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House of Commons

Monday 1 November 2010

The House met at half-past Two o'clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Home Department

The Secretary of State was asked-

West Midlands Police

1. Mr Bob Ainsworth (Coventry North East) (Lab): If she will discuss with West Midlands police the likely effects on police numbers in the west midlands of the outcome of the comprehensive spending review. [20298]

The Secretary of State for the Home Department (Mrs Theresa May): The Government's first duty is to protect the public. The events of the last few days have been a stark reminder of the harm our enemies wish to inflict on us. I will make a statement later this afternoon on the airline terror plot, following the Prime Minister's statement on the European Council.

To respond to the right hon. Gentleman's question, I spoke to Chris Sims, the chief constable of West Midlands police, just under a fortnight ago. He reassured me, as he has also done publicly, that he remains absolutely confident that West Midlands police will continue to protect and serve people in the west midlands in the way they expect. I will continue to hold discussions with police forces.

Mr Ainsworth: Of course they will try, but West Midlands police is planning to shed 400 police officers and support staff, and that is just in year one. Why is low-crime Surrey getting a far lower rate of cuts than the west midlands? I thought we were all in this together.

Mrs May: May I first thank the right hon. Gentleman for advance notice of his question, which he tweeted about half an hour ago?

The effectiveness of a police force does not depend primarily on the numbers of staff. What matters is how effectively they are deployed, whether they are visible and available doing the job the public want them to do, and whether they have been freed from unnecessary paperwork and bureaucracy. We will be doing that, and the steps we are already taking to do away with the stop-and-account form and to reduce the amount of information recorded for stop and search will save 800,000 man hours a year.

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Ed Balls (Morley and Outwood) (Lab/Co-op): We will hear more from the Home Secretary later this afternoon about the security threat to our country, but I am sure the whole House will want to join me in commending her on the very calm way in which she has handled events over the past few days. I also want to thank her for welcoming me to my shadow role and offering me a detailed security briefing.

On the spending review and its impact on police numbers in the west midlands, at the weekend the Home Secretary said that in the spending review it is important that the Home Office takes its share, and policing is taking its share in that, but given that the NHS budget is rising by 0.4% in real terms over four years and the Defence and Education budgets are falling by 7.5% and 11%, does the Home Secretary really think a real-terms cut in the Home Office budget of 25% and a 20% real-terms cut in the central resource budget for policing constitutes a fair share?

Mrs May: May I first welcome the right hon. Gentleman to his post as shadow Home Secretary? I was pleased to be able to welcome him to his new position with a telephone call and, indeed, to be able to update him over the weekend on the recent events that have taken place-they will be discussed in more detail later this afternoon, of course.

I simply say to the right hon. Gentleman that, yes, it is important for the Home Office to be willing to look at playing its part in dealing with the biggest deficit of any G20 nation, a deficit that was left as a legacy to this country by his Labour Government.

Ed Balls: Police leaders in the west midlands and across the country will have to decide for themselves whether that was an adequate answer. In the last week, the accountancy firm KPMG has estimated that 18,000 police officers will lose their jobs, and the Police Federation says 20,000, which would mean that 1,200 officers would be lost in the west midlands alone in the next four years. Given the impact these cuts will have in the west midlands and across the country, does the Home Secretary agree with these estimates of deep cuts to front-line policing, or does she think that KPMG and the Police Federation have got their sums wrong?

Mrs May: I repeat to the right hon. Gentleman what I said to the right hon. Member for Coventry North East (Mr Ainsworth): the issue of policing and the effectiveness of policing is not just about numbers, which is what he and his colleagues seem to think; it is about how we deploy police staff and the job they are doing out on the streets. I have more confidence in the ability of our chief constables up and down the country, chief constables like Jon Stoddart in Durham, who says that

and the deputy chief constable in Essex who said:

We are clear that savings can be made without affecting front-line policing. We are doing our bit as a Government in reducing the heavy load of bureaucracy introduced by the right hon. Gentleman's Government, which will result in police being out on the streets.

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Immigration System

2. Mr Mark Spencer (Sherwood) (Con): What recent progress she has made on reform of the immigration system. [20299]

10. Mr David Evennett (Bexleyheath and Crayford) (Con): What recent progress she has made on reform of the immigration system. [20307]

12. Bob Blackman (Harrow East) (Con): What recent progress she has made on reform of the immigration system. [20309]

17. Dr Phillip Lee (Bracknell) (Con): What recent progress she has made on reform of the immigration system. [20315]

The Minister for Immigration (Damian Green): In just six months, the coalition Government have made significant progress in the reform of the immigration system. We have introduced an interim limit on non-EU economic migrants and consulted on proposals for the annual limit. We are also reviewing student and family routes. We have made significant progress towards ending the detention of children and we have also begun exploring improvements to the asylum system.

Mr Spencer: The Minister will be aware that companies such as Rolls-Royce, in my constituency, require highly skilled staff from outside the EU. What can be done to ensure that those companies have access to those highly skilled staff while also ensuring that the immigrants coming in have the right skills?

Damian Green: My hon. Friend makes an extremely good point, because this is what we are seeking to achieve under our annual limit: we want to ensure not only that the skills that may not be available at the moment in this country are made available, but that jobs are also available for British workers. I commend to him the research published by the Home Office last week showing that 29% of those who came in under the tier 1 route-the route meant for the most highly skilled: the people who are so highly skilled that they do not even need a job offer-were employed in low-skilled roles. That tells me that the points-based system has not been working as well as it should have been.

Mr Evennett: I welcome my hon. Friend's actions to date on this matter, but in order to bring net migration down to a sustainable level a robust limit on non-EU economic migration is vital. Will he update us on what progress he has made on dealing with other routes into the UK, for example, bogus colleges and illegal transportation?

Damian Green: I agree with my hon. Friend that it is not just the economic routes we are looking at-as I have said, we are examining other routes. We are, of course, committed to attracting the brightest and best students to the UK, and we welcome legitimate students coming here to study legitimate courses, but there has been and still is significant abuse of the student route. Part of our summer crackdown on illegal immigration has been aimed at bogus colleges. We have suspended the licences of another five bogus colleges in the past
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three months, and I am happy to assure him and the House that we will continue to crack down as hard as possible on those using the student route to promote illegal immigration.

Bob Blackman: My hon. Friend has referred to the previous Government's policy of relying on a points-based system for controlling immigration. Can he elucidate on the figures he cited on the success of tier 1 migrants-by definition, the brightest and best-in obtaining highly skilled jobs?

Damian Green: The detail of the tier 1 research is fascinating because, as I say, it showed that nearly a third of the people who came in under that route were doing essential but low-skilled jobs-they were shop assistants, they were working in fast food outlets, and so on. Those are all jobs that need to be done, but upwards of 2 million people are unemployed in this country and they will find it very strange that those jobs, in particular, are being done by people who have come to this country under a route that is supposed to be specifically designed for the most highly skilled. That situation seems to be unfair to many of our British workers.

Dr Lee: What are the Government doing to tackle the problem of sham marriages in the immigration system?

Mr Kevan Jones (North Durham) (Lab): That was a killer question.

Damian Green: Some Labour Members seem not to think this an important issue, but it is an extremely important issue. Part of our summer crackdown has been precisely aimed at sham marriages, and that campaign has produced more than 800 arrests. Perhaps most vividly, and extremely regrettably, a Church of England vicar has been convicted of facilitating sham marriages. We are working very hard with the Church authorities to make sure that nothing like this happens in future and that we help vicars, those in register offices and all such people to make sure that they are not accidentally involved in any more of this type of criminality.

Keith Vaz (Leicester East) (Lab): One area that might well need reform is the humane removal of failed asylum seekers, following the death only 20 days ago of Jimmy Mubenga. Will the Minister confirm newspaper reports that the contract for escort services provided by G4S has now been terminated? What immediate steps, pending the outcome of the police investigation and the other investigations, is he taking to ensure that that kind of tragic event never happens again?

Damian Green: The right hon. Gentleman will know, of course, that while a police investigation is going on it would be completely improper of me to give any details about that investigation. I can confirm that the contract for the removals has been given to Reliance, but I should say at this point-to clear up any possible misunderstanding-that the tendering for the new contract took place under the previous Government, last September, and the decision was taken in August. The change in the contract away from G4S has nothing to do with any recent events.

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Fiona Mactaggart (Slough) (Lab): One of the changes that the hon. Gentleman has made to the immigration service system is to bring forward pre-entry English language testing for spouses overseas. What assessment has he made of the availability and quality of English language teaching in places such as Pakistan and India, where many of these spouses come from?

Damian Green: The hon. Lady mentions two particularly entrepreneurial societies where, if there is a need for businesses, businesses will spring up. I remind her that the desire to introduce English language tests in that sphere was promoted by a Government of which she was a member. We have brought it forward to this November because, as I am sure she agrees, it is a significant way of ensuring that everybody who comes to this country can be fully integrated into the life of this country. That seems to me to be an extremely important goal for the long-term health of our society.

Pete Wishart (Perth and North Perthshire) (SNP): Does the Minister appreciate and understand that the different nations of the UK have different immigration requirements that require different solutions? Will he therefore start to explain how his immigration cap will help the nations of Scotland and Wales?

Damian Green: The immigration cap will help all parts of the United Kingdom by ensuring that we bring in the skills of those we need while not having the scale of immigration that we have had over the past 10 years, which has proved simply unsustainable. I am sure that the hon. Gentleman would agree that we could not carry on as we had done over the past decade. Over that decade, more than 2 million people net arrived in this country, putting pressure on public services. That is why we need an immigration limit, and it will be for the benefit of every one of the nations of the United Kingdom.

Shabana Mahmood (Birmingham, Ladywood) (Lab): On the subject of reforms to the immigration system and the particular point of deportation, the death of Jimmy Mubenga a few weeks ago was the first time that an escorted individual has died during deportation. My right hon. Friend the Member for Morley and Outwood (Ed Balls) has twice requested a briefing from the Home Secretary regarding the circumstances of that case, and both requests have been refused. Will the Minister now make a statement to the House, updating Members on the progress of any internal investigation into Mr Mubenga's death and the use of restraint during enforced deportation more generally? In particular, will he state whether the use of restraint on children during deportation is also being reviewed?

Mr Speaker: Order. In less than a minute, if the Minister is going to do it now.

Damian Green: I welcome the hon. Lady to the Front Bench and congratulate her on her very rapid promotion. May I repeat what I said to the right hon. Member for Leicester East (Keith Vaz)? There is a police investigation going on at the moment. It would clearly be inappropriate for me or my right hon. Friend the Home Secretary to give any details about this case while the police investigation
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is going on. I am surprised that the shadow Home Secretary asked the hon. Lady to do that while a police investigation was going on.

National Crime Agency

3. Esther McVey (Wirral West) (Con): What assessment she has made of the likely effect on the administrative burden on police forces of the establishment of the proposed national crime agency. [20300]

14. Mr David Ruffley (Bury St Edmunds) (Con): What assessment she has made of the likely effect on the administrative burden on police forces of the establishment of the proposed national crime agency. [20312]

The Secretary of State for the Home Department (Mrs Theresa May): We believe there is a real need to bring a greater focus to the issue of organised crime and other national aspects of policing. The national crime agency will strengthen the operational response to organised crime and better secure our borders. The NCA will contribute to our aim of rationalising the national policing landscape, thereby driving out waste and increasing productivity.

Esther McVey: Will my right hon. Friend assure the House that the new joined-up approach of the national crime agency, which will also incorporate functions from the National Policing Improvement Agency, will not only provide efficiency savings but will give equal attention to the individual regions, mine being the north-west?

Mrs May: I thank my hon. Friend for her question. I assure her that in setting up the national crime agency we are considering efficiency, and efficiency savings. We will be changing the national policing landscape and it is important to put greater emphasis on serious organised crime. Organised crime is calculated to cost this country and society £20 billion to £40 billion a year and it is right that we should do something to enhance our fight against it.

Mr Ruffley: Police forces have to comply with 162 separate protective services standards involving answering 1,099 separate questions. The fact that there is too much process and paperwork prevents the police from catching criminals, so will my right hon. Friend publish an annual statement to the House telling us what she has cut and how much police time she has saved?

Mrs May: I am grateful to my hon. Friend for that proposal. I suspect that is exactly the sort of thing that the Policing Minister will be happy to keep the House informed about. As I said earlier, a very good example of the impact of that bureaucracy is the fact that it is reckoned that what we are doing to stop the stop-and-account records and to change the stop-and-search records will save up to 800,000 man hours a year.

Ann Coffey (Stockport) (Lab): The Missing Persons Bureau is the only UK agency focused exclusively on missing people and is the UK's national and international point of contact for all missing person and unidentified
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body cases. What assurances can the Secretary of State give me that the valuable work it does will be recognised when the proposed national crime agency is set up?

Mrs May: The hon. Lady asks a very important question: the work of the bureau is of considerable significance. Work relating to young people has already moved to the Child Exploitation and Online Protection Centre and we are considering where it is most appropriate that the bureau's work relating to adults should sit in the new policing landscape.

Diana Johnson (Kingston upon Hull North) (Lab): Given the concerns that have been expressed by Sara Payne and the National Society for the Prevention of Cruelty to Children as well as the evidence given by Jim Gamble to the Select Committee on Home Affairs on 12 October, will the Secretary of State tell the House what evidence base informed the decision to submerge the Child Exploitation and Online Protection Centre within the proposed national crime agency, especially given that previous independent reviews had supported CEOP remaining separate?

Mrs May: I welcome the hon. Lady to her position on the Opposition Front Bench. We have considered closely the CEOP issue, but there seems to be a misconception out there that it currently has independent status. It does not: it is part of the Serious Organised Crime Agency. The proposals that we put in the White Paper, which will be coming forward in the Bill with our final decisions, relate to its becoming part of the national crime agency and being able to benefit from the synergies of being part of that agency.

Police Numbers

4. Mr David Hanson (Delyn) (Lab): What estimate she has made of the likely effect of the outcome of the comprehensive spending review on the number of police officers in England and Wales in the period to 2014. [20301]

9. Chris Evans (Islwyn) (Lab/Co-op): How many police officers she expects there to be at the end of the current spending review period. [20306]

The Minister for Policing and Criminal Justice (Nick Herbert): The number of police officers is not set by central Government, but we believe that forces can make savings to ensure that visible and available policing is secured for the public.

Mr Hanson: The Minister will be aware, because it has been mentioned already, that the poorest areas of England and Wales will bear disproportionately the brunt of any reductions in central Government funding, because the Home Office provides the bulk of resources to those areas in particular. That will mean fewer officers on the street and inexorable rises in crime. Is that fair?

Nick Herbert: I do not accept any of what the right hon. Gentleman has said. We believe that police forces can make significant savings in line with the report of Her Majesty's inspectorate of constabulary, which said that they could save more than £1 billion a year without
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impacting on the front line. The settlement that we have announced will enable them to protect the visible and available policing that is so important to the public.

Chris Evans: Fears over the cut in the number of police mean that there are real concerns that small forces such as Gwent police could disappear in forced mergers. Given the serious impact that that would have on the quality of front-line policing in Islwyn, can the Minister give an assurance that it will not happen?

Nick Herbert: I remind the hon. Gentleman that the previous Government proposed compulsory forced mergers. We do not intend to go down that route. Where forces wish to merge, if there is a sound business case and the merger has the consent of local people, we will not stand in the way. We believe that forces can make significant savings by sharing services and collaborating, without having to merge.

Tom Brake (Carshalton and Wallington) (LD): How can the cost of elected police commissioners be minimised so that it reduces the impact on police officer numbers?

Nick Herbert: We do not wish elected police commissioners to cost any more than police authorities currently do. The exception is that there will be the cost of the elections, which will be once every four years. That will be met by separate funding. It will not come out of the police budget.

Mr Philip Hollobone (Kettering) (Con): Given that 10% of criminals cause 50% of the crime, does my right hon. Friend agree that one of the best ways to maximise the effective use of police time would be to ensure that our colleagues in the Ministry of Justice ensure that persistent and prolific offenders, when apprehended, serve their time in jail in full?

Nick Herbert: I was talking about that this morning to senior police officers responsible for criminal justice policy. Our concern is to ensure that rising rates of reoffending are reversed. That means ensuring that sentences are effective, and that we focus on the rehabilitation that is necessary to ensure that prisons fulfil their purpose and criminals go straight.

Vernon Coaker (Gedling) (Lab): It is interesting that the Home Secretary chose not to answer the question on the spending review and the impact on police numbers, but we have heard from both the Home Secretary and the policing Minister that thousands of police jobs are to be lost. The idea that that will not impact on front-line policing is one for the fairies. Can the Minister explain why the 20% cut announced in direct Government funding for police forces is front-loaded? In other words, of that 20%, why are the deepest, most far-reaching cuts in the first two years-next year 6%, in 2012-13 8%, then 4% and 4%? Why is the deepest, most far-reaching cut, 8%, in the year when the country is facing one of it greatest security challenges, the Olympics?

Nick Herbert: I welcome the hon. Gentleman to his position.

Olympic security funding is being prioritised in Home Office budgets, and counter-terrorist policing was subject to a much lower cut than the 20% cut for policing. We
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intend to ensure that priority continues to be given to counter-terrorist policing. We believe that significant savings can be made. Her Majesty's inspectorate of constabulary found that only 11% of force strength, on average, was visible and available at any one time, because officers are spending too much time tied up in the red tape that the hon. Gentleman created when he was a Minister.

Anne Marie Morris (Newton Abbot) (Con): What steps has my right hon. Friend taken to ensure that when the cuts come, they will impact on the back office rather than the front office? I have a particular concern in a rural constituency where front office is fairly thinly spread.

Nick Herbert: Chief constables agree with us that the front line should be the last thing that is cut, and under the spending settlement that we have announced, there is no need for the front line to be cut. They can make savings through better collaboration and efficiencies. That is what the inspectorate says. They can also make savings in relation to procurement, amounting to hundreds of millions of pounds. As a consequence, we think that the visible and available policing that the public value can be retained.

Community Support Officers

5. Sir Peter Soulsby (Leicester South) (Lab): What estimate she has made of the likely effect on the number of police community support officers in post of implementation of the outcomes of the comprehensive spending review; and if she will make a statement. [20302]

13. Mr Kevan Jones (North Durham) (Lab): What estimate she has made of the likely effect on the number of police community support officers in post of implementation of the outcomes of the comprehensive spending review; and if she will make a statement. [20310]

The Minister for Policing and Criminal Justice (Nick Herbert): PCSOs are an important part of the policing family, providing a visible, uniformed presence on our streets. It is for police forces and authorities to determine how they deploy their personnel, but we are clear that forces should be focusing on finding efficiencies in back-office and support functions to protect front-line policing.

Sir Peter Soulsby: In recent years community support officers have become a vital part of the policing team, particularly in the delivery of crime prevention and genuine community policing. There can be nothing more front-line than that. It is inconceivable that the Department has not made an estimate of the number of these posts that will be lost. The House deserves to know what that number is, and the public deserve to know how this vital service will be cut.

Nick Herbert: We do not set the number of PCSOs; that is a decision for chief constables. When I speak to chief constables throughout the country, I, like the hon. Gentleman, find that they value police community support officers, and there is an overwhelming desire on the part
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of chief constables to protect PCSO numbers, in so far as is possible, as an important part of the delivery of neighbourhood policing. I share that view with the hon. Gentleman.

Mr Jones: On Friday last week, Durham MPs met the deputy chief constable of Durham, who said that the constabulary was just about to announce 190 compulsory redundancies. When asked whether that would include community support officers, he said it could not give a guarantee, because the decision was dependent on whether its central Government grant was going to be protected. Can the Minister guarantee Durham that its money from central Government for PCSOs will be protected?

Nick Herbert: We will announce the specific allocations for forces and the future of particular grants later on this year, but on 20 October the chief constable of Durham said:

Mrs Helen Grant (Maidstone and The Weald) (Con): Does the Minister agree that good policing is about tangible results, and not fixated on cuts?

Nick Herbert: The previous Government would not give any guarantee on police officer numbers. Indeed, in many forces police officer numbers were already falling when this Government came to power. The test is about what those police officers are doing, and whether they are visible and available to the public. We will accept no lectures from the Opposition, who have put this country in the position of having to cut police officer funding. [ Interruption. ]

Mr Speaker: Order. I am not quite sure what Members had for either breakfast or lunch, but I think I had better steer clear of both.

Licensing Act 2003

6. Mr Robert Buckland (South Swindon) (Con): When she plans to publish her proposals to amend the Licensing Act 2003. [20303]

The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire): The proposals for amendments to the 2003 Act will be included in the police reform and social responsibility Bill, which will be introduced later in the year.

Mr Buckland: Local residents and businesses in my constituency feel effectively gagged and excluded from the current licensing application process. What plans do the Government have to improve the fairness of the system?

James Brokenshire: I am very grateful to my hon. Friend for making that point, because the consultation that the Government embarked on in relation to reforms to the Licensing Act was precisely on that issue-about rebalancing the Act in favour of local communities. He makes his point very well, and we will bring forward proposals in due course.

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Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): Those of us who argued against the 2003 Act did so on the basis that 24-hour drinking would not introduce a café society to the UK where youngsters sipped wine into the early hours discussing Baudelaire, and the only thing that the Act has done is to move yobbishness, drunkenness and violence from late nights to early mornings.

James Brokenshire: The hon. Gentleman makes a very important point, and it will be interesting to hear whether the former licensing Minister, the hon. Member for Bradford South (Mr Sutcliffe), who is now on the shadow Front Bench, will be able to explain why that café culture, which was supposed to be created as a result of the previous Government's reforms, has perhaps not arisen. In reality, we have seen an increase of about 65% in the number of hospital admissions linked to alcohol over the five years to 2008-09, and that is why we think that reforms are required.

Dr Julian Huppert (Cambridge) (LD): In the Minister's work on the Licensing Act, will he ensure that he looks carefully at the licensing of one-off and annual events, such as Strawberry Fair in my constituency, so that delays in determination, because of late interventions, for example, do not mean that the events have to be cancelled regardless of what is decided?

James Brokenshire: I am not familiar with the detail of the individual event to which the hon. Gentleman refers, but we are looking at temporary event notices and how community events are licensed, and if issues continue to prevail in relation to that situation no doubt he will write to me.

Police Numbers

7. Mr David Crausby (Bolton North East) (Lab): How many police officers there were in England and Wales in March (a) 2010 and (b) 1997. [20304]

The Minister for Policing and Criminal Justice (Nick Herbert): On 31 March 2010 there were 142,132 police officers, compared with 125,825 on 31 March 1997.

Mr Crausby: I thank the Minister for that reply. Does he believe that the previous Labour Government spent too much on police officers and too little on the European Union budget?

Nick Herbert: I will not be drawn on the European budget, but I can tell the hon. Gentleman what the previous Government spent too much on-red tape that tied up police officers and wasted police time. When we had a position whereby police officers were spending more time on paperwork than on patrol, we knew that something had gone wrong: it was costly and it reduced police availability.

Miss Anne McIntosh (Thirsk and Malton) (Con): Can the Minister tell us how we got to the sorry state in which warranted police officers are inside the building doing the police work and non-warranted officers-community support officers-are on the streets without the power of arrest?

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Nick Herbert: We believe that police community support officers do an important job out in communities, and the fact that they do not have the power to arrest prevents them from being abstracted and builds confidence in neighbourhoods. However, we are determined to release police officers from the red tape that can keep them in police stations-for instance, by fully scrapping the stop form and reducing the burden of stop-and-search reporting, which will save 450,000 and 350,000 hours of police time respectively.

David Wright (Telford) (Lab): West Mercia police authority tells me that it wants to protect record police numbers in Telford, and that one of the ways of reducing the administrative burden is to scrap the crazy, politicised idea of having elected police commissioners. Will the Minister save the money that he is going to spend, even if the budget is ring-fenced, and reallocate it to police forces for front-line policing?

Nick Herbert: May I remind the hon. Gentleman that the policy of increasing the direct accountability of police authorities was proposed twice by the previous Government, who backed down from that proposal in the face of opposition? We are determined to see it through, because we want to exchange bureaucratic accountability for democratic accountability and help to get police officers where they are needed-on the streets.

Immigration Rules (UK Science Base)

8. Jo Swinson (East Dunbartonshire) (LD): What representations she has received from scientific organisations on the likely effects on the UK's science base of proposed changes to the immigration rules. [20305]

The Secretary of State for the Home Department (Mrs Theresa May): Our recent consultation on the immigration system fully involved scientific organisations, which have underlined the importance of being able to recruit the best scientists from around the world. I am aware of the case of the Beatson institute in my hon. Friend's constituency, and I can assure her that the UK Border Agency is looking closely at this and related cases.

Jo Swinson: I thank the Home Secretary for that reply. She refers to the Beatson institute, which is a world-class cancer research facility that needs to attract the very best scientists in their field, regardless of their nationality. Previously it required about five tier 2 visas every year; that has been cut to just one under the new regime, so I welcome the fact that the issue will be looked at. Does she recognise the damage that could be caused to the Beatson, and to other scientific institutions, as a result of the unintended consequences of the immigration cap, and will she look again at whether an exemption could be made for science and research?

Mrs May: I am grateful to my hon. Friend for recognising that the UK Border Agency will look at the very real case that has been presented by the Beatson institute in relation to its particular requirements. We have a commitment, as a coalition Government, to reduce net migration into this country. I believe that it is important
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that we do that, but do it a way that will ensure that we can truly attract the brightest and the best into this country to do the valuable work that they do in places such as the Beatson institute.

Andrew Miller (Ellesmere Port and Neston) (Lab): I presume that there must have been some joined-up thinking in the Government on this matter. Will the Home Secretary therefore publish the cross-departmental analysis that brings together the impact on our science base and competitiveness of Lord Browne's report, the comprehensive spending review, cuts in departmental science, and the immigration cap?

Mrs May: As the hon. Gentleman has an interest in these matters, he will be aware that the Department for Business, Innovation and Skills has made efforts to protect the spending in relation to research on science. In looking at how we introduce our immigration cap, we will be making efforts to ensure that institutes and universities that require access to truly the brightest and the best are able to have it.


11. Stephen Mosley (City of Chester) (Con): How many immigrants entered the UK in the most recent period for which figures are available. [20308]

The Minister for Immigration (Damian Green): A total of 528,000 long-term migrants entered the UK in 2009, according to the most recent figures from the international passenger survey. Of these, 437,000 were non-UK nationals. IPS figures do not include asylum seekers, those who have arrived from Northern Ireland, and those who change their original intentions and therefore alter their length of stay. Final detailed figures for 2009 will be published on 25 November.

Stephen Mosley: I understand that my hon. Friend has recently been to Heathrow to see our front-line border controls in action. Will he give the House his assessment of the quality of our current systems to detect illegal entry into the UK at the first port of call?

Damian Green: We do have a comprehensive border protection framework, provided not just by the UK Border Agency but by the police and other agencies. The whole House will recognise that there will be an increase in passenger journeys and freight volume, and in the use of ever more sophisticated technologies by those who have malicious intent of either illegal immigration or, even worse, terrorism. That is one reason why we are setting up a new border police command within the new national crime agency, which will enhance our existing capacity to protect our borders.

Mr Phil Woolas (Oldham East and Saddleworth) (Lab): I thank the Minister for that straightforward answer. On 27 February, he told the House in relation to border control that we would become increasingly dependent on technology. In table A.6 in the spending review document, we see that there is to be a 49% reduction in capital investment in the Home Office's budget. Is he confident that he has the resources to provide the kit needed to protect our borders at airports and ports
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from illegal immigration and, given the events of the past few days, from potentially dangerous weapons and other attacks?

Damian Green: I congratulate the hon. Gentleman on being appointed to my old job by the Leader of the Opposition. I did it for four and a half years and I can say with complete sincerity that I hope he does it for even longer.

Yes is the answer to the very serious question that the hon. Gentleman asks. He has been intimately involved in this subject for some years, so he will be pleased to know that the e-Borders system will continue, I hope in an improved way, under our new arrangements, and that other areas of capital spending such as the integrated casework project will also continue so that we use technology and the experience of our border officers to keep our borders safe.

Newport Passport Office

15. Jessica Morden (Newport East) (Lab): What consultation her Department has undertaken on the future of the Newport Passport Office. [20313]

The Minister for Immigration (Damian Green): On 19 October, the Identity and Passport Service began a formal 90-day consultation period with the trade unions on the future of the passport application processing centre at Newport. In addition, as the hon. Lady knows, I have had meetings with her and the hon. Member for Newport West (Paul Flynn), the leader of Newport city council and the Secretary of State for Wales.

Jessica Morden: Will the Minister reassure me that the consultation on the future of Newport passport office is truly a consultation, in that he is genuinely listening to the concerns of people in Wales, including the 17,000 who have now signed the South Wales Argus petition on the future of the office and its staff?

Damian Green: I am happy to give the hon. Lady that assurance. She has quite rightly made her position perfectly clear in defending her constituents' jobs, and I would expect no less of her. I hope that she can help me correct the misunderstanding that has been put about that Wales is losing its passport office. It simply is not. The passport office delivering passports to people in Wales will remain in Newport.

Paul Flynn (Newport West) (Lab): Was the Minister impressed yesterday when the Conservative Assembly Member Darren Millar said on television that the Welsh Conservatives in the National Assembly were united in their opposition to the closure of the Newport passport office and the Government's proposal? Will he provide an assurance that he will re-examine the matter, to ensure that cuts are made evenly across the United Kingdom and not concentrated in Newport?

Damian Green: As I just said to the hon. Member for Newport East (Jessica Morden), anticipating the hon. Gentleman's question, the passport office in Newport is not being closed. It is a simple untruth to say that it is. The passport office will remain open. Some 47,000 people a year use it, and they are very important to the economy of Newport. I have been told that in no uncertain terms
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by the Secretary of State for Wales. I am pleased that we are able to keep that passport office open, not just for those who will continue to work there but for the economy of Newport city centre.

Deportation Services (Private Companies)

16. Greg Mulholland (Leeds North West) (LD): What recent representations she has received on the regulation of private companies contracted to provide deportation services; and if she will make a statement. [20314]

The Minister for Immigration (Damian Green): All detention and escorting services provided by private sector companies are subject to internal and external oversight. Contracted staff are vetted carefully by the Home Office as part of their accreditation to work as detention custody officers or escorts, and services are monitored by UK Border Agency officials and the independent monitoring board and through announced and unannounced inspections by Her Majesty's inspectorate of prisons.

Greg Mulholland: I thank my hon. Friend for that answer. Of course, it is part of a functioning immigration system sometimes to remove foreign nationals who no longer have a right to stay. Nevertheless, that has to be done in a regularised and humane way. What plans does my hon. Friend have to limit and regulate the use of force as part of the accountability that he rightly talks about?

Damian Green: As I have explained in answer to previous questions, there is already significant regulation. Indeed, as I have just said, there is quite rightly a large number of checks, and the people who escort those who have no right to be in this country and who therefore have to be removed do need to be checked. Baroness O'Loan published a report on the issue in March 2010 and she found no evidence of systemic abuse by UK Border Agency escorts removing individuals from the UK. I am glad that that was true then and I am determined to make sure it continues to be true in the future.


18. Bob Stewart (Beckenham) (Con): How many immigrants entered the UK in the most recent period for which figures are available. [20316]

The Minister for Immigration (Damian Green): I refer my hon. Friend to the answer I gave some moments ago.

Bob Stewart: One of the main problems facing the immigration system has been the abuse of student visas. What plans have the Government to tackle that?

Damian Green: My hon. Friend points up one of the many problems with the immigration system. I point him particularly to student visas issued at below-degree level. We often think of student visas as being about the brightest and the best from around the world coming to our universities. Everyone in the House will welcome that, and they will want it to continue and our university sector to flourish. The problems have often come at sub-degree level with bogus students who do not have the appropriate qualifications, or with bogus colleges. Both of those routes need to be stamped out, which is
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why, along with proposing a limit on work routes, we are working hard to bring forward proposals on the student route, precisely to stamp out the abuse that my hon. Friend is rightly worried about.

Topical Questions

T1. [20372] Jane Ellison (Battersea) (Con): If she will make a statement on her departmental responsibilities.

The Secretary of State for the Home Department (Mrs Theresa May): The Home Office continues to prioritise the counter-terrorism elements of policing. The national security strategy and the strategic defence and security review published two weeks ago will deliver a step change in Britain's ability to protect its security and advance its interests in the world. To meet the real and growing threat identified from cyber-attack, £650 million of new funding has been allocated to a cross-Government programme to enhance Britain's cyber-security. While I speak about the Department's responsibilities, I should perhaps explain for the avoidance of doubt that the Under-Secretary of State for the Home Department, my hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone), who has responsibility for equalities and criminal information, has not been able to answer a question today because she has lost her voice.

Jane Ellison: Another real and growing threat for many of us, especially those with urban constituencies, is the use and abuse of dogs as weapons. That is a real problem, which is often associated with gang activity. It is clearly an animal welfare issue, and Battersea dogs and cats home in my constituency has long been a voice on policy on the issue. However, it is also a crime and policing challenge. Will my right hon. Friend update the House on how Home Office Ministers are working with colleagues in the Department for Environment, Food and Rural Affairs following that Department's recent consultation on dangerous dogs?

Mrs May: I thank my hon. Friend for raising an important issue. It is particularly important for her constituency, for obvious reasons, as she said. The Home Office is reviewing the issue of antisocial behaviour and the tools and powers that need to be made available to deal with it. It is also dealing with Departments across Whitehall, including DEFRA. DEFRA will respond to the previous Government's consultation on dangerous dogs, looking at issues such as dog licensing and wider issues such as breed-specific bans, once the Home Office has published our proposals on antisocial behaviour.

Several hon. Members rose -

Mr Speaker: Order. I hope that the Under-Secretary recovers her voice before very long. We wish her better.

T4. [20375] Mr David Hanson (Delyn) (Lab): Does the Home Secretary agree with the views of the Secretary of State for Energy and Climate Change on control orders? Having now had five months in office, does she accept that those of us who exercised such powers on behalf of the Home Office when we were in government did so because we tried to secure the safety of the British people, and we were, indeed, right to do so?

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Mrs May: The prime responsibility of any Government is to keep people safe, and we are very conscious of that. The counter-terrorism legislation review is continuing. No final decisions have been taken on any aspects of that review, but, of course, I have undertaken to inform the House when the review is complete and when the answers to the questions that have been posed are available.

T2. [20373] Mr Matthew Offord (Hendon) (Con): Following comments by my local police commander, my constituents in the Barnet neighbourhood watch, ably led by Maureen West, have expressed concerns to me about the ring-fencing rule for safer neighbourhoods teams and the impact of possible further cuts as a result of the Government tackling the economic deficit. What assurance can the Minister give me that the reduction in the police family will not lead to a reduction in the police presence on the streets of my constituency?

The Minister for Policing and Criminal Justice (Nick Herbert): I can assure my hon. Friend that there is no need for a reduction in neighbourhood policing. Many police forces up and down the country are making a commitment to maintain neighbourhood policing by finding savings in the back office and collaborating, and through better procurement and saving money.

T5. [20376] Andrew Gwynne (Denton and Reddish) (Lab): We all want to see our police officers out on the beat more, but how will cutting police staff who often free up police officers from administrative tasks help with that?

Mrs May: One of the crucial things that we are doing, as we indicated earlier, is cutting the administrative tasks that need to be done by cutting the extreme levels of bureaucracy that were introduced to policing by the Labour Government.

T3. [20374] Julian Smith (Skipton and Ripon) (Con): Can my right hon. Friend reassure us that the new immigration cap will reflect the need for businesses to recruit international, highly skilled migrants and to transfer international employees internally? Will she make that process as easy and unbureaucratic as possible?

Mrs May: I thank my hon. Friend for raising the important issue of the impact of immigration on businesses. As we consider how to introduce the immigration cap, we will take on board comments made by business and its requirements in relation to the operation of the system. However, one thing that we have found recently is that nearly one third of those who arrived via the tier 1 route-the brightest and the best highly skilled migrants-did not take on highly skilled jobs. That is something to which we should pay attention.

T8. [20379] Phil Wilson (Sedgefield) (Lab): The Independent Safeguarding Authority in my constituency employs about 250 people. Can the Home Secretary let me know what their future is? What is the future of the authority under this Government?

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Mrs May: The Government have a commitment to ensure that we bring the vetting and barring scheme down to common-sense levels. Many people are concerned that the scheme introduced by the previous Labour Government actually reduced people's willingness to volunteer and to do good in their communities. We are currently reviewing vetting and barring. The impact on the ISA will come out of that review.

T6. [20377] Charlie Elphicke (Dover) (Con): May I ask about border security? Illegal entry at Dover has fallen 18% in the last year. We will no doubt hear more about the excellent work of those who keep our country safe and secure in the statement on aviation security later, but will the Minister congratulate those who keep our country safe?

The Minister for Immigration (Damian Green): I am happy to echo my hon. Friend's congratulations to his constituents at Dover, and indeed to immigration officers at ports, airports and inland ports all around the country. They work tirelessly-day and night-to keep our borders as safe as possible. Like him, I welcome the significant reduction in the amount of illegal immigration through Dover over the past few months.

Mr David Winnick (Walsall North) (Lab): We all look forward to the review anti-terrorism legislation, but is it not important that murderous fanatics-another indication of what they are like was given last week-and the enemies of all humanity do not force us to give up long-held, traditional liberties in this country? The sort of changes that the Home Secretary mentioned earlier will hopefully come about despite the current terrorist danger.

Mrs May: The coalition Government are very aware of the need to rebalance our national security requirements and our civil liberties. That is precisely why we have undertaken the review of counter-terrorism legislation. As I indicated in a previous answer, the results of that review will be brought to the House when they are available, but I can assure the hon. Gentleman that we are aware that we need to ensure that we keep the country safe so that people can exercise those ancient freedoms and civil liberties.

T7. [20378] Laura Sandys (South Thanet) (Con): Will the Home Secretary join me in welcoming the shadow Home Secretary's conversion to our policy of putting antisocial behaviour orders behind us? The shadow Home Secretary said:

The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire): I hope that the shadow Home Secretary will remember his original comments, and will therefore accept that the current tools and powers for dealing with antisocial behaviour are overly bureaucratic and do not work effectively. That is why we are currently reviewing them to ensure that all local agencies have a toolkit that provides a strong deterrent, and is quick, practical and easy to use.

Jack Dromey (Birmingham, Erdington) (Lab): The Home Secretary was reluctant yesterday to confirm the consequences of Government cuts for the police service.
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Will she give a straight answer to that question today, and confirm that 2,000 jobs will go in the west midlands police service, including those of 400 police officers in Birmingham-40 for each of Birmingham's 10 constituencies -and does she share my constituents' fears that, as police numbers fall, crime will go up?

Mrs May: The fight against crime is not simply a matter of the number of police officers, but about how effectively they are deployed and what they are doing. What the Government are doing by releasing police officers from the bureaucracy imposed by the last Labour Government will make them freer and more available to be out there on the streets doing the job the public want them to do.

T9. [20380] John Glen (Salisbury) (Con): In 2004, my constituent Stephen Ings's son and ex-wife were murdered by an illegal immigrant, Alex George. Will the Minister meet me and my constituent to explain the decision to offer a deferred conditional discharge to Mr George while his appeal against deportation is heard?

Damian Green: I and my ministerial colleagues are aware of the correspondence between my hon. Friend and the UK Border Agency about this case. I understand perfectly-as the whole House will-how distressing and awful the case must be for his constituent, and of course I will happily meet him, and his constituent and his family to discuss the matter further.

Mrs Mary Glindon (North Tyneside) (Lab): Will the Home Secretary join me in wishing Northumbria police warm congratulations on the opening of the new area command at the north Tyneside headquarters, especially given that it was built with money from the Labour Government?

Mrs May: I rather hope I might at some stage be given an invitation to visit the new area command. May I say, however, given that Northumbria has been mentioned, that I was pleased to speak to Sue Sim recently, following the difficult time that Northumbria police had earlier this year in dealing with the case of Raoul Moat, to congratulate her on how she and her force dealt with that case?

Lorely Burt (Solihull) (LD): Many international companies contemplating investment in the UK are being put off by the fact that inter-company transfers are defined as coming under the immigration cap. Inter-company transfers mean more jobs for British workers, and they do not stay in the United Kingdom. Will Ministers look at the rules placing inter-company transfers under the immigration cap, otherwise we run the risk of saying, "Yes, we are open for business, but you cannot come in"?

Damian Green: I am happy to assure my hon. Friend and the companies in her constituency that, under the interim cap operating now, inter-company transfers are not covered-they are outside the cap-so there is no reason for any business to be worried about that now. Obviously, for the permanent cap that will come in from next April, we are considering the best way to enable businesses to operate successfully in the future.

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Alun Michael (Cardiff South and Penarth) (Lab/Co-op): Will the Minister accept that there is deep unease within the IT industry about the possibility that the focus on numbers will reduce the flexibility of companies to bring people in and out of the country to meet the needs of what is an extremely flexible and internationally important industry?

Damian Green: I completely agree with the right hon. Gentleman. It is an important international industry. I hope, however, that he will recognise two countervailing pressures here. There is the pressure from international business, which wants to move people around, but there is also a lot of perfectly reasonable pressure from trained British IT workers, who have done everything that society has asked of them-got the right sort of degree, gone into the right sort of business-but are finding it increasingly difficult to find jobs. We should listen to their voices as well.

Mark Pawsey (Rugby) (Con): Many of my constituents are concerned that the inquiry desk at Rugby police station is being closed between the hours of 8 pm and midnight. Although I recognise the pressure on police budgets caused by Labour's economic mismanagement, does the Minister agree that this decision should be reconsidered?

Nick Herbert: What is important is how visible and available the police are. There are innovative things that they can do instead of necessarily keeping police stations open at times when very few people visit them, such as setting up shop in shared premises in supermarkets. My hon. Friend should talk to his chief constable about such ideas.

Huw Irranca-Davies (Ogmore) (Lab): May I genuinely and unbegrudgingly thank the Policing Minister for recently visiting my constituency and seeing the award-winning group of police community support officers and police officers at the Caerau station? Thank you very much indeed. However, will he pay a return visit if we find that that team, or any others in my constituency, is broken up because of the police cuts coming down the line?

Nick Herbert: I am happy to tell the hon. Gentleman that I will be returning to the force area this week, although not to his constituency. I spoke to his chief constable a few days ago, and he assured me that by making savings, there would be protection for the visible and available policing in the streets that the hon. Gentleman's constituents want to see.

Nigel Adams (Selby and Ainsty) (Con): Is the Minister aware that a pioneering partnership between North Yorkshire police and the local community in Sherburn in Elmet in my constituency has seen the public inquiry desk at the village police station reopen? The desk is manned completely by volunteers. Does he agree that this is a great example of the big society in action? Will he join me in congratulating the local volunteers and North Yorkshire police-

Mr Speaker: Order. We are all very grateful to the hon. Gentleman.

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Nick Herbert: My hon. Friend might have noticed that he just got a nod of approval from the Prime Minister. Helping to keep police stations and front desks open is a very good use of volunteers. There may
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be very few visitors, but that visibility is important, and there are many other ways in which the police can maintain such a presence in their areas.

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European Council

3.32 pm

The Prime Minister (Mr David Cameron): With permission, Mr Speaker, I should like to make a statement.

Clearly the whole country has been focused this weekend on the terrorist threat, and the Home Secretary will make a full statement after this. However, I want to put on record my thanks, and the thanks of everyone in this House, to all those involved in the international police and intelligence operation, whose efforts clearly prevented the terrorists from killing and maiming many innocent people, whether here or elsewhere in the world. The fact that the device was being carried from Yemen to the United Arab Emirates, Germany and Britain, en route to America, shows the interest of the whole world in coming together to deal with this. While we are rightly engaged in Afghanistan to deny the terrorists there, the threat from the Arabian peninsula, and from Yemen in particular, has grown. So as well as the immediate steps, which the Home Secretary will outline, it is clear that we must take every possible step to work with our partners in the Arab world to cut out the terrorist cancer that lurks in the Arabian peninsula.

Let me turn to last week's European Council. The Council's main business was going to be economic governance in the light of the serious problems that the eurozone has faced. However, I was clear that we could not talk about the need for fiscal rigour in the EU's member states without also talking about the need for fiscal rigour in the EU budget, both next year and for the future, so we ensured that the EU budget was also on the agenda. Let me go through both issues. First, on the budget for 2011, from the outset in May, we wanted a freeze. We pressed for a freeze, and in July we voted for a freeze, seeking to block the 2.9% proposed by the presidency. Finland, Sweden, Denmark, the Netherlands, the Czech Republic and Austria all voted with us. Unfortunately, we were just short of the numbers needed for a blocking minority, so in August the Council agreed a 2.9% increase.

Then in October, the matter went to the European Parliament, which voted for around a 6% increase. That was the frankly outrageous proposal with which we were confronted at this European Council. Now, normally what happens in these situations is that you take the position of the EU Council and that of the EU Parliament, and there is a negotiation that ends up splitting the difference. Indeed, that is precisely what happened last year. So before the Council started, we began building an alliance to take a different approach and to insist on the 2.9%. I made phone calls to my counterparts in Sweden, France and Germany, among others, and then continued to press the case during the Council. Twelve other Heads of State took that approach, and we issued a joint letter that makes it clear that a 6% increase is

Furthermore, the joint letter goes on to say that

the 2.9% increase being proposed by the Council.

Let me explain what this means. Either the Council and the Parliament now have to agree to the 2.9%, or there will be deadlock, in which case the EU will have to
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live on a repeat of last year's budget settlement handed out in twelfths over the next 12 months, an outcome that we would be perfectly content with. Next, and more importantly, Britain secured a significant breakthrough on a fundamental principle for the longer term. As well as the individual budget negotiations for 2011, 2012 and 2013, there is also a big negotiation about to happen for the future funding of the EU over the period between 2014 and 2020. We clearly want to do all we can to make the negotiations go the right way, and what we agreed at the Council was, I think, a big step forward. The European Commission was wholly opposed to it, but the Council agreed that

So from now on, the EU budget must reflect what we are doing in our own countries, and it is quite apparent that almost every country in Europe, like us, is seeing very tough spending settlements.

This new principle applies to the 2012 and 2013 budgets, and to the crucial 2014 to 2020 EU spending framework. Just as countries have had to change their financial plans because of the crisis, so the EU must change its financial plans too. Mr Speaker, if you look at the published conclusions and language on the budget, they formed a prominent part even though it was not originally on the agenda. I think this is an important step forward.

In my discussions with Chancellor Merkel at the weekend, we agreed to take forward some joint work to bring some transparency to the EU budget--salaries, allowances, grants. This work has just not been done properly in the past, and it is about time that citizens of the EU knew what the EU spends its money on. That is the spotlight that needs to be shone, and that is what we propose to do.

On economic governance, there are basically two issues. First, there is Herman Van Rompuy's report from the taskforce on economic governance. This was set up after the sovereign debt crisis, and my right hon. Friend the Chancellor and the Treasury have been fully involved. Secondly, there is the additional proposal made by the Germans, and in principle agreed by the Council, for a limited treaty amendment focusing on putting the EU's temporary bail-out mechanism on to a permanent basis. Let me take each in turn. In Van Rompuy's report, there are some sensible proposals. For example, the eurozone clearly needs reinforced fiscal discipline to ensure its stability, and the crisis has shown that in a global economy early warning is clearly needed about imbalances between different countries.

Let me be clear on one point about which there has been some debate: the question of surveillance. All member states, including the UK, have participated in surveillance for more than a decade. This is not a new framework. The report is clear, and the current framework remains broadly valid, but needs to be applied in a better and more consistent way. The report proposes new sanctions, but we have ensured that no sanctions, either existing or new, will apply to the UK. The report could not be clearer. It says that

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That is our opt-out. It kept us out of the single currency; it kept us out of sanctions under the Maastricht treaty; and we have ensured that it keeps us out of any sanctions in the future.

In addition to the issue of sanctions, a number of other concerns have been raised. Let me try to address each of them head on. First, will we have to present our budget to Europe before this House? No. Secondly, will we have to give Europe access to information for budgetary surveillance that is not similarly shared with organisations such as the International Monetary Fund or is publicly available on the internet? Again, the answer is no. Thirdly, will powers over our budget be transferred from Westminster to Brussels? Again, no.

I turn to the proposal mentioned in the Council's conclusions for limited treaty amendment. We have established that any possible future treaty change, should it occur, would not affect the UK, and I would not agree to it if it did. The proposal to put the temporary bail-out mechanism on a permanent footing is important for the eurozone, and eurozone stability is important for the UK. Nearly half our trade is with the eurozone, and London is Europe's international financial centre.

Let me be clear. Throughout this process, I have been focused on our national interest, and it is in our national interest that the eurozone should sort itself out. It is in our national interest that Europe should avoid being paralysed by another debt crisis, as it was with Greece in May, and it is absolutely in our national interest that Britain should not be drawn into having to help with any future bail-out. That is what we have secured.

Let me turn briefly to the other business of the Council. On the G20, the Council discussed its priorities for the upcoming summit in Seoul. Again, our interests are clear. As an open trading nation, we want progress on Doha. This has been going for nearly a decade, and 2011 should be the year when we try to achieve a deal. We believe that the world has suffered from economic imbalances, so we want countries with fiscal deficits to deal with them, and countries with trade surpluses to look at structural and currency reforms. We recognise the importance of strengthening global financial stability, and that is why we support the recent Basel agreement on stronger banking regulations. We also want global institutions to be reformed to reflect the growth of emerging powers, so we will see through the work that my right hon. Friend the Chancellor has led on the reform of IMF votes and board seats. Finally, on Cancun, we are committed to making progress towards a legally binding United Nations agreement.

I believe that this Council demonstrates that it is perfectly possible to deliver for our national interest while protecting our national sovereignty. Tomorrow, the British and French Governments will sign new defence and security co-operation treaties, which will be laid before Parliament in the usual way. This follows the same principle: partnership, yes; giving away sovereignty, no. At this Council, Britain helped Europe to take the first vital steps towards bringing its finances under control. We prevented a crazy 6% rise in the EU budget next year, we ensured that the budget would reflect domestic spending cuts in all future years, and we protected the UK taxpayer from having to bail out eurozone countries that get themselves into trouble. There is a long way to go, but we have made a strong start. I commend this statement to the House.

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Edward Miliband (Doncaster North) (Lab): May I thank the Prime Minister for his statement? I also thank him for the briefing statement that he gave me on Saturday on the developments following the discovery of explosive materials, including those at East Midlands airport. I join him in thanking the security services, the police and others for the work that they do to protect innocent people here and abroad. I also want to assure him that he has the full support of the Opposition in his efforts to tackle terrorism and keep the nation safe.

On Europe, Labour Members think that it is in the national interest for Britain to be strongly engaged in Europe on issues from terrorism to climate change, and from the global economy to human trafficking. We all know that the Prime Minister is in a slightly tricky predicament on Europe. He has his old friends and his new friends on the Front Bench. I want to tell him very sincerely that we are here to help him. We know that he held some pretty strong views on Europe in the past, but we are willing to ignore his previous convictions, just as long as he is as well.

Let me start with the Council's conclusions on economic governance. We welcome any sensible proposals for greater co-operation to ensure economic stability across Europe. In principle, we also welcome the idea of putting in place clear arrangements for providing help to eurozone countries that get into trouble, rather than relying on an ad hoc approach. The Prime Minister is also right to say that eurozone countries should take financial responsibility when those circumstances arise. He was right to say in his statement that these new arrangements would not apply to Britain, but they might affect Britain. We have an interest in stability in the eurozone but also in supporting growth in what is our largest export market. Can he therefore assure the House that, as well as protecting Britain from those provisions, he will engage in discussions to ensure that the right balance is struck between the need for stability and the need for growth in the eurozone?

In the context of these reforms, I do not think the Prime Minister made it clear in his statement whether, if proposals are made for treaty change as a result of the amendments, he is prepared to accept the changes without a referendum. He used to imply that if treaty change were ever back on the table, he would have a referendum, but he seems to have abandoned that position. Will he confirm that that is the case?

The Prime Minister also used to imply that he would use the opportunity of treaty change to bring back the British opt-out on employment and social legislation. I think that is a pledge he made for this Parliament. Labour Members do not believe that this is a necessary or sensible course of action. He was silent on this issue during his statement. Can we therefore assume that his previous red lines on this issue were not raised by him at any time in these negotiations, and can he confirm that he does not intend to raise these red lines-or what were his red lines-in the coming months in the context of any possible treaty changes that might take place? Again, we will support him if he takes the right course.

Secondly, on the G20 summit in Seoul, which will discuss the prospects for the world economy, the Prime Minister will know that an increase in trade accounts for almost half of the growth forecast that the Office for Budget Responsibility predicts for the United Kingdom next year. Can I ask what discussions were had at the
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European Council about the uncertainty in the world economy and how Europe plans to do its bit to ensure that economic demand is sustained?

Thirdly, on the Cancun conference on climate change, I have to say-I think the Prime Minister will agree-that the prospects do not look bright for completing the unfinished work of Copenhagen. May I urge him on to show greater leadership on this issue- [Interruption.] Leadership, which is not just about some huskies, but is real leadership on this issue. Can he say what he will be doing personally to advance a deal on finance, which is a crucial precondition of progress and a key objective of the Cancun summit?

Let me turn next to the EU budget. The Prime Minister has offered what we might call an interesting version of events. He confirmed that, in August, the 2.9% increase was put forward by the Council of Ministers and 20 countries voted for that-Britain was not one of them; it voted against that. The Prime Minister tells us in his statement today that "before the Council started, we began building an alliance to take a different approach"-different from the Parliament-"and insist on 2.9%". The question I ask the right hon. Gentleman is when he took that view. On 20 October, he told this House:

He was not saying that 2.9% had been agreed and that he had lowered his sights; he was telling us that he was still working for a freeze. Three days later he repeated this to the Daily Mail-a reliable source:

That was his position at that time. So I have a simple question: when did the Prime Minister change his position on this issue? He certainly did not tell the House; he certainly did not tell the Daily Mail-and one would have thought that he would have kept it informed. As far as we can gather, it was sleeves rolled up, full steam ahead and when it came to 2.9%, it was "fight them on the beaches". Now the Prime Minister has said that he changed his position.

Now, the Prime Minister has agreed to 2.9%. What does he say about something he originally voted against? One would have thought that he might be slightly sheepish about this-but not a bit of it! He actually says that he has "succeeded quite spectacularly". If that is his view of spectacular success, I would hate to see what happens when things go wrong in his negotiations in Brussels.

What about the letter that the Prime Minster brandished as having been signed by 13 member states, supporting 2.9%? I do not think that is a spectacular success. Twenty countries were supporting 2.9% in August, so this is seven fewer countries than were originally supporting that increase. The only big difference is that Britain, which used to be against the 2.9% increase, is now for it. Let me say to the Prime Minister, in words that my grandmother might have used, that I admire his chutzpah on this issue. Is not the truth about it that he wished he could come back and say, "No, no, no," but in his case, it is a bit more like, "No, maybe, oh, go on then, have your 2.9% after all"?

What is the deeper truth about the Prime Minister's position? I have to say that I am disappointed in him, because he has fallen back into his old ways. It is more
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ludicrous grandstanding on Europe, which ends up proving futile and fooling no one. The Prime Minister said that he would provide for a referendum on Lisbon if there was an opportunity; he has abandoned that position. He said that he would repatriate powers; he has abandoned that position. He said that he would obtain a freeze in the EU budget; he has abandoned that position.

The Prime Minister has obviously not learned the lesson, because he left the summit bragging again, saying that he was a Euroscpetic. When will he recognise that anti-European bluster and PR are no substitute for a decent, engaged European policy? He should be leading the way on climate change, signing the directive on human trafficking, and working with European Governments to sustain demand in the global economy. The Prime Minister may have abandoned some of his previous convictions, but his rehabilitation on Europe has a long way to go.

The Prime Minister: If mine was chutzpah, that was brass neck.

The right hon. Gentleman asked how I was getting on with my new friends and my old friends. Let me put it in a way that he may understand: we are just one big happy family. It is brotherly love on this side of the House; it really is. The problem is that we are living with the decision of the right hon. Gentleman's old friend, Tony Blair, who gave away £8 billion of rebate and received nothing in return.

The right hon. Gentleman asked whether we would ensure stability in the eurozone. Of course we want to do that, as I said in my statement. He said that this did not affect Britain in terms of the treaty change, and he was quite right about that. He asked whether this should lead to a referendum. The point is that we are not passing any powers from Britain to Brussels: this limited treaty change does not affect the United Kingdom. However, I cannot take a lecture on referendums from someone who could have provided a referendum on the Lisbon treaty, but failed to do so.

The right hon. Gentleman asked what we were getting in return. We are getting progress on the budget, which we never saw in a month of Sundays under a Labour Government. Let me say something about the issue of the budget, and the points that he made. Let us contrast the position now with what happened last year under a Labour Government. Last year under a Labour Government- [Interruption.] It is very instructive to look at what happened last year and what happened this year.

Last year the European Council voted for a 3.8% increase. The Labour Government supported it. The European Parliament proposed a 9.8% increase. The Council then agreed a 6% increase, and the Labour Government supported it. That is the difference between last year and this year. Last year we had a feeble Government who would not stand up for Britain; this time we have a Government who will.

Several hon. Members rose -

Mr Speaker: Order. A great many Members wish to catch my eye, and there is another important statement to follow, followed by business that I suspect will be of considerable interest to the House. Brevity from Back Benchers and Front Benchers alike is essential.

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Sir Peter Tapsell (Louth and Horncastle) (Con): As it appears that the treaties of the European Union can be changed on the insistence of a German Chancellor, is it possible to give a British Prime Minister the same opportunities, thus enabling him to give his country the pledge of the referendum that was promised to them? Is that so, or not?

The Prime Minister: If there were any prospect of a passage of power from Britain to Brussels, we should have a referendum. That is not just my word: we are going to legislate to put it into place. But the question that we must answer here-this goes directly to what my right hon. Friend has said-is, "What is it in Britain's national interest to try to insist on at this time?" In my view it is the budget, and the amount of money that goes from Britain to Brussels, into which we should be putting our efforts. That is what I did, and that is what I am going to go on doing.

Mr Denis MacShane (Rotherham) (Lab): May I welcome the Prime Minister to the club of Euro-pragmatism? He has said nothing today with which I can greatly disagree. Will he answer two questions, however? First, will he confirm that if the final budget deal is above 2.9%, Britain will not seek to veto it? Secondly, will the proposed treaty change happen under the so-called passerelle clause of the Lisbon treaty?

The Prime Minister: I thank the right hon. Gentleman for his endorsement-wherever they come from, they are always welcome. The point about the budget approach is that 13 countries have put their signature to a letter saying they will not accept anything over 2.9%. They will, I believe, all stick to their word, and we will insist on this so that we either get 2.9%, agreed between Parliament and the Council, or we get deadlock, in which case the budget is frozen at last year's level.

The final decisions on the proposed treaty change will be taken at the December summit. That is likely to be under the simplified revision procedure so there is not a parliamentary convention. The key point here is to be absolutely clear that this is going to be a few lines that are about putting in place what is a temporary bail-out mechanism and making it a permanent bail-out mechanism. The key point for the House to hold on to is that this does not affect the UK, except inasmuch as we want the eurozone to sort itself out.

Mr Charles Kennedy (Ross, Skye and Lochaber) (LD): Given today's lunchtime praise of the Prime Minister by Miles Templeman of the Institute of Directors, and in particular his observation that the Prime Minister's greater European sensitivity, which the IOD welcomed, must be down to the presence of Liberal Democrats in his coalition Government, may I assure the Prime Minister, speaking as one long-standing pro-European now to another, that as long as he maintains such constructive engagement he will deserve, and I am sure will receive, solid support?

The Prime Minister: Said without a hint of mischief. I believe the national interest right now is all about- [Interruption.] I heard that, I say to whoever said the G word. The national interest is about restricting our contributions to the EU. We are making difficult decisions here, and that is what we should be pushing for in
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Europe. What was encouraging about this European Council was what a strong alliance we could build with others at the same time as protecting ourselves by preventing any of this treaty change from having an effect on the UK.

Mr Nigel Dodds (Belfast North) (DUP): The Prime Minister says that from now on the EU budget must reflect what we are doing in our own countries, so can he give us a cast-iron guarantee that in 2012, 2013 and thereafter there will be cuts to the EU budget, or can he use more reassuring words?

The Prime Minister: What I can say to the right hon. Gentleman is that, for the first time, the European Council's conclusions set out the new principle that increases or changes to the EU budget should reflect what we are doing in our nation states. That has never been put in place before, which is why the Commission opposed it so much. The principle is that what is happening across Europe must be reflected in the EU budget; that is the key. I will be pressing for the best possible outcome in 2012 and 2013, and as Britain is a net contributor the best possible outcome for us is that we do not make these increases in our net contribution.

Sir Malcolm Rifkind (Kensington) (Con): Does the Prime Minister agree that the experience of the Labour Government in respect of the European budget was a failure to reconcile net income with gross habits, and will he also confirm that his success in putting together this blocking coalition will save the British taxpayer half a billion pounds?

The Prime Minister: My right hon. and learned Friend is absolutely right. Every percentage increase we save is equivalent to well over £100 million. The failure there has been-for a long time, frankly-over this issue is twofold: a failure to take the budget issue seriously enough and, secondly, a failure to have transparency and therefore to have the information about the EU budget out there so that citizens in Europe can really complain about the inflated salaries and allowances. Let me give just one example: civil servants who have been in Brussels for 30 years are still paid generous expatriate allowances. That is the sort of excess that we have got to deal with.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Prime Minister seems to have great faith in protocol 15. I also noted that he did not really answer the question asked by my right hon. Friend the Member for Rotherham (Mr MacShane), and I am beginning to wonder something: has the Prime Minister ever actually read the Lisbon treaty from page one to page-to the end. If so, when?

The Prime Minister: One of the many contributions to public life that my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made after making that remark is that all future Front Benchers, probably on either side of the House, will carefully read every treaty and get to the end.

Mr William Cash (Stone) (Con): Given that response, will the Prime Minister confirm that the presidency conclusions, to which he has referred, do in fact endorse the EU taskforce report, which clearly states that there
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will be "a new legal framework" for further surveillance and powers for economic governance, which cover both the eurozone and the EU, including us, and, moreover, that any EU treaty imposes legal rights and obligations on all the member states? Why, therefore, did my right hon. Friend reckon that, together, these do not affect the UK, that

and that, on that basis, there would be, as he put it, no referendum?

The Prime Minister: This is a very serious point and we probably require a longer exchange than is possible from the Dispatch Box. I say to my hon. Friend, who follows this very closely, that we have to differentiate between two important things-the first is the Van Rompuy report and the second is the very limited treaty change that is being proposed by the Germans and now, in principle, endorsed by the Council-because the treaty change is really focused simply on the issue of putting a temporary bail-out mechanism on to a permanent basis.

On the Van Rompuy report, the paragraph to which my hon. Friend refers is paragraph 34, which talks about "macro-economic surveillance"-something that has happened for more than 10 years in the European Union. It is defined in paragraph 35, and paragraph 39 is very clear that the sanctions it talks about refer only to euro area members. I would also draw his attention to paragraph 4, which states that all of this is looked at

That is important. The other paragraph that I think is vitally important is paragraph 18, which says-I quoted it earlier-that

That is what gives us the protection. We read these things very carefully.

Mike Gapes (Ilford South) (Lab/Co-op): May I congratulate the Prime Minister on his consistency? In 2005, he won the leadership of his party by being the most Eurosceptic candidate; in 2007, he made a very clear commitment to hold a referendum on the Lisbon treaty; and now he has capitulated on his previous position of a freeze. Can I take it that public sector workers facing a freeze will now get a 2.9% increase?

The Prime Minister: The hon. Gentleman, who is very experienced in this House, has clearly not met my right hon. Friend the Defence Secretary. I am sure that I can arrange for them to spend some quality time together.

Richard Ottaway (Croydon South) (Con): I congratulate the Prime Minister on playing a very difficult hand at the summit. Does he agree that seeing off the European Parliament's budget, securing our opt-out on economic governance and ensuring that future budgets will reflect a nation's spending cuts all adds up to a good day's work?

The Prime Minister: May I thank my hon. Friend? I do think this principle that what happens in terms of the EU budget should reflect what happens to member
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states' budgets is an important principle. Of course, as we speak today, it is just words in a conclusions text, but many of the things that my hon. Friends and I have worried about over the years have been words in a conclusions text-a little opening that people who want more and more of the European Union push their force through. We have now got a wedge, if you like, that we can push on at all subsequent negotiations: that the European Council has accepted that what is good for nation states is good for the European Union's budget.

Hywel Williams (Arfon) (PC): What discussions did the Prime Minister have with the Council on convergence funding and what are the implications of the budgetary settlement on that funding?

The Prime Minister: We did not have detailed conversations about the elements of the budget. Clearly those countries that are net recipients were opposed to what I was proposing, and obviously the tighter the budget, the less money there is for the things within that budget, but within the budget we should always fight for a good deal and we should also make sure that depressed parts of the UK get access to that money. But when you look at what the European Parliament was putting forward for its 6%, you find that it included, for instance, a massive amount more for dairy farming, so it was not actually connected to getting the European economy moving.

Mr Edward Leigh (Gainsborough) (Con): What sort of world are MEPs living in? At a time when everybody else is tightening their belts, these people are awarding themselves ever more generous allowances and salaries, despite the fact that most people do not even know who they are. Will my right hon. Friend suggest to his friends on the Council that we export IPSA the-Independent Parliamentary Standards Authority-to the European Parliament?

The Prime Minister: That is an idea of pure genius. I am not sure that even the brilliant simultaneous translation that is available would really enable me to explain IPSA in all its complexities. There is a serious point, however, and this is where transparency matters. I remember, when the whole problem of allowances, pay, pensions and everything broke in this place, looking again at the European Parliament's rules. They are not transparent enough and we need to sort that out. As I say, when it comes to the European budget, transparency, which is going to be a great weapon in local government and central Government, can be such a weapon in Europe, too.

Tony Lloyd (Manchester Central) (Lab): The Prime Minister, of course, will not have been able to see the faces of his colleagues behind him when he made his statement. In terms of the big happy family that he commands, does he think that he still has the support of the majority of Conservative MPs?

Hon. Members: Hear, hear!

The Prime Minister rose-

Sir Alan Haselhurst (Saffron Walden) (Con): Instead of the passing satisfaction that might be gained from a "toys out of pram" approach, is not my right hon.
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Friend's achievement the fact that we have a first pragmatic step towards getting a grip on the EU budget, and will other steps follow?

The Prime Minister: It is important that we build alliances for what we are trying to achieve. I would say to all my right hon. and hon. Friends that there are many things that we do not like about the European Union's development and many things that we would like to change. We must pick our battles and our fights. The important battle to have is the one over the budget and it is important to try to build alliances for that. There is strong support from other countries-not just the donor countries but those that are making difficult decisions at home and recognise that it is simply insupportable to see one budget going up and up when they are having to cut things back in their domestic economies.

Mr Tom Watson (West Bromwich East) (Lab): At what we now know as the Prime Minister's "delicious" press conference, he questioned the number of BBC correspondents sent over to report on his triumph. Who did he want to send home the most-Nick Robinson or Michael Crick?

The Prime Minister: I probably should not have used the word "delicious". I was just making the point, as we were talking about cuts, that the BBC seemed to be extremely well represented. I do not think that Nick Robinson was there, but it is always a joy to see Michael Crick.

Mr James Arbuthnot (North East Hampshire) (Con): On the defence relationship with France to which my right hon. Friend referred, is he aware that I have forgiven the French for taking off the head of my great-great-great-great grandfather at Trafalgar? Does he agree that the treaty that he will be signing tomorrow with President Sarkozy needs to contain real concrete arrangements to improve defence co-operation between our two countries?

The Prime Minister: I am extremely glad that my right hon. Friend has forgiven the French, as I think he is joining me for lunch with President Sarkozy tomorrow-it might have been a little bit frosty. This is important, because Britain and France share a real interest. We have similarly sized and structured armed forces, we both have a nuclear deterrent and we both want to enhance our sovereign capability while being more efficient at the same time. This treaty will set out that in many areas-such as the A400M, the future strategic tanker aircraft, the issue of carriers and more besides-we can work together and enhance our capabilities while saving money at the same time.

Graham Stringer (Blackley and Broughton) (Lab): Local democracy in this country is facing 28% cuts over the next four years. That would be a good starting point, I think, as a target for the EU budget. What level does the Prime Minister think that the EU budget should be set at, ideally?

The Prime Minister: Obviously, we had to do the best we could with the 2011 budget. We now have the issues of 2012 and 2013 before we go into the 2014-2020 perspective. Many countries will be arguing for increases-the recipient countries will fight very hard for them and
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the European Commission, which always wants to see greater competences and more powers, will fight for them. Those of us who are doing the paying will have to unite and fight very hard. The better we can do in 2012 and 2013, the lower the baseline we will work off for the 2014-2020 perspective. That is where we will be pushing extremely hard.

Conor Burns (Bournemouth West) (Con): It is some 16 years since the European Court of Auditors last signed off the accounts. In welcoming our right hon. and noble Friend Baroness Thatcher's return to home and health this afternoon, may I invite the Prime Minister to consult her regarding what instrument he could use in place of the handbag to sort out this mess?

The Prime Minister: I am sure that the whole House will welcome Baroness Thatcher's better health and return from hospital. The deal she achieved at Fontainebleau all those years ago has saved this country £88 billion and it will be extremely important to defend that abatement as we go into the 2014-2020 negotiation. I am sure that she will be looking carefully to make sure that her legacy is assured.

Mr Dennis Skinner (Bolsover) (Lab): After such a miserable failure on the budget freeze, did the Prime Minister console himself by thanking the Italians for building British ships such as the Queen Elizabeth or by congratulating the Germans on winning a contract to occupy the channel tunnel? How much time did he spend hawking around Royal Mail to his new European pals?

The Prime Minister: The answer is no, I did not do any of that. I am not quite sure what point the hon. Gentleman is making. Trade between European countries is extremely worth while: just as we sell important goods and services to Germany and France, so they sell to us. I would have thought that even he and the dinosaurs opposite would think that was a good thing.

Mr David Nuttall (Bury North) (Con): I thank my right hon. Friend for his statement. Given that the proposed treaty change apparently will not affect the UK in any way, should we not simply leave it to the countries in the eurozone, which will be affected, to sign any new treaty? Should we not keep out of it?

The Prime Minister: My hon. Friend makes a fair point, but I think the best option for the UK, because this is a very limited treaty change about making this temporary mechanism permanent and because it is in Britain's interests, as we do not want a eurozone that goes kaput and we do not want to have to join in bail-outs-that is what this is about-it is better that it takes place through existing operations. Also, as I said in the statement, we have to bear in mind the role of London and Britain as a key financial centre. That will be strengthened by what is being done rather than by any alternative.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): The Prime Minister's visit to Brussels cost British taxpayers £450 million or so. Where is that money coming from, and would it not have been better spent on avoiding some of the cuts in services for ordinary hard-working families that his Government are putting through?

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The Prime Minister: If we had taken the approach of the previous Government, we would have just said, "Never mind the increase suggested by the Council or the increase suggested by the Parliament, let's just let them come to some sort of deal and Britain will cough up," but we said, "No, let's restrict this to the very minimum it could be." That is not an approach that the previous Government took, but I am proud to say it is one that we took.

Mr Peter Bone (Wellingborough) (Con): As one pro-European who has concerns about the European Union to another, may I ask the Prime Minister whether the real problem with the budget is the £17.5 billion extra that we are going to pay over the next four years because that lot opposite gave up Mrs Thatcher's rebate?

The Prime Minister: My hon. Friend is absolutely right. In the negotiations in 2005, we were told repeatedly in the House by Tony Blair, standing here at the Dispatch Box, that he would consider giving up the rebate only if he got a proper deal on common agricultural policy reform. Do hon. Members remember that? In the end, all we got was a review of the CAP. That teaches us the very important lesson that we have to halt it.

Kate Hoey (Vauxhall) (Lab): Did the Prime Minister get a chance to discuss with any of the leaders privately or publicly the ludicrous European Union embassies being set up all over the world at huge expense? Does he realise that the public do not want that, but want well-staffed British embassies? Can we do anything about it, and is there any chance of a referendum in the next five years on whether we stay in or go out?

The Prime Minister: I do not believe in an in-out referendum, for many reasons. I think we are better off in the European Union-we have to fight our corner very hard-but I would grant a referendum if there were any proposed transfer of powers from Westminster to Brussels. On the European External Action Service, the hon. Lady knows that we opposed the Lisbon treaty, that we thought the creation of the EEAS was a mistake and that we have pushed as hard as we can within Europe to keep its costs under control. There is an argument that because of the combination of the previous High Representative and Foreign Minister roles, the posts and the budget should cost less, and we push that case as hard as we can.

Sir Menzies Campbell (North East Fife) (LD): As another of the Prime Minister's new friends, may I remind him that in 2010 family life takes many different forms in this country? May I also commend his pragmatism in relation to defence co-operation with the French, which he no doubt discussed with President Sarkozy over the weekend? If it is successful in conventional co-operation, what are the prospects for similar co-operation in nuclear matters?

The Prime Minister: I think there are prospects for our working together in this area, not least the French investment in civil nuclear power that is going to take place in the UK. There are opportunities, which we will be talking about tomorrow. In terms of the broader family, I do not quite know what my right hon. and learned Friend would be-a wise uncle, I suppose, to
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give me good advice. I seriously believe that the link-up with the French over defence is in the long-term interests of both our countries. To those who worry that this might in some way lead to European armies, I say that is not the point. The point is to enhance sovereign capability by two like-minded countries being able to work together.

Nia Griffith (Llanelli) (Lab): Following on from the Prime Minister's answer to his hon. Friend the Member for Stone (Mr Cash) in which he explained very carefully why he fully understands and justifies the use of the Lisbon treaty for modifications, can he explain to us exactly what type of modifications or changes he would want to have a referendum on? Exactly what transfers of power would he want to put to the country in a referendum?

The Prime Minister: The hon. Lady asks a reasonable question. The Bill that we will be looking at will say that there should be a referendum on any transfer of power-a proper transfer of competence. As a general principle, the House should not give away powers it has without asking the people who put us here first. That is the principle that we should adopt. I do not want us to give any further powers from Britain to Brussels, so I am not proposing that we should. Further to answer the hon. Member for Vauxhall (Kate Hoey), I am not anticipating us having a referendum, because I do not want to see that transfer of powers. What is being proposed by the Germans and will be finally agreed at the December Council, yes, is a transfer of powers for countries in the eurozone. It definitely means that as well as having the euro, they will have more co-ordination of their economic policy, and punishments if they do not do certain things. That, to me, is perfectly logical if they are in the euro. It was one of the reasons why I did not want to join the euro in the first place and why, as long as I am Prime Minister, we will not do so.

Mr Oliver Heald (North East Hertfordshire) (Con): Does the Prime Minister accept that it is welcome, if unusual, to see so many Heads of State supporting a British Prime Minister on an issue on which the European Parliament takes a different view? Does he agree that perhaps there is a role for national Parliaments, which, right across Europe, are facing difficult economic decisions, to support these Heads of State, including, of course, the Prime Minister, because it is right-

Chris Bryant (Rhondda) (Lab): He is not a Head of State.

Mr Heald: -the Head of Government, I said. It is right that the EU's budget should reflect the means of the countries that are in the EU.

The Prime Minister: I hope the former Europe Minister, the hon. Member for Rhondda (Chris Bryant), will stay calm. My hon. Friend the Member for North East Hertfordshire (Mr Heald) makes a good point. Part of the problem in the past has been that other member states have not been as focused on the budget and the impact on their own publics as they are now. They are focused on it now because they all have to make difficult decisions. When we sit round the European Council table, we are often discussing what we are having to do with public sector pay, pensions or other difficult decisions, so there is a common interest which the Parliaments of Europe can help remind their Governments about.

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Kelvin Hopkins (Luton North) (Lab): It is clear that a number of member states are unlikely to be able to sustain their membership of the euro for the long term. They are already suffering serious internal economic damage, some requiring external fiscal transfers, and other countries may be in the same position in the not-too-distant future. Was there any talk, privately or otherwise, of the possibility of member states leaving the euro, so making it work better?

The Prime Minister: I do not believe that will happen, but what was interesting about this European Council is that there is quite an existential debate taking place within the eurozone about what it means to be a member of the euro. There is a very strong push by the Germans, who obviously feel that they have had to bail out the Greeks, that they have to have tighter rules for members of the eurozone, and there are very great worries on the part of some countries about the sanctions that could be applied to them. This is a debate that was inevitable when there is one currency and many countries and they are having to give up some of their sovereignty to make that single currency work. It is perfectly logical for eurozone members. It reinforces in my mind that they are right to do that, but we are right not to be part of it.

Chris Heaton-Harris (Daventry) (Con): May I say to the Prime Minister how refreshing it was, after 13 years of inactivity and disinterest in this area, to see a British Prime Minister fighting for a reduction in the size of the EU budget and for better value for money for British taxpayers? Can he confirm that he now has two potential vetoes-first, on the limited treaty change on economic governance, and, secondly, on the EU budget for the next period, 2014 to 2020-and that they can be used independently of each other?

The Prime Minister: My hon. Friend is entirely right. Britain does have leverage, influence and an impact in these negotiations. The question that we have to answer is, what can we achieve that is most in the national interest. I do not want to make promises that I cannot keep or to set goals that are impossible, but action on the budget and the future financing is where we should exert our influence.

When it comes to treaty change, there would be a stronger argument for pursuing treaty changes of our own if what was now being suggested were a wider treaty change. It is not; it is a relatively limited change that makes the temporary mechanism permanent. We will see the full details of it in December, and we will be able to be involved in its negotiation, as my hon. Friend says.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Has the Prime Minister made any calculation of how many new teachers, nurses or police officers could have been employed with the 2.9% increase that he has conceded to the EU?

The Prime Minister: I have to say to the hon. Lady that one constructive thing that she and other Opposition Members could do is to talk to their Members of the European Parliament. They had the chance to vote for a freeze in the budget, and they did not do that. So, it is all very well hon. Members standing up and saying how much more Britain is going to have to pay, but their MEPs are doing nothing to help in that argument.

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Mr Aidan Burley (Cannock Chase) (Con): Has the Prime Minister had the chance to discuss security co-operation with the German Chancellor in the light of the increased bomb threats?

The Prime Minister: Yes. I did have that conversation, because the German Chancellor stayed at Chequers over the weekend, and we discussed a range of those issues. Obviously the aeroplane in question, having left Yemen, had landed in Germany and then in Britain before it was due to go on to the United States. That reminds us of how interconnected we are, so the British and the Germans, quite close together, made the announcement about not receiving packages and parcels from Yemen. My right hon. Friend the Home Secretary will be giving further details in a moment or two, when she makes her statement.

Chris Bryant: Let me get this right. The Prime Minister failed to put together a blocking minority in July, and he did not even manage to get the Polish on board, despite the fact that the Polish Foreign Secretary was in the Bullingdon club with him at Oxford. He failed to put together a blocking minority, he let the matter go through in August, he tried again at the beginning of last week, he failed-and then he proclaims himself the great saviour of this country. How can it possibly be a success until he comes back to this country with a guarantee from the French that they intend to cut the common agricultural policy?

The Prime Minister: The difference between the hon. Gentleman and me is that when we were both at Oxford he was a member of the Conservative association and I was not.

Nadhim Zahawi (Stratford-on-Avon) (Con): The Prime Minister quite rightly says that London is the financial heart of Europe. The chief executive of the London stock exchange, a Frenchman, has warned of the harm that European legislation can do to the vital alternative investment market. Can the Prime Minister reassure the House that that will not happen?

The Prime Minister: My hon. Friend makes an extremely good point, and it goes to the heart of the point that my hon. Friend the Member for Daventry (Chris Heaton-Harris) made. When the Chancellor of the Exchequer, the Financial Secretary to the Treasury, I and others negotiate in Europe, I am extremely conscious of the fact that some of the directives coming out of the European Commission on alternative investments, such as the Larosière proposals on finance, have the potential to do great damage to the UK, and we do have to make sure that we use our negotiating muscle on the things that make the most difference to us. That is very important. Rather than focusing on things that might sound good from this Dispatch Box, let us focus on the things that make a difference to the great businesses of our country.

Diana Johnson (Kingston upon Hull North) (Lab): In the light of the estimated 20,000 job losses among police officers in this country, how many officers does the Prime Minister think could be employed by the 2.9% increase that he has conceded?

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The Prime Minister: I have a message for the Whips: you need to hand out more than one question; it is always better if there is a choice. But I think that I answered it earlier.

Alec Shelbrooke (Elmet and Rothwell) (Con): I congratulate the Prime Minister on once again showing real leadership in Europe. Drawing on the comments made by the Leader of the Opposition a moment ago, we all want to be fully involved at the heart of Europe and in partnership with it, but that does not mean that we have to roll over and have our bellies tickled every time a proposal comes forward.

The Prime Minister: I am on only my third European Council, and they are rather more frequent than they used to be, but I do not think it is impossible to combine a strong defence of the national interest with building alliances. Everyone round that European Council table recognises that we actually do all have interests that we have to try to protect on our own as well as making sure that we are making the right decisions for the 27.

Mr Kevan Jones (North Durham) (Lab): Given that negotiations on the budget are continuing with the European Parliament, will the Prime Minister give us one of his famous cast-iron guarantees that his Government will not accept an increase above 2.9%?

The Prime Minister: The point I can make is that 13 Heads of Government or Heads of State signed a letter saying they would not accept more than 2.9%, so it is not just my word but the word of all those leaders who have said that this should not be accepted. That is the best thing that we could do, and it gives a real chance of either achieving 2.9% or, possibly even better, a deadlock which would mean a freeze for next year.

Mr John Baron (Basildon and Billericay) (Con): Given the extent of belt tightening in this country, does my right hon. Friend believe that now is the right time to get the EU's accounts fully and independently audited in order to reduce waste and fraud, and will he push for that?

The Prime Minister: My hon. Friend makes a good point. The first thing we are going to do is the initiative on transparency and openness to try to draw greater attention to what the European Union spends its money on. We will find that some of the spending-spending on science projects and the like-may be worth while, but I am convinced that there is a lot of waste that could be cut out if we had the transparency that we are applying to our own budget back here in the UK.

Mr James Clappison (Hertsmere) (Con): May I congratulate my right hon. Friend on clearly standing up for Britain's interests? On the parts of the Van Rompuy report that set in place new mechanisms that clearly concern the United Kingdom, even though it is a non-eurozone member, will my right hon. Friend bear in mind the inevitable pattern of EU history whereby any grant of power is followed by demands for more and more power, as surely as night follows day?

The Prime Minister: My hon. Friend makes an extremely good point. I can tell him that the Chancellor and I, in undertaking these negotiations, are acutely conscious
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that you have to watch the language that is being proposed by others in the European Council and keep asking whether it is setting some future trap for the UK Government. I have to say that I think the language in the Van Rompuy report about its not affecting Britain in terms of sanctions is extremely clear.

There is one other point I would make, which is about the opt-out that was negotiated from the Maastricht treaty. That opt-out has worked well. Yes, there is surveillance in terms of economic policy-that has happened for 10 years-but frankly, it has not forced us into doing anything we did not want to do. Just as that opt-out has held good, we have now renewed and refreshed it for this fresh group of challenges that have come towards us.

Charlie Elphicke (Dover) (Con): May I congratulate my right hon. old Friend on his excellent statement- [ Interruption ] Well, having some friends, that is-and ask him if he is aware of any member of the British delegation to the European Parliament who voted for the higher budget increase, and if so, will he name and shame them?

The Prime Minister: What I can say is that when there was a motion in the European Parliament to support a freeze, 12 out of 13-I think it was-Labour MEPs voted against that, so they had the opportunity to stand up for what some of their colleagues have stood up for today, and they failed to do it.

Mr Julian Brazier (Canterbury) (Con): In the light of my right hon. Friend's opening remarks and his comments on his bilateral with the German Chancellor, does he agree that Britain is very well placed to lead the transition in Europe towards the era of information-age terrorism, especially as we have GCHQ, and as his new National Security Council has made such a strong commitment to more spending against cyber warfare?

The Prime Minister: My hon. Friend makes a very good point. Prime Ministers and Ministers often praise the security services, and it is good to put on the record the very hard work that people at GCHQ in Cheltenham do; they are among the best in the world at what they do. That gives us an opportunity to combat this new threat of cyber terror and cyber attacks that affects not just our defences but many, many businesses in our country. There is a chance to have some real leadership in this respect, and other countries, including France and Germany, are coming to us wanting to work with us in combating cyber threats because of the investment we are managing to put in.

Mr Philip Hollobone (Kettering) (Con): The cost of the new European diplomatic corps will eat up on its own the entire net contribution from this country, both this year and going forward. What did my right hon. Friend say to Baroness Ashton about the ballooning costs of that organisation, and what was her response?

The Prime Minister: I know that my right hon. Friend the Foreign Secretary has had this conversation, and I have discussed the issue as well. While we opposed the European External Action Service-we did not want it to be created in the first place-the Lisbon treaty, sadly, is now a fact we have to live with. But because what
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were two roles are combined into the role that Baroness Ashton fills, there should be opportunities for some cost savings. Actually, the European Parliament has offices around the world, and we think there is a real opportunity to rationalise that and ensure that it keeps its cost under control.

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