group, of which we are not a part, that use the European institutions. The fact is that this treaty is outside the EU treaties, which gives us that extra protection. Furthermore, we have the ability to exercise leverage to ensure that they stick to fiscal union, rather than getting into the single market, which is what we want to protect. That is absolutely important and the approach that we should take.

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

The Greek writer Aristophanes gave us the concept of cloud cuckoo land. I wonder whether some European leaders visited that mythical country on Monday. Will the Prime Minister tell us how on earth he thinks that a country such as Greece will regain competitiveness if it cannot devalue, which it cannot do within the euro?

[The Prime Minister]

The hon. Lady makes a serious point. I have read the agreement that these countries have come to, and I completely understand the need for fiscal discipline within the eurozone. Clearly, we cannot have countries building up excessive deficits year after year, and one can understand the concern of Germany and other northern countries, but on the text of the treaty, it is actually very concerning that some countries will struggle to meet it. Of course, Europe needs not only arrangements for fiscal discipline but, above all, arrangements for additional competitiveness, for opening up markets and for getting economies growing. That was the subject of the first half of the EU meeting, in which we were major participants, and we are very much driving that agenda to help Greece, Spain and other countries in the south of Europe.

[Mr Andrew Tyrie (Chichester) (Con)]

The eurozone crisis has now become a major global risk, but the member countries seem wholly incapable of addressing it and its root causes properly. Will the need for IMF intervention and direction of the crisis be discussed at the G20 summit that the Prime Minister will be attending on 25 February, and was it discussed at the summit from which he has just come?

--- Later in debate ---

[The Prime Minister]

There was not a discussion about IMF resources at the informal EU Council. To be fair to eurozone members, what they need to do is difficult for countries to do: they need to contribute huge amounts of money to a firewall to prevent contagion; they need to put capital into their banks to strengthen them at this time of stress; and they have to give up large areas of sovereignty to make sense of the eurozone. Those are all reasons we stayed out of the eurozone, and why I believe that we should not join the single currency. It is only fair, however, to explain that they have taken quite a few steps down that road. The argument that I made in Davos was that, as well as the short-term things that they need to do, they need a set-up that makes sense for the long term of the eurozone.

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

The Prime Minister said that he will watch closely and, if necessary, take action, including legal action, if our national interests are threatened by the treaty. Will that legal action be taken through the European Court of Justice, and how does that marry with his next statement that EU institutions should only act with the explicit authorisation of all member states? Will not other states refuse to allow that?

[The Prime Minister]

I do not think that the hon. Gentleman understands how these institutions work. The point is simple: it is clearly in our national interests to maintain the single market at the level of the 27 to make it work for us. As long as this treaty stays out of that area, and instead focuses on fiscal union and discusses the things that the hon. Member for Birmingham, Edgbaston (Ms Stuart) mentioned, it will not be a problem for Britain. If it encroaches on our national interests, however, we will have the ability to take action and the case to do so.

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

After what was clearly a much more successful and satisfactory summit than the one in December—the Prime Minister came back with clear EU commitments to democracy around the world, and to the single market and the extra jobs that it can sustain, particularly in the energy industry at home—will he agree that his constituents, like mine, want the Government to concentrate, as Europe appears to be united in doing, on jobs, growth, training and skills, instead of obsessing about constitutional and treaty niceties? Those are not important.

[The Prime Minister]

I think the right hon. Gentleman is entirely right, and the refreshing thing about this Council is how much time was spent on the nitty-gritty of the single market—on digital, on services, on education and on energy markets. Having Mario Monti, the new Greek Prime Minister and others there with a real focus on the single market, including the new Spanish Prime Minister, gives us a much better prospect for making progress on this agenda than we have had for many years.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is not the truth of the matter that throughout 2011 the Prime Minister marched his troops to the top of the anti-European hill, and now, like John Major before him, and with the help of the Deputy Prime Minister, he has marched them down again? I think there is a word for it: it is called appeasement. If this meeting had been held in Munich, the Prime Minister would have been coming back waving a piece of paper.

[The Prime Minister]

I always wonder whether practice is going to make perfect with the hon. Gentleman. At least he has been consistent: he has always voted against all EU treaties, and I am giving him the rare pleasure of not having an EU treaty to vote against.

[Harriett Baldwin (West Worcestershire) (Con)]

The Prime Minister has referred to the five European countries that are now less competitive than Iran. On competitiveness, his announcement today is welcome, but how quickly will those steps be taken to increase the competitiveness of the single market?

[The Prime Minister]

My hon. Friend is entirely right to raise the issue in this way. We have tended in the past in the European Union to sign up to Council conclusions or informal statements, like the one agreed late last night, that are full of good words about taking such steps but do not contain enough concrete dates. The difference last night is that dates have started to appear for when specific things should be done, whether it be completing EU free trade arrangements with other countries or completing deregulation or single market programmes. That is very welcome.

[Keith Vaz (Leicester East) (Lab)]

The position taken on Iran at the summit was clearly the right one. However, as the Prime Minister knows, there are 73,000 Iranians living in London. What provisions have been made to nominate a third country, so that British Iranians can go to visit Tehran, and their friends and relatives can come and visit here?

[The Prime Minister]

The right hon. Gentleman asks an important question. Perhaps I can write to him about that. What I would say is that, in a move that may have surprised some people, the EU has been decisive—for instance, in creating the oil embargo when some members of the EU have been quite reliant on Iranian oil, which is a real step forward. However, on the issue of third countries and travel, perhaps I can write to the right hon. Gentleman.

[David T. C. Davies (Monmouth) (Con)]

We have learned today that in Britain’s national interest the Prime Minister is prepared to use a veto to allow national agreements and to rule out for ever Britain’s membership of the euro. Does he or anyone else in this room have any idea what the Leader of the Opposition stands for?

[The Prime Minister]

It is going to be interesting. We are now going to have a period of days when the Leader of the Opposition is finally going to have to get off the fence and tell us: would he sign up to this treaty or not? The treaty is right here—I can give him a copy. It is a treaty that we will not be signing; he now has to make up his mind whether he is going to sign it or not.

[Kate Hoey (Vauxhall) (Lab)]

How does the Prime Minister feel about attending a European Council of a supposedly democratic EU when the leaders of two of the countries not only have not been elected, but were more or less imposed by the bureaucracy in Brussels? Does he not feel seriously that we are moving more and more away from a democratic Europe, and that this is why the people of this country, ultimately, will have to decide on our future?

[The Prime Minister]

The difference between the situation in this country, where we face great economic challenges, and countries in the eurozone is that we have been able to adopt a policy stance that, yes, combines a very tight fiscal policy with difficult public spending reductions, but can also be accompanied by a loose monetary policy, with the Bank of England standing behind the economy. The problem for many eurozone countries is that they do not have that policy mix. That is making life difficult for them, and I fully understand that. They want to stay in the euro; they want to make the euro work. Whatever our private views about the euro, we should do what we can to help them get on with the job of sorting out the single currency and its arrangements, because it is currently having such a bad effect on our economy.

[Andrea Leadsom (South Northamptonshire) (Con)]

Can the Prime Minister reassure the House that in exercising his veto, exhorting the eurozone to sort out its financial crisis and promoting growth through the single market, he is acting in Britain’s national interests? Does he also share my concern that the Leader of the Opposition does not seem to know where Britain’s interests lie?

[The Prime Minister]

My hon. Friend is right. At the end of the day, we have to decide whether we are going to agree to this treaty or not. The fact is that every European country had to make that decision, and we have made ours. I repeat that it is in our national interest for the eurozone to deal with its problems, to keep this treaty focused on fiscal union and then to maximise the potential of the single market. I think that Britain should be relaxed about being in those parts of Europe where we want action—just as we are a leading member of NATO, and just as we led that action in Libya—but that we should quite happily stay out of areas that we do not feel are in our interests, such as the Schengen no-borders agreement or the euro.

[Mr Ben Bradshaw (Exeter) (Lab)]

Given that Germany grew 3% last year, and has its lowest unemployment for 20 years and more manufacturing and a smaller pay gap than Britain, why is the Prime Minister so against the practice of worker representation on company boards?

[The Prime Minister]

One of the points about Germany is that it did not spend the last decade making its economy unbalanced with a massive boom and a massive bust. The right hon. Gentleman is right to raise the IMF forecasts, however, because they are very instructive about what is happening in Europe this year. They are actually forecasting higher growth for Britain than for almost any other country in the European Union, but they have made very chilling forecasts for countries such as Spain and Italy, for which they are forecasting quite a steep decline.

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

Will the Prime Minister explain what it is that he has vetoed?

--- Later in debate ---

[The Prime Minister]

I have vetoed Britain’s involvement in a treaty. As a result, it is not an EU treaty. We had in front of this House the Maastricht EU treaty and the Lisbon EU treaty; we had Amsterdam and we had Nice. All of those were treaties that Britain was involved in as a member of the EU, and they were EU treaties with the full force of the law. This is not like that; this is outside the European Union. It is an arrangement that has been reached by 25 other countries and we are not involved. As a result, we have safeguarded Britain’s interests, which could have been put at risk by a new EU treaty.

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

What indications did the Prime Minister receive from the German Government that if they want their political project of fiscal and monetary union in the eurozone to succeed, they will finally have to face the sad fact that they will have to put in the necessary resources, rather than just imposing greater austerity on countries that have been steadily stripped of their democracy?

[The Prime Minister]

I tried to set out what I think is the sensible view in my speech to the Davos summit. Look, I do understand the German concern. It sees countries across Europe that have run up huge debts and huge deficits, putting at risk the stability of the single currency. It does not want that to happen again, so it wants these assurances for the future. Just as everyone needs to understand the German position, however, we also need to show some understanding of those countries that are going to struggle in the years ahead. They are going to need extra help and assistance, and there is going to have to be solidarity across the eurozone, because the single currency requires that, as I explained in my Davos speech. We manage a single currency across the United Kingdom because we show solidarity with different areas of the country, and the eurozone has to understand that similar solidarity will be required there, to make the single currency work in the long run.

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

I was encouraged to see reference in the communiqué to this year being a decisive year for free trade agreements. Will my right hon. Friend do all that he can to move ahead with the free trade agreement with Japan, which is vital to large parts of our motor manufacturing industry?

[The Prime Minister]

I will certainly do that. I have discussed this issue with the Japanese Prime Minister and with the European Union. One of the issues with Japan is non-tariff barriers, in regard to the access to Japanese markets that British goods and services want. There is a particular advantage for us, in an economy with such a high level of services and branded goods, in ensuring that we really secure progress on the free trade agreement, not only with Japan but with India. The Indian economy is fairly closed off to services, and we want to see it opened up.

[Sir Stuart Bell (Middlesbrough) (Lab)]

The Prime Minister has talked about competitiveness, growth and jobs, but he skated over the fiscal compact and its fiscal consolidation, which could have a severe effect on jobs and growth. Further to the question from my right hon. Friend the Member for Blackburn (Mr Straw), and given that the Prime Minister thinks the eurozone is so important to us, what influence does he think he can bring to bear, as he is not part of the 25?

--- Later in debate ---

[The Prime Minister]

The hon. Gentleman seems to be having his cake and eating it. On the one hand, he says that the treaty is tough in terms of fiscal discipline and consolidation, while on the other hand he is worried about the fact that we have not signed it and are not subject to it. I think it is right for this country to take measures to consolidate our fiscal position. These are difficult measures, but we can at least look the British people in the eye and say we are doing it for our own benefit and our own good. We are not doing it because we are instructed by some foreign body to get our budget under control; we are doing it in our own national interest.

[Mr Richard Shepherd (Aldridge-Brownhills) (Con)]

The Prime Minister will well remember that nearly 20 years ago, the United Kingdom, Italy, Spain and the Irish Republic left the exchange rate mechanism—the precursor of the euro. There was an exit strategy. Now the crisis facing Europe seems to be one of solvency in some of these countries, there is no exit strategy and it appears that there is no money. Will the Prime Minister reassure the British public that no funds will be given to the IMF and that we will give no more money to the European Union?

[The Prime Minister]

I obviously remember very well the exchange rate mechanism experience. Indeed, it is that experience that makes me so passionate about not joining the single currency or the euro—because it is so difficult to exit from it if it does suit our needs or our arrangements. I believe that Britain is a big enough economy to have its own interest rates and its own monetary policy to suit our needs. My hon. Friend asks for guarantees. What we have done is already to have got out of the bail-out mechanism to which the last Government signed us up and, as I clarified a few moments ago, we have set out very clearly our conditions to the IMF.

[Barry Gardiner (Brent North) (Lab)]

The Prime Minister says that his veto has left the European Commission in the room to protect against encroachment on single market issues and competitiveness. Will he remind us of the name of the noble baroness who represents the UK on that Commission and of which party will therefore represent Britain’s last line of defence?

[The Prime Minister]

The point the hon. Gentleman has clearly not understood is that the treaty itself sets out that the treaty cannot be used to encroach on the single market; it is there in black and white. As I have said, if that is not the case we have the ability to take action, including legal action, to protect our national interest.

[Sarah Newton (Truro and Falmouth) (Con)]

My constituents really appreciate the Prime Minister’s straight talking on this issue, so will he answer the question that they want answering: if asked, will the Prime Minister stump up more money for Greece?

[The Prime Minister]

Our answer is very clear. We were not involved in the Greek bail-out, and we will not be involved in European bail-outs of Greece. We have got out of the EU mechanism that the last Government got us into, and we have set out our conditions on the IMF very clearly.

[Kelvin Hopkins (Luton North) (Lab)]

In the last few days, the Greek Government have said that they refuse to have their economic governance taken over by the European Union. Does the Prime Minister support the Greeks in that, and if so, will he say so here and now?

[The Prime Minister]

The only way I can answer that question is to say that the Greeks have to decide themselves whether they want to stay in the euro. If they do, they have clearly got to meet some pretty exacting targets for reducing Government deficit, reducing Government debt and accepting a very austere approach. If Greece wants to stay in the euro, those are the conditions it will have to meet. I am not Greek; I am British. We have made our decision to stay out of the euro; this is their decision, and we should not tell them what to do.

[Nicholas Soames (Mid Sussex) (Con)]

It is clear that the Prime Minister has considerable support within Europe in seeking a more adaptable, flexible and competitive economy. Will he reassure businesses in my constituency and elsewhere that the casting of the veto will have done nothing to prevent his ability to drive forward that agenda in Europe?

[The Prime Minister]

What last night’s meeting proved is that there is a very strong and growing consensus for action around the European Council table on issues of competitiveness. British Ministers—and, to be fair to Labour, British Ministers for the last 20 years—have been going to Europe arguing for completing the single market, deregulation, lifting the burdens on business and all those issues, and we have always had strong supporters in the northern liberal countries, as it were, but we have come unstuck when it comes to other countries. I think we now see—partly because the centre right is in power in so much of Europe—really strong support for that sort of agenda, and we can certainly drive it forward.

[Stewart Hosie (Dundee East) (SNP)]

The Joint Ministerial Committee memorandum of understanding on EU policy says that Ministers and officials from all the devolved Administrations should be involved in discussion with the UK Government on the formulation of UK policy. What discussions did the Prime Minister or his officials have with Edinburgh, Cardiff and Belfast before the European Council meeting?

[The Prime Minister]

As the hon. Gentleman knows, there are arrangements for these things. Actually, the Government have been very generous in ensuring that the Scottish Administration have been fully involved in, for instance, fishing quota negotiations. However, I thought that the hon. Gentleman wanted to leave the UK altogether. If that is the case, he will have to seek access to the European Union, and seek access to joining the euro as well. I think that he ought to read the treaty and work out whether he wants to sign it. Perhaps when he has made up his mind he will be able to tell the Labour leader what to do.

[Mr Edward Leigh (Gainsborough) (Con)]

The Prime Minister said this afternoon that, if necessary, we would take legal action. What would trigger that legal action? Is not the problem for the majority the fact that if they stretch the European institutions to achieve greater compliance, the minority may be tempted to stretch them to achieve greater independence?

--- Later in debate ---

[The Prime Minister]

I think that the conditions are very straightforward. As I have said, we want those institutions to sort out the problems of the European Union, and we want them to stick to fiscal union and not go into single market issues. If they were to go into single market issues and threaten Britain’s national interests, of course we would act. That seems to me to be a much more sensible approach than taking an alternative path, because all the while we shall be maintaining some leverage over this organisation, outside the European Union, to ensure that it sticks to the job that it is meant to do.

[Nic Dakin (Scunthorpe) (Lab)]

What, in terms of content, is not in the EU treaty as a result of the Prime Minister’s not signing it?

[The Prime Minister]

I do not know whether the hon. Gentleman has spotted this yet, but there is not an EU treaty.

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

The Prime Minister will be aware that the latest report on Iran by the International Atomic Energy Authority contains no smoking gun whatsoever. Given that the sabre-rattling and sanctions from the west have served only to strengthen the position of the hardliners, and—as is illustrated by the fact that Iran is thinking of bringing forward the deadline for the oil embargo—have failed to date, is this not the time for a fresh approach, which should include ruling out the option of force?

[The Prime Minister]

I listened carefully to my hon. Friend’s question, and indeed I listened to him carefully when he made the same case on the radio this morning, I do not read the IAEA report in the same way as he does, and I do not altogether trust Iran’s motives in this area, but the easiest way for Iran to settle the issue is to open up and show everyone just what it is doing. If it is only pursuing nuclear power and is not pursuing nuclear weaponry, the world will be able to move on, but until those assurances are given, the world will not be able to move on. That is the reason for the tough action that we are taking, which shows that there are alternatives to military force. We want to ensure that we maximise the use of all those options before considering anything else.

[Mr Wayne David (Caerphilly) (Lab)]

Will the Prime Minister explain the difference between a veto and an opt-out?

[The Prime Minister]

There is a very important difference. Let us consider what happened with Maastricht, for instance. There was a European Union treaty to which Britain was a full signatory. We opted out of certain parts of it, but we were still subject to a huge amount of additional EU law. That is why there were so many agonised debates in the House about whether it was a good thing or a bad thing. The same can be said of all EU treaties. The difference in this case is that there is no EU treaty. We are not going to put something in front of the House, and nothing will be voted on, so it will not affect the UK.

[Steve Baker (Wycombe) (Con)]

May I draw my right hon. Friend’s attention to the initiative for a free and prosperous Europe which was launched yesterday with the support of think-tanks and non-governmental organisations across the continent? In a nutshell, it asked the EU to stop centralising power, and instead to build prosperity on liberty and responsibility. There is an appetite throughout Europe for the kind of policies that my right hon. Friend’s Government are advocating. Does he share my hope that the leaders of the European nations may abandon their outdated ideology of centralisation and follow him instead?

[The Prime Minister]

I am grateful to my hon. Friend for his comments, and I will certainly look at the report he mentions. We in this House must understand that 17 members of the European Union have opted for a single currency—that was the big moment, when different parts of Europe chose to take a slightly different path—and even in spite of the difficulties, those member states are fully committed to trying to make it work. We have to respect the view they have taken and allow them to go on and do some of the things that can make sense of the eurozone. It is not the choice that we are making; we are making a different choice. We want a competitive Europe, we want a trading Europe, we want an open Europe, but we do not want a more centralised Europe, and not signing this treaty—not having an EU treaty—helps us down that path.

[Jeremy Corbyn (Islington North) (Lab)]

When the Ministers discussed the situation in Iran, was any concern expressed about the bombings and assassinations currently taking place and the military build-up in the area, which clearly leads to much greater tension? Will the Prime Minister think again about the suggestion of the hon. Member for Basildon and Billericay (Mr Baron) that there should be a renewed diplomatic initiative by either Britain or the European Union to try to build relations with all the power structures in Iran, rather than head down this very dangerous road towards a war?

[The Prime Minister]

I am afraid I do not agree with the hon. Gentleman for this—reasonable, I hope—reason: Iran has been offered a normal diplomatic relationship. Indeed, it was offered many times by the right hon. Member for Blackburn (Mr Straw) when he was Foreign Secretary. The fact is that that did not move Iran off the path of trying to acquire all it needs for nuclear weapons. So I think the path of sanctions, travel bans and asset freezes, and all the tough measures we are taking right across the EU, is the right path. It is the right alternative to the alternatives that I think the hon. Gentleman does not welcome, and hopefully it will make the Iranian regime change its strategy.

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

In December, the Minister for Europe said in response to my right hon. Friend the Member for Wokingham (Mr Redwood) that

“we understand why those countries want to use the institutions, but it is new territory and raises important issues that we will need to explore with our colleagues in those other European countries.”—[Official Report, 13 December 2011; Vol. 537, c. 718.]

Further, today my right hon. Friend the Prime Minister has said there are legal implications as a result of the discussions he has had. Does he share my concern that by invoking the institutions we may well end up in a Jarndyce v. Jarndyce-type legal squabble with the European Court of Justice that will not go in our favour?

--- Later in debate ---

[The Prime Minister]

That is not my concern; instead, my concern is that although there are uses of the EU institutions that are already sanctioned by existing treaties and to which we could not possibly object, this agreement between the 25 countries goes further than that and raises legal concerns. So we are right to raise them and use the leverage to try to keep this new organisation on the straight and narrow path of fiscal union rather than moving over into the single currency. I do not really fear what my hon. Friend says, because of course people can take cases about what has been signed to the European Court, but that is not going to drag Britain into a treaty that we are not part of. That is another advantage of not having signed the treaty.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Prime Minister was right to veto the treaty because it was against this country’s interests. The agreement arrived at between the 25 countries is fundamentally deflationary and will not lead to growth—it will lead to mass unemployment across Europe—and is also against this country’s interests. Rather than reneging on his original commitment to stop the 25 using European institutions, should not the Prime Minister now be using all the power of his office to stop them?

[The Prime Minister]

I am grateful to the hon. Gentleman, as at least we have at last got a clear Labour view. Clearly he, like me, would not have signed the treaty and thinks Britain is better off outside the treaty. Is that the Labour position? The Leader of the Opposition can just nod. That is not much to ask for. They have had 53 days to make up their minds. There are three options: yes, no or “I don’t know because I’m weak and indecisive.”

[Jessica Lee (Erewash) (Con)]

I welcome the reduction in regulation on small and medium-sized enterprises set out in the statement. Will my right hon. Friend reassure the constituents of Erewash that the priority throughout negotiations is the protection of jobs and businesses in Britain?

[The Prime Minister]

That is absolutely our priority. The more we can get the single market to work, the better it will be for British jobs, including in Derbyshire. There is an important agenda here, and it is not just about getting the European Commission and European Union to do things in terms of completing the single market. It is also, sometimes, about trying to get them not to do things—it is about rolling back some of the bureaucracy that has been placed on business that can cost jobs and mean extra regulation.

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

Figures released by the EU today reveal that one in 10 people in the EU is out of work, including 16 million people within the eurozone. Why has the Prime Minister not been more vocal about an increased role for the European Central Bank, including the use of eurobonds to help restore confidence to the markets and increase growth?

[The Prime Minister]

I always think it is the first sign of madness for a politician to say, “Please go and read one of my speeches,” but on this occasion I will make an exception. If the hon. Gentleman reads my speech at the Davos summit, he will see that that is exactly what I said.

[Chris Bryant]

So, you’re mad?

[The Prime Minister]

Thank you very much—you are so charitable.

On unemployment, the hon. Member for Glasgow North East (Mr Bain) is absolutely right. There was a very good and strong discussion in the European Council and it is really worth looking in particular at examples of countries that have lower youth unemployment than Britain—there are many with higher youth unemployment —to see what lessons we can learn from them.

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

Does the Prime Minister agree that the question of European bail-outs would be much less likely to arise if different countries with different economies had different currencies? Will he therefore recommend this tried-and-tested model for the eurozone countries?

[The Prime Minister]

We have a very strong view in this country that we should keep our own currency, but that does not let us off the need for fiscal discipline, proper monetary policy and keeping inflation under control. It is not a free lunch or a free ride. We have to take tough decisions, but clearly we have to show some respect for the 17 eurozone countries that want to make the euro work. It is no good wishing away what is there. The responsible thing to do is not to stand in their way when they are trying to put out the fire in their own house, but to ensure that they do so in a way that does not threaten our national interests. That is exactly what I have done.

[Bill Esterson (Sefton Central) (Lab)]

I still do not know whether the Prime Minister thinks that he did not sign a treaty or just an agreement. Is not his real failure his commitment to austerity and his lack of a plan for jobs and growth either in the EU or in the UK?

[The Prime Minister]

In Europe, we have a plan for jobs and growth, which is called completing the single market. The question that the hon. Gentleman and his leader have to answer is about the new treaty being proposed, which 25 countries are going to sign and Britain is not. [Interruption.] I do not care how bad the lasagne is, at some stage the shadow Chancellor and the Leader of the Opposition are going to have to make up their minds. Are they for it, are they against it, or are they weak and indecisive and cannot make up their minds?

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

Like many others, I welcome the commitment to cut the burden of regulation, but does the Prime Minister agree that there could be potential to revisit the way in which directives were transcribed into UK law by the previous Labour Government, with a view to removing some of the gold-plating that businesses complain about so much?

[The Prime Minister]

My hon. Friend makes a very good point. There have been occasions on which EU directives have been added to by Government Departments and implemented with more vigour than in other parts of the European Union. We have tried to put a stop to that under this Government.

[Chris Bryant]

Name one.

--- Later in debate ---

[The Prime Minister]

Horse passports—that was a good one. I do not think we eat horses in this country, but the previous Government, in their wisdom, decided that every one needed a passport. That is just one example. In future we can ensure that we do only what is absolutely necessary, rather than gold-plating.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

Will the Prime Minister share with the House and the country what influence, if any, his Back-Bench Eurosceptics have had on his thinking during these discussions?

[The Prime Minister]

I think the Conservative party is entirely united in thinking that Britain is not right to sign this treaty.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate the Prime Minister on defending Britain’s interests, and I note what he says about Iran and Syria. Does he think that if we had a common EU defence policy, HMS Dauntless would now be readying to sail to the south Atlantic?

[The Prime Minister]

The point is this: we should make sure that NATO is the cornerstone of our defence and we should be very clear about our own defence responsibilities—I have spoken about the Falklands. We need to win the argument in Europe that there is no point in having endless competing defence headquarters. What we need throughout NATO, particularly in Europe, is greater defence capacity, and we need to encourage other European partners to invest in that.

[Jonathan Ashworth (Leicester South) (Lab)]

Will the Prime Minister explain how he will take action, as he says, if this non-EU treaty under which the 25 nations can take advantage of the full force of the EU institutions, encroached on our national interest and undermined the single market?

[The Prime Minister]

Let me explain: there are uses of the EU institutions set out in previous treaties—mostly put through this House by the Labour Government—but this treaty outside the EU goes further than that, and that raises legal issues. We have said very clearly, including in the EU Council last night, that if that were to encroach on the single market and threaten this country’s national interest, we could take action, including legal action.

[Tony Baldry (Banbury) (Con)]

The UK is fortunate in having many excellent professional bodies—engineers, architects, surveyors, lawyers and so forth—but often they find it difficult to practise within the European Union because of a host of national barriers to professional practice. In the context of the single market, improving competitiveness and creating jobs, has the Council taken steps to remove some of those national barriers to professions being able to practise throughout the EU?

[The Prime Minister]

My hon. Friend is entirely right to raise that big gap in the single market. We passed the Single European Act all those years ago—more than 20 years ago—yet the professions and services have still not been properly opened up. The action we are taking is for all Governments to agree to open up those professions, and on this occasion the European Court of Justice may actually be helpful in that the Commission is taking infraction proceedings against a number of member states—Germany included, I think—to make sure that they genuinely open up their professions and complete the single market.

[Ben Gummer (Ipswich) (Con)]

On the radio today, the shadow Foreign Secretary claimed that Britain had lost influence in Europe. In the matters of the single market, competitiveness, Iran and Syria, what does the Prime Minister feel was achieved by the British presence at the European Council?

[The Prime Minister]

The specific foreign policy stances taken by the EU are all agreed by unanimity, which proves that agreement by unanimity is possible if there is political will and drive. Almost the entire approach to Iran and Syria and Burma was something that the British requested be discussed at the Council and we requested that there be a statement. I think that shows that with political will, but with unanimity, it is possible to get a lot done.

[Kevin Brennan (Cardiff West) (Lab)]

Does the Prime Minister realise that the more he denies that this is effectively a European treaty, the more he reminds us of comical Ali denying that an invasion had taken place while the tanks rolled by behind him?

[The Prime Minister]

The hon. Gentleman is in for a big surprise. When no treaty arrives in the House of Commons, he will have to do a bit of explaining.

[Martin Horwood (Cheltenham) (LD)]

On Iran, did the European summit discuss the planned regional conference on non-proliferation of weapons of mass destruction, and does the Prime Minister agree that it might offer a vital pathway out of an increasingly dangerous stand-off?

[The Prime Minister]

We did not discuss that specific matter. It is entirely right and worth while to try to bring regional neighbours into the debate, but I have to say that it is some of the regional powers that are the most concerned about Iranian activity, not only in their own countries but in stirring up trouble elsewhere, so it is probably only part of what needs to happen, which is to get the Iranian Government to change their strategic direction.

[Mark Durkan (Foyle) (SDLP)]

The Prime Minister has highlighted a growth test to ensure that all actions at European Union level fully support growth and job creation. This new “I can’t believe it’s not an EU treaty” will prescribe prolonged and tight austerity for many economies, affecting not only services there but trade and commercial capacity more widely in Europe. Would this non-EU treaty pass any meaningful EU growth test?

[The Prime Minister]

If the hon. Gentleman is so against the treaty, I am surprised that he is not praising me for making sure that Britain is not involved in it; I would have thought that would be the first thing that he would say. We have to understand that the countries of the eurozone want to take an approach that prescribes rules on debt and deficit. We can all have our own views about whether it is the right approach or whether it is too tight, and all the rest of it, but that is what they want to do; I do not think that we should stand in their way as it is done, but it is better done outside the European Union.

[Several hon. Members]

rose—

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend the Prime Minister outlined in his speech at the Council several criteria needed for a successful monetary union, none of which have really been met by the changes, however welcome, outlined there, so may I urge him to continue to plan, while doing everything that he can to co-operate constructively, for the likely eventual break-up of the eurozone?

[The Prime Minister]

We have to plan for all eventualities, but I would make two points. As I have said, I think we have to respect the fact that the countries of the eurozone want to make it work. They have taken quite a number of steps that are painful and difficult for individual sovereign countries to take, and it must be in our interests, because we want the European economy to grow, for them at least to take the short-term measures to take the heat out of the crisis. There were some signs of the crisis easing at the beginning of this year, as Italian and other bond spreads have come down, but we are far from through it.

[Mr Christopher Chope (Christchurch) (Con)]

Will my right hon. Friend expand on the basis on which we were able to find common cause with our good friends in the Czech Republic?

[The Prime Minister]

The point came when different countries had to decide whether they wanted to sign up to the treaty or not; it is not a treaty within the EU, so there is no compulsion to do so. The Czechs, on 9 December, were not sure whether they wanted to sign it. They then considered whether they wanted to, and last night they decided what to do, as everyone had to; the only person who cannot seem to make a decision is the leader of the Labour party, who has no idea whether he is against it, in favour of it, or does not know. One day, he will have to decide.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

What message does my right hon. Friend have for the great manufacturers of this country, such as DCS Europe in my constituency, given that President Sarkozy says that Britain does not have much manufacturing left?

[The Prime Minister]

The point that I would make gently to my friend Nicolas Sarkozy is that, if one looks at the figures, Britain actually has a higher percentage of industry than France does, but we think that we need to rebalance even further; we want to see a growth in manufacturing, technology and aerospace, but we do not believe that we should do that by damaging the financial services industry, which employs many people not just in the City of London, but right across our country.

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

The overwhelming majority of my constituents, and indeed the country, already believe that the European Union has far too much power over the United Kingdom. Does my right hon. Friend agree with that, and if he does, is he as amazed as me that the leader of any political party in this country that claimed to be in touch with public opinion could argue otherwise?

[The Prime Minister]

rose—

[Edward Miliband]

Briefing note N.

[The Prime Minister]

I think it is briefing note N, and there is plenty in it; it is full. I think the best one in briefing note N is on whether or not the leader of the Labour party would like to join the euro. I know that the House enjoys this, so I might share it one more time: when asked whether he would join the euro, he said,

“It depends how long I'm prime minister for.”

This is the one thing that the shadow Chancellor and I, who often disagree, have in common: we are not going to let it happen.

[Mr Philip Hollobone (Kettering) (Con)]

The German Chancellor was on the radio this morning saying that she firmly expected the fiscal union to be inside the EU treaties within five years. What part of the British veto is giving her such hope and encouragement?

[The Prime Minister]

The point is that the countries that have signed the agreement want to fold it into the EU. That cannot happen without the permission of every country, and those people who say that the veto did not have effect perhaps need to explain why they want to fold the treaty back into the European Union. It seems to me that that is a very powerful point.

[Neil Carmichael (Stroud) (Con)]

I welcome the statement because of its focus on competition, the single market, and energy. It is great that the Prime Minister has demonstrated British leadership in those fields, and he has added useful advice to the discussions, but will he ensure that we continue to have dialogue with our European partners? It is absolutely essential that they know and understand where we are coming from and what we can contribute.

[The Prime Minister]

My hon. Friend is entirely right. As I have said, last night’s meeting proved that it is perfectly possible to stay out of parts of agreements that other European countries want to go into, but have real influence on the things we care about, such as the single market.

[Margot James (Stourbridge) (Con)]

I welcome the fact that the agreement places no new obligations on the UK, but is it not the case that the agreement, whatever its merits or disadvantages, should not distract us or our EU partners from the necessary task of ending the barriers in the single market and reducing regulation?

--- Later in debate ---

[The Prime Minister]

My hon. Friend makes an important point. Of course the eurozone countries want to see rules on fiscal discipline, but as I have said many times, it is not just fiscal deficits that have to be addressed, but trade deficits, and that is where the single market agenda can help not only countries such as ours, but theirs too.

[Joseph Johnson (Orpington) (Con)]

I welcome the Prime Minister’s commitment to trade deals with fast-growing parts of the world. An ambitious trade deal between the EU and India, which would help us double our trade with India by 2015, has eluded negotiators since 2007. Does he agree that next week’s EU-India summit in Delhi should see a clear timetable for the delivery of an ambitious deal as soon as possible?

[The Prime Minister]

My hon. Friend is entirely right, and I know that he has a lot of experience in this sphere. We are totally committed to trying to get this free trade agreement going. I think that there are real opportunities for both sides. I have mentioned the fact that we want to open up retail and services in banking and insurance in India. Frankly, we will have to do quite a lot of work to convince the Indians that that is in their interests too, but I profoundly believe that it is, as they want to be a rapidly growing success story of the future.

[Gavin Barwell (Croydon Central) (Con)]

I welcome what the Prime Minister said about applying a growth test to everything that the EU does in future. Will he tell my constituents what prospect he thinks there is of applying that test retrospectively to existing EU regulations, which the British Chambers of Commerce says costs business £7.5 billion a year?

[The Prime Minister]

It is important to try to look at some of the existing stock of regulations, but I think that one of the things that badly needs to be done in Europe is making sure that it is not just when Economic Affairs Ministers get together that we think about growth, but that when Social Affairs Ministers and Environment Ministers get together we think about the potential costs of what they are signing up to. That does not happen at the moment and badly needs to.

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

I very much welcome the Prime Minister’s statement. My question relates to the discussions held on Syria. What action will EU member states take to protect civilians if Russia vetoes any UN Security Council resolution on the matter?

[The Prime Minister]

My hon. Friend is right to raise this matter. Clearly the Russians have taken a different view up to now and have not supported robust action at the Security Council. My right hon. Friend the Foreign Secretary is trying to build the strongest possible resolution with colleagues at the Security Council and to say to the Russians, “If you go on vetoing or preventing these motions, you will be completely outside not just world public opinion, but the very clearly expressed opinion of the Arab League itself.”

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Is not my right hon. Friend’s strategy of rejecting the fiscal union treaty, which would not be in Britain’s economic interests, and at the same time pushing for a free trade agreement with Canada, Japan and India, which has the potential to create thousands of jobs in this country, absolutely the right one?

[The Prime Minister]

I am grateful to my hon. Friend. I think that Britain is better off outside the eurozone, but clearly we need to get trade going with parts of the world that are growing faster, which is why these trade deals are so important to us.

[Andrew Percy (Brigg and Goole) (Con)]

The good folk of Brigg and Goole are under no illusions about how hopelessly out of touch this House, and the Opposition side in particular, is on the European Union, but they were heartened by the Prime Minister’s veto. They are similarly under no illusion about what happens in Europe: it is where assurances are given, but ultimately breached, and a whole new set of proposals come back. What can he say to my constituents to assure them that this will not become another treaty that we end up getting sucked into?

[The Prime Minister]

We cannot be sucked into this treaty because we are out of it, and we can only go into it if all 27—soon to be 28—EU member states agree. That is the effect of the veto.

[Mr Peter Bone (Wellingborough) (Con)]

I am happy to report that Mrs Bone was singing in the bath yesterday, congratulating the Prime Minister on standing up for British interests and keeping us away from German economic domination of Europe. But she was concerned, because it must be pretty miserable for the Prime Minister to go to Europe when his Deputy Prime Minister forces him to take with him an unelected left-wing Liberal. At the next conference, would it be possible for my right hon. Friend to take a moderate constituent from my constituency—perhaps Mrs Bone?

[The Prime Minister]

I am just relieved that my hon. Friend did not ask me what happens if I am run over by a bus, which I gather is the question that he has asked everybody else. I have been warming up for that one for some time. To be fair to the Deputy Prime Minister, I do not know whether there is room in the deposition for Mrs Bone, and I would not want to get her out of her bath.

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

I welcome the Council’s statement on Iran, but does the Prime Minister agree that the sanctions that the EU has agreed on Iran really need to bite? Iran is in the last chance saloon, so at the European Council what systems and processes were agreed in relation to monitoring the implementation of those sanctions?

[The Prime Minister]

My hon. Friend is right to raise that issue. The key part of the sanctions is the oil embargo, which is a very big step for European countries to take. There is a time lag before it comes in, but I believe that it does so in July, and it is a big step, because there are countries, such as Italy, Spain and others, that have been very reliant on Iranian crude in the past. It is an important step. Europe has quite a good record of making sure that the sanctions that it imposes are put in place, but I will make sure that that happens.

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

My constituents warmly welcome the Prime Minister’s determination to protect our interests in Europe. Will he explain how the United Kingdom will, in practical terms, actually be able to prevent those countries that sign up to the fiscal union treaty utilising the European Commission and the European Court of Justice in a way that damages UK interests?

[The Prime Minister]

The guarantee that they will not damage UK interests is this. First, the treaty itself is clear that it has to be in line with EU law; it cannot override it, and it cannot get into areas such as the single market. Secondly, as I have said in answer to previous questions, if the institutions do things that are not permitted, there can be a challenge, including a legal challenge. But, above all, Britain is protected because, although others are going ahead with this treaty outside the European Union, we are not part of it.

[Chris Kelly (Dudley South) (Con)]

I thank my right hon. Friend for his statement and for bringing greater clarity to Britain’s position, because these are complicated issues. My constituents in Dudley South were very grateful for his exercise of the veto last month, but is the ECJ, as an institution of the whole European Union, not now being unjustly used?

[The Prime Minister]

As I said, in pre-existing treaties there are ways in which the European institutions can be used by groups of member states. That is a fact, and those treaties, as I said, tend to be passed by the Labour party. But, if member states go beyond that, there are real legal issues, and legal issues that I have set out; and, if that were to happen, we would be able to take action to protect our national interest.

[Stephen Mosley (City of Chester) (Con)]

I trust my right hon. Friend the Prime Minister to do what is right for Britain, but I do not necessarily trust his successors. After all, we saw the previous Government give up our hard-fought opt-out from the social chapter and give up our hard-fought budget rebate. What guarantees are there that the UK will not be sucked into this new treaty?

[The Prime Minister]

One of the best guarantees is the referendum lock, which we have in place in this country, which this House of Commons passed, which the Labour party opposed and which says that, if we propose any passage of power from Westminster to Brussels, there has to be a referendum. That is absolutely key to protecting our interests and to making sure that future Governments cannot give away powers that they should not.

[Christopher Pincher (Tamworth) (Con)]

The Prime Minister has made clear his determination to secure free trade agreements with, among others, India, but will he agree to pursue with equal vigour similar opportunities in the emerging markets of Africa?

[The Prime Minister]

My hon. Friend makes a very important point. If we look at which continents are going to grow over the next decade, we find that Africa has a very healthy growth rate and that countries such as Nigeria, South Africa, Ghana and others will grow rapidly. We already have very low tariff access from African countries to the European Union, and one thing we ought to try to encourage and look at is a pan-African free trade area, so that more of their trade can take place within Africa and they can have an effective single market, as we do in the European Union.

[David Rutley (Macclesfield) (Con)]

Given that EU regulations account for 70% of the regulatory burden on businesses, will my right hon. Friend tell the House what steps are being taken to exempt micro-businesses from EU legislation?

[The Prime Minister]

My hon. Friend makes an important point. This is a breakthrough in Europe. We have been arguing for a moratorium on new EU regulations for micro-businesses—those employing fewer than 10 people—and that was agreed to at the European Council. We need to ensure that it is put in place rapidly.

[Andrew Selous (South West Bedfordshire) (Con)]

The Prime Minister is to be congratulated on what he and others achieved with the sanctions on Iran. Will he tell the House whether there have been discussions between the European Union and Asian countries so that Iran cannot sell to Asia the oil that it is now not selling to Europe? Otherwise, we will be back to where we were before.

[The Prime Minister]

My hon. Friend is right to raise that issue. There are two things that we need to do. First, we must ensure that countries that can increase production, such as Saudi Arabia, sell more oil to the countries in Europe that were reliant on Iranian crude. We then need to persuade Asian countries that might buy Iranian crude not to do the deals that they might otherwise have planned. We need to take action on both fronts.

[Dan Byles (North Warwickshire) (Con)]

I strongly welcome the agreement to reduce regulatory burdens on SMEs and micro-enterprises. Although I do not expect the Prime Minister to give us a list today, will he tell the House when we can expect to see more detail on precisely which regulatory burdens small businesses in my constituency might see reduced and when?

[The Prime Minister]

The formal European Council on the single market, competitiveness and the economy is in March. This was a special European Council to kick-start progress on the single market. I hope that after the March Council we will have a specific list for my hon. Friend.

[Bob Blackman (Harrow East) (Con)]

I welcome the commitments to bring down trade barriers and encourage trade outside the European Union. Will my right hon. Friend expand on the opportunities that British business will have for increased jobs, trade and commerce throughout the world?

[The Prime Minister]

This is an important point. In our trade with India and China over the past couple of years, we have seen increases of more than 20%. As there is a difficult situation in European markets, we have to look to the faster-growing markets of the world to grow our exports. That means great challenges for businesses. They have to get out there and sell. The Government have to get behind them. We need to help by opening up those markets, and particularly by allowing services full access to those markets. That is why the free trade deals are so important.

[Robert Halfon (Harlow) (Con)]

Will my right hon. Friend say whether there were any discussions about the cost of oil and the geopolitical threats that might increase that cost? Will any action be taken by the EU to reduce the cost of oil and thereby reduce the price at the pump for motorists?

[The Prime Minister]

We did not discuss the cost of oil. As I have said, Saudi Arabian production is an important issue. The completion of the energy single market should help to bring energy prices down, because it will make the energy markets in Europe more efficient and ensure that there is a proper networked energy grid around Europe.

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

More than 1 million people are employed in the financial services sector across the United Kingdom. Does the Prime Minister agree that many of those jobs could have been exposed to a significant degree if he had not used his veto in December and secured the agreement yesterday?

[The Prime Minister]

It is important to remember that the financial services industry is not just the City of London; it employs 100,000 people in Birmingham and more than 100,000 people in Scotland. It is important that we stand up for those people. Obviously, there is still the danger of eurozone countries going ahead with financial transactions taxes. However, Britain is making the case strongly that there are ways to ensure that the financial services industry pays its fair share through bank levies and the stamp duty on share transactions, without having a financial transactions tax, which would drive these activities to areas of the world that do not apply it. It does not work and the European Commission has said that it does not work. That is why we should reject it.

[Mr Speaker]

I thank the Prime Minister and the House for their succinctness, which enabled 72 Back Benchers to question the Prime Minister in 66 minutes of exclusively Back-Bench time. That shows what we can do when we put our minds to it. I am grateful to colleagues.

Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 25th January 2012 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

Q1. If he will list his official engagements for Wednesday 25 January.

[The Prime Minister (Mr David Cameron)]

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

[Nia Griffith]

The Prime Minister frequently claims that he is not complacent about the tragedy of youth unemployment, so can he tell the House why his youth contract scheme still has not started?

[The Prime Minister]

The youth contract scheme is going to make a big difference to young people because it will, over the coming years, have 160,000 places for people in private sector firms. That will be far better than the failed future jobs fund, which in some cases had more than 97% of its jobs placed in the public sector. It will be up and running this year and it will make a big difference to young people.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Today is the anniversary of the birth of the great Scottish poet Robert Burns. Does the Prime Minister agree with Burns’s impassioned plea for the unity of our nation in his poem, “The Dumfries Volunteers”,

“Be Britain still to Britain true,

Amang oursels united;

For never but by British hands

Maun British wrangs be righted!”?

[The Prime Minister]

I am grateful to my hon. Friend for her question, and the point she makes is a good one. Burns night will be celebrated not just across Scotland but across the whole of the United Kingdom and in many parts of the world. When I hear the Scottish nationalists, who are so keen to leave the UK yet so anxious about having a referendum, I think that perhaps they should remember Burns’s words when he referred to the

“Wee, sleekit, cowrin, tim’rous beastie,

O, what a panic’s in thy breastie!”

[Edward Miliband (Doncaster North) (Lab)]

We are 18 months into the Prime Minister’s Government, and today’s figures show that our economy is not growing but is shrinking. What has gone wrong with his economic plan?

[The Prime Minister]

These are extremely difficult economic times and these are disappointing figures—although they are not unexpected, because the Office for Budget Responsibility forecast a small decline in gross domestic product at the end of last year. I will be frank with the right hon. Gentleman: they reflect three things. They reflect the overhang of the debt and the deficit that we have to deal with; they reflect the higher food and fuel prices that put a squeeze on household income towards the end of last year; and they also reflect the crisis in the eurozone that has frozen Europe’s economies. The forecasts for France, Germany, Spain and Italy for the end of last year forecast as great a decline, or in many cases a greater decline. This is the year when we have to take further action to get our economy moving, but the most important thing is to have a credible plan to get on top of the deficit, which has given us the lowest interest rates for more than 100 years.

[Edward Miliband]

People are fed up with the right hon. Gentleman’s excuses about what is happening in our economy. He blames the eurozone. Growth has been flatlining in our economy since well before the eurozone crisis—in fact, since his spending review in autumn 2010. And what has characterised the Government’s approach throughout this period? Total arrogance. In his first Budget the Chancellor painted a glowing picture of what his policies would deliver for our economy. He said that his policies would deliver

“a steady and sustained economic recovery, with…falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]

We have a shrinking economy and the highest unemployment in 18 years. How bad do things have to get in our economy to shake the Prime Minister out of his complacency?

[The Prime Minister]

As usual, the right hon. Gentleman writes the question before he listens to the answer. I did not just say, “This is an issue of the eurozone.” It is an issue of debt and deficit; it is an issue of squeezed household incomes—issues that are affecting many other economies. He talks about what our policy is. We remember what his policy was: “No more boom and bust”. And yet he gave us the biggest boom and the biggest bust, which we are having to recover from. There is not one ounce of complacency; that is why we are cutting corporation tax, we scrapped Labour’s job tax, we have introduced the enterprise zones, we are investing record sums in apprenticeships—[Interruption.]

[Mr Speaker]

Order. Both the Prime Minister and the Leader of the Opposition must be heard.

[The Prime Minister]

We are doing all of these things, but the Labour party has only one answer, and that is to deal with a debt crisis by borrowing more and adding to debt. That is his answer. That would wreck our interest rates, wreck our economy and make things much worse.

[Edward Miliband]

The Prime Minister says that there is not one ounce of complacency, but he and his Chancellor are the byword for self-satisfied smug complacency, and that is the reality. He talks about borrowing; he is failing not just on unemployment, not just on growth, but on borrowing as well. Because of his failure on growth and unemployment, he is borrowing £158 billion more than he forecast. And now we know—he said unemployment would fall; it isn’t. He said our economy would grow; it hasn’t. He said, “We’re all in this together”; we’re not. When will this Prime Minister face up to the fact that it is his policies that are failing our country?

[The Prime Minister]

Our economy grew last year, but the right hon. Gentleman cannot find it in himself—[Interruption.] There are more people in work today than there were at the time of the last election. But we were given—[Interruption.]

[Mr Speaker]

Order. The House must calm itself, and will hear the Prime Minister.

[The Prime Minister]

We were given a very clear instruction yesterday. At 5 o’clock in the afternoon the shadow Chancellor said that the Government should listen to the IMF and change course. At 7 o’clock in the evening the IMF told us what we should do. It said that it does not think that fiscal consolidation adds to the problem, and that

“The fiscal consolidation is part of resolving problems facing the UK economy.”

That is the truth. There are two parties in this country taking responsibility for clearing up the mess; there is one party refusing to take responsibility for causing the mess.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Sir Fred Goodwin has recently been censured by the Financial Services Authority in its report on the RBS shambles. Can the Prime Minister tell the House when the Honours Forfeiture Committee will be sitting, to consider stripping this man of his ill-deserved knighthood?

[The Prime Minister]

The forfeiture Committee will, as I understand it, be meeting this week, and it will be considering all the evidence—including, as I have said before, the Financial Services Authority report on RBS and what went wrong, and who was responsible for what went wrong.

[Mr Speaker]

I call Mr Angus Brendan MacNeil. [Interruption.]

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Q2. It seems, Mr Speaker, that the SNP gets more reaction from Labour than their own Leader does. Does the Prime Minister agree that in Scotland the people are sovereign, and therefore for improvement they have the right to determine their own constitutional future as they see fit?

[The Prime Minister]

Of course this is an issue for the people of Scotland, and I think we should bring forward the date when we put to the Scottish people the question of whether they want to stay in the United Kingdom—which I dearly hope that they do—or to leave the United Kingdom. But the point that everyone needs to understand is that options for further devolution—options for changes across the United Kingdom—are matters for all of the United Kingdom, and matters that all of the United Kingdom should rightly discuss.

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

May I put it to the Prime Minister that for Britain to commit still more funds to the IMF would, in effect, be providing a subsidy to Germany, because it is still not fully supporting its own currency, while benefiting from its depreciation?

[The Prime Minister]

My right hon. Friend makes an important point. Of course the IMF managing director, Christine Lagarde, is in London today, and our message has been clear: there should be no question of committing further IMF funds until the eurozone itself has shown that it is comprehensively going to stand behind its own currency. In her speech in Germany last night Christine Lagarde made it absolutely clear that the IMF’s role is to support countries, not currency zones, and the Government support that position.

[Edward Miliband]

Last September the Prime Minister said about his flagship health Bill:

“we have the Royal College of GPs, the physicians, the nurses and people working in the health service supporting the changes we are making”.—[Official Report, 7 September 2011; Vol. 532, c. 352.]

Will he give the House an update on the support for his Bill from the medical profession?

[The Prime Minister]

I have certainly learned that when it comes to the NHS you should always expect a second opinion—or conceivably even a third opinion.

The point is this: there are thousands of GPs throughout the country who are not just supporting our reforms, but actually implementing our reforms. Let me give the right hon. Gentleman just one example of a supportive GP, who happens—[Interruption.]

[Mr Speaker]

Order. Hon. Members should not be yelling out. The question was asked, the answer will be given, and the answer will be heard.

[The Prime Minister]

I think they want to hear from this one particular GP, who hails from Doncaster. When he was the acting chairman of the Doncaster GP commissioning group, he said:

“Becoming one of the first national pathfinder areas is a real boost for Doncaster.”

I think that what is good for Doncaster is good for the rest of the country, too.

[Edward Miliband]

How out of touch is the Prime Minister with what is happening in the NHS? Let me tell him what the medical profession is saying. The latest survey of the Royal College of General Practitioners says that 98% of GPs want the Bill withdrawn. The Royal College of Nursing has said:

“the turmoil of proceeding with these reforms is now greater than the turmoil of stopping them”.

In his famous listening exercise, the Prime Minister said:

“change—if it is to endure, to really work—should have the support of people who work in our NHS. We have to take our nurses and doctors with us.”

If he wants to hear the voice of doctors and nurses across our NHS, why does he not listen?

[The Prime Minister]

The right hon. Gentleman seems to be out of touch with what is happening in Doncaster. He asks what is happening in the NHS. Let me tell him what is happening in the NHS: 4,000 extra doctors since the election; 100,000 more patients treated since the election; in-patient and out-patient waiting times lower than they were at the election; and £7 billion of the £20 billion already saved. At the same time, we have got hospital-acquired infections at their lowest ever level. That is what is happening in the NHS, but if we listened to him, we would be cutting spending in the NHS and scrapping reforms of the NHS, and the NHS would be getting worse, not better.

[Edward Miliband]

I shall tell the Prime Minister what is happening in the NHS: waiting lists up, morale down. What does the majority-Conservative Select Committee on Health say about his reorganisation? It says that it will be a

“disruption and distraction that hinders the ability of organisations to”

release savings.

Let us be frank: this is a Bill that nobody wants. It is opposed by doctors, nurses and patients. Before the election the Prime Minister said, “No more top-down reorganisation.” Is it not time he kept at least one promise, put aside his pride and arrogance, and dropped this unnecessary and unwanted Bill?

[The Prime Minister]

I know that the Leader of the Opposition panics and backs down the first time a trade union says no, but this Government do not. Of course if you introduce choice, transparency and competition and say that the private and voluntary sectors should play a greater role you face a challenge, but that is what doing the right thing is sometimes all about. Let him remember what his party’s Health Secretary said about GP commissioning:

“That change will put power in the hands of local GPs to drive improvements in their area, so it should give more power to their elbow than they have at present. That is what I would like to see”.—[Official Report, 16 May 2006; Vol. 446, c. 861-62.]

What a shame they talk about it in government, but do not have the guts to face down opposition when they are in opposition.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Following the death of 167 workers in the Piper Alpha disaster in the North sea, this country developed a world-leading safety case regime for offshore oil and gas, which is now threatened by regulations from the European Union. Will the Prime Minister use his best endeavours to back his Department of Energy and Climate Change in persuading the rest of the EU that what we need is not more regulation, but a— [Hon. Members: “Derogation?”] No—I am sorry Mr Speaker. What we need is not regulation, but a directive, which can be implemented flexibly.

[The Prime Minister]

My hon. Friend makes a very important point. I well remember the Piper Alpha disaster and the huge suffering and loss of life it caused. Since that day, we have put in place what I agree is a world-leading system of regulation, and I shall do all I can to support the Secretary of State for Energy and Climate Change in making sure that we get a result in Europe that means we can go on with the right regulations for the North Sea.

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

Q3. On 2 May 2010 the Prime Minister said that“The test of a good society”was how it cares for the frail and the vulnerable, adding that that was“even more important in difficult times.”Will he not be offending the basic sense of decency of the British people if he persists next week with proposals to take away up to £94 per week in employment and support allowance from up to 7,000 recovering cancer patients across the country?

[The Prime Minister]

What our plans envisage is more people with cancer receiving the higher level of benefit and fewer people having to have the face-to-face interview. That is the case. As the hon. Gentleman knows, there are two types of employment and support allowance. Those in the support group get that money for ever—for as long as they need it and as long as they are unable to work. Many people with cancer go straight into that group, and quite right too.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Q4. I know that my right hon. Friend is aware that the Coryton oil refinery in my constituency went into protective administration yesterday. Although the future is uncertain, it is by no means bleak. Does he agree with me that what is needed now to protect the 1,000 jobs the refinery provides is the full support of the customers and the suppliers, and accurate reporting of the situation? Will he agree to ensure that I meet all the relevant Ministers to discuss what further action the Government can take to secure the future of that important business?

[The Prime Minister]

My hon. Friend is right to raise that case and to mention the importance of the role played by the customers and the suppliers. I shall certainly make sure that he meets Ministers as appropriate. The key is the role of the administrator, which has made it clear that its immediate priority is to continue to operate the refinery operations at Coryton and the other Petroplus sites in the UK while the financial position is clarified and all the restructuring options are explored. We are confident that the administrator is doing all it can, but we will keep on the case.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Q5. The existing UK controls on the movement of terrorist suspects lapse today, including in the case of suspect CD, of whom Mr Justice Owen said at his appeal last year that relocation was a “necessary and proportionate measure to protect the public from…an immediate and real risk of a terrorist-related attack.” Will the Prime Minister tell the House why his Government supported the relocation power at the court hearing last year, but have since legislated to remove it and to give suspect CD and others like him the freedom to come to London in the run-up to the Olympic games?

[The Prime Minister]

I think that most people across the House realise that the control order regime needed to be reformed, as it did not have public confidence, nor did it have the confidence of many people in the police and security services. We have reformed it, and we have worked with the police and security services. We have put in all the resources that they believe are necessary to make sure that our country is kept safe.

[Nigel Adams (Selby and Ainsty) (Con)]

Q6. Following the renewable energy subsidy review, will the Prime Minister assure taxpayers that the Government will focus their support on technologies that are cost-effective and reliable, such as biomass, rather than inefficient, costly, large-scale onshore wind farms?

[The Prime Minister]

My hon. Friend will know that the consultation on the renewable obligation banding review has just closed. It proposed targeting only the most cost-effective onshore wind farms, recognising that that is now one of the mature and cheaper technologies. We should, as he says, increase support for an expansion in sustainable biomass generation, which is reliable and cost-effective, and will help us to meet our renewables target.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

On Friday, Holocaust memorial day commemorates the liberation of the concentration and extermination camp at Auschwitz-Birkenau. What can the Prime Minister do to ensure that all of our society understands the depravity of the era of Nazi evil and learns the lessons of it for the present?

[The Prime Minister]

The hon. Lady, who has a long record of supporting this cause, speaks for the whole House and the whole nation in raising it and stressing its importance. I met representatives of the Holocaust Educational Trust yesterday and I met a holocaust survivor, whose story was truly inspiring about what he had seen and gone through as a young boy—and then his coming to Britain and becoming an Olympic and Commonwealth contender. It was a fantastic story. We need to make sure that these stories are told in all our schools, right across the country. That is the work of the Holocaust Educational Trust, and it is work that I strongly support.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

Q7. Is the Prime Minister aware that for the whole of Lancashire, average household income after tax is a little above £26,000? Yes, my constituents want a fair deal for those who deserve benefits, but they also want a fair deal for those who work and pay for benefits.

[The Prime Minister]

My hon. Friend speaks for many people. We say that the proposal for a cap on benefits of £26,000 is fair. It allows people to receive £500 a day—[Interruption]—a week. His constituents, and many other constituents, ask themselves, “Is it right that my hard-earned taxes, when I am earning less than that, are going to support people on benefits?” I have to say how disappointing it was that, after the Labour party said that it would support a cap—the announcement was made on the BBC—it voted against it in the other place. What a complete act of hypocrisy!

[Lisa Nandy (Wigan) (Lab)]

Following today’s media reports, will the Prime Minister explain why ministerial advisers and senior civil servants continued to attend networking events with lobbyists who paid several thousand pounds to attend, despite the fact that the Cabinet Office deemed that to be a breach of the civil service code, and had previously issued a ban on attendance?

[The Prime Minister]

The point that I would make to the hon. Lady is that, unlike the position under the previous Government, there is now a proper system for declaring the interests of special advisers and Ministers. That used not to be the case: it is now the case.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Q8. My right hon. Friend will have noted that the Government’s proposed benefits cut excludes war widows, the disabled and those claiming working tax credits. Does he not agree that my constituents on the Lancashire wage to which my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) referred deserve to know that they have a Government who are on the side of families who do the right thing and support their local communities?

[The Prime Minister]

My hon. Friend speaks very powerfully about this issue, which is why a benefit cap is fair. It is also very important to recognise that we are excluding from that benefit cap those entitled to working tax credit, as well as households with someone receiving disability living allowance. As we have always said, there will be a hardship fund, a grace period and a way of helping those families to cope with the cap, and to make sure, where possible, that we actually get people into work. The real shame is that there are so many millions of children who live in households where nobody works—and indeed, that number doubled under the previous Government.

[Lindsay Roy (Glenrothes) (Lab)]

Q9. The Prime Minister has said that it would be “a personal betrayal if banks failed to increase lending to businesses”.Yet last week the Bank of England stated that businesses are still not getting the investment that they need from the banks. Have the banks betrayed the Prime Minister, or has the Prime Minister betrayed businesses?

[The Prime Minister]

What I have done is put in place the Merlin agreement, which actually led to an increase in bank lending last year. What we now have in place is a massive credit easing programme, which the Chancellor announced in the autumn statement, that will kick in this year and make sure that banks are doing what banks ought to do in a free enterprise economy, and lending to businesses large and small.

[Bob Stewart (Beckenham) (Con)]

I am sure there will be families with children who may have difficulties with the new benefit regime. However, would the Prime Minister care to comment on the feelings of elderly couples who have spent their entire lives working for this country, paid into the state pension system, and are now existing on about £7,000 a year, rather than £26,000?

[The Prime Minister]

My hon. Friend makes a very good point. The fact is that if one looks at the figures today, there are still families in London receiving housing benefit worth more than £50,000 a year. Each one of those families is taking up the hard-earned taxes of many working people earning far less, who could not dream of living in such houses. The point that he makes about pensioners is right, and I am proud of the fact that the Government will be increasing the basic state pension by £5 a week, starting in April, because we believe in dignity and security for our pensioners in old age.

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

Q10. What does the Prime Minister make of the National Audit Office’s slating of his flagship Work programme? It says that the Government have totally overestimated the number of people that it will put back to work. It is not so much a Work programme as a “doesn’t work” programme.

[The Prime Minister]

Instead of just reading the press release, the hon. Gentleman should read the NAO report, which praises the Government for introducing a scheme in such a short time. The basic point that the NAO is making is that the Work programme is not putting taxpayers’ money at risk but putting the providers at risk, and that is a different way of doing things. It is about payment by results, getting better performance and value for money—things that his Government never provided.

[Chris Kelly (Dudley South) (Con)]

Q11. As my hon. Friends have said earlier, many of my constituents, like theirs, work extremely hard for modest salaries. Given that many people think that the benefit cap should be set lower than £26,000, does my right hon. Friend agree that the Opposition are completely out of touch by voting to make it higher?

[The Prime Minister]

My hon. Friend makes a good point. Let me remind the Leader of the Opposition what he said at the beginning of this year. On the “Today” programme, he said:

“I’m not against the cap.”

If he is not against the cap, why could he not get his Labour peers to vote for the cap in the House of Lords? What is he—weak, incompetent, or both?

[Mrs Anne McGuire (Stirling) (Lab)]

Q12. On 14 December I asked the Prime Minister about cutting benefits for disabled children, and he replied:“First of all, we are not cutting benefits for disabled children.”—[Official Report, 14 December 2011; Vol. 537, c. 793.]I wonder whether since that time he has checked his facts and discovered that on 12 December, two days before I asked my question, his coalition Members in the Lords voted against the protection of benefits for disabled children under the new universal credit, resulting in a loss of £1,300. I will give the Prime Minister another go. How does this fit in with “We’re all in this together”?

[The Prime Minister]

The right hon. Lady is wrong. The money going into universal credit for the most disabled children is not being cut. She is just plain wrong about that. But is it not interesting that all the questions that we get from all Opposition Members are always about calling for more spending? They have learned absolutely nothing about the mess they landed this country in.

[Malcolm Bruce (Gordon) (LD)]

British Airways has announced that it has reached an agreement to take over British Midland International. Although this is being challenged under competition rules, what assurances can the Prime Minister give that the landing slots at Heathrow from regional airports such as Aberdeen will be protected if it is allowed to go ahead?

[The Prime Minister]

The right hon. Gentleman makes an important point, and I am sure that it is important to his constituents as well. I will look into the issue of landing slots—I know how important it is for regional airports—and get back to him.

[Mark Hendrick (Preston) (Lab/Co-op)]

Q13. Why does the Prime Minister want NHS hospitals to hand over up to half their beds to private patients?

[The Prime Minister]

That is not what the reforms do at all. The reforms ensure that there can be some private and voluntary sector activity going on within the NHS. Before they all—[Interruption.] Perhaps the Leader of the Opposition should quieten down for a second and listen to what his own shadow Health Secretary said. He said:

“the private sector puts its capacity into the NHS for the benefit of NHS patients, which I think most people in this country would celebrate”—[Official Report, 15 May 2007; Vol. 460, c. 250WH.]

Again, that is what he said in government, but since going into opposition Labour Members have taken up a position of just supporting the producer interest, total irresponsibility and total short-termism. I stand by what you said in 2007; it is a pity you could not stick by it.

[Mr Speaker]

Of course, it is not my obligation to stick by any of these matters.

[Priti Patel (Witham) (Con)]

The Prime Minister will be aware of the brutal murder last year in Germany of my constituent, Lee Heath. The murder trial is set to start in March and will last for a good couple of months. Will the Prime Minister ensure that the Government do everything possible to support Lee’s mother, Marie Heath, in dealing with the ever increasing financial costs that she faces in seeking justice for her son?

[The Prime Minister]

My hon. Friend is absolutely right to raise this case. First, may I offer my sincere condolences to Marie Heath and her family following the tragic death of her son Lee last year? I know what a distressing time this will be for them as they travel for the trial in Germany. The Foreign Office will do everything it can to support Marie and her family. I have to say that I have been quite impressed by what the Foreign Office does in cases like this. I think that it shows sympathy and understanding, and I will make sure that that is carried through in this case as well.

[Graham Stringer (Blackley and Broughton) (Lab)]

Q14. Twenty-five per cent. of our constituents suffer from musculoskeletal diseases. The National Audit Office and the Public Accounts Committee believe that we could get better outcomes for those people at lower cost if a clinical director was appointed to co-ordinate things in the NHS. Will the Prime Minister agree to meet charities representing those people, with me, in the near future?

[The Prime Minister]

I will certainly look carefully at the case that the hon. Gentleman makes. One of the points of the NHS reforms that is perhaps not yet fully understood is the idea of having public health budgets properly ring-fenced, properly funded and with properly employed directors of public health in each area, which will help in many of these areas.

[Chris Skidmore (Kingswood) (Con)]

My constituents in Kingswood entirely agree with the Government’s proposed benefits cap. They believe that no one should earn more in benefits than hard-working families earn. Does the Prime Minister not agree that it is a damned disgrace—[Hon. Members: “Oh!”]—that the Labour party is opposing and trying to wreck this important measure?

[Mr Speaker]

Order. Moderation in the use of parliamentary language—and, indeed, the use of parliamentary language— is much to be preferred.

[The Prime Minister]

My hon. Friend makes a very important point. This is an important decision that the House of Commons has to make. We were told that the Labour party would support a cap on benefits—Labour Members have said that repeatedly—yet when the challenge comes they duck it and refuse to support the cap. [Interruption.] They will have another chance when the legislation comes back to this House—[Interruption.] It is no good the Leader of the Opposition shaking his head. His own peers voted against the cap in the Lords. People in this country will not understand why they are taking that position.

Parliamentary Assembly of the Council of Europe (UK Delegation)

Lord Cameron of Chipping Norton Excerpts

Tuesday 17th January 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

The hon. Member for North Thanet (Sir Roger Gale) and the hon. Member for North East Hertfordshire (Oliver Heald) have been appointed as full members of the United Kingdom delegation to the Parliamentary Assembly of the Council of Europe in place of the hon. Member for East Surrey (Mr Gyimah) and the hon. Member for Devizes (Claire Perry), who become substitute members.

Lord Anderson has been appointed as a full member in place of the hon. Member for Stockport (Ann Coffey), who becomes a substitute member.

Lord Ahmad and Baroness Eaton have been appointed as substitute members in place of Lord Glentoran and Lord Inglewood.

The hon. Member for Monmouth (David T. C. Davies) has been appointed as a substitute member in place of the hon. Member for Grantham and Stamford (Nick Boles).

Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 14th December 2011 Commons Chamber

[Richard Fuller (Bedford) (Con)]

Q1. If he will list his official engagements for Wednesday 14 December.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to Sapper Elijah Bond of 35 Engineer Regiment, who died in Queen Elizabeth hospital, Birmingham last Thursday as a result of wounds that he had sustained in Afghanistan. He was a dedicated and highly professional soldier, and at this tragic time we should send our condolences to his loved ones, his friends and his colleagues.

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

[Richard Fuller]

Let me associate myself and, I am sure, all other Members with the Prime Minister’s words about Sapper Elijah Bond.

The people of Bedford and Kempston will be disappointed that this week’s report on the financial crisis in the Royal Bank of Scotland contained no provision for the criminal prosecution of executives, directors, regulators and Ministers for their failures. Can the Prime Minister assure me that, unlike the last Government, his Ministers will reinforce financial regulations, and will not undermine them as the shadow Chancellor did when he was in office?

[The Prime Minister]

My hon. Friend is right, and as he will know, we are considering specific extra measures. We are considering sanctions in relation to what was done by people on the board of RBS. However, the report was not just damning about the board of RBS; it was damning about the politicians who were responsible for regulating RBS. And it did not just name politicians who are no longer serving: it also named the shadow Chancellor.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Sapper Elijah Bond of 35 Engineer Regiment. He bravely gave his life in trying to improve the lives of others, and all our thoughts are with his family and friends. As we approach Christmas, our thoughts are also with all our troops who are serving so bravely in Afghanistan and elsewhere. Many will be spending Christmas away from their families and friends to ensure a peaceful Christmas for us, and we owe them a huge debt of gratitude.

In this, the last Prime Minister’s Question Time of the year, let me remind the Prime Minister of what he had to say in his new year message of 2011. He said:

“Uppermost in my mind as we enter the New Year is jobs.”

In the light of today’s unemployment figures, can he explain what has gone wrong?

[The Prime Minister]

First, let me join the right hon. Gentleman in his fitting and right tribute to our forces at Christmas time—those who are serving in Afghanistan, but also those who are serving in other parts of the world. One of the things that strikes you most in this job is that they are the best of the best. They are brave, they are courageous, they are dedicated, and their families, too, give up a huge amount. I join the right hon. Gentleman in saying that.

Let me say about the unemployment figures that any increase in unemployment is bad news and a tragedy for those involved, and that is why we will do everything we can to help people back into work. That is why we have the Work programme, which will help 2.5 million people; that is why we have the massive increase in apprenticeships that will help 400,000 people this year; and that is why we will give particular help to young people through the youth contract and through the work experience places. We will do all we can to help people back into work.

[Edward Miliband]

But the figures show that the Prime Minister’s economic strategy is failing. The Chancellor said at the time of the spending review last year:

“private sector job creation will far outweigh the reduction in public sector employment.”—[Official Report, 29 November 2010; Vol. 536, c. 531.]

Will the Prime Minister confirm that over the last three months, for every job being created in the private sector 13 are being lost in the public sector?

[The Prime Minister]

Let me give the right hon. Gentleman the figures. Since the election, in the private sector there have been 581,000 extra jobs. In the public sector, he is right that we have lost 336,000 jobs, so we need private sector employment to grow even faster. But let me make this point to him, because I think this is important: whoever was in government right now would have to be making reductions in public spending. The only way you can keep people in work in the public sector while doing that is to cut welfare—something we are doing and he opposes—or to freeze public sector pay—something we are doing and he opposes—or to reform public sector pensions—something we are doing and he opposes. So it is all very well standing there and complaining about the rise in unemployment, but if we do not take those steps, we would lose more jobs in the public sector.

[Edward Miliband]

I think the whole House will have heard that the Prime Minister cannot deny that the central economic claim that he made—that the private sector would fill the gap left by the public sector—has not been met. He has broken his promise, and today’s figures also confirm that youth unemployment not only remains over 1 million; it is still rising, and long-term youth unemployment has gone up by 93% since he made his new year pledge on jobs. Is not the reality that he is betraying a whole generation of young people?

[The Prime Minister]

We will not take lectures from a party that put up youth unemployment by 40%. That is the case—even the right hon. Gentleman’s brother admitted the other day that youth unemployment was not a problem invented by this Government; it has been going up since 2004. But let me explain what we are doing to help young people get a job. Through the youth contract we are providing 160,000 new jobs with private sector subsidies. With the 250,000 work experience places, half those people are actually getting jobs and getting off benefit within two months. That is 20 times more effective than the future jobs fund.

But the absolute key to all this is getting our economy moving. We need private sector jobs. It is this Government who have got interest rates down to 2%—that is why we have the prospects of growth—whereas the right hon. Gentleman’s plans are for more spending, more borrowing and more debt: more of the mess that we started with.

[Edward Miliband]

The truth is that the Prime Minister’s promises to young people for next year are as worthless as the promises he made in 2011. Let us turn from his broken promise on jobs to his broken promise on the coalition. And Mr Speaker, let me say that it is good to see the Deputy Prime Minister back in the House. This is what the Prime Minister said—[Interruption.] Calm down. This is what he said in his new year’s message for 2011—and I will place a copy in the Library of the House, just so that everyone can see it:

“Coalition politics is not always straightforward…But I believe we are bringing in a”

whole

“new style of government.”

[Hon. Members: “More! More!”] There is more:

“A more collegiate approach.”

I am bound to ask, what has gone wrong?

[Hon. Members]

Answer!

[The Prime Minister]

I will answer. No one in this House is going to be surprised that Conservatives and Liberal Democrats do not always agree about Europe, but let me reassure the right hon. Gentleman. He should not believe everything he reads in the papers. It’s not that bad—it’s not like we’re brothers or anything! [Hon. Members: “More! More!”] He certainly walked into that one.

[Edward Miliband]

I think our sympathy is with the Deputy Prime Minister. His partner goes on a business trip and he is left waiting by the phone, but he hears nothing until a rambling phone call at 4 am confessing to a terrible mistake.

How is the Prime Minister going to pick up the pieces of the bad deal he delivered for Britain? The Council came to conclusions on Friday morning, but the treaty will not be signed until March. In the cold light of day, with other countries—[Interruption.]

--- Later in debate ---

[Edward Miliband]

In the cold light of day, with other countries spending the weeks and months ahead trying to see whether they can get a better deal for themselves, would not the sensible thing for the Prime Minister to do be to re-enter the negotiations and try to get a better deal for Britain?

[The Prime Minister]

First, I make no apologies for standing up for Britain. In the past two days we have read a lot about my opinions and we have read a lot about the Deputy Prime Minister’s opinions; the one thing we do not know is what the right hon. Gentleman would have done. While he was here on Monday his aides were running around the Press Gallery briefing that he would not have signed up to the treaty. Well, here is another try: what’s your answer?

[Mr Speaker]

I have no answer on this matter whatsoever—[Interruption.] Order. I am glad the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), has returned from his travels. We wish him a merry Christmas, but in his case it should be a quiet one.

[Edward Miliband]

There was a better deal for Britain that the Prime Minister should have got, and that is what the Deputy Prime Minister himself says. Here is the truth: last week the Prime Minister made a catastrophic mistake, and this week we discover that unemployment is at its highest level for 17 years. This Prime Minister thinks he is born to rule. The truth is that he is just not very good at it.

[The Prime Minister]

Even the soundbite was recycled from a previous Prime Minister’s Question Time. On Wednesday the answer was no. Today—I think—the answer is maybe. This Leader of the Labour party makes weakness and indecision an art form; that is the fact.

The right hon. Gentleman gave me my end-of-year report; let me give him his. He told us at the start of the year, in his new year’s message, that the fightback started in Scotland. Well, that went well, didn’t it? He told us that he would have credible plans to cut the deficit, but we still have not seen them. He said that he would stand up to vested interests, yet he backed the biggest strike for years. We all know that he has achieved one thing, though. He has completely united his party. Every single one of them has asked Santa for the same thing: a new leader for Christmas.

[Hon. Members]

Hear, hear!

--- Later in debate ---

[The Prime Minister]

I would be delighted to do that. I do not have any immediate plans to visit north Lincolnshire, but I do support local television. I also think that north Lincolnshire had some very good news with the Siemens plant going into Hull. That is excellent news for the whole region.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

Q2. In the early new year the Government intend to announce a wholesale revision of the national curriculum. May I put it to the Prime Minister that it would be perverse—in fact it would be absurd—to require those coming from abroad to settle in Britain to learn about our democracy and to take citizenship courses while withdrawing the teaching of citizenship and democracy to our own children in our schools?

[The Prime Minister]

I listen very carefully to what the right hon. Gentleman says, because I agree with some of the proposals about citizenship that he put forward when he was Home Secretary. Many Members will have been to the citizenship ceremonies that he was responsible for, which have been a good addition to our country and our democracy. On behalf of the whole House, I pay tribute to him for that. We will look very carefully at what he says about the curriculum, but the key aim has to be to making sure that we teach the basics properly and well, and that we test on those basics, because if someone cannot read and write properly, no lessons in citizenship will mean anything at all.

[Justin Tomlinson (North Swindon) (Con)]

Ninety-one per cent. of people who get into financial difficulty believe they would have avoided doing so had they been better informed. Therefore, ahead of tomorrow’s debate on financial education, will the Prime Minister support our calls for compulsory financial education for young people?

[The Prime Minister]

This very much links with the previous question. I strongly support teaching young children about the importance of financial education, but the point of having a proper review of the curriculum is to make sure that we know what is absolutely essential and core and what can be included as extra lessons.

[Yvonne Fovargue (Makerfield) (Lab)]

Q3. Unemployment is going up and living standards are being squeezed. Many more people are being forced into the hands of the payday lenders and fee-charging debt management companies. Will the Prime Minister act to protect ordinary people who are being preyed on and ripped off?

[The Prime Minister]

The hon. Lady speaks with great experience, because she worked for Citizens Advice before coming to the House. She stands up for Citizens Advice and is right to do so. All of us know what a brilliant job it does in our constituencies. She will know that the previous Government wrestled with the issue of how best to regulate doorstep lenders and other lenders, and the danger of driving people into the hands of loan sharks if we got rid of the regulated sector. I am very happy to discuss this further with interested colleagues. It is a very difficult subject to get right, but the Government are working at it.

[Simon Wright (Norwich South) (LD)]

Does the Prime Minister share my concern about the impact of pocket-money priced alcohol on the state of our nation’s health and antisocial behaviour in our town centres, as well as about the damage it does to our community pubs?

[The Prime Minister]

The hon. Gentleman makes an extremely important point. There is no doubt in my mind that very low-cost alcohol is part of the problem in our town centres. One of the answers that the Government have already come up with is to ban the deeply discounted selling of alcohol, but we need to look at the broader question of low-cost alcohol. I have noted very carefully the letter in the papers this morning from a whole set of people with great expertise on this, and we are looking carefully at the issue.

[Mrs Jenny Chapman (Darlington) (Lab)]

Q4. This morning we learned that the Teesside airport is up for sale and it seems that, as unemployment is sky-rocketing in the north-east, our planes may be grounded. Is not the loss of infrastructure and jobs in the north-east further evidence that this Government’s economic plan is a catastrophic failure?

[The Prime Minister]

The key thing about the future of Durham Tees Valley airport, which is a vital airport, is not necessarily who owns it but whether it is being invested in and expanded. Is it working well? That is the key question, and that is the question that I know my right hon. Friend the Transport Secretary is looking at carefully.

[Sheryll Murray (South East Cornwall) (Con)]

Q5. Has the Prime Minister seen the OECD and National Institute of Economic and Social Research findings this week, which show that soaring immigration was caused not by the prospect of prosperity but by the open-door policies of the previous Government—and will he prevent that from happening again?

[The Prime Minister]

My hon. Friend is absolutely right. The report said specifically that

“the increase in net immigration to the UK was not driven primarily by the economic performance of the UK or other countries.”

Instead, the report points to immigration policy. The fact is that the previous Government quadrupled immigration and let an extra 2.2 million people into the country. The answer is to deal with the bogus colleges, and we are doing that; to put a limit on economic migration from outside the EU, and we are doing that; and to have proper border controls and a border police command, and we are doing that as well.

[John Robertson (Glasgow North West) (Lab)]

Q6. The autumn statement saw 400,000 Scottish children lose more than £40 million as a result of changes in the tax system. In my constituency that meant that £600,000 was taken from children. Why is the Prime Minister taking money out of children’s pockets, while allowing it to remain in the pockets of bankers?

[The Prime Minister]

I am afraid the hon. Gentleman is just plain wrong: the child tax credit is going up by £135. He talks about the bankers, but it is this Government who have put in place a bank levy that will raise more every year than Labour’s one-off bonus tax raised in one year.

[Julian Sturdy (York Outer) (Con)]

Q7. As a York MP, I am extremely proud of our city’s vibrant tourism sector. Does my right hon. Friend agree that tourism plays a key role in our local economies? Will he ensure that northern tourist attractions in particular are promoted in the run-up to the Olympic games?

[The Prime Minister]

My hon. Friend makes an important point. Millions of people will be coming to this country for the Olympic games. We need to encourage them not just to go to the Olympic games, but to visit other parts of the country and to return to Britain for a subsequent visit. We will be running all sorts of promotions and schemes to encourage that. If we could encourage people more generally to visit other places as well as London—York has many great tourist attractions and things of historical importance to see—we would drive a huge amount of jobs and growth in our regions.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

On 16 December Bangladesh will mark its 40th anniversary as an independent nation, following a war that cost 3 million lives. I want to pay tribute to the contribution made by this Parliament in supporting the people in their fight for liberty and self-determination. As Bangladesh is the country that is the second most vulnerable to climate change, with an estimated 15 million to 20 million people likely to be affected in the coming decades, does the Prime Minister agree that it is now more important than ever to support developing countries against the devastating effects of climate change?

[The Prime Minister]

I absolutely agree with the hon. Lady. The whole House should recognise what she has done in raising the issue at this time, as Bangladesh approaches this important anniversary. Britain can be proud of the fact that we have very good relations with Bangladesh, and our aid programme in Bangladesh is now of the leading ones from anywhere in the world into that country. We are spending specific money on helping the Bangladeshis with climate change, meeting all the promises that we made. I have met the Prime Minister of Bangladesh. One of the issues that we do have to raise, though, is that there are human rights issues in Bangladesh, and we should not be scared of raising them with the authorities in the proper way.

[Mr Philip Hollobone (Kettering) (Con)]

Q8. An EU-wide agreement on prisoner transfers comes into force this month, which will enable the UK to repatriate to jails in their own country any EU nationals imprisoned here. Given that some 13% of our prison population is made up of foreign nationals, will the Prime Minister ensure that our EU partners stick to these new rules and take their criminals back?

[The Prime Minister]

If my hon. Friend, with his strong views, is asking a question about a successful EU scheme, it really must be Christmas, so his question is very welcome. He is absolutely right: 13% of our prison spaces are taken up by foreign nationals. That is hugely expensive, and the EU-wide agreement gives us a great opportunity to return people to their national prisons and save money at the same time.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

Is freezing the pay of young privates and corporals while they are fighting in Afghanistan, without reference to the Armed Forces Pay Review Body, a breach of the military covenant?

[The Prime Minister]

It is this Government who doubled the operational allowance, which is the best way to get money to the privates and the corporals in Afghanistan who are doing such a good job. The operational allowance, being a flat cash sum, is of disproportionate benefit to relatively low-paid people in the armed forces, whereas obviously a percentage increase would mean more money for the generals, the colonels and the brigadiers, rather than for the people on the front line. Looking at the operational allowance is crucial, but this Government have not just done that. We have extended the pupil premium to forces children, we have increased the council tax rebates for those who are serving, and for the first time we have written the military covenant into the law of our land.

[Chris Kelly (Dudley South) (Con)]

Q9. I commend my right hon. Friend for protecting our national interest by exercising the veto last Friday. The people of Dudley South thank him for it. The deal that he vetoed commits eurozone members to restricting structural deficits to below 0.5% of GDP. Did the Prime Minister appreciate that this is 16 times the UK structural deficit left by Labour?

[The Prime Minister]

My hon. Friend makes a good point, which is perhaps why the leader of the Labour party is struggling so much to tell us what his view is on the proposed treaty. On one hand he wants to join the euro, if he is Prime Minister for long enough, and on the other hand he wants to sign a treaty—[Interruption.] That is rubbish? He does not want to be Prime Minister for long enough! He wants to join the euro, he wants a deal with very tough budget deficit limits, and he wants to increase spending, borrowing and debt. He tells us that he has a five-point plan, and I can sum it up in five words: “Let us bankrupt Britain again.”

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

Q10. Perhaps the Prime Minister could tell us why the Deputy Prime Minister did not support his position on Europe on Monday, and why not one single Liberal Democrat MP voted with the Prime Minister last night.

[The Prime Minister]

Last night there was something of a parliamentary rarity: a motion tabled by an opposition party praising the Prime Minister. I am very grateful to colleagues in the Democratic Unionist party. I suspect that many people concluded that Labour simply would not get its act together and did not think that it was worth voting, and as a result we won very easily.

[Richard Drax (South Dorset) (Con)]

I am sure that the whole House will join me in thanking a remarkable man who has served this country and this place with courage and distinction for nearly 50 years. Eddie McKay, who is in the Gallery right now, has been a Doorkeeper here for 23 years and retires on Tuesday. Before coming to this place he served with distinction with the Scots Guards, leaving after 23 years of service as a senior warrant officer. In the Household Division, you are not promoted to drill sergeant unless you are exceptional. He saw action on Tumbledown mountain during the Falklands war in 1982. His company, G company, 2nd Battalion Scots Guards, led that successful and audacious night assault. May I ask the Prime Minister, on behalf of us all, to wish Drill Sergeant Eddie McKay a happy retirement and a happy Christmas?

[The Prime Minister]

I thank my hon. Friend for raising this issue and, on behalf of the whole House, very much thank Eddie for his incredible service. I think that in this House we sometimes take for granted the people who work so hard to keep it working and keep it going, and I sometimes wonder what they think of all the antics we get up to in this House. We are incredibly grateful that he, after the incredible service he gave our nation, came here and worked so hard for so many years. We are all in his debt, and send him good wishes for his retirement.

[Mr Kevin Barron (Rother Valley) (Lab)]

Q11. Youth unemployment figures published this morning show that in the last quarter, 22% of 16 to 24-year-old economically active citizens are unemployed—an increase of 1.2% on the previous quarter. The Prime Minister ranted earlier in Question Time about what the Government are doing about youth unemployment in this country. Can he tell us why it is increasing?

[The Prime Minister]

Every increase in youth unemployment is unacceptable—[Interruption.] I will tell the House exactly what is happening. The number of 16 to 18-year-old young people not in employment, education or training is actually going down, but the problem, as the hon. Gentleman rightly says, is that 18 to 24-year-olds are finding the job market extremely difficult. [Hon. Members: “Why?”] The reason why unemployment is going up is that we are losing jobs in the public sector and not growing them fast enough in the private sector, so we need to do everything we can to get our economy moving. The absolute key to that is keeping our interest rates low. We now have interest rates down to 2%. If we followed his party’s policy of extra spending, extra borrowing and extra debt, interest rates would go up, more businesses would go under and we would not get our economy moving.

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

Q12. Many Members will have encountered examples of banks using the threat of receivership to extract new charges and higher interest rates from their business customers. Does the Prime Minister agree that it is wrong for banks to use what is effectively an extortionate bargaining position in this way, and will he agree to meet me to discuss some of the proposals I have outlined to limit the power of receivers and require banks to obtain a possession order before selling up small businesses?

[The Prime Minister]

I am very happy to meet my hon. Friend about this issue. It is vital that we not only get our banks lending properly, and lending to small businesses, but ensure that they behave in an ethical and proper way as they do so. We are addressing the first issue—the quantity of lending—through the national loan guarantee scheme and the other credit-easing measures that the Chancellor set out in the autumn statement, but we also need to ensure that the practices that the banks follow are fair, and seen to be fair. They have an interest in making sure that small businesses are in good health, and they need to follow those sorts of procedures to ensure that that happens.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Q13. Youth unemployment in Dumfries and Galloway has risen by 65% over the past 12 months, and with the British Retail Consortium indicating that almost one in three jobs there are filled by under-25s, does the Prime Minister recognise that the predicted squeeze on the retail sector will only increase the chances of youth unemployment increasing across the entire country?

[The Prime Minister]

The thing that would put the biggest squeeze on the retail sector is interest rates going up. Just one percentage point increase in interest rates would see the typical family lose £1,000 a year through extra mortgage payments. Everybody knows we are in a difficult economic situation and we have to take difficult decisions, as there is effectively a freeze across the eurozone, but the most important thing is to keep those interest rates low, so that people have money in their pockets and we can see some good retail recovery.

[David Rutley (Macclesfield) (Con)]

Q14. East Cheshire hospice and many other hospices across the country run Christmas tree collection services that help many families to recycle their Christmas trees in an environmentally sensitive way. Will the Prime Minister join me in this festive season in supporting the great work that such charities do in collecting trees to raise hundreds of thousands of pounds for the important work of our hospices?

[The Prime Minister]

I certainly join my hon. Friend, at this time of year, particularly, in praising the amazing work that hospices do. Many hospices do not receive a huge amount of Government funding, and they have to be very ingenious about how they raise money from people up and down the country. Collecting and recycling Christmas trees so that we do not just leave them outside the house but do this thing properly is an excellent idea. I am sure that the whole House will want to join me in praising the work that hospices do, particularly at Christmas time.

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

Q15. For the past 18 months the Prime Minister has been promising legislation to create a register of lobbyists, but nothing has happened so far. Will he give us a publication date for a consultation paper leading to legislation—or could he take on my ten-minute rule Bill, which is already published? I am a generous sort of bloke, so he can have it now and get it on to the statute book.

[The Prime Minister]

I am a generous sort of bloke too, so I can tell the hon. Gentleman that the lobbying proposals will be published within the next month—so this Government will have moved faster in 18 months than the previous Government did in 13 years.

[Mr Adrian Sanders (Torbay) (LD)]

The Prime Minister will have seen the news this morning of the study on the excess deaths of people with diabetes—unnecessary deaths, if the condition is treated correctly. The national service framework for diabetes comes to an end in 2013. Will the Prime Minister look at NSFs as a way of meeting the challenges in the health service and the health service budget, and helping people with diabetes?

[The Prime Minister]

I am very happy to look at the national service frameworks, as the hon. Gentleman suggests. The key issue with diabetes is that we need to raise the profile of the condition, because many people have it and do not know they have it—but also to look at the public health issues, because the explosion in diabetes is partly due to bad diet and obesity in childhood. We need to address those issues; otherwise we are always going to be dealing with the disease rather than trying to prevent it.

[Several hon. Members]

rose—

[Mrs Anne McGuire (Stirling) (Lab)]

Earlier this week in the other place, the coalition Government voted down, by a majority of two, a proposal to protect the benefits of disabled children. Is reducing benefits for disabled children by over £1,300 a year something that reflects the Prime Minister’s often repeated mantra that we are all in this together?

[The Prime Minister]

First of all, we are not cutting benefits for disabled children. Actually, we are uprating all those benefits by 5.2%, so people will see an increase in the benefits that they receive next year.

[Mr Speaker]

Last, but never forgotten, Mr Brian Binley.

[Mr Brian Binley (Northampton South) (Con)]

The Prime Minister will be aware that capacity levels on the west coast main line are intolerable and getting worse. Does he share the concerns of rail users that delays to High Speed 2 will only make their journeys more unpleasant? Will he provide the assurance that they seek about the future that he promised them?

[The Prime Minister]

I am grateful to my hon. Friend for raising that question. Clearly the country has a choice. Because the west coast main line is as congested as it is, we need to replace it with either a traditional line or a high-speed line. It is well known that the Government’s view is that a high-speed line is the right answer. That is why the consultation has been conducted. Not only will it be good for people who use the west coast main line; it will be a successful regional policy that will link up our great cities, shrink the size of our country and ensure that all parts of the country can enjoy economic prosperity and growth.

[Mr Speaker]

I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly so that we can all listen attentively to the Secretary of State for Environment, Food and Rural Affairs—preferably facing the House or the Chair.

EU Council

Lord Cameron of Chipping Norton Excerpts

Monday 12th December 2011 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on last week’s European Council—

[Hon. Members]

Where’s Nick?

[Mr Speaker]

Order. The House must calm itself, taking whatever medicaments are required for the purpose, and the Prime Minister’s statement must and will be heard.

[The Prime Minister]

Thank you, Mr Speaker.

I went to Brussels with one objective: to protect Britain’s national interest, and that is what I did. Let me refer to what I said to the House last Wednesday. I made it clear that if the eurozone countries wanted a treaty involving all 27 members of the European Union, we would insist on some safeguards for Britain to protect our own national interests. Some thought that the safeguards I was asking for were relatively modest. Nevertheless, satisfactory safeguards were not forthcoming, so I did not agree to the treaty. Let me be clear about exactly what happened, what it means for Britain and what I see happening next.

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

Où est Clegg?

[Mr Speaker]

Order. I apologise for interrupting the Prime Minister. I hope that Members have now got it out of their system. The statement will be heard. Right hon. and hon. Members on both sides of the House will have ample opportunity to question the Prime Minister, but courtesy and parliamentary convention dictate that the statement will be heard.

[The Prime Minister]

Thank you, Mr Speaker.

Let me take the House through the events of last week. At this Council, the eurozone economies agreed that there should be much tighter fiscal discipline in the eurozone as part of restoring market confidence. That is something that Britain recognises as necessary in a single currency. We want the eurozone to sort out its problems. That is in Britain’s national interest because the crisis in the eurozone is having a chilling effect on Britain’s economy too, so the question at the Council was not whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.

There were two possible outcomes: either a treaty of all 27 countries, with proper safeguards for Britain; or a separate treaty in which eurozone countries and others would pool their sovereignty on an intergovernmental basis, with Britain maintaining its position in the single market and in the European Union of 27 members. We went seeking a deal at 27 and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach an agreement at the level of the whole of the European Union, with the necessary safeguards for Britain. Those safeguards—on the single market and on financial services—were modest, reasonable and relevant. We were not trying to create an unfair advantage for Britain. London is the leading centre for financial services in the world, and this sector employs 100,000 people in Birmingham and a further 150,000 people in Scotland. It supports the rest of the economy in Britain and more widely in Europe.

We were not asking for a UK opt-out, special exemption or a generalised emergency brake on financial services legislation. They were safeguards sought for the EU as a whole. We were simply asking for a level playing field for open competition for financial services companies in all EU countries, with arrangements that would enable every EU member state to regulate its financial sector properly. To those who say that we were trying to go soft on the banks, nothing could be further from the truth. We have said that we are going to respond positively to the tough measures set out in the Vickers report. There are issues about whether this can be done under current European regulations, so one of the things we wanted was to make sure we could go further than European rules on regulating the banks. The Financial Services Authority report on RBS today demonstrates just how necessary that is—[Interruption]—and perhaps instead of talking Opposition Members will remember their responsibility for the mess that they created.

Those who say that this proposed treaty change was all about safeguarding the eurozone, and so Britain should not have tried to interfere or to insist on safeguards, are fundamentally wrong as well. The EU treaty is the treaty of those outside the euro as much as it is for those inside the euro, so creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU for us, too. It would not just have meant a whole new bureaucracy, with rules and competences for the eurozone countries being incorporated directly into the EU treaty; it would have changed the nature of the EU—strengthening the eurozone without balancing measures to strengthen the single market.

Of course, an intergovernmental arrangement is not without risks, but we did not want to see that imbalance hard-wired into the treaty without proper safeguards. To those who believe that that was not a real risk, I tell them that France and Germany said in their letter last week that the eurozone should work on single market issues such as financial regulation and competitiveness. That is why we required safeguards, and I make no apology for it.

Of course, I wish those safeguards had been accepted, but frankly I have to tell the House that the choice was a treaty without proper safeguards or no treaty—and the right answer was no treaty. It was not an easy thing to do, but it was the right thing to do. As a result, eurozone countries and others are now making separate arrangements for the fiscal integration that they need to solve the problems in the eurozone. They recognise that this approach will be less attractive, more complex and more difficult to enforce, and they would prefer to incorporate the new treaty into the EU treaties in future. Our position remains the same.

Let me turn to what this means for Britain. Britain remains a full member of the European Union, and the events of the last week do nothing to change that. Our membership of the EU is vital to our national interest. We are a trading nation, and we need the single market for trade, investment and jobs. The EU makes Britain a gateway to the largest single market in the world for investors; it secures half of our exports and millions of British jobs; and membership of the EU strengthens our ability to progress our foreign policy objectives, too, giving us a strong voice on the global stage on issues such as trade and, as we have seen in Durban this week, climate change and the environment.

So we are in the European Union and we want to be. This week there will be meetings of the Councils on Transport, Telecommunications and Energy, and Agriculture and Fisheries. Britain will be there as a full member of each one, but I believe in an EU with the flexibility of a network, not the rigidity of a bloc. We are not in the Schengen no-borders agreement, and neither should we be, because it is right that we use our natural advantage as an island to protect ourselves against illegal immigration, guns and drugs; we are not in the single currency, and while I am Prime Minister we will never join; we are not in the new euro area bail-out funds, even though we had to negotiate our way out of them; and we are not in this year’s euro-plus pact.

When the euro was created, the previous Government agreed that there would need to be separate meetings of eurozone Ministers, and it is hardly surprising that those countries required by treaty to join the euro chose to join the existing eurozone members in developing future arrangements for the eurozone. Those countries are going to be negotiating a treaty that passes unprecedented powers from their nation states to Brussels. Some will have budgets effectively checked and re-written by the European Commission. None of this will happen in Britain. But, just as we wanted safeguards for Britain’s interests if we changed the EU treaty, we will continue to be vigilant in protecting our national interests.

An intergovernmental treaty, while it does not carry with it the same dangers for Britain, is none the less not without risks. The decision of the new eurozone-led arrangement is a discussion that is just beginning. We want the new treaty to work in stabilising the euro and putting it on a firm foundation. I understand why they would want to use EU institutions—but this is new territory and does raise important issues that we will want to explore with the euro-plus countries. So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included. The UK is supportive of the role of the institutions, not least because of the role they play in safeguarding the single market, so we will look constructively at any proposals with an open mind. But let us be clear about one thing: if Britain had agreed treaty change without safeguards, there would be no discussion. Britain would not have proper protection.

Finally, let me turn to the next steps. The most pressing step of all is to fix the problems of the euro. As I have said, that involves far more than simply medium-term fiscal integration, important though that is. Above all, the eurozone needs to focus, at the very least, on implementing its October agreement. The markets want to be assured that the eurozone firewall is big enough, that Europe’s banks are being adequately recapitalised, and that problems in countries like Greece have been properly dealt with. There was some progress at the Council, but far more needs to be done. The eurozone countries noted the possibility of additional IMF assistance. Our position on IMF resources remains the one I set out at the Cannes G20 summit. Alongside non-European G20 countries, we are ready to look positively at strengthening the IMF’s capacity to help countries in difficulty across the world. But IMF resources are for countries, not currencies, and cannot be used specifically to support the euro—and we would not support that.

There also needs to be greater competitiveness between the countries of the eurozone. To be frank, the whole of Europe needs to become more competitive. That is the way to more jobs and growth. Many eurozone countries have substantial trade deficits as well as budget deficits. If they are not to be reliant on massive transfers of capital, they need to become more competitive and trade out of those deficits. The British agenda has always been about improving Europe’s competitiveness, and at recent Councils we have achieved substantial progress on completing the single market in services, opening up our energy markets, and exempting micro-businesses from future regulations. This has been done by working in partnership with a combination of countries that are in the eurozone and outside it. Similarly, on this year’s EU budget, it was Britain, in partnership with France, Germany and Holland, that successfully insisted on no real increases in resources—for the first time in many, many years in the EU.

On defence, Britain is an absolutely key European player, whether leading the NATO rapid reaction force or tackling piracy in the Indian ocean. Our partnership with France—[Interruption.]

[Mr Speaker]

Order. I apologise for having to interrupt the Prime Minister. Those on the Opposition Front Bench, at the moment, are making the most noise. [Interruption.] Order. This is not acceptable. The Leader of the Opposition will have an opportunity to reply on behalf of the Opposition, and his colleagues must conduct themselves with a degree of reserve.

[The Prime Minister]

Thank you, Mr Speaker.

Our partnership with France was crucial in taking successful action in Libya. Britain will continue to form alliances on the things we want to get done. We have always had a leading role in advocating the policy of enlargement and, at this Council, we all celebrated the signing of Croatia’s accession treaty. That was one European treaty I was happy to sign.

Let me conclude with this point. I do not believe there is a binary choice for Britain: that we can either sacrifice the national interest on issue after issue or lose our influence at the heart of Europe’s decision-making processes. I am absolutely clear that it is possible to be a full, committed and influential member of the European Union but to stay out of arrangements where they do not protect our interests. That is what I have done at this Council. That is what I will continue to do as long as I am Prime Minister. It is the right course for this country. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

May I start by thanking the Prime Minister for his statement? We all note the absence of the Deputy Prime Minister from his normal place.

The reality is this: the Prime Minister has given up our seat at the table; he has exposed, not protected, British business; and he has come back with a bad deal for Britain. The Prime Minister told us that his first priority at the summit was to sort out the eurozone, but the euro crisis is not resolved. There is no promise by the European Central Bank to be the lender of last resort, there is no plan for growth and there is little progress on bank recapitalisation. Will he first tell us why his promise of action did not materialise and what that will mean for the British economy in the months ahead? At the summit that was meant to solve these problems, the Prime Minister walked away from the table.

Let me turn to where that leaves Britain. Many people feared an outcome of 17 countries going it alone. Few could have anticipated the diplomatic disaster of 26 going ahead and one country—Britain—being left behind. The Prime Minister rests his whole case on the fact that 26 countries will not be able to use the existing treaties or institutions. That is apparently the win that he got for this country. However, can he confirm that article 273 of the treaty on the functioning of the European Union allows those countries to use the European Court of Justice? No doubt they will end up using the Commission’s services and, yes, even the buildings—the point that he made in the negotiations. In case anyone had any doubt, that was confirmed yesterday by the absent Deputy Prime Minister, who said:

“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union…to completely reinvent…a whole panoply of new institutions.”

The Prime Minister will not even be sent the agenda for the meetings that will start in January. He will read about decisions affecting British business in the pages of the Financial Times.

The Prime Minister’s next claim was that he did not want to sign up to the fiscal rules being imposed on euro area countries. Can he confirm that no one even proposed that those would have applied to Britain? The next claim in his statement was that he did what he did because the treaty posed a grave threat to our financial services industry. However, over the whole course of the weekend, he has been unable to point to a single proposal in the proposed treaty that would entail the alleged destruction of the City of London. Will he tell us what the threat was?

In any case, there is nothing worse for protecting our interests in financial services than the outcome that the Prime Minister ended up with. Will he confirm that he has not secured one extra protection for financial services? The veto on financial services regulation—he did not get it. The guarantees on the location of the European Banking Authority—he did not get them. Far from protecting our interests, he has left us without a voice.

The sensible members of his party understand that as well as anyone. What did Lord Heseltine say—[Interruption.] Oh, how significant! That is what the Tory party now thinks of Lord Heseltine. What did he say at the weekend?

“You can’t protect the interest of the City by floating off into the middle of the Atlantic.”

It is no longer the Conservative party of Lord Heseltine; it is the Conservative party of the hon. Member for Stone (Mr Cash), who went out on Friday saying that this was exactly what he had always wanted.

What about the rest of British business, which the Prime Minister does not seem to have been thinking about? The danger is that the discussions about the single market, on which it relies, will now take place without us. Only this Prime Minister could call that leadership. The Deputy Prime Minister clearly does not agree with him. He said that the outcome leaves Britain “isolated and marginalised”. Does the Prime Minister agree with that assessment? How can he expect to persuade anybody else that it is a good outcome when he cannot persuade his own deputy?

The Prime Minister claims to have wielded a veto. Let me explain to him that a veto is supposed to stop something happening. It is not a veto when the thing that you wanted to stop goes ahead without you. That is called losing. That is called being defeated. That is called letting Britain down. I have not finished with the Prime Minister yet. Next, I want to ask him—[Interruption.]

[Edward Miliband]

Next, I want to ask the Prime Minister about how he ended up with this outcome. The proposals he tabled, when he tabled them and his failure even to try to build alliances for them suggest someone who did not exactly want a deal. Can he confirm that what he actually proposed was to unpick the existing rules of Lady Thatcher’s Single European Act as regards the internal market? Given that those proposals would have changed 25 years of the single market, why did he make them in the final hours of the summit?

Where were the Prime Minister’s allies? If he wanted a deal, why did he fail to build alliances with the Swedes, the Dutch, the Poles and Britain’s traditional supporters? If he really did want to protect the single market and financial services, why did he not seek guarantees that those issues would be discussed only with all 27 members in the room?

In any case, the Prime Minister should not have walked away, because the truth is—[Interruption.] Just calm down. The truth is, the treaty will take months and months to negotiate. Other countries have carried on negotiating and carried on fighting for their national interest. The real answer is this: he did not want a deal, because he could not deliver it through his party. He responded to the biggest rebellion of his party in Europe in a generation by making the biggest mistake of Britain in Europe for a generation.

So this is a bad deal, which we ended up with for bad reasons, and it will have long-lasting consequences. It is a decision that means we are on the sidelines, not just for one summit but for the years ahead. The Prime Minister said in this House on 24 October that what mattered

“is not only access to that single market but the need to ensure that we are sitting around the table”.

He went on:

“That is key to our national interest, and we must not lose that.”—[Official Report, 24 October 2011; Vol. 534, c. 38.]

Well congratulations, Prime Minister, that is exactly what you have done. He has done what no Prime Minister ever thought was wise—to leave the room to others, to abandon our seat at the table.

The Prime Minister says he had no choice. He did. He could have stayed inside and fought his corner; he should have stayed inside and fought his corner. Faced with a choice between the national interest and his party interest, he has chosen the party interest. We will rue the day this Prime Minister left Britain alone, without allies, without influence. It is bad for business, it is bad for jobs, it is bad for Britain.

[The Prime Minister]

A lot of sound and fury, but one crucial weakness—the right hon. Gentleman has not told us whether he would sign up to the new treaty. He had about 15 minutes, and he could not tell us whether he is for it or against it. Has it got enough safeguards in it, or has it got too few safeguards? Would a Labour Government back it, or would they veto it? Let me tell him: if you cannot decide, you cannot lead.

Inasmuch as there were some specific questions, let me try to answer them. The right hon. Gentleman asks what the threat was to financial services. Why cannot he understand that if you allowed a new treaty of 17 members within the EU, without proper safeguards, huge damage could be done to the single market and to financial services? He asks what will happen when this new organisation goes ahead. Of course, a new organisation cannot do anything that cuts across the existing treaties or the existing legislation, so he does not even understand how the European Union works.

The right hon. Gentleman asks what we gained from the veto. I will tell him: we stopped Britain signing up to a treaty without any safeguards. That is what we gained.

On the issue of the City and financial services, the right hon. Gentleman completely fails to understand that this is a nationwide industry. It is not just the City of London; it is the whole of our country. I have to say, there was not a word about the report today showing that Labour was to blame for the appalling regulation of the Royal Bank of Scotland. Then, of course, we had a lecture—[Interruption.]

[Mr Speaker]

Order. Members must calm down. I have my eye on one hon. Gentleman from the north of England who entered the House 32 years ago and should know better.

[The Prime Minister]

Of course, then we had a lecture on how to negotiate. I have to say that I am not going to take any lessons from people who gave in time after time to the comfy consensus rather than ever stand up for Britain. Just look at the record: the previous Government joined a bail-out scheme even though it was not protecting a currency that they were a member of; they gave up the rebate even though they got nothing in terms of the reform of agriculture; and they signed up to the Lisbon treaty but never had the courage to put it to the British people. Every time, they just go along with what others want.

The Leader of the Opposition also talked about growth and jobs. Let me just say this: his plan, alone in Europe, is to spend more, borrow more and increase debt by more. All the while, if he wants to join the euro, he needs to understand that the treaty that is being established would actually make that illegal. The very thing he wants to do in Britain he wants to ban in Brussels.

But the key question the right hon. Gentleman cannot answer is this: does he back this treaty or not? If the answer is yes, he should have the courage to say so. If the answer is no, he should have the honesty to say that I was right to keep Britain out of it. And let me just say this: just because the right hon. Gentleman is in opposition does not mean that he should oppose Britain’s interests.

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

May I declare my admiration and full-hearted support for my right hon. Friend at this definitive moment in his first premiership, and query whether this Brussels summit achieved anything of strategic value to protect the threatened European banking system? Without the long-delayed and still unpromised massive support of the European Central Bank and the Bundesbank, the euro is doomed—[Hon. Members: “Doomed!”] Yes, doomed—and as Chancellor Merkel has said, the European Union is doomed with it.

[The Prime Minister]

I certainly agree with my right hon. Friend on the balance of effort that has been given, on the one hand, to new treaty powers and changes, and, on the other, to actually looking at what needs to be done, particularly in the short term, in terms of the firewall, bank recapitalisation and action by the ECB. More needs to be focused on those things rather than on the medium-term power changes in the EU, which I do not think are being hovered over by the markets, which are working out whether countries can pay their debts. In that regard, my right hon. Friend is right.

[Mr Jack Straw (Blackburn) (Lab)]

There was no draft treaty before the European Council last Thursday and Friday; there was a set of draft conclusions. Will the Prime Minister set out the paragraph numbers that he thinks would have damaged Britain’s interests had we agreed to them? Will he also confirm that we had a veto on a financial transactions tax before the Council and that we still have one; and that financial services regulation was subject to qualified majority voting before last Thursday and still is?

[The Prime Minister]

As I said in my statement, the eurozone members wanted to create a new treaty within the EU, which has all sorts of dangers. If the right hon. Gentleman looks at the letter that Angela Merkel and Nicolas Sarkozy sent, he will see that they specifically wanted the 17 to look at issues such as financial services and the market within that treaty. Without safeguards, a treaty within a treaty would have been far more dangerous than a treaty outside the EU.

Let me repeat this point: a treaty outside the EU cannot do anything that cuts across European treaties or European legislation. Of course, that is not without its dangers, but my judgment was that without safeguards, an EU treaty was more dangerous.

[Sir Malcolm Rifkind (Kensington) (Con)]

The leadership of the Prime Minister in Brussels compares favourably with the refusal of the Leader of the Opposition over three long days to indicate whether he would have supported the treaty. The public will come to their own conclusion.

Does the Prime Minister agree that the term “two-speed Europe” is inaccurate, because it implies a destination that all countries will reach except over a different period? Whereas, is it not the case that the UK and perhaps other countries will never find it possible to accept a destination that involves not only a single currency, but fiscal union, tax harmonisation and supranational control of budgets? Is it not necessary to have a fundamental debate about whether Europe can become a Europe à la carte in order to survive?

[The Prime Minister]

My right hon. and learned Friend makes an important point. This is not about the speed at which different organisations travel: it is about the fact that Europe already has different facets. Britain is not in the single currency or in the Schengen no-borders agreement, but we are a leading member of the single market and we play a huge role in foreign and defence policy throughout Europe and NATO. We should not be embarrassed about that, and we should do what is in our national interest—rather than thinking that the right thing to do is to sign up whether or not it suits us.

[David Miliband (South Shields) (Lab)]

Will the Prime Minister confirm that in all the negotiations since 1973 the United Kingdom has never lost a significant vote on financial services regulation? Why does he think that his negotiating tactics in the future would fail where those of Margaret Thatcher and Tony Blair succeeded, and why does he think that it is helpful to have driven nine other members of the European Union who are not in the euro into Franco-German hands?

[The Prime Minister]

For all the right hon. Gentleman’s experience, I think that he is very naive about what is happening in Europe over financial services. Time and again—[Interruption.]

[Mr Speaker]

Order. Members must calm themselves. I am concerned for them, and I also feel that the Prime Minister must be heard.

[The Prime Minister]

There have been any number of examples of frankly discriminatory legislation against financial services in the European Union that have affected Britain very badly. Let me give the right hon. Gentleman one example. At the moment, the ECB is taking Britain to court on the basis that we should not be able to clear euros through London. So we would be put in the extraordinary position that banks in Britain could clear Swiss francs, dollars and yen, but—even though we are in the single market—we could not clear euros. That is one example of discriminatory legislation. When you are faced with a situation in which the 17 eurozone members want to go into a further treaty within the European Union, with all the powers and force that would have—[Interruption.] They are not going to have a treaty within the European Union: they are doing it outside—it is right to seek safeguards. That is why the right hon. Gentleman is naive not to understand that.

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

May I congratulate my right hon. Friend on his unequivocal statement that our membership of the European Union is vital to our national interests, and express the hope that he may give it some wider currency in his own party? He mentioned both the single market and the eurozone. What practical steps can our Government take now to assist in reaching a solution to the problems of the eurozone and towards enhancing the opportunities provided by the single market, both of which are essential to the economic prosperity of this country?

[The Prime Minister]

Let me repeat again to the right hon. and learned Gentleman that I do believe that it is in Britain’s interest to be in the European Union and to be active, especially on those dossiers where that is in our interest—chief among which is the single market. If we want to see what will make a difference to the single currency and the success of the eurozone, nothing matters more than competitiveness, where Britain should be very active, with others both in the eurozone and outside, to drive forward changes. We are fully committed to keeping up that work.

[Margaret Hodge (Barking) (Lab)]

Any politician with experience of doing business in Europe knows that you never go to a key European meeting without having done extensive and thorough preparatory work, so that as you walk in you are pretty much sure of the outcome you will get. Either the Prime Minister did not bother to do the preparatory work, and betrayed Britain’s long-term interests through sheer incompetence, or he had made up his mind before to use the veto because he was afraid of his own Back Benchers. Which of those two was it?

[The Prime Minister]

Let me say to the right hon. Lady that I went to Brussels wanting a result at 27, but there were safeguards that I believed that Britain needed. Frankly, you can have all the experience of negotiating in the world, but if you are not prepared to say no from time to time, you do not have any influence or power.

[Mr John Redwood (Wokingham) (Con)]

I congratulate my right hon. Friend on his excellent statesmanship. Does he agree that Britain has much more negotiating strength today, because Europe knows that it is dealing with a Prime Minister who will say no if he needs to, than when we had two Prime Ministers who gave in to bad deal after bad deal, including giving away our rebate for no good reason?

[The Prime Minister]

I am grateful to my right hon. Friend. It is the case that on too many occasions under the previous Government, Britain was outnumbered, but on the issue of the rebate, it was given away for nothing in return simply because they wanted to go along with a cosy and comfortable consensus. Sometimes it is necessary to say no. In my judgment, we did not have the safeguards that we needed, so, as a result, it was right not to agree to this treaty.

[Mr Denis MacShane (Rotherham) (Lab)]

Out of every European Council meeting, there are perceptions and realities. The Prime Minister did list some of the realities, but may I put it to him that the perception around the world, in not just Europe but the United States, is that we have committed a diplomatic catastrophe? The words “isolated” and “Britain” are fused. To come back from that, will he assure the House that in all future negotiations, he will take with him the Deputy Prime Minister, who, I believe, spoke for Britain?

[The Prime Minister]

The right hon. Gentleman, like so many of those who oppose what has happened, is part of exactly the same group of people who wanted us to join the single currency in the first place. They are never prepared to recognise that there are occasions when we need to safeguard our nation’s interests and we have to be able to say no.

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

Does my right hon. Friend agree that the best way to increase one’s influence within Europe and, indeed, within a coalition Government is to set up one’s position and stick to it?

[The Prime Minister]

I am very grateful to my right hon. Friend for that question. I always find this slightly surprising. Before going to Brussels I set out exactly what I was going to do and what I would do if I could not get the safeguards. I did exactly what I said I was going to do, but apparently in politics these days that is very surprising.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

Will the Basel III regulatory regime for financial services apply in the United Kingdom?

[The Prime Minister]

I am afraid that I missed the beginning of the right hon. Gentleman’s question.

[Mr Speaker]

Does the right hon. Gentleman wish to repeat his question?

[Mr Nicholas Brown]

Will the Basel III regulatory regime for financial services apply in the United Kingdom?

[The Prime Minister]

Yes.

[Mr Andrew Tyrie (Chichester) (Con)]

The Prime Minister must be right to do whatever is required to protect the 1.3 million jobs in our financial services sector. Will he confirm that the current EU proposals for the so-called maximum harmonisation of bank regulations could prevent us from implementing the conclusions of the Vickers commission to make our banks safer with a ring-fence?

[The Prime Minister]

My hon. Friend is entirely right. One of the things that we are concerned about is that if we want to take the extra action in this country to make our banks safe, including what Vickers is recommending, there is a danger—and this is the current advice—that the current European regulatory framework could stop us doing that. That is exactly the sort of safeguard—it is entirely reasonable, modest and relevant—to ask for in these negotiations. We did not get it, so, as a result, I was not content to go ahead with the treaty.

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

May I, on behalf of my right hon. and hon. Friends, commend the Prime Minister for the stance that he took at the European Council? Indeed, his stance has been welcomed by the First Minister and many in the community in Northern Ireland. The question is where we go from here because there is still qualified majority voting. We can still be outvoted by perhaps a vindictive Europe. Will the Prime Minister now indicate what his next step will be to change the fundamental nature of the relationship that we currently have towards one based on co-operation and free trade and away from ever-closer political union?

--- Later in debate ---

[The Prime Minister]

I am grateful to the right hon. Gentleman for his kind remarks. I have long believed, and still believe, that the balance of powers between Britain and Europe is not right, and I would like some of those powers returned. As Prime Minister, I specifically got the bail-out power back through my first negotiations on the European stability mechanism treaty. In the latest negotiations, we prevented a treaty from going ahead at the level of 27 because there were not adequate safeguards. Frankly, I think that we will see now a period of great change in Europe. No one quite knows where this new organisation outside the European treaties will go, what powers it will seek and how it will act. Neither does anyone know exactly how the eurozone will develop. My job in government is to protect and defend the national interest at all times, and that is what I will continue to do.

[Richard Ottaway (Croydon South) (Con)]

As someone who is not known for his hostility to the European Union, I fully support the Prime Minister for what was an inevitable decision. However, the relationship between the fiscal compact of the 26 and the European Union remains uncertain. In particular, the fiscal compact reads:

“The objective remains to incorporate these provisions into the treaties of the Union as soon as possible.”

In the light of that, does he agree that the battle for Britain’s interest still has a long way to go?

[The Prime Minister]

The other EU countries recognise that going ahead at less than 27 has its disadvantages: they do not have the power and authority of the European institutions fully behind them and it will make some of the things that they want to do more difficult. None the less, we have set out our position. We believe that those safeguards are necessary, and I will not, and have not, changed my mind about that. I want to make this point one more time because I am not sure that everyone has taken it fully onboard: the disadvantage for those countries that will have a treaty outside the EU is that it means that nothing can be done in that treaty that cuts across the EU treaties or the legislation adopted under them. That is an important safeguard, given that we could not get the safeguard within the EU treaties.

[Several hon. Members]

rose—

[Chris Bryant (Rhondda) (Lab)]

I think, Mr Speaker, that that was an example of irony.

The single most important thing that our voters have seen over the past weeks and months has been the crisis in the economies across the whole of Europe, which is depressing the economy in this country as well. They want to ensure that they have jobs to go to next year. Last week, the Prime Minister surrendered an opportunity to do that; he surrendered his seat; and he surrendered to his Back Benchers. Is he not ashamed of himself?

[The Prime Minister]

And it all started so well! The hon. Gentleman is right to say that there is a crisis of jobs and opportunity across Europe, and a lot of that is linked to the chilling effect of the eurozone crisis. Some of that crisis needs to be resolved by better fiscal integration, and we can argue about whether that requires the treaty change being pushed for by France and Germany, but the real agenda—to help the eurozone and to help growth and jobs—is about competitiveness and the single market, and about ensuring that, even in the short term, there is the big bazooka, the re-capitalisation of the banks and the proper programme for Greece, which are all things that Britain has been pushing for.

[Mr William Cash (Stone) (Con)]

On the protection of the national interest, will my right hon. Friend gently remind the Deputy Prime Minister and the Leader of the Opposition that even Edward Heath’s 1970 White Paper confirmed that we have to maintain and use the veto in the national interest and to protect the fabric of the European Union—then the European Community—as a whole? To adapt William Pitt’s phrase, my right hon. Friend has exerted all his influence to ensure that Britain is protected. Does he take it that Europe will learn from his example?

[The Prime Minister]

I am grateful for my hon. Friend’s support. I agree that it is important that, when considering changing the institutions of the EU, there must be unanimity, and the veto is there for a purpose—if you feel that the national interests are not being protected. It is important that we maintain that in the EU.

[Sir Stuart Bell (Middlesbrough) (Lab)]

The Prime Minister talked of us being a trading nation, of investment in jobs and of the importance of the eurozone. Why, then, did he not help the Greeks in their bail-out? Why has he not supported the European financial stability facility? Why is he not helping the European stability mechanism? Building on the questions from the right hon. and learned Member for North East Fife (Sir Menzies Campbell) and my hon. Friend the Member for Rhondda (Chris Bryant), what specific measures can the Prime Minister announce today to help the euro, trade, investment and jobs?

[The Prime Minister]

I respect the hon. Gentleman, who has a long track record on these issues, but on the Greek bail-out I am afraid I just do not support him. Britain was not in the original Greek bail-out—rightly, I think—and we should not be in subsequent Greek bail-outs. Frankly, the last Government made a mistake in getting us into the euro bail-out mechanism. We have got out of that, but that does not mean that Britain is not a generous nation that wants to help its allies. We have lent £5 billion to Ireland, and our economies are very integrated. I think the Irish are doing some very difficult things to get their economy back on track, and we support them in the work they are doing.

[Several hon. Members]

rose—

[Malcolm Bruce (Gordon) (LD)]

Given that we are facing the worst financial crisis in living memory, does the Prime Minister agree with me that the UK coalition Government have a policy for dealing with it and that unfortunately the eurozone does not? What we now need, surely, is to work in parallel to ensure that we have outcomes that are not divergent, but deliver a strong pound and a strong euro.

[The Prime Minister]

I am very grateful for that question. Of course it is important to recognise in a coalition Government that both sides of that coalition cannot always achieve everything that they want to. However, it is important that we work together, and where we absolutely have agreed is on the importance of a programme of getting our economy back on track. It has been of huge benefit—and will continue to be of benefit to our country—that two parties have put their interests aside to work for the common good.

[Tony Lloyd (Manchester Central) (Lab)]

The thing that was obviously lacking last Friday was any reference to growth or any ambition to get growth in the European economy. Can the Prime Minister dispel the rumour that he offered no leadership on that by telling us what proposals he tabled on European growth?

[The Prime Minister]

I am afraid that that is completely wrong. Britain has been very consistent, tabling proposal after proposal for growth. It is a British proposal to complete the single market in energy, a British proposal to complete the single market in services and a British proposal, which has just been passed, to exempt all micro-businesses—those with fewer than 10 employees—from future European regulation. Britain has the most pro-growth, pro-enterprise, pro-single market Government, and that is the way it is going to stay.

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

May I congratulate my right hon. Friend on sticking to a very simple principle of fairness in the European Union: that the institutions for the 27 are there for the 27? May I also remind him and those on the Opposition Benches—and, indeed, the BBC—that he has the support not only of the Conservative party but of the British people for what he has just done?

[The Prime Minister]

I am grateful for what my hon. Friend says. The absolute key to this issue about the institutions is actually what the new organisation does, rather than necessarily what the institutions do. The key is to protect the single market and those things that are vital for Britain. As I keep repeating, the fact is that an organisation outside the EU treaties is not allowed to cut across those treaties or the legislation under those treaties. It would be a greater danger to allow a treaty of 17 to go ahead within the EU, with all the additional powers, bureaucracy and everything else that involves, unless, of course, you can get the safeguards I was seeking.

[Mr David Winnick (Walsall North) (Lab)]

We have heard the Prime Minister give his account of the meeting. Can arrangements now be made urgently for the Deputy Prime Minister to explain to the House why he is very much opposed to what has occurred?

[The Prime Minister]

Let me be clear: the negotiating approach of the Government was agreed by the Government before I went to Brussels, because it was very important to set out and agree the safeguards that we believed were necessary—I also set them out to the House, by the way—and that was agreed. However, it is of course important to recognise that it is no surprise that Conservatives and Liberal Democrats have not always agreed about European integration. But, as I say, we have both put aside our interest to work in the national interest in having a Government who are able to clear up the mess that the hon. Gentleman’s party left.

[Andrew Rosindell (Romford) (Con)]

If there were ever any doubt before, may I tell the Prime Minister that there is none today in the minds of the British people that we are led by a Prime Minister with the courage to put our country’s interests first? I thank him for displaying the bulldog spirit in Brussels last week, but will he discuss the long-term future of Europe with members of the European economic area and Switzerland and Turkey, which have customs union with the European Union, to ensure that we are all working together?

[The Prime Minister]

I am grateful for my hon. Friend’s support but would repeat the point I made last Wednesday. Of course Britain has a key interest in being in the European Union. I do not believe that the sort of options that other countries have outside the European Union give them anything like the influence that we have, because it is not just the markets we need open; it is a say over the rules of those markets. That is what membership of the single market gives us in this country.

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

Is it not utterly bizarre that the Prime Minister has marginalised this country and recklessly thrown away Britain’s international influence, from Washington to Beijing, solely to protect the City from regulation when it is urgently in need of some regulation? In any case, his veto cannot protect the banking sector from any future EU finance directives. Is he not therefore ashamed that never before has so much been thrown away for so little or, indeed, needlessly for almost nothing?

[The Prime Minister]

The right hon. Gentleman clearly wrote his questions before coming to the House and listening to my statement. As I set out in the statement, we were not seeking special protections for the City; we were seeking a level playing field. Indeed, in some ways, we were asking to be able to have more regulation here in the UK, not least because of the shambles of RBS. Let us be clear: the Financial Services Authority report today names only three politicians as culpable—Tony Blair, the former Prime Minister and the shadow Chancellor, who was the man partly responsible for this complete shambles that we now have to clear up.

[Martin Horwood (Cheltenham) (LD)]

This morning The New York Times questioned whether this country’s interests—or, indeed, the City’s interests—were not at greater risk, following this weekend’s events. Looking forward, what positive reassurance can the Prime Minister give to potential foreign investors that we will remain at the heart of European economic decision making?

[The Prime Minister]

International investors know that Britain has the advantage of being a member of the single market, but outside the eurozone and the euro. I would say to the hon. Gentleman that the greatest risk for Britain would be to go into a treaty, including a new treaty of the 17 at the EU level, that did not safeguard our interests. Of course I would rather that our protocol had been accepted and that those protections and safeguards had been put in place; they were not, so the greater danger would have been to go ahead with a treaty without those safeguards.

[Mr Ben Bradshaw (Exeter) (Lab)]

Given that Britain has, or perhaps had, many natural friends and allies in the rest of Europe, why does the Prime Minister think he failed to persuade a single one of them of his case?

[The Prime Minister]

There is great understanding of Britain’s interests in the European Union and great support for our backing of the single market, particularly among countries like Holland, Sweden and Germany and the Baltic states. We have just achieved a breakthrough deal—something the right hon. Gentleman never achieved in all his years in government—of a freeze in the EU budget. Britain did that by having allies and supporters in the EU who backed our move.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the Prime Minister share my concern that Opposition Members just do not get it? They talk about the need to create jobs in Britain, yet they criticise him for looking after Britain’s financial services that provide 11% of our tax base and 2 million jobs in this country and are our biggest net export. When are the Opposition going to understand that my right hon. Friend was standing up for British interests?

[The Prime Minister]

My hon. Friend makes a good point—that the financial services go way beyond the City of London. As I said in my statement, 100,000 people are employed in the financial services in Birmingham, and the sector makes up 7% of UK employment; it is responsible for £1 of every £9 collected in tax, and 3% of our trade surplus. It is a hugely important industry. There would be a threat if there were a treaty of the 17 in the EU without the proper safeguards; that is why I vetoed that approach.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is this not the same Prime Minister who month after month has been castigating working people for not staying at meetings to deal with pensions? He has walked out, without using his veto; he has walked out, without getting a rebate like Mrs Thatcher; and he has walked out without a couple of opt-outs like Major. As Del Boy would say, what a plonker!

[The Prime Minister]

I can absolutely assure the hon. Gentleman that I did not at any stage walk out of the meeting. What I did was to press Britain’s interests as a British Prime Minister should.

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

Now that the Prime Minister has cast his vote on Europe so effectively in Brussels, does he think there is any chance that the British people might one day have an opportunity to do something similar over here?

[The Prime Minister]

I wondered how long we would take to reach that issue. I believe that this is the most important use of a referendum: if there is a proposal for this House of Commons, or any Government, to pass powers from this House to somewhere else, we should ask the British people first. That, for me, in a parliamentary democracy, is the right use of a referendum. However, as we are not signing a treaty, I think that the whole issue of a referendum does not arise.

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

Does the Prime Minister believe that if Baroness Thatcher and John Major had followed his negotiating tactics, we would have had the Single European Act or the opt-outs on Maastricht that John Major negotiated with Chancellor Kohl?

[The Prime Minister]

The point about the Single European Act is that it was in Britain’s interest, which is why Margaret Thatcher signed it. The Maastricht treaty was only in Britain’s interest if we could get an opt-out from the single European currency, and that is what John Major achieved. I could not get a treaty with safeguards, so I was right to say no.

[Mark Pritchard (The Wrekin) (Con)]

I congratulate the Prime Minister on his leadership on this issue and on putting the British national interest first, unlike the Labour party when it was in power for 13 years. Has he seen the results of an opinion poll today, which show huge support in the country for his actions, unanimous support among Conservative Members, and, most revealingly and interestingly, the support of 49% of Liberal Democrat voters?

[The Prime Minister]

I am grateful to my hon. Friend for his support. The key issue for me was not whether this would be popular today, tomorrow or next week, but what was the right thing for Britain, and I judged that a treaty without safeguards was not right for Britain. [Interruption.] For all the interruptions from Opposition Members, I think that until they answer the question “Would you sign this treaty?”, a little bit of silence is needed.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Given that it was precisely the City of London’s deregulated recklessness that did so much to exacerbate the impact of the financial crisis in this country, can the Prime Minister tell us why he persists in behaving as if the interests of the City were synonymous with the national interest, which they clearly are not?

[The Prime Minister]

I am not sure that the hon. Lady was listening, but the point is that there are some ways in which we actually want to regulate banks and financial institutions more, but are not able to because of the European Union rules. Some of the other issues that I was considering were specifically about discrimination: it is quite wrong that we, as a member of the single market, are not able to deal in euros in the same way as we are able to deal in dollars and yen.

This was a very straightforward set of undertakings, and it was not about special protection for the City. I hope that I got that across in my statement, and I hope that the hon. Lady will support us when we reach those regulations.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Over the weekend it was impossible to meet a resident of Mid Bedfordshire who was not full of praise and admiration for what the Prime Minister had done in Brussels, but does he share my concern about the fact that the most cowardly and negative attacks over the weekend came not from the Labour party—which is incapable of opposition—but, unfortunately, from the Liberal Democrats? That cowardice is surpassed only by the absence of the Deputy Prime Minister from the Chamber today.

[The Prime Minister]

I am afraid that I do not agree with my hon. Friend, grateful though I am for her support. We have to recognise that we are in a coalition, and that parties in a coalition cannot achieve all the things that they want to achieve. I think that we must praise each other in the coalition when we make sacrifices on behalf of the country.

The Liberal Democrats did agree to the negotiating strategy that we pursued. I can be very clear: I came to the House, I said what I was going to do, and I then did what I had said I was going to do, because I could not achieve the safeguards that I wanted. That was a very straightforward way in which to act, and, I hope, one that every Member on this side of the House can support.

[Mr Frank Field (Birkenhead) (Lab)]

At what stage of the negotiations did the Prime Minister realise that France and Germany would do their best for us not to sign? As this is a period of Christmas cheer, can he give us an undiplomatic reply?

[The Prime Minister]

My right hon. Friend—[Interruption.] Well, we often agree. It was obviously a developing situation, but I had a meeting with Angela Merkel and Nicolas Sarkozy before the Council began. I had been to see the German Chancellor three weeks before the Council, I had been to see the French President a week before the Council, and I think that there was a good prospect of making an agreement. Conversations were also held with a huge number of Finance Ministers and other Government leaders. Clearly the 27 would rather have a deal at 27. They see the problems and difficulties of what they are proposing, but in the end they were not willing to give the safeguards—rational, moderate, reasonable and sensible though they were—and, as a result, I think I did the right thing.

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

I am sure that the Prime Minister will want to know that the toast of the people in Somerset was to the pilot who weathered the storm, because he has stood up for democracy, he has stood up for free trade and he has stood up for free markets, and this is to be wonderfully commended.

[The Prime Minister]

I thank my hon. Friend for his such full-voiced support.

[Natascha Engel (North East Derbyshire) (Lab)]

The Prime Minister said that he went to Europe seeking a treaty change and, had he got that treaty change, he would have had to have held a referendum. If that is the case, can he confirm that success in his eyes would have been a referendum? If so, why does he not hold one?

[The Prime Minister]

With huge respect to the hon. Lady, I think that she is wrong on both counts. I did not go to Brussels seeking a treaty change; the point was that if a treaty change was put forward, there needed to be safeguards for Britain. That is the first point. The second point is that I did not go thinking that a treaty change would necessarily lead to a referendum, because I was not willing to sign up to a treaty change that passed power from Britain to Brussels, so I am afraid that both parts of her question are inaccurate. I also did not go to Brussels with an impossibly long list of demands because of pressure or anything else; I went to Brussels with a set of proposals that were modest, reasonable and relevant.

[Nicholas Soames (Mid Sussex) (Con)]

Will my right hon. Friend reassure successful, outward-looking businesses in Mid Sussex, some of which are understandably anxious about the consequences of what may flow from this weekend, that what the United Kingdom seeks is an adaptable, flexible and competitive EU, and that we will continue to play a full and creative role in Europe, as well as fortifying our important, substantial bilateral relations elsewhere?

[The Prime Minister]

I agree wholeheartedly with what my right hon. Friend says and I will reassure those businesses. The absolutely key thing is that the single market, which is fully protected by the European Commission, the European Court of Justice and all the institutions of the EU, is unchanged. We have full membership of those treaties and of that organisation, and because the other EU members are going for a treaty outside the EU, that protection will remain. I would say to those businesses that not only do we maintain the single market, but we will keep up the pressure for something else they need, which is a more fundamental solution to the crisis affecting the eurozone.

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

The UK is 90,000 square miles in area, but the Prime Minister seems to think that only one square mile is of any importance. May I put it to him that his colleague—the self-styled “pragmatic revolutionary”—the Deputy Prime Minister was heavily supportive of the Prime Minister on Thursday and Friday, but was yesterday condemning him? Does the Prime Minister have any idea what he is thinking now?

[The Prime Minister]

On the issue of financial services, this is not about just one square mile of the United Kingdom. I think of people working in the financial services industry in Cardiff, and I think of banks, building societies and insurance businesses right across Wales. They need to know that there is fair regulation within the EU and they want those safeguards too. It is not just about those industries on their own; it is about the support they give to the other industries as well.

[Conor Burns (Bournemouth West) (Con)]

May I add my words of support for the Prime Minister, who at the weekend kept faith with this House and, more importantly, with the country? Can he confirm that, as the Foreign Secretary said yesterday, the existing treaties of the European Union belong to all 27 member states and that there can be no question of the eurozone countries having recourse to the institutions, mechanisms and procedures of those treaties?

--- Later in debate ---

[The Prime Minister]

I think what my hon. Friend says is important. The treaties belong equally to those who are in the euro and those who are out of the euro. The key thing is that if there are going to be further changes to those treaties—if you are going to allow the eurozone members to do something within the architecture of the European Union—it is important to get safeguards for those countries that are not in the euro, not going to join the euro, want to safeguard the single market and recognise that there is a potential threat to financial services. That is what we were about in Brussels and that is what matters.

[Several hon. Members]

rose—

[Keith Vaz (Leicester East) (Lab)]

Given the current economic crisis in Europe, does the Prime Minister believe that the Europe 2020 strategy still has a future as a successor to the Lisbon benchmarks, and is he confident that we will achieve those shared goals?

[The Prime Minister]

The short answer is that the 2020 strategy needs to have a future and we must encourage European Union countries to spend more time focusing on what really drives growth, which is completing the single market, rather than some of these initiatives on medium-term fiscal austerity and big transfers of sovereignty. I know that they are important—and particularly important for some in the EU—but real growth will be driven through the single market.

[Steve Brine (Winchester) (Con)]

May I remind the Prime Minister that we on these Benches and the vast majority of the British people support what he did last week and are very glad that it was this party leader and this party leader alone who was speaking up for Britain at this summit? Does he agree with one of his predecessors? She said:

“Europe is strongest when it grows through willing co-operation and practical measures, not compulsion or bureaucratic dreams.”—[Official Report, 22 November 1990; Vol. 181, c. 451.]

[The Prime Minister]

I am very grateful for my hon. Friend’s support. The point I made in my statement about Europe being a network, not a bloc, is completely consistent with that. We should not be shy about its developing as a network, with some networks we want to be in and others we do not.

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

Will the Prime Minister confirm that British banks and finance houses hold about £75 billion of bonds issued by eurozone Governments and that in the event of a default, with nobody representing Britain, he will still be expected to get the British taxpayer to bail some of them out?

[The Prime Minister]

The exposure of the British banks to European countries is published by the Bank of England—quite right, too—and obviously we want to avoid a collapse of the eurozone and to ensure that it takes the necessary steps to prevent that from happening. This Government will obviously always do whatever is necessary to safeguard our financial system and the economy.

[Jo Swinson (East Dunbartonshire) (LD)]

Against the odds, an excellent deal on climate change was agreed in Durban this weekend, with the UK playing a leading role alongside our EU counterparts. Would the Prime Minister reflect on whether such constructive and positive diplomacy might be a better approach to securing British interests than rushing for the exit?

[The Prime Minister]

I certainly agree that the Durban outcome is worth while and it is a staging post towards another global deal, which is very worth while. I am afraid I do not see any contradiction between being incredibly positive and constructive and having a bottom line. When you have a bottom line, it is quite important that you stick to it.

[Hugh Bayley (York Central) (Lab)]

Over the years to come, as a result of the Prime Minister’s decisions, economic and financial power will inevitably drain away from London to Frankfurt. How is that in the interests of British manufacturing or British financial services?

[The Prime Minister]

This is exactly the argument that was made about the euro. I remember it very well. People said that if we did not join the euro, Frankfurt would be the major financial centre of Europe and not Britain. Frankly, it was scaremongering then and is scaremongering now—from the same people.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I welcome the Prime Minister’s statement and his standing up for British interests, which I am sure will be widely supported across the whole country. Does my right hon. Friend remember the words of the former Prime Minister, Tony Blair, after a confrontation with Europe, when he said:

“If we are isolated and we are in the right, then that’s the correct position”

to be in? Would he not agree?

[The Prime Minister]

Yes.

[Malcolm Wicks (Croydon North) (Lab)]

Is this the first case in recorded history of a proud premiership team relegating itself to a second division, cheered on by the new English Tea party?

[The Prime Minister]

Again, this is the same argument that we had at the time of the debate about whether Britain should join the euro and it is largely the same people making it. They were in favour of it and felt that not joining the euro meant relegating oneself to the second division. Frankly, I am glad that Britain is out of the euro. We are able to set our own interest rates and make our own decisions for the benefit of our economy here in Britain and we are better off because of it. It is the same arguments from the same people; they were wrong then and they are wrong now.

[Philip Davies (Shipley) (Con)]

The Prime Minister should be in no doubt that he did the right thing last week. Will he confirm that he will not make any further policy concessions to the lickspittle Eurofanatics on the Lib Dem Benches as a result of doing the right thing for Britain last week?

[The Prime Minister]

I am always grateful for my hon. Friend’s support but he tends to take it just a little too far. The coalition is right for Britain and I want it to go on working for the good of Britain. We have to recognise that that sometimes means we cannot get the things we want.

[Clive Efford (Eltham) (Lab)]

Will the Prime Minister explain specifically what safeguards are in place today for the City of London and British interests that were not in place last week?

[The Prime Minister]

Clearly, if we had been able to achieve the protocol on financial services there would have been greater safeguards, but the safeguard we do have is that we are not signing up to a treaty that could have put that industry in danger.

[Henry Smith (Crawley) (Con)]

I congratulate my right hon. Friend on his bold and courageous stance in the early hours of the morning last Friday and I should like to pass on the thanks that many of my constituents have expressed to me over the weekend. Will he confirm that of the nations at the European Council that did sign up to an agreement, the Parliaments of Bulgaria, Poland, Denmark, Sweden, Latvia, Lithuania and others such as Hungary still need to approve and ratify it?

[The Prime Minister]

My hon. Friend makes a very good point. We do not yet know exactly how the new organisation and treaty will develop or how many countries will sign up to it. There will then be a huge process involving very detailed scrutiny by and punishment from the European Commission if Governments draw up inappropriate budgets or have a structural deficit of greater than 0.5%. Labour left us a structural deficit of—what was it?—7% or 8%? There are big processes to go through before the treaty is either finalised in March or implemented, for which it will again have to be put to Parliaments and, possibly, even to referendums as well. There are many hoops to go through.

[Austin Mitchell (Great Grimsby) (Lab)]

I am not going to criticise the Prime Minister for using his veto because that job can safely be left to his Liberal Democrat colleagues who are hawking their consciences around the media. Surely, however, he would have done better to use the big bazooka later when the undemocratic and deflationary consequences of this Merkozy diktat became clear, because at that stage he would have had lots of allies, which he should have had now and used now.

[The Prime Minister]

The hon. Gentleman makes an interesting argument. There are big questions to answer for the countries that are signing this. I think you have to have that sort of fiscal co-ordination with a single currency—he and I probably agree that that is one of many reasons why we should not join a single currency. My job at that European Council was to stand up for Britain’s interests and that is what I did.

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

I welcome the stance taken by the Prime Minister. Given that the other members of the European Union refused to agree even to the very modest proposals that he put forward, what chance is there of their ever agreeing to allow this country to regain control over such matters as those covered by, for example, the working time directive?

[The Prime Minister]

I am grateful for my hon. Friend’s question, but I am not as pessimistic as he is that there is no prospect of rebalancing powers within the European Union. There are possibilities and opportunities. We did that in terms of the bail-out fund and I think there will be opportunities in future.

[Stewart Hosie (Dundee East) (SNP)]

The concordat on the co-ordination of European Union policy is very clear—it requires the UK Government to engage with the devolved Governments in the formulation of UK policy, but that clearly did not happen on this occasion. How will the Prime Minister now explain to Cardiff, Belfast and Edinburgh that adopting an isolationist policy and abdicating all leadership is anything other than damaging and dangerous?

[The Prime Minister]

I do not accept that. In the final analysis, our relations with the European Union are a reserved issue for the UK Parliament and the UK Government. To be fair to this Government, we have gone further than any previous Government on the issues that really matter to people in Scotland—about the single market, fisheries and decisions taken within the European Union—to work very constructively with the other Administrations.

[Elizabeth Truss (South West Norfolk) (Con)]

Does the Prime Minister agree that Britain’s influence in the world is dependent on our economic strength, our productivity and our competitiveness, and that we should not trade away these valuable assets?

[The Prime Minister]

My hon. Friend makes an important point. Every country in Europe is challenged at present in relation to its economy, and it is very important to make sure that we are safeguarding Britain’s interest, staying in the single market, seeking extra safeguards for finance and other industry, and making sure we can grow out of this crisis.

[Kate Hoey (Vauxhall) (Lab)]

The Prime Minister must know that right across the UK, the majority of the public and—dare I say it on the Opposition Benches?—the majority of Labour voters support what the Prime Minister has done. He knows that that is the reality. Does he agree that instead of seeing ourselves isolated in Europe, what the public want to see now is our looking to be much more internationalist and less little Europeanist?

[The Prime Minister]

I have great sympathy with what the hon. Lady says. What it requires is both action within Europe on issues that matter to us, such as the single market, and a recognition that we should be refreshing and restoring our links with other parts of the world, whether it is the Gulf, the Commonwealth or the fast-growing countries of south-east Asia. This Government are committed to doing all those things.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

In Aberdeen in the north-east of Scotland and in Norway, there is considerable concern that the draft regulations on offshore drilling for oil and gas threaten the gold safety standard achieved in the North sea. Will what happened last week make it easier or more difficult to get the qualified minority necessary to make sure that those regulations are withdrawn and a directive is used as a means of implementing them?

[The Prime Minister]

I do not think what happened last week will have any impact on that decision because these issues are dealt with properly in the single market, and an organisation set up outside the EU cannot cut across existing treaties or existing legislation. We should work very hard to make sure we get a good deal for the North sea.

[Kelvin Hopkins (Luton North) (Lab)]

The great former Labour politicians Peter Shore and Bryan Gould both said that the single currency would fail, and they have been proved absolutely right. Does the Prime Minister accept that the choice is between a controlled deconstruction of the euro or an uncontrolled crash, and will he make this point to his European colleagues?

[The Prime Minister]

What I would say to the hon. Gentleman is that “I told you so” is not an economic policy. I have every sympathy with what he says. I have never supported Britain joining the euro because a single currency implies a single economic policy and a single fiscal policy, and trying to run those things across different democracies is so incredibly difficult. That is what they are struggling with, but if I am asked what is Britain’s interest today, I would say that it is for the eurozone to sort out its problems. A break-up of the eurozone would have very severe consequences for banks across Europe and also for banks here in Britain, and could trigger some very, very difficult economic times. In spite of what the hon. Gentleman says, we should be working constructively to encourage eurozone countries to do what is necessary, particularly in the short term, to stabilise a difficult situation.

[Andrew Selous (South West Bedfordshire) (Con)]

May I warmly congratulate the Prime Minister on standing up for British interests last week and on refusing to take the approach of Labour, who signed away £7 billion of British rebate for nothing in return?

[The Prime Minister]

I thank my hon. Friend for his support. What we do not know is what the Opposition’s approach is to this issue. Despite all the fury we have heard from those on the Opposition Benches, they cannot tell us whether they support the treaty proposal or not.

[Stephen Timms (East Ham) (Lab)]

Britain will continue to be subject to EU single market financial services regulation. Do we not now have a major problem in that we will be absent when many of those rules are drawn up?

[The Prime Minister]

That is absolutely not the case because this new organisation cannot draw up or pass proposals that cut across EU treaties or EU legislation. The right hon. Gentleman knows this well. It is the case that Britain has suffered from some of the regulation that has come out of Brussels on financial services, and that we need greater safeguards. If we cannot get those safeguards within a treaty, it is better that those countries are in a separate treaty. That is a better safeguard than the alternative, and that is the point that he needs to understand.

[Gavin Barwell (Croydon Central) (Con)]

The Leader of the Opposition’s argument that one should never leave an empty seat at the table is surely a criticism of the previous Government’s failure to join the euro. [Hon. Members: “What?”] There has been an empty seat at the table ever since we did not join the euro. Does my right hon. Friend agree that somebody who is never prepared to disagree with our European friends, even when that is in British interests, is not fit to hold the office of Prime Minister?

[The Prime Minister]

I am grateful for my hon. Friend’s support. His point about the creation of the euro being the fundamental moment that created these tensions in Europe is entirely right. The previous Government’s position was that they wanted to get us into the euro, but they realised that that was not possible. I think that that is still their policy. It was the creation of the euro that fundamentally changed the relationship in Europe, but even they decided that it was okay for eurozone countries to meet on their own. That is not being isolated; it is recognising the reality that Britain does not want to be in the euro, so we cannot stop the meeting going ahead.

[Mr Kevin Barron (Rother Valley) (Lab)]

Given that last Thursday was not about joining the euro but about protecting the interests of the euro as a currency and, therefore, the interests of our national economy, as the Prime Minister has said this afternoon and on several occasions over the past few weeks, why has he walked away from such a responsible position and allowed our economy potentially to be attacked if there is no success in looking after the interests of the euro? We did it with Ireland, and rightly so, so why are we not looking at taking action more widely to protect the interests of this country?

[The Prime Minister]

What we did with Ireland, as a very close neighbour, long-standing friend and integrated economy, was give it a bilateral loan, which was the right thing to do. I do not accept that the proposal put forward on Thursday night and Friday morning is the most important part of delivering a successful euro. We need to spend more time on the single market, on competitiveness and on short-term measures to stabilise the eurozone. I simple do not believe that whether a treaty is within or without the EU will make a huge difference to the future of the euro.

[Several hon. Members]

rose—

--- Later in debate ---

[The Prime Minister]

As ever, I am grateful for her support.

[Mr Wayne David (Caerphilly) (Lab)]

Is it correct that the Deputy Prime Minister said that he is not here because he does not want to be a distraction?

[The Prime Minister]

The point is that the Deputy Prime Minister and I agreed the negotiating strategy for the European Council, and that is important because it was the whole Government who were doing it at the Council.

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

The Prime Minister was negotiating as the Prime Minister of the coalition Government. Does he agree that now is not the time to listen to either those who say that we should leave the EU, or those who say that we should push into political and fiscal union, and can he tell the British people that he will stick to the coalition policies and get the economy back on its feet?

[The Prime Minister]

I am grateful to the hon. Gentleman and absolutely confirm that that is the case. The coalition is united in wanting to have growth policies across Europe and in promoting the single market in a very active way, and I can guarantee that we will continue to do that.

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

The Prime Minister had the opportunity to visit Feltham and Heston last week and arrived late at the European summit. How many leaders of the 26 other EU member states did he speak with in the fortnight before the summit?

[The Prime Minister]

First, I went to Feltham and Heston because I do not believe in the normal chicken theory that Prime Ministers should stay away from by-elections, so I am proud to have gone. I spoke to a wide audience of DHL employees who live in the constituency and encouraged them to vote Conservative before Christmas. After that, I popped in to see my son’s nativity play, which was also a rare joy. I got to the European Council some time before it started and met the Italian Prime Minister, the French President and the German Prime Minister. In addition, I had had a series of telephone calls with the Dutch Prime Minister, the Swedish Prime Minister and many others besides. I am sure that the hon. Lady understands—it is called multi-tasking.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My right hon. Friend had no option but to use his veto, if British interests were to be protected. Does he agree that the euro sovereign debt crisis is still the most important threat to us all and that that is what our eurozone partners ought to be concentrating on, rather than unwanted treaty changes?

[The Prime Minister]

My hon. Friend makes a very good point. I quite understand why particularly the Germans want this fiscal union and want tougher rules because they do not want to see irresponsible behaviour repeat itself. One can debate whether that actually requires change in the treaty or not, but we have to spend more time on the other parts of solving the crisis, which are to do with short-term changes and longer-term competitiveness.

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

The Prime Minister is aware that this situation represents one of the most fundamental changes in our national politics and in European politics. Will he assure the House that in all his future negotiations he will be mindful to look after not just financial services but the manufacturing sector and other service industries that do not have a part to play in the City of London?

[The Prime Minister]

I completely agree with the hon. Gentleman. I do not see financial services on their own, because they obviously have a role in supporting the rest of the economy. The key in terms of Europe for the rest of the economy is the single market, and that is what we are determined to safeguard.

[Chris Heaton-Harris (Daventry) (Con)]

The UK wields its influence in the EU in many different ways, and our net contribution to the EU in 2010-11 was £9.2 billion. We are the second largest net contributor, so perhaps we could become a little more like the unions with Labour and demand a little more influence for our money.

[The Prime Minister]

My hon. Friend makes a good point, which is that we are a major player in the European Union, not least because we are the second largest net contributor, which gives us a huge amount of influence. We have safeguarded the European Union and its treaties—not allowing them to be changed if we were not able to get the safeguards that we needed.

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

Does the Prime Minister know the whereabouts of the Deputy Prime Minister; and will their tiff lead to separation and divorce?

[The Prime Minister]

No.

[David Rutley (Macclesfield) (Con)]

I should like to pass on the hugs, best wishes and kisses from people in Macclesfield, who are very grateful for the stance that the Prime Minister took last week. Under the previous Government, from 2005 the burden of EU regulation cost British businesses billions of pounds each year. What steps is my right hon. Friend taking to reduce, rather than increase, the burden of EU regulation?

[The Prime Minister]

I am grateful for that question. We are working extremely hard, particularly in the area of the single market, to encourage the Commission, which is now looking at reducing the burden of the regulation that it passes and, specifically, the burden of regulation on businesses that employ fewer than 10 people. We have for the first time secured the idea of a moratorium: there will not be more regulations on them in the coming years.

[Pat Glass (North West Durham) (Lab)]

May I remind the Prime Minister that it is the jobs of not just the banks and the City of London which matter here? Millions of jobs throughout the country and in constituencies such as mine rely directly on the EU and on Britain being at the centre of the EU. Now that we are no longer at the table, who is going to stand up for those jobs?

[The Prime Minister]

I say to the hon. Lady, first, that the RBS report reminds us of the terrible effect on the rest of the economy when the banking system goes wrong because it is not regulated properly, so there is a very important connection. Secondly, other businesses require us to safeguard the single market, and that is exactly what I did.

[Mike Weatherley (Hove) (Con)]

Given that we are the second largest contributor to Europe, does the Prime Minister agree that without our contribution Europe would fail?

[The Prime Minister]

It does mean that we have a huge amount of influence in the EU, and that we do drive, particularly in the area of single-market policies. My hon. Friend makes the point that we have to ensure that we get value for money, however, and that is why I am so keen that we manage to achieve a freeze in the EU budget this year.

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

There is great concern throughout the business community about the implications of the Prime Minister’s walk-out from the European summit. Will he reassure the House that the uncertainty caused by that decision will not impact upon real jobs in the real economy of the United Kingdom?

[The Prime Minister]

I can certainly give the hon. Gentleman that assurance, because we can say to international investors, to businesses looking at Britain, “You have all the advantages of the single market—access to Europe’s markets—but we are not in the eurozone. Of course, we are affected by what happens in the eurozone, but our interests are just over 2%, whereas countries in the eurozone with budget deficits like ours have interest rates more like 5%, 6%, 7%.”

[Margot James (Stourbridge) (Con)]

Is my right hon. Friend aware of the words this morning of Chancellor Merkel’s spokesperson on last week’s vote? He said that

“this changes absolutely nothing of the fact that Britain is one of our closest partners and one of our most important allies and friends… We want to make the single market a joint success, and that is something for which we have Britain on our side… Britain thus remains a very important partner for Germany.”

Does my right hon. Friend not share my surprise that, if the German Chancellor can accept that it is perfectly possible to stand up for one’s national interest and be a good European, that fact should elude the Opposition?

[The Prime Minister]

My hon. Friend makes a very good point. That leads to something else, which is that the countries that are like-minded on single-market issues—Holland, Germany, Sweden, the Baltic states—want Britain to be there when we are discussing single-market issues. That is another reason I do not believe that this separate treaty and separate organisation will cut across the single market.

[Kevin Brennan (Cardiff West) (Lab)]

For the sake of clarity, can the Prime Minister tell the House where the Deputy Prime Minister is and why he is not here for this extremely important statement?

[The Prime Minister]

The Deputy Prime Minister agreed to the negotiating strategy. I am not responsible for his whereabouts, but I am sure he is working extremely hard.

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

The Prime Minister’s veto has rightly struck a chord with the nation. May I suggest that instead of this being the end of the affair, it should be the start of a process to recalibrate our relationship with the EU based on free trade and growth and not on political union and regulation, which has cost this country so much?

[The Prime Minister]

I am grateful for my hon. Friend’s support. Our position is that we want to get the best out of Europe for Britain. That means a focus, yes, on the single market, but it is not purely about a focus on trade—it is about recognising that that market is not just open for our goods but that we have a say in setting the rules. That is absolutely key to our national interest.

[Paul Blomfield (Sheffield Central) (Lab)]

What will the Prime Minister say to those leaders of the manufacturing sector who believe that his actions have deeply undermined their interests? They include Ian Rodgers, the director of UK Steel, who said today that

“we are going to become less relevant in political decision-making”.

[The Prime Minister]

I do not agree with that. A lot of these arguments were made when Britain did not join the euro. A number of organisations, media outlets and, indeed, political parties and political leaders said, “If you stay out of the euro, you’ll marginalise Britain and it’ll be bad for our economy.” That was not the case. They were wrong then, and I think they are wrong now.

[Dan Byles (North Warwickshire) (Con)]

Most post-treaty analysis has focused on the use of the veto, but can the Prime Minister confirm that the detail of the fiscal union proposed by the rest of the European Union would, quite remarkably, render the Opposition party’s entire economic policy illegal?

[The Prime Minister]

That is a very good point. We know that the leader of the Labour party is committed to joining the euro, if he is Prime Minister for long enough. At the same time, if he supported this treaty—but frankly we have not heard today whether he is for it or against it—and joined this treaty he would make his own policy illegal and he would be fined by the European Commission for the policies that the shadow Chancellor, who I see is now not here either, has signed him up to.

[Graham Stringer (Blackley and Broughton) (Lab)]

rose—[Interruption.]

[Graham Stringer]

Thank you, Mr Speaker.

Europe would not be in the economic and political mess that it is in now if we had not had to wait nearly 40 years before a British Prime Minister came back and said that he or she had used the veto. Can the Prime Minister tell us how, and when, he is going to repatriate some of the powers that have been so carelessly given away?

[The Prime Minister]

I am grateful for the hon. Gentleman’s support. As I said, we have brought back the bail-out power. We have prevented Britain from joining this treaty without the safeguards. I believe there will be opportunities in the future. There are areas, particularly in terms of costly regulation, where Britain has paid a high price for European regulation, and we should use future opportunities to act on that.

[Bob Russell (Colchester) (LD)]

I bring some grandfatherly advice to the proceedings. I urge the Prime Minister to let the dust settle, keep calm and carry on carefully, but please to abandon the Carlos Tevez approach to Europe. Bridges need to be built, and the first bridge the Prime Minister can build is to get Tory MEPs to rejoin the group of mainstream European conservatives.

[The Prime Minister]

I am very grateful for the grandfatherly advice. I remember the advice that the hon. Gentleman used to give me when we both cycled in to the House of Commons many years ago, so I will take it carefully on board. I will also take away the Carlos Tevez reference and give it a bit of thought.

[Karl Turner (Kingston upon Hull East) (Lab)]

It is becoming increasingly obvious to everyone that the Lib Dem partners in this coalition are completely pointless. As the Prime Minister does not know the whereabouts of his deputy, will he assure the House and Mrs Clegg that he will send out a search party to look for him?

[The Prime Minister]

Did the hon. Gentleman really wait one hour and 34 minutes for that? I am keen to hold on to the rebate and I think that his constituents might want a rebate as well.

[Mr Sam Gyimah (East Surrey) (Con)]

We are hearing from outside the House an answer that the Leader of the Opposition would not give on whether he would have signed the treaty last Thursday. His aides are saying that he would not have signed it. Will the Prime Minister press him further to give us an answer on whether he would have signed the treaty?

[The Prime Minister]

I am very grateful to my hon. Friend for looking at Twitter or whatever else it is that the Leader of the Opposition now uses. I gather that it is possible for the Leader of the Opposition to come back on that. Perhaps he can confirm whether he would have signed the treaty. I am happy to give him a few more minutes if we get a bit of clarity.

[Mr Speaker]

I think that the sensible approach, in conformity with convention, is to stick to questions to and answers from the Prime Minister in this Chamber.

[Bill Esterson (Sefton Central) (Lab)]

In the words of one business leader today,

“Margaret Thatcher was a constant thorn in the side of European leaders, but she never vacated the negotiating table; I am anxious by the implications of what the prime minister has done.”

When will the Prime Minister give business in this country the reassurance that it needs about the impact that his walking away will have on jobs and the economy?

[The Prime Minister]

I think that business does understand that we must be in the European Union for trade, growth and jobs, and that our membership of the single market is key. However, there is a lot of damaging regulation coming from Brussels and we need to stand up to that. When new treaties are suggested that involve huge fiscal changes and other changes in the European Union, it is right that Britain should seek safeguards. I am not hearing the same message from business that the hon. Gentleman is hearing.

[Karen Bradley (Staffordshire Moorlands) (Con)]

We have heard much this afternoon about the number of people who are employed in financial services. More than 2,000 of those jobs are located in my constituency. Can the Prime Minister reassure those employees that the action that he took last week was in their interests and that it will safeguard their jobs and not put them at unnecessary risk?

[The Prime Minister]

I can certainly do that. My hon. Friend makes the important point that this is an industry that is based around the country and not just in London. However, the protections of the single market go far beyond the financial services industry.

[Nia Griffith (Llanelli) (Lab)]

The Prime Minister has likened his experience of EU negotiations to playing chess against 26 different people. Will he therefore tell us what attempts he has made to build alliances with countries that have similar views to the UK, which could have played with him rather than against him?

[The Prime Minister]

Year after year, Ministers have had to stand at this Dispatch Box and apologise as the EU budget has gone up by 3%, 4%, 5% or more, because it is decided by qualified majority voting. I put together a qualified majority bloc so that we could get a real-terms freeze in the budget. There was help from Germany, France, Sweden and Holland. That is exactly the sort of constructive role that we play.

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

I am pleased that we have a Chancellor who understands that we need to take tight control of the fiscal reins of this country and that we have a Prime Minister who understands the difficult questions that need to be asked. I am surprised that we have a Leader of the Opposition who does not understand any of that and who cannot make his mind up. May I ask, with all humility, when the great British public will have the chance to have a say on Europe?

[The Prime Minister]

I am grateful to my hon. Friend for her support. I have given my answer on a referendum. I think that there is a role for referendums in a parliamentary democracy, but that comes at the moment when a Government or a Parliament proposes to give up power, rather than at other times.

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

How many countries outside the European Union have free trade agreements with it?

--- Later in debate ---

[The Prime Minister]

There is a growing number, with countries such as Mexico, and now we have the Korea free trade agreement. I am very keen to try to finalise the Japan free trade agreement. Huge effort should be made to have such treaties, because they are good for both sides.

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

May I pay tribute to the Prime Minister for his practical approach to the negotiations last week? May I also say that his practical, obvious negotiating style now seems to be supported by the Leader of the Opposition, whose aides are briefing the press that he would not have signed the agreement, in the same way that the Prime Minister did not?

[The Prime Minister]

Ah. Either the Leader of the Opposition has no control over his aides, who are randomly briefing the press about his position, or he failed to tell the House, in his minutes and minutes of speaking, that he would not have signed the treaty. If he would have signed it, he can say I made the wrong decision, but if he would not, he will have to accept that I made the right decision. He either has to have the courage of his convictions or give an answer.

[Jonathan Ashworth (Leicester South) (Lab)]

Will the Prime Minister confirm that his veto does nothing to strengthen financial services in the way that he would want? Now that he has adopted a position of isolation, does he think he is more or less likely to win those safeguards in the future?

[The Prime Minister]

The key safeguard that we did get was against a treaty without proper protections and safeguards for the single market. It was in Britain’s interest to do that, and that is what the hon. Gentleman needs to understand.

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

After last week’s isolation, can the Prime Minister confirm that he still agrees fully with the words of the coalition agreement that

“Britain should play a leading role”

and be

“a positive participant in the European Union”,

and that in that way we will help solve the economic crisis and bring growth and jobs to the United Kingdom?

[The Prime Minister]

I completely agree with that. We are members of the European Union, and that membership has not changed; nor have the treaties that govern the single market.

[Alex Cunningham (Stockton North) (Lab)]

We all know that an ill-prepared Prime Minister failed to build the alliances and friendships to ensure that Britain’s best interests were protected in Europe last week. What will he be doing on his days off, when the leaders of the other 26 EU nations are sitting around a table, working hard and discussing economics that affect countries both inside and outside the eurozone?

[The Prime Minister]

What I will be doing is sorting out the mess that the hon. Gentleman’s party left when it left office.

[Chris Kelly (Dudley South) (Con)]

My right hon. Friend might be interested to hear that I have recently visited businesses in Dudley South that are now exporting to markets such as Mexico, Brazil and the far east. Given the decline of the European Union’s share of world GDP and world trade over the past decade, does he agree that we need to ensure that we have robust relationships with the rising powers in Asia and south America as much as with the declining powers in the EU?

[The Prime Minister]

My hon. Friend is right. What we want is the best of both worlds. We want to have the single market in Europe and use it to drive free trade deals with countries in south and central America and the far east, so that we maximise trade for Britain, Europe and the world.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Is it not more likely than not that the 26 member states other than Britain will increasingly agree among themselves courses of action on financial services, the single market and other matters, and that even if Britain still has the right to oppose them in the full EU, it will not be able to stand out against 26 countries that have effectively agreed a position among themselves?

[The Prime Minister]

The new organisation outside the EU cannot draw up or implement agreements on financial services or other things that have an impact on the single market. Those things have to be done through the Single Market Council. Of course there will always be difficulties at that Council, where frankly my right hon. Friend the Chancellor has to fight Britain’s corner very hard, but the danger for us was allowing the treaty of the 17 to come into the EU without proper safeguards. That is why we behaved as we did.

[Christopher Pincher (Tamworth) (Con)]

Is my right hon. Friend aware that François Hollande, the front-runner for the French presidency in next year’s elections, has said that if elected he will tear up the accord because it is not right for France? Does that not suggest that there are socialists who appreciate it when Britain stands up for herself? Sadly, they are not our socialists.

[The Prime Minister]

I do not want to get drawn into the French election campaign, because despite reports to the contrary I am still on extremely good terms with my friend Nicolas Sarkozy, as the Libya campaign proved. I will say one thing: at least the Opposition leader in France has told us what he thinks. I can see the Opposition Front Benchers tweeting, blogging and poking for all they are worth, but they still do not have a policy.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

The Prime Minister has referred to today’s Financial Services Authority announcement, and I have to say that he has selective memory loss, because it was he who was calling for less and lighter-touch regulation of our financial services when he was in opposition.

May I ask the Prime Minister why it was better to placate his Back Benchers than stay in the room, stand up and fight for British interests?

[The Prime Minister]

There are two points. First, the FSA mentions only three politicians, one of whom is the shadow Chancellor. On placating people, if the hon. Gentleman casts his mind back to last Wednesday, he will find that I was not particularly placating anybody with the moderate and reasonable requests I was making of the European Union. It was leadership on behalf of Britain, not any one part of it.

[Martin Vickers (Cleethorpes) (Con)]

My right hon. Friend will be aware that he has the overwhelming support of my constituents from across the political spectrum. If we are to safeguard jobs and expand the economy, we must be equally robust in all our EU negotiations. He will know that the common fisheries policy adversely affects my constituency. Will he assure my constituents that his colleagues will follow his lead when negotiating on that matter?

[The Prime Minister]

I know how important the cod issue is to my hon. Friend’s constituents and people right across that region. I will ensure that Ministers in the coalition Government stand up for our fishermen.

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

The Prime Minister has stated that he wanted to deal at the level of 27 nations. Why, then, did he end up having bilateral discussions with just three?

[The Prime Minister]

The point is that it is quite clear that when it came to the issue of wanting a change to the treaty—[Hon. Members: “Answer!”] I am answering the question very directly. It was clear that the Germans and the French were leading the charge on wanting a change to the treaty, so it was very important to have discussions with them, but I also had discussions with the Dutch, the Swedish, the Irish and many others.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

May I add my support to the Prime Minister and to the coalition Government for taking a tough decision under difficult circumstances? Will he confirm that over and above our contribution to the EU, we buy more from Europe than we export to it? The difference is about £100 billion in product, which the eurozone will need at the moment to help it out of its crisis.

[The Prime Minister]

My hon. Friend makes an important point. We have a large trade deficit with Europe, apart from in one area: financial services. Frankly, I wish our economy was more rebalanced. We are aiming to rebalance it, but it is important in the meantime that we recognise realities.

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

Successful completion of the single market could add 7% to UK gross domestic product. After Thursday’s summit and the Prime Minister’s policy of isolation, does he believe that he has more or fewer allies in Europe for something that is vital to our national interest?

--- Later in debate ---

[The Prime Minister]

We have huge amounts of allies and support for action on the single market. If the hon. Gentleman looks at what has happened in the past 18 months, he will see that there have been more positive steps taken by the European Commission on the single market than there have been for the past 10 yeas or more. If we look at what is happening on the services directive, energy, small business, we see that the penny has finally dropped that Europe has a role, but it needs to be about deregulation. That is no coincidence. One reason is that of the 27 countries sitting around the table, only four are run by socialists.

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

Many jobs in Suffolk rely on a fair, level playing field in the single market. If last Friday morning was not the time to stand up for British interests, when is?

[The Prime Minister]

My hon. Friend is right. Institutional arrangements and treaty arrangements in the EU must be agreed by unanimity. If anyone is not content with what is being put forward, it is perfectly acceptable to do what I did and say, “I am not happy to go ahead with the treaty without these safeguards.”

[Toby Perkins (Chesterfield) (Lab)]

The Prime Minister has heard from Members on both sides of the House about the worries of manufacturing industry. Will he say specifically which exporting firms think that his actions last week will make exports easier rather than harder—which ones have come out and supported his move?

[The Prime Minister]

Frankly, I have found huge support from the business community for what I have said—and that spans a huge number of different industries. Many industries are asking what we will do about the problem of excessive regulation. That should be dealt with through the single market, which we will continue to do.

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

As someone who has long advocated a positive role for Britain in Europe, may I welcome my right hon. Friend’s decision on Friday as the right one for this country? Will he further commit the Government to carry on engaging strongly with our European partners to ensure more jobs and growth in the single market?

[The Prime Minister]

I am grateful for my hon. Friend’s support. I have spoken to a number of people over the last few days, in my party and others, who have a long history of supporting Britain’s membership of the EU and who think that what I did was right. Of course we need to engage, and in terms of the single market we need to make that engagement even more powerful in the weeks and months ahead. But it was right, on this occasion, to say no to this treaty.

[Ian Austin (Dudley North) (Lab)]

There is one member of the Government who does not seem to share his colleagues’ antipathy for all things European, but after sitting through and paying for a dinner at which guests toasted the Third Reich and chanted “Hitler, Hitler, Hitler”—[Interruption.] Members on the other side of the House may not take this seriously, but why has the Prime Minister not sacked—

--- Later in debate ---

[Stephen Mosley (City of Chester) (Con)]

It is only the tough action taken by my right hon. Friend’s Government to tackle our own deficit that has made us a safe haven in Europe and given us a choice last week. Is it not the case that if we had followed the economic policies advocated by the Opposition, it would not be the eurozone asking us for help, but us going to beg Europe to bail us out?

[The Prime Minister]

My hon. Friend makes an important point. At the last election, British and Greek interest rates were pretty much equivalent at about 4.5% and we had similar sized deficits. What has happened since is a huge increase in Greek interest rates and a decline in British interest rates, partly because we have a plan—and have shown that we have a plan—to deal with our debts and our deficit.

[Esther McVey (Wirral West) (Con)]

The Populus poll reported today shows that only 14% of the public opposed the Prime Minister’s actions. Does that not show that Members on this side of the House are totally in touch with public opinion and the Opposition are not?

[The Prime Minister]

I am grateful to my hon. Friend for that point. What I also noticed from that poll, which says that more than 50% support what we have done and—as she says—14% are against, is that the leader of the Labour party does have a constituency of opinion among the people who have not made up their minds.

[David Morris (Morecambe and Lunesdale) (Con)]

May I congratulate the Prime Minister on the strength he has shown in leading this country? The tabloid press says that £40 billion would have gone over to Europe, or £642 for every man, woman and child in this country. I thank the Prime Minister for stopping that happening, and will he point out to the Leader of the Opposition—who now says that he would not have signed the treaty—that instead of being cast adrift on the waves of the Atlantic, we are now the financial lifeboat of Europe?

[The Prime Minister]

I am grateful to my hon. Friend for his question. The point about the budget is important because, as a net contributor, every extra percentage point of budget increase does result in a big transfer from Britain to Brussels, so it is important that we have managed to achieve a freeze.

[Simon Kirby (Brighton, Kemptown) (Con)]

May I congratulate the Prime Minister on his strong and decisive leadership and on doing not only what is best for Britain, but best for the 2,000 of my constituents who work in financial services?

[The Prime Minister]

I thank my hon. Friend, who has made a number of sacrifices on my behalf over the last 18 months, one of which is waiting to the very last in this marathon question session. I am delighted that he believes that we have done the right thing for Britain and for Brighton, and I praise him for his very hard work in his constituency.

[Mr Speaker]

I am extremely grateful to the Prime Minister and other colleagues, as 101 Back Benchers had the opportunity to question the Prime Minister in the 88 minutes of exclusively Back Bench time on this statement. I thank colleagues for their co-operation.

Appointment of the Chair of the National Audit Office

Lord Cameron of Chipping Norton Excerpts

Wednesday 7th December 2011 Commons Chamber

[The Prime Minister (Mr David Cameron)]

I beg to move,

That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Professor Sir Andrew Likierman to the Office of Chair of the National Audit Office.

This is the first time that a Prime Minister has moved a motion to appoint the chair of the National Audit Office, and it is a direct result of the legislation that we have brought forward to implement the Public Accounts Commission’s recommendations on strengthening the governance of the National Audit Office, including through new board arrangements and an independent chair.

At a time when we are getting to grips with a record budget deficit, and when families and businesses up and down the country are working hard to make ends meet, it is more important than ever that we get the best possible value for money in public service delivery. That is why, for example, this Government have delivered £3.7 billion of savings in just 10 months—enough to pay the salaries of 200,000 junior nurses or 150,000 secondary school teachers.

The National Audit Office has a vital role to play in holding the Government to account and in ensuring that we achieve the greatest possible value for money. The proposed chair is Professor Sir Andrew Likierman, currently the NAO’s acting chairman. He was appointed following an open competition by my predecessor the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the former Chair of the Committee of Public Accounts, my hon. Friend the Member for Gainsborough (Mr Leigh). The intention was that Professor Likierman should become the chair of the new NAO in due course, and he has indicated his willingness to continue in the role for a further three years.

Professor Likierman is a distinguished public servant with extensive knowledge and experience of business and public service. Since taking up the acting chair role, he has established the NAO’s board as an effective governance body, providing support and independent challenge to the NAO’s decision-making process. He has also provided counsel and advice to the Comptroller and Auditor General at a time of change for both the NAO and the central Government bodies that it audits.

I believe it is desirable for Professor Likierman to be appointed under the new legislation in order to provide continuity as the NAO formally adopts its new governance arrangements, and I have no hesitation in commending this motion to the House.

Strategic Defence and Security Review (First Annual Report)

Lord Cameron of Chipping Norton Excerpts

Wednesday 7th December 2011 Written Statements

[The Prime Minister (Mr David Cameron)]

Along with the Deputy Prime Minister, and the other members of the National Security Council, I am pleased to provide the House with the following update on implementation of the 2010 strategic defence and security review. This review was undertaken at a time of immense challenge for UK defence and security: a severe mismatch between future defence plans and budgets inherited from the previous Government; the absence of any up-to-date strategy within the Ministry of Defence (MOD), due to the lack of a defence review for 12 years; a major global economic crisis that required action across the whole of Government to tackle the deficit; and armed forces engaged in a major campaign in Afghanistan. As the Government made it clear at the time, the challenges facing defence were too great to solve in a single review. But the SDSR took the first vital steps to transform UK defence and security to face the challenges of the 21st century.

Based on the conclusions of the new national security strategy, “A Strong Britain in an Age of Uncertainty”, the SDSR described the National Security Council’s chosen policy response: an adaptable defence and security posture able to respond flexibly to a wide range of potential crises while continuing to fulfil our standing commitments. This is an approach that depends upon integrated effort across Government, achieving greater effect by combining defence, development, diplomatic, intelligence and other capabilities. Events over the last year, especially the profound changes under way in north Africa, have underlined the wisdom of this approach: few predicted an Arab spring even six months before it occurred—powerfully illustrating the need for a highly adaptable posture The campaign in Libya showed it was right to keep balanced armed forces, right to retain a significant RAF fast-jet capability, right to focus on building practical co-operation with the UAE and Qatar, and right to be buying more drones, tanker aircraft, helicopters and intelligence gathering capability.

We undertook in the SDSR to report annually to Parliament on its implementation. Today the Deputy Prime Minister and I are placing copies of the first SDSR annual progress report in the Library of the House. The report describes the work that has been carried out in the last year. Key developments include agreement on a radical plan to transform the MOD, based on the conclusions of the review by Lord Levene; taking the very difficult further steps necessary to close the £38 billion shortfall in funding over the next 10 years; completion of a review into the future of the reserve forces; establishment of a transformative cyber-security programme; new measures to tackle both the terrorist and organised crime threats to the UK; and expanding and strengthening our network of influence in a fast changing world.

Decisions taken during the SDSR and the 2010 comprehensive spending review ensured that we will continue to meet the NATO target of spending at least 2% of GDP on defence over the spending review period: in 2014-15, the UK defence budget will be £33.5 billion. Further work was undertaken this year to address the longer-term financial position so that on 18 July the Government were able to set out plans to increase in real terms the investment in defence equipment by 1% per annum between 2015-16 and 2020-21. On the same day, the Government announced detailed plans to return the Army from Germany and £1.5 billion of additional investment in our reserve forces, expanding their size after years of decline, enhancing their role and adjusting the long-term balance between the regulars and reserves. Taken together with a range of further measures this has brought the defence programme broadly into balance with the resources available for the first time in many years and ensured that the Government can deliver the long-term vision for our armed forces: Future Force 2020.

These measures ensure that Britain retains the fourth largest military budget in the world and that we will invest around £150 billion in equipment for our armed forces over the next 10 years. By tackling the imbalance in the defence programme, the Government have been able to commit to a range of new equipment programmes for which funding had previously not been identified, including 14 new Chinook helicopters and refurbishment of the Army’s fleet of Warrior vehicles. In May this year, formal approval was granted to begin the assessment phase for the programme to replace the Vanguard-class submarines. In addition, to assist the Liberal Democrats make the case for alternatives to the Trident system, the Government initiated a study into the costs, feasibility and credibility of alternative nuclear deterrent systems and postures. Progress has also been made on implementing the new nuclear assurances policy and the reduction in our nuclear weapon stockpile to no more than 180 warheads, both commitments set out in the SDSR.

The past year has seen significant changes in the threat from international terrorism. Al Qaeda’s leadership is now weaker than at any time since 9/11. But al-Qaeda continues to pose a threat and groups affiliated to al-Qaeda in countries such as Yemen and Somalia have emerged as a threat in their own right. We are implementing a revised counter-terrorism strategy to tackle the terrorist threat to the UK and our interests overseas. In keeping with the approach in the SDSR, we are also working hard to tackle the underlying causes of instability in Yemen and Somalia.

The SDSR recognised the rapidly changing nature of opportunities and risks from cyberspace. Following the April launch of the UK’s £650 million national cyber-security programme, the new cyber-security strategy, published on 25 November, sets out the UK’s approach to cyber-security in four priority areas: securing opportunities for UK growth, including overhauling the UK’s approach to tackling cybercrime; strengthening and securing UK infrastructure and improving our ability to protect our national interests in cyberspace; helping shape an open, vibrant and safe cyberspace; and improving national cyber-security skills and capabilities. November’s London conference on cyberspace demonstrated the UK’s continued lead in international cyber-thinking and enabled us to build alliances with like-minded nations, the private sector and civil society.

The organised crime strategy, “Local to Global”, was published in July, setting out the Government’s response to organised crime, a key element being the creation of the National Crime Agency—a powerful new body of operational crime fighters that will make the UK a hostile environment for serious and organised criminality. The NCA will incorporate a border policing command which will provide a co-ordinated, multi-agency, cohesive approach to securing the border.

Tackling the root causes of instability and helping to resolve conflicts overseas are key national security tasks. We have put development at the heart of an integrated approach that supports the world’s most vulnerable people and protects Britain from external threats. The FCO, DFID and MOD launched the building stability overseas strategy on 19 July. The three Departments are now working with the rest of Government and with NGOs and international partners to implement the strategy. In other areas too, the SDSR committed us to focusing existing resources better in a more co-ordinated Government response. On natural hazards, the last year has seen the largest ever multi-agency exercise to test the UK’s response, as well as a review of arrangements for an influenza pandemic and vital steps to reduce the vulnerability of critical national infrastructure.

In a rapidly changing world, alliances and partnerships are more important than ever to the UK’s international influence and therefore our national security and prosperity. Internationally we rarely act alone. We are working more closely with established allies, including through the two ground-breaking defence treaties signed with France last year and our continuing close co-operation with the USA. We continue to deepen our defence co-operation with France and to explore the potential to open such co-operation to other nations willing to invest in developing and deploying modern military capabilities. The UK has led the debate on tougher action on piracy, commanding EU Operation Atalanta, the EU mission to counter piracy off the coast of Somalia. On 11 May, the Foreign Office also announced plans to expand its diplomatic network in India, China, Brazil, Turkey, Mexico and Indonesia, and re-open embassies in Côte D’Ivoire, El Salvador and Madagascar. We will use this strengthened diplomatic network to develop the partnerships the UK needs not only to ensure our security but also to promote British commercial interests—as we did through the UK business delegations that have accompanied ministerial visits to China, India, Brazil and Russia.

The acid test of any defence and security strategy is its ability to deal with a crisis. The UK’s prompt and flexible military, diplomatic and stabilisation activity in Libya confirmed the validity of many of the key conclusions of the SDSR. The outstanding performance of our armed forces and civilians demonstrated the UK’s continued ability to project power flexibly and to take a leading role in shaping international events. NATO again demonstrated its centrality. And the excellent political and military cooperation with France, other NATO partners and Gulf states demonstrated the vital importance of strengthening defence ties with existing allies and new partners in tackling defence and security.

Work continues across Government to implement the SDSR and we will provide a further annual update to Parliament in 2012.

Libya Crisis

Lord Cameron of Chipping Norton Excerpts

Thursday 1st December 2011 Written Statements

[The Prime Minister (Mr David Cameron)]

I am today publishing in full the National Security Adviser’s review of how the Whitehall machine operated during the Libya conflict and what lessons we can learn, in keeping with the commitment I made to the House on 5 September.

I told the House on 21 March that I believed that military intervention was necessary, legal and right to protect the people of Libya from the brutality of the Gaddafi regime, and I pay tribute to the courage and professionalism of our armed forces during this conflict. There remains much to do to secure a successful transition to a peaceful and prosperous democracy, and we will continue to assist the interim Libyan Government. But our armed forces, our diplomats and development experts who re-established the British presence in Benghazi and Tripoli, and all those in the UK who contributed to the success of the international effort, can be proud of the part they have already played.

The National Security Council proved its worth in ensuring effective co-ordination of this country’s contribution throughout the crisis in Libya. But it is always right to learn the lessons after any conflict. In addition to the areas where things went well, Sir Peter Ricketts’ review has also highlighted a number of lessons for future conflicts, including the importance of swift evacuation of UK nationals; integrating better economic analysis and policy more prominently at the early stages of conflict planning; and establishing a clearer cross-Government process for the negotiation of United Nations Security Council Resolutions.

Copies of the review of lessons learned from Libya have been placed in the Libraries of both Houses. The review is also available on the No. 10 website.