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House of Commons

Monday 22 October 2012

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Service Leavers (Support)

1. Hazel Blears (Salford and Eccles) (Lab): What recent assessment he has made of the support given to service leavers when re-entering civilian life. [123711]

The Secretary of State for Defence (Mr Philip Hammond): Providing transitional support to service leavers is a high priority. Those who have completed a minimum duration in the armed forces are offered a framework of support services. Of those who make use of this framework, over 90% of those seeking work find employment within six months of leaving the armed forces. However, we believe we can do more, and I announced in September the appointment of Lord Ashcroft as the Prime Minister’s special representative for veterans’ transition. He has a long-standing interest in the armed forces and a track record of support for veterans’ charities. He will review the support available to service leavers making the transition to civilian life and make recommendations for improving that support and for better co-ordination across Government and with service charities. We look forward to receiving his recommendations in due course.

Hazel Blears: I am grateful to the Secretary of State for that reply. Over the next two years, 9,000 brave men and women who have put their lives on the line for our country will be coming home from Afghanistan. They will need help to find a home and retrain to find a job, and support for their families. At the moment, they are often pushed from pillar to post around local authorities. If there were a veterans champion in each local authority who could co-ordinate those services, they could make the system work effectively for those veterans coming home. Will the Secretary of State consider the campaign for veterans champions in each local authority area and give it his support?

Mr Hammond: The right hon. Lady is absolutely right that local authorities are a vital part of this equation. I am pleased to be able to tell her that more than 150 local authorities so far have signed up to the community covenant. I will certainly make her specific point to Lord Ashcroft and ask him to consider it very carefully in his deliberations.

Bob Stewart (Beckenham) (Con): Will my right hon. Friend assure me that maximum effort is being put into trying to recruit to the reserve Army people who have been well trained in the armed forces but are leaving, so that we do not lose their expertise?

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Mr Hammond: I am grateful to my hon. Friend. He is absolutely right. As we build our Army reserve to a level of trained strength of 30,000, it will be essential that we capture the skills of regular Army leavers, not just to help us with the numbers but because of the resilience that they will give to reserve forces. I promise him that that is what we will do.

Nick Smith (Blaenau Gwent) (Lab): Following Labour’s lead, employers such as John Lewis and O2 will guarantee to interview veterans applying for jobs. Will the Minister introduce this scheme to all public sector employers?

Mr Hammond: One of the tasks that we have asked Lord Ashcroft to undertake is a discussion across Government and the wider public sector to see what more we can do to ensure that service leavers have the very best opportunities in relation not only to employment but access to benefits and social housing—all the other things that they need. I assure the hon. Gentleman that from my knowledge of Lord Ashcroft I am sure he will do this extremely thoroughly.

Mr James Gray (North Wiltshire) (Con): My right hon. Friend knows very well, not least from the excellent report produced by the Under-Secretary of State for Defence, my hon. Friend the Member for South West Wiltshire (Dr Murrison), that one of the biggest problems facing returning servicemen is mental health problems, not only when they first get back but for very many years thereafter. What extra steps can the Secretary of State take to make sure that we alleviate the worst effects of these mental disturbances?

Mr Hammond: As my hon. Friend will know, the excellent report produced by my hon. Friend the Under-Secretary is being taken forward by the Government. We will continue to work closely with the Department of Health and others to look at how best we can implement the remaining recommendations in that report.

Mr Jim Murphy (East Renfrewshire) (Lab): May I congratulate the new ministerial team who have found their places on the Front Bench today? It is only a shame that that comes at the expense of their dedicated and highly effective predecessors, who deserve the thanks of everyone in all parts of the House.

Many of our armed forces are currently being made redundant. One of the worries is that the Ministry of Defence seems to be trying to save money by sacking experienced people very close to their full pension entitlement. I have been contacted by angry and disappointed family members who feel very let down by this approach. Will the Secretary of State confirm that in future rounds of service redundancies he will take into account proximity to pension qualification when deciding whom to make redundant?

Mr Hammond: I am extremely grateful to the right hon. Gentleman for his generous comments on the retiring ministerial team, and I am sure that he will appreciate that my new Front-Bench colleagues will give him an equally hard time in future.

As the right hon. Gentleman knows, proximity to pension point is not and cannot be a determining factor in selection for redundancy. Wherever we set the bar—we

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have made some reductions in the immediate pension point for those being made redundant—some people will, unfortunately, fall just short of it and it is inevitable that they will feel a sense of injustice. The legal advice that I have received is that it would not be appropriate—we would be subject to challenge—if we used proximity to pension point as a criterion in redundancy selection.

Mr Murphy: There will be disappointment at that answer, not least in the pension justice for troops campaign, one of whose high-profile supporters is Sergeant Lee Nolan, who served our country in Iraq, Bosnia and Kosovo, and who was sacked just 72 hours before qualifying for his full pension. So disgusted is he that he has returned all six of his medals to Downing street in protest. Will the Secretary of State at least enter into all-party talks, with the aim of guaranteeing that no one currently serving in Afghanistan will be affected in this way? It is simply wrong and not good enough for someone who has served our country bravely and for many years in Iraq, Afghanistan or any other theatre to be sacked so close to qualifying for their full pension entitlement.

Mr Hammond: Before the right hon. Gentleman climbs any further on his high horse, I remind him that we are having to make reductions in the size of our armed forces to deal with the legacy that we inherited from the Labour party. Nobody who is serving on operations or who is on post-operational leave is eligible for selection for redundancy. The right hon. Gentleman knows that we are deeply sympathetic with regard to those very difficult cases in which people missed their immediate pension point by a very short period, but I assure him that the legal advice is unambiguous on the issue.

Patrick Mercer (Newark) (Con): Will the Secretary of State join me in congratulating the Newark Patriotic Fund, particularly Mrs Sue Gray and Mrs Karen Grayson, for its work? It is tireless, splendid and could very easily be copied by hon. Members, so could I encourage him to encourage them?

Mr Hammond: I can honestly say that I have not come across the Newark Patriotic Fund, but I have no doubt that my hon. Friend will acquaint me with it intimately in the near future. I look forward to disseminating its good intentions.

BAE Systems/EADS Merger

3. Mr Jim Cunningham (Coventry South) (Lab): What discussions he has had on the proposed merger of BAE Systems and EADS. [123713]

The Secretary of State for Defence (Mr Philip Hammond): I was involved in a number of discussions regarding the possible merger of BAE Systems and EADS, as proposed by the companies themselves, prior to their mutual decision to end negotiations on 10 October.

Mr Cunningham: I first pay tribute to the former Minister with responsibility for procurement. When we had problems and needed meetings to resolve difficulties, he was one of the very first to arrange such meetings. We never had a problem. Having said that, why did the Secretary of State not take into consideration the

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shareholding issues experienced by BAE and its associates? Does he not understand that this has caused a lot of unease among them?

Mr Hammond: I am not quite sure what the hon. Gentleman means by saying that I did not take account of shareholding issues. The Government made it clear that we understood the reasons why the companies were attracted to a possible merger and that we were willing to listen to the arguments for it, subject to setting out clear red lines about the UK’s national interest with regard to national security, our technology base and protecting jobs. It subsequently became clear that the UK’s red lines could not be satisfied while simultaneously satisfying those of the French and German Governments. It also became clear—I think that this is the point of the hon. Gentleman’s question—that not all the shareholders on either side of the transaction were satisfied that it made sense.

Mr Julian Brazier (Canterbury) (Con): I strongly support my right hon. Friend’s red lines, but I put it to him that the palpable failure of BAE’s business model—which, basically, focused only on defence—and the shortcomings in its current management should not be allowed to drive us into an unsatisfactory situation, and that, such is the value of the assets that it controls, we may in the long run have to take a less than entirely hands-off approach to the company.

Mr Hammond: As my hon. Friend would expect, the Ministry of Defence has a close working relationship with BAE Systems as our largest supplier. The company has a substantial order book, a profitable business and strong cash flow, and it will continue to operate as an independent British business. Clearly, it will face challenges as its principal customers shrink their budgets, and it will need to adapt its business model for the future.

Veterans (Support)

4. Julie Hilling (Bolton West) (Lab): What recent discussions he has had with the Secretary of State for Work and Pensions on steps to ensure that seriously wounded war veterans will receive a minimum of £130 per week towards the cost of care and living. [123714]

The Minister of State, Ministry of Defence (Mr Mark Francois): The Defence Secretary has regular discussions with his Cabinet colleagues regarding the support provided to those who have been seriously wounded while serving in the armed forces. The matter has also been discussed by the Cabinet Sub-Committee on the Armed Forces Covenant. Work on minimum payments is at an early stage, but Ministry of Defence officials continue to work closely with the Department for Work and Pensions to develop the support that we provide to service personnel and veterans.

Julie Hilling: There seems to be a little hope in the Minister’s answer. Will he say what is being done now about veterans who have already lost their disability living allowance? My constituent Aaron Moon lost his leg in Afghanistan and had more than six months without disability living allowance. Surely that is not the right way to treat our wounded heroes.

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Mr Francois: I hope that we can offer the hon. Lady some good news. When the personal independence payment comes in, anyone will be able to apply for it. However, seriously injured service personnel and ex-service personnel will instead be able to apply for a separate payment, which will guarantee that they will not be worse off than under disability living allowance. Under that payment, they will not be subject to periodic reassessment, as PIP recipients will be. The separate payment, which is known as the armed forces independence payment, or AFIP, will be available to those in receipt of an award from the armed forces compensation scheme at tariff levels 1 to 8, or with an entitlement to a guaranteed income payment of 50% or higher.

11. [123722] Nick de Bois (Enfield North) (Con): Does the Minister share my concern that multiple amputee UK soldiers are not receiving the Genium X2 product, which is generally accredited as the best available in the prosthetics field and is used by the US? Will he agree to meet triple amputee Rifleman Jack Otter, who is my constituent, to understand the difficulties and worries that such people have?

Mr Francois: I understand that my hon. Friend’s Question was further down the Order Paper, but has been grouped with another Question. However, using the principles of military flexibility, I will attempt to be fleet of foot.

I am familiar with the issue that my hon. Friend raises. The Ministry of Defence has made considerable investments at Headley Court to provide a world-class service for those with prosthetics. I was present when His Royal Highness the Prince of Wales opened the new £17 million Jubilee rehabilitation wing, which was paid for by the Ministry of Defence. The Secretary of State has recently announced a further £5 million of investment. I am familiar with the case of my hon. Friend’s constituent and will agree to meet him. However, I must enter the caveat that I am not qualified as a doctor and that I will have to take clinical advice on what decision it would be best to take following the meeting.

Mr Speaker: I have known the right hon. Gentleman for 27 years and he is often right, but on this occasion he is half right. The hon. Member for Enfield North (Nick de Bois) does have a Question lower down the Order Paper. That played a part in my choosing to call him now. It is Question 11, as the right hon. Gentleman will correctly discern, but it has not been grouped with any other Question.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): I welcome the Minister to his post. Having travelled with him and his colleague, the Under-Secretary of State for Defence, the hon. hon. Member for Ludlow (Mr Dunne), all the way to Stanley last year, I can say that an 18-hour journey is useful in fostering cross-party co-operation.

I welcome the Minister’s comments today because, despite the Prime Minister’s assurances on the personal independence payment, in a letter to me dated 30 September the then Under-Secretary of State for Work and Pensions, the right hon. Member for Basingstoke (Maria Miller), who had responsibility for disabled people, wrote:

“we are working with the MOD to establish if it would be possible to avoid severely injured veterans undergoing multiple reassessments”.

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At that stage, the Prime Minister’s message clearly had not filtered through to Ministers at the Department for Work and Pensions. Will the Minister clarify how far back the policy that he has announced today will apply?

Mr Francois: It was an enjoyable trip, but what goes on tour stays on tour.

As I have already tried to explain, there will be a special payment called the AFIP, which we hope will be able to address the bulk of these issues. The hon. Lady will know from her interest in the field that the second principle of the armed forces covenant is special treatment where appropriate, especially for the injured or bereaved. We hope that the AFIP will play into that and be an example of the second principle of the covenant in action.

Nuclear Fleet

5. David Mowat (Warrington South) (Con): Whether his Department has undertaken any preparations for the removal of the nuclear fleet from HMNB Clyde in the event of Scottish independence. [123715]

The Minister for the Armed Forces (Mr Andrew Robathan): The UK Government are confident that the people of Scotland will choose to remain part of the United Kingdom, and we are not making plans for Scottish independence. We therefore have no plan for the strategic nuclear deterrent to be relocated from its current home at Her Majesty’s Naval Base Clyde.

David Mowat: The Minister will be aware that last week the Scottish National party decided that an independent Scotland would join NATO, availing itself of the nuclear umbrella. It then voted to evict the UK deterrent from the Clyde. Replicating that facility would cost millions and take many years. Is that a coherent policy or a hypocritical rant?

Mr Robathan: I have to say that that question is best addressed to the SNP, but unfortunately no SNP Members are here to answer it at the moment. It is almost incredible that a country might wish to join NATO but then say that NATO’s assets and armaments would not be allowed to be stationed in that country or pass through it.

Anas Sarwar (Glasgow Central) (Lab): The Minister has noted that there is no SNP presence in the House today. The hon. Member for Moray (Angus Robertson) said, “Who dares wins,” but SNP Members do not dare turn up to engage in the debate.

Does the Minister agree that it smacks of a contradiction for the SNP to say that it wants to join an international alliance and promote co-operation with NATO, and at the very same time say that it wants to leave a Union that best serves the defence of Scotland?

Mr Robathan: I am grateful to the hon. Gentleman, because I entirely agree. That is an interesting dilemma that members of the SNP will have to sort out among themselves.

Sir Menzies Campbell (North East Fife) (LD): We should not be too hard on SNP Members. I am sure that pressing engagements in their constituencies have prevented them from attending Defence questions.

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Does my right hon. Friend agree that we can share respect for those who are opposed to nuclear weapons in principle, but that we can share only incomprehension at those who say they are opposed to nuclear weapons in principle and then want to join an alliance that is based on nuclear deterrence?

Mr Robathan: I am grateful to the right hon. and learned Gentleman, and I do agree with him. If I may, I shall quote from The Guardian—not always my favourite reading. It stated this morning:

“After losing Friday’s vote, rebels inside the party now want him”—

the First Minister—

“to prove that NATO would allow a non-nuclear Scotland to join the alliance.”

That is a very good point.

Mr Russell Brown (Dumfries and Galloway) (Lab): The hon. Member for Warrington South (David Mowat) is exactly right. What we witnessed at the SNP conference at the end of last week was double standards—the shelter of the NATO umbrella, but the removal of Trident.

Has the Minister heard that the Scottish Government are establishing a defence department or section? What formal approaches have Ministers had from the Scottish Government, or from that dedicated department, about the removal of the nuclear fleet from an independent Scotland? The SNP talks about that a lot, but have there been any approaches?

Mr Robathan: This is an unusual outbreak of consensus throughout the Chamber, and I welcome what the hon. Gentleman says. I believe that the Scottish Government have a Minister for Veteran Affairs, who shares the hon. Gentleman’s surname, but if I am honest I am not quite sure what he does. We have had no contact from the Scottish Government about a department of defence. We remain committed to the United Kingdom, and I am glad to say that there is agreement pretty much throughout the Chamber on the need to continue the UK.

Dr Julian Lewis (New Forest East) (Con): I congratulate my right hon. Friend on his well deserved promotion. Will we continue with the UK’s Trident ballistic missile nuclear deterrent irrespective of the outcome of the Scottish vote?

Mr Robathan: I thank my hon. Friend for his congratulations. Current Government policy is to continue with the continuous at-sea nuclear deterrent based on Trident. Should the Scots vote for independence—God forbid!—we would need to review the situation, but the continuous at-sea nuclear deterrent remains our policy, and I see that proceeding into the future.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I echo the sentiment that we should not be too hard on SNP Members who are not in the Chamber—after all, we want to keep them in this place. Is the Minister aware of any discussions that SNP Ministers have held about their plans to remove the deterrent with either the United States or other NATO members?

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Mr Robathan: There have been no discussions with the UK Government or, as far as I am aware, with any other NATO member. As I said earlier, I think it incredible that NATO would accept in the alliance a country that would not allow the various weapons used by NATO to be stationed in or pass through it.

Type 26 Combat Ship

6. Penny Mordaunt (Portsmouth North) (Con): What the timetable is for the production of the Type 26 combat ship. [123716]

The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne): The Type 26 global combat ship programme is still in its assessment phase, and the timetable for the build programme of the ships will be determined at the main gate investment decision, currently scheduled for the middle of the decade. Build will commence to meet the current planning assumption of the first ship entering service as soon as possible after 2020.

Penny Mordaunt: When the carrier work ends there will be more than 200,000 tonnes of warship in Portsmouth dockyard, and 1,000 extra sailors—numbers not seen in my city since the 1950s. There will then be a two-year gap before work starts on the Type 26. Rather than pay more to stretch out those contracts to cover that gap and retain sovereign capability, would it be a better use of funds to build some much-needed ocean patrol vessels? Would, and when might, the Minister consider such an option?

Mr Dunne: As my hon. Friend knows, the Ministry of Defence has a terms of business agreement with BAE Systems Maritime Naval Ships. That agreement commits the company to maintain warship design and build capability, and elements of support covering all complex service warships in the UK. The Government continue to work with BAE Systems on the utilisation of shipbuilding capability once work on the current carrier programme is complete. As my hon. Friend knows, Corvette offshore patrol vessels are currently under construction by BAE Systems in Portsmouth for the royal navy of Oman.

Mr Kevan Jones (North Durham) (Lab): I welcome the Minister to his new position. As he will know, there is a long and proud record on the Clyde of building warships for the British Navy, and a complex ship for the British Navy has never been built in a foreign country. Will the contract for the Type 26 ships contain a clause for the event of a vote for an independent Scotland in 2014?

Mr Dunne: I thank the hon. Gentleman for his kind words. As my right hon. Friend the Minister for the Armed Forces said, the Government are not currently planning on the basis that the Scottish people will vote in favour of independence in a referendum. The hon. Member for North Durham (Mr Jones) is right to say that the UK has not built a complex warship outside its shores since the second world war, and I believe that the only times it did so during the first and second world wars were in then colonial territories for local use. The Government remain committed to using UK industry to build UK warships.

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In the unlikely event that Scotland should decide to separate from the UK, the Scottish defence industry would be eligible to bid only for contracts placed by a future Scottish Government or competed outside the UK, or placed by the UK or other Governments. That is because, as the hon. Gentleman knows, many UK defence contracts are exempted from procurement rules for reasons of national security.

Stephen Gilbert (St Austell and Newquay) (LD): The Prime Minister told the House last Wednesday that the Type 26 programme is “fully funded”. How many Type 26 combat ships are fully funded, and when can we expect to see them in service?

Mr Dunne: The hon. Gentleman needs to be aware that the programme is currently in its assessment phase. A decision on main gate assumption is due to be taken in a few years’ time, and the build programme will roll forward from that point. The Government have made some assumptions in the equipment plan, which we will publish shortly, and the hon. Gentleman will be able to glean more information from that once it is available.


7. Mr Philip Hollobone (Kettering) (Con): How many UK service personnel are based in the Gulf; and whether reserves are earmarked for deployment to the Gulf in the event of military action against Iran. [123717]

The Secretary of State for Defence (Mr Philip Hammond): Just under 2,000 UK military personnel in the Gulf region are serving on current operations, of whom the majority are royal naval personnel. Reserves could be made available to support the full range of military activity in any operation. The decision to employ reserves is taken by Ministers and subject to a 28-day notice period for individuals.

The UK, together with the international community, remains committed to a negotiated diplomatic solution with Iran on its nuclear ambitions. The Government are pursuing a strategy of pressure and engagement to persuade Iran to negotiate seriously, and to allay the legitimate concerns of the international community. However, we have made it clear that if Iran makes the wrong choice, all options remain on the table.

Mr Hollobone: What assessment has been made both of the conventional capability of the Iranian armed forces, and of the ability of Her Majesty’s armed forces to overcome the particular challenges of an armed conflict in that theatre?

Mr Hammond: The Iranian armed forces have a significant capability. We do not, at the moment, advocate a military solution to this crisis. We advocate a solution based on pressure and engagement, and on persuading the Iranians to engage with the legitimate concerns of the international community. Should the situation evolve, it is certain that, if the UK took part in any action, it would do so as part of an international coalition.

Mr Bob Ainsworth (Coventry North East) (Lab): The ramifications of any military action against Iran are enormously unpredictable, not only for our forces in the

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middle east but for the wider region, so I am glad to hear the Secretary of State confirm that our main thrust is diplomacy. Although we are enormously worried about Iran’s intentions, I hope he can tell the House that we will do everything we can to avoid any military dimension.

Mr Hammond: The right hon. Gentleman is absolutely right. Because of the strategic position occupied by Iran and the vital nature of the strait of Hormuz to the world’s economy—oil supplies transit that waterway—any action, or even suggestion of action, will be deeply destabilising and debilitating. We remain committed to the process of engagement with our European allies and others, which includes the use of economic and financial sanctions to bring pressure to bear on the Iranian regime. There is very significant evidence, particularly the declining value of the Iranian currency, to suggest that such sanctions are beginning to have an effect and to cause fracture within the Iranian leadership.

Mr Crispin Blunt (Reigate) (Con): I commend my right hon. Friend and the Government for the policy they are pursuing towards Iran. Will he continue to ensure that the policy serves to divide the Iranian Government from their people and does not inadvertently unite them?

Mr Hammond: My hon. Friend makes a good point and is absolutely right. I have quizzed many of our allies in the Gulf who have an intimate knowledge of what is going on in Iran on the ground. We do not want those sanctions to unite the Iranian people with their oppressive regime; we want to wake the Iranian people up to the cost of this madcap dash for nuclear capability.

16. [123727] Angela Smith (Penistone and Stocksbridge) (Lab): Does the Secretary of State agree with the Israeli Prime Minister that the international community must draw a “clear red line” over Iran’s nuclear programme? If so, where would that be?

Mr Hammond: The Israeli Government have their own well known position on the issue. The UK Government believe that engagement and continuous ratcheted pressure on the Iranian regime is the best way to proceed. We have also made it very clear to the Israelis and others that we do not believe that a pre-emptive military strike is the right way to proceed or the best way to resolve the situation.

Advertising Spend

8. Mr Peter Bone (Wellingborough) (Con): How much his Department expects to spend on advertising in 2012-13. [123719]

The Minister for the Armed Forces (Mr Andrew Robathan): Nearly all advertising expenditure by the Ministry of Defence is to attract and recruit the best personnel for the armed forces. In the current financial year, the MOD has to date had approval from the Cabinet Office efficiency and reform group to spend £12 million on recruitment marketing operations to fund general service recruitment activities. A further £18 million was approved for specific recruitment marketing campaigns to address pinch points. The efficiency and

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reform group is due to decide soon whether to grant a further request for £250,000 for marketing operations and just under £3 million for pinch point campaigns. Further requests may arise during the course of the year. Like all Departments, the MOD seeks to minimise the cost of advertising. Spending has, for example, been reduced from nearly £60 million in 2009-10.

Mr Bone: I thank the Minister for that full response. It does seem a little strange that we are spending money on advertising for the Army at the same time as we are making members of the armed forces redundant. On the surface, it looks strange: would the Minister comment?

Mr Robathan: I know that my hon. Friend has a personal interest in the armed forces as his son is a Chinook pilot who is still flying—I pay tribute to him. His son could probably explain that one needs a constant flow of recruits into the armed forces as otherwise one ends up with an age gap. That has happened in the past—I recall it happening in the 1970s, under the Labour Government of Wilson-Callaghan—so one must continue to recruit; otherwise one ends up with a great gap in skills and ages that is very difficult to fill. A constant age structure is needed throughout the armed forces.

Afghan National Security Forces

9. Jason McCartney (Colne Valley) (Con): What plans he has for the future involvement of UK troops in the mentoring and training of the Afghan National Security Forces. [123720]

12. George Eustice (Camborne and Redruth) (Con): What plans he has for the future involvement of UK troops in the mentoring and training of the Afghan National Security Forces. [123723]

The Secretary of State for Defence (Mr Philip Hammond): UK forces will continue to mentor and train the Afghan army and police as they progressively assume responsibility for security operations over the next two years. The Government are clear that our support to Afghanistan will endure long after the end of our combat operations in 2014. That is in our national interests and in line with the long-term commitment made by the international community at the Chicago summit in May.

NATO is currently working to refine the detail of its training, advisory and assistance mission in Afghanistan after 2014, but the UK has already committed to lead the new Afghan national army officer academy near Kabul, which is under construction.

Jason McCartney: One of my constituents, Private Thomas Wroe, who was just 18, went to the aid of an Afghan policeman last month but was murdered in a cowardly way. Will my right hon. Friend ensure that during the draw-down our troops are protected as much as possible from these green on blue attacks? Will he also join me in praising the hundreds of people from Kirklees and Huddersfield who turned out last Thursday to pay tribute on the homecoming of Corunna Company, 3rd Battalion the Yorkshire Regiment?

Mr Hammond: I know that every Member will join me in condemning these attacks and those who perpetrate them in the strongest possible terms. We were all deeply shocked by the cowardly act that resulted in the death

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of Private Wroe and his colleague in 3 York, Sergeant Gareth Thursby. I know that the thoughts of the whole House will be with their families and friends.

We continue to work with our ISAF and Afghan partners to reduce the risk to an absolute minimum, but I am clear that we will not allow these cowardly attacks to deter us from our strategy or our commitment to the mission in Afghanistan. I am sure that all hon. Members will join me in congratulating the people of Kirklees and Huddersfield on turning out in strength to demonstrate their support for the units of the armed forces that are particularly connected with those communities.

George Eustice: As long ago as 2006 I saw on a visit to Afghanistan some of the excellent work our forces were doing to train the Afghan army. Given that six years later we still appear to have more work to do, how confident is my right hon. Friend that the transition of security responsibility to Afghan forces will be completed by 2014?

Mr Hammond: Commanders on the ground are confident that it will be completed by 2014. Yes, we still have more work to do, because Afghan security forces have been expanding dramatically since the time six years ago to which my hon. Friend refers. Afghan forces are taking more initiatives on their own. They are planning their operations, leading on almost all operations and acting alone or as the primary force on many of them. They have recently started to conduct much more sophisticated operations—for example, flying raids using night vision goggles. This is a very important step for them and we are very confident that by the end of 2014 Afghan national security forces will be capable of containing the insurgency as ISAF forces withdraw.

Huw Irranca-Davies (Ogmore) (Lab): Families who suffer bereavement or veterans who suffer injury in Afghanistan know that when they return local authorities currently have the power completely to exempt war disablement pension and war widow’s pensions when means-testing for council tax benefit. Does the Secretary of State agree that under the new system local authorities should continue to ensure that the full disregard is given for those benefits in England and Wales?

Mr Hammond: I agree with the hon. Gentleman in principle, and will look into his specific question, although I doubt whether we have the power to direct local authorities in Wales. I suspect that is a matter for the Welsh Assembly Government, and I know that he will take it up with the relevant authorities.

Mrs Madeleine Moon (Bridgend) (Lab): The RAF tactical medical team provides the only consultant-led, blue-light rescue service across ISAF. It is highly regarded, giving those whom it rescues and treats a 25% greater chance of survival. Will he ensure that at least a basic capability is passed on to the Afghan national security forces, so that they too will have the confidence of knowing that they have rescue services that can support them?

Mr Hammond: I cannot give the hon. Lady any specific assurances about the form of continuing enablement post-2014, but I can assure her that ISAF commanders are acutely aware of the effect on Afghan morale of

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having high-quality medical support services available. One issue that will be addressed over the next two years will be how best to deliver that in a way that is sustainable post-2014.

Sir Nick Harvey (North Devon) (LD): When my right hon. Friend made his welcome comments last week about reducing the number of British troops in Afghanistan next year, was he signalling a change from the agreement at the Lisbon NATO summit of “in together, out together”? Or will he confirm that decisions will continue to be taken with our key allies, most notably the US, which is a little preoccupied at the moment? How soon does he expect the US to make the decisions, and will those not be all-important?

Mr Hammond: I can reassure my hon. Friend that there is no change in policy. Over the last couple of weeks, I have been able to pass on the rather good news that commanders in theatre now believe, given the situation on the ground and the role that Afghan security forces are increasingly playing, that it should be possible to achieve a further significant draw-down in forces before the end of 2013. I can assure him, however, that the principle of “in together, out together” remains. ISAF will take these decisions together, and I expect them to be made once the new US Administration is formed early in the new year.

Veterans (Support)

10. Jack Dromey (Birmingham, Erdington) (Lab): What recent discussions he has had with ministerial colleagues on increasing support for veterans in finding work. [123721]

15. Martin Horwood (Cheltenham) (LD): What support his Department is providing for veterans seeking employment; and if he will make a statement. [123726]

The Minister of State, Ministry of Defence (Mr Mark Francois): With permission, I shall answer these questions together as I understand that they have actually been grouped.

The MOD regularly meets the Department for Education, the Department for Business, Innovation and Skills, the Department for Work and Pensions and others regarding initiatives to assist service leavers in making a successful transition to civilian life. Prior to leaving, all service personnel are entitled to some form of resettlement assistance, consisting of time, money and training, according to length of service. Those who serve six years or more, and all those medically discharged, regardless of how long served, are entitled to the full resettlement programme, which includes a three-day career transition workshop, the use of a career consultant, a job-finding service, retraining time and a retraining grant.

Jack Dromey: To leave the armed forces is to lose a way of life. Does the Minister not accept that we have a triple obligation to our heroes—never to short-change them by making them redundant within days of their enjoying a full pension; always to ensure that they get the support necessary to re-enter civilian life; and, crucially, to honour their past service to this country?

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Will he therefore take this opportunity to apologise to the House and the Royal Fusiliers for the actions of one of his fellow Ministers last week, who wrongly sought to exclude those brave men from the Public Gallery?

Mr Francois: I do not believe that my right hon. Friend attempted to do that. The hon. Gentleman’s first point was addressed directly in an earlier answer by my right hon. Friend the Secretary of State. I agree that we should endeavour to do the best for our service men and women when they leave the service—it is part of the armed forces covenant—and on that I can offer the hon. Gentleman some specific good news and one direct example: BT is set to bolster its current work force by recruiting 250 further engineers from service personnel already committed to leaving the armed forces. That will make a total of 1,000 people whom BT has taken on under that heading, and we welcome that.

Martin Horwood: Given the worrying statistics on the problems faced by ex-service people in gaining employment, would Ministers be interested to hear that 1 Rifles is working with Omega Resource Group from my constituency in developing veteran-specific employment programmes? Is that something they would like to hear more about, and should it be considered in Lord Ashcroft’s review?

Mr Francois: I would indeed be interested to hear more about that, as I am sure will be Lord Ashcroft. I know for a fact that, for instance, the Rifles have been working on projects to help seriously wounded ex-servicemen to engage in archaeology. A number have gone on to study archaeology or have applied to study it in further or higher education as a result of that initiative. The Rifles have an active programme in this regard, and we commend them for it.

Service Personnel Children

13. Rehman Chishti (Gillingham and Rainham) (Con): What steps the Government are taking to extend support in education for the children of current and former service personnel. [123724]

14. Mr Marcus Jones (Nuneaton) (Con): What steps the Government are taking to extend support in education for the children of current and former service personnel. [123725]

The Minister of State, Ministry of Defence (Mr Mark Francois): The Ministry of Defence and other Departments have made important changes in service children’s education. We have introduced the service pupil premium, and we have extended it to children of military personnel who have died in service and to eligible service children whose parents have left the armed forces. In addition, the MOD introduced the support fund for state schools with service children. The new schools admissions code now enables infant schools in England to treat the children of UK service personnel as a permitted exception to class size regulations. That means that infant schools may admit service children and increase the class size to more than 30 if they feel they have the resources to do so.

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Rehman Chishti: Will the Minister join me in welcoming the community covenant recently agreed in my constituency in Medway, which has been supported by well over 50 local companies?

Mr Francois: I most certainly will. As the Secretary of State has already said, more than 150 local authorities have signed the community covenant, and we are now on track to get to 200. They are coming in fast, which gives us the nice problem of tracking them as they come in. If I can give my hon. Friend another example of how the scheme works in practice, Oxfordshire county council has amended its admissions procedures so that service personnel who apply to move their children into an Oxfordshire school before they move to Oxfordshire can use a British Forces Post Office number on the application form. That might sound like a small thing, but prior to the change service personnel could not apply for a school place until they had moved into an area. Allowing service personnel to apply in advance of their children moving to an area materially affects their family’s quality of life. I commend Oxfordshire county council for its initiative and I hope others will copy it.

Mr Marcus Jones: I welcome the recent announcements made by the Minister, which clearly demonstrate that this Government are doing their bit to honour the military covenant. Can my right hon. Friend say what steps are being taken to help those children who have been bereaved to go on to higher education?

Mr Francois: Yes, I can. The coalition programme for government included an undertaking to provide

“university and further education scholarships for…children of Service”


“who have been killed on active duty since 1990”.

The aim is to provide a head start in life, enabling bereaved service children to obtain higher education qualifications. The education scholarship scheme was launched on 8 April 2011 and, where the criteria are met, provides further education and university scholarships for the children of servicemen and women who died while serving in Her Majesty’s armed forces.

Topical Questions

T1. [123736] Mrs Madeleine Moon (Bridgend) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Defence (Mr Philip Hammond): My departmental responsibilities are to ensure that our country is properly defended, now and in the future, through delivery of the military tasks for which the MOD is mandated. My first priority is and will remain the success of the operation in Afghanistan. The Ministry of Defence has also embarked on a major project of transformation to ensure the behavioural change needed to maintain the budget in balance and deliver the equipment programme, so that our armed forces can be confident of being properly equipped and trained. With many of the most difficult decisions needed to put our defences on a sustainable basis having been taken, and with the

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benefit of a balanced budget to build on, we now need to focus on the future, and in particular on building the trust and confidence of the people who make up defence.

Mrs Moon: Small and medium enterprises such as Aircraft Maintenance Support Services in my Bridgend constituency provide invaluable support and enablement to combat troops. They send their employees out to ensure that equipment is available for troops to use outside the bases. Does the Secretary of State agree that we owe a huge debt of thanks to those private sector companies that ensure that our troops are appropriately equipped to take part in active service?

Mr Hammond: I absolutely agree. I always make the point clearly that there are three legs to our defence: the armed forces, regular and reserve; the civilians who support them; and the contractors—the hundreds of thousands of people working in the defence and defence support industries who provide and maintain equipment so that our troops can do their job.

T3. [123738] Nick de Bois (Enfield North) (Con): Given the outstanding contribution of our reserves to the armed forces, will the Minister please update the House on the progress of the Green Paper?

Mr Hammond: The Green Paper on our plans for the reserves is expected to be published around the end of this month or early next month.

Alison Seabeck (Plymouth, Moor View) (Lab): I, too, welcome the new Front-Bench team. Two and half years into this Government, there is a hiatus in the decision making on Defence Equipment and Support. Ministers’ views seem to ebb and flow, and indecision is rampant. We need clarity, so when exactly will the Minister set out plans for a Government-owned contractor-operated body—a GoCo—or whatever other body he intends to bring forward?

The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne): The hon. Lady talks about a hiatus. There were 13 years during which the previous Administration made no attempt to transform procurement within the Ministry of Defence, but this Government are determined to make procurement efficient and effective so that our armed forces can be given the right equipment at the right time and at the right cost. In July, my right hon. Friend the Secretary of State announced an investigation into the GoCo route, narrowing the options for Defence Equipment and Support. A value-for-money exercise is nearing completion, and we expect to make a decision before the end of the year on whether to move forward.

T4. [123739] Jeremy Lefroy (Stafford) (Con): What progress is being made on moving bases from Germany to the United Kingdom, and to Stafford?

The Minister for the Armed Forces (Mr Andrew Robathan): My hon. Friend might know that the 1st Armoured Division’s signal regiment, based at Herford, and the 16th Signal Regiment, based at Elmpt, will move to Beacon barracks in Stafford in the second half of 2015. A competition is under way between four

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bidders to develop the main site, and we hope to let a contract for that development in the summer of next year.

T2. [123737] Angela Smith (Penistone and Stocksbridge) (Lab): There is a degree of confusion over what happened in last Thursday’s debate, so may I ask the Secretary of State to confirm that the Minister for the Armed Forces approached the Speaker’s Chair about the conduct of Fusiliers in the Public Gallery?

Mr Robathan: I am grateful to the hon. Lady for letting me set the record straight. I have the greatest respect for ex-service personnel, including the Fusiliers who were in the Chamber last week. By the way, I do not think that the hon. Lady was in the Chamber that day, so she does not speak with great effect, does she? Furthermore, I believe that anybody should be allowed to watch our proceedings from the Gallery, because that is an important part of our democratic process. May I finally say that what she alleges is entirely untrue?

T5. [123740] David T. C. Davies (Monmouth) (Con): I shall be pleased to be wearing the Queen’s Jubilee medal for service to the police on Remembrance Sunday this year, but that service pales into insignificance compared with the service given by the Arctic convoy veterans. Should not the Government recognise—or allow the Russian Government to recognise—their heroic role in defeating national socialism?

The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison): I thank my hon. Friend for his question; he has taken a long-standing interest in these matters. I should also like to add my strong thanks to those who served in that particularly unpleasant theatre during the second world war. He will know that, earlier this year, Sir John Holmes began to undertake an independent review of the rules applying to military medals and that, on 17 July, he reported his findings, which appeared in the form of a written ministerial statement. Further work has been commissioned by the Prime Minister, including a re-examination of issues that have been the subject of past campaigns, such as the Arctic convoy medal. The outcome of Sir John’s further work is expected by the end of the year.

T6. [123741] Mrs Mary Glindon (North Tyneside) (Lab): Last Thursday, the House voted to oppose the disbandment of the 2nd Battalion the Royal Regiment of Fusiliers. Will the Government now have the humility to accept that Commons decision?

Mr Robathan: May I say that we had an excellent debate? I have to say that I found myself in a minority of one when it came to speeches defending the Government’s position. We had an excellent debate and we listened carefully to what was said, but I do not think that, at the moment, it is the House’s intention for a vote in such a debate to be binding upon the Government.

T7. [123742] Andrew Jones (Harrogate and Knaresborough) (Con): Does my right hon. Friend agree that support across society for the work of our brave servicemen and women in keeping our country safe is ever more widely recognised? Will he welcome the support of businesses for the new defence discount scheme and encourage more businesses to get involved in it?

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The Minister of State, Ministry of Defence (Mr Mark Francois): Yes, we do indeed welcome the support of businesses for the defence discount scheme, which will offer servicemen, veterans and servicemen’s families a number of discounts in a range of high street businesses across the country. People may already register for the scheme now, but we hope within the next few months to progress the scheme by giving them a card bearing their name, which will make it easier to prove their membership when they enter one of the participating companies. We believe this will be valuable to the people concerned, and we commend those businesses that are participating in the scheme.

Dan Jarvis (Barnsley Central) (Lab): The 2012 armed forces continuous attitudes survey provides some very concerning information, particularly in respect of the Army. Only 52% of soldiers are satisfied with service life; the trend of declining morale has continued, with only 18% reporting high morale across the Army; and only 33% of soldiers questioned felt valued. Does the Secretary of State share my concern at these figures, and, if he does, what is he going to do about them?

Mr Philip Hammond: Yes, of course we are concerned about morale in the Army, which I have previously described as “fragile”. We have been through a period of enormous change—budget retrenchment, necessary redundancies, reorganisation and rebasing. What we can do now is try to get this process completed as quickly as possible, so we can return to some certainty whereby people are able to plan their personal futures. As I said just a few moments ago, we have the challenge of starting to rebuild the trust and confidence of people in the armed forces around the armed forces of the future. I am confident that, despite being smaller, our future armed forces will be highly capable, valued and very well respected.

T8. [123744] Rehman Chishti (Gillingham and Rainham) (Con): Will the Secretary of State clarify whether the United Kingdom has shared intelligence on locations with the United States leading to drone strikes in Pakistan? If so, will he explain the legal justification for sharing such information?

Mr Hammond: We do not discuss in this Chamber matters relating to intelligence. I can tell my hon. Friend that there is a need for effective action in the Pakistani tribal areas and that there is a need for that action to be owned by the Pakistanis. The United States operates in Afghanistan under a different basis of law from the one under which we operate. I can assure my hon. Friend and the House that everything we do complies with the law under which we operate.

Hugh Bayley (York Central) (Lab): One of my constituents served on the Arctic convoys during the second world war. Like many others, he has been advised not to accept a medal offered by the Russian Government. I was heartened by the Minister saying that this matter would be reconsidered and a decision taken by the end of the year. May I ask him to reflect on the fact that other British Commonwealth countries—Australia, New Zealand, Canada—have advised that this medal can be

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accepted and that it is hardly surprising the offer was not made earlier when there was a communist Government in Russia?

Dr Murrison: Sir John Holmes, in his excellent review published in July this year, accepted all the principal parts of the rules that go behind or underpin medalling in this country. We have to accept that the integrity of our medalling system is peerless. Nevertheless, Sir John will report further towards the end of the year on the rules that apply to medalling and will deal specifically with the Arctic convoy and various other circumstances.

T9. [123745] Martin Horwood (Cheltenham) (LD): Following the failure of the talks between EADS and BAE Systems, will the Government tell us about any more promising avenues for European defence co-operation that they are pursuing?

Mr Philip Hammond: It is not for the Government to pursue arrangements for the future of BAES, EADS or any other company, but we will of course listen carefully with an open mind to any proposals brought to us by any of these companies. Where we hold a golden share—a veto share—we will allow any such transactions to proceed only where the United Kingdom’s vital national interests can be protected.

Peter Luff (Mid Worcestershire) (Con): When does my right hon. Friend expect the National Audit Office’s assessment of the affordability of the defence equipment programme to be published?

Mr Hammond: Shortly.

Jack Lopresti (Filton and Bradley Stoke) (Con): Given the Secretary of State’s past comments about the failure of the private sector to fulfil its obligations in regard to

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Olympic security, does he have similar doubts about the outsourcing of procurement at Defence Equipment and Support, which is based in my constituency?

Mr Hammond: I think that my hon. Friend is referring to comments about the security arrangements for the Olympic games. Let me say this: there are things that are best done in the sector, and there are things that are better done in the private sector. Our proposals for DE and S are an attempt to get the best of both worlds by bringing in private sector management expertise to work alongside highly skilled civilian and military professionals who have specialist knowledge of military procurement.

Sir Bob Russell (Colchester) (LD): I am grateful to the Prime Minister for coming into the Chamber to hear my question.

The Secretary of State will now be aware that the Defence Committee has written about the future of Garrison Radio, in the context of local radio not just at Colchester but at Catterick. Will a statement be made today about preventing the British Forces Broadcasting Service from snuffing out local Garrison Radio services?

Mr Francois: On behalf of the Prime Minister, I thank the hon. Gentleman for his kind comments.

I am aware of the issue involving the BFBS and Garrison Radio. I understand that Garrison Radio tendered for the work initially, but that unfortunately its tender was not entirely successful. I believe that the Future Forces Broadcasting Service will be able to provide a perfectly adequate service, but if the hon. Gentleman—who I know represents a valuable garrison—is still dissatisfied, I shall be willing to meet him personally to discuss the matter.

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European Council

3.31 pm

The Prime Minister (Mr David Cameron): With permission, Mr Speaker, I shall make a statement on last week’s European Council.

The European Union faces important choices in the coming months in order to meet tough economic challenges and deal with problems in the eurozone. There were no landmark decisions at this Council, but there was some limited progress on both issues.

As I have said, we are in a global economic race, and all European economies need to become more competitive. That means taking steps such as expanding their private sectors, reforming welfare and improving education. In terms of action at European Union level, we believe that it means lifting the burdens on businesses, completing the single market, and taking forward trade deals with the biggest economies and the fastest-growing countries and regions in the world. I have consistently promoted those solutions, and at the Council we made some progress.

On deregulation, I joined others to secure a new agreement that specifically refers to withdrawing legislative proposals from Brussels that stifle our businesses. Of course, we now need to see specific actions, but it is worth noting that the conclusions refer to the

“intention to withdraw a number of pending proposals and to identify possible areas where the regulatory burden could be lightened”.

On completion of the single market, as I reported in June, there is now a proper plan with dates and actions for completing the market in energy, services and digital, but once again it is important for that to be followed through in order to secure jobs and growth.

On trade, the Council agreed on an ambitious agenda to create 2 million jobs across Europe. That includes completing free trade deals with Canada and Singapore in the coming months, and starting negotiations with the United States next year on a comprehensive transatlantic trade and investment agreement. We made some new progress on launching negotiations with Japan “in the coming months.” That deal alone could increase European Union GDP by €42 billion.

Let me now turn to the eurozone. Britain is not in the eurozone and we will not be joining the eurozone, but it is in our national interest for the uncertainty surrounding the eurozone to end. I have argued for some time that a working eurozone needs a working banking union. It is one of the features that a successful single currency needs. Obviously you do not need a banking union because you have a single market; you need it because you have a single currency—so Britain should not, and will not, be part of that banking union.

Britain’s banks will be supervised by the Bank of England, not by the European Central Bank, and British taxpayers will not be guaranteeing or rescuing eurozone banks, but we do need eurozone members to get on with forming a banking union. At the Council, I joined those who were arguing for progress to be made on the plan that had been announced in June. To put it simply, I believe that it is not enough to have a banking union that is stripped of the very elements—such as mutualised deposit guarantees, a common fiscal backstop and a

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framework for rescuing banks—that are needed to break the dangerous link in the eurozone between sovereign debt problems and the stability of eurozone banks. But because not all countries outside the eurozone—like Britain—will want to join such a banking union, it is also essential that the unity and integrity of the single market is fully respected. The organisation that currently ensures a level playing field for banking within the single market is the European Banking Authority. We need to make sure that it will continue to function properly, ensuring fair and effective decision making. This, again, is specifically recognised in the conclusions. More broadly, as eurozone countries take steps to deepen their economic and monetary union—as they will—it is important that we secure, as I did, an explicit commitment in the conclusions that the final report and road map in December will include “concrete proposals” to ensure that the integrity of the single market is respected.

Finally, the next Council in November will discuss the financial framework for Europe between 2014 and 2020. We have not put in place tough settlements in Britain in order to go to Brussels and sign up to big increases in European spending. I do not believe that German voters want that any more than British voters, and that is why our Governments have led the argument in Europe for fiscal restraint, so I put down a marker that we need a rigorous settlement. As the letter signed in December 2010 by a number of European leaders said, given the tough spending settlements that all member states have had to pursue in their own countries,

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives”.

On foreign affairs, the Council, led by Britain, once again discussed further restrictive measures on the Syrian regime, and made clear to Iran that we will increase the pressure if there is no progress on the nuclear dossier.

Making our economies competitive, dealing with uncertainty in the eurozone, keeping the EU budget under proper control, and making sure the EU speaks with a strong and united voice on the key international challenges: this is our agenda, and I commend this statement to the House.

3.36 pm

Edward Miliband (Doncaster North) (Lab): I thank the Prime Minister for his statement and associate myself entirely with the summit’s conclusions in particular on Iran and Syria. The dangers of the civil war in Syria spilling over into the wider region are now all too apparent, and we strongly support the EU playing its part to seek to prevent this from happening.

The backdrop to this summit is that across Europe there is low or no growth. I am afraid on this fundamental issue the Prime Minister has yet again returned from a European summit with nothing to offer. So, first, can he tell us whether he had any responses to the proposals on the immediate growth crisis facing Europe that he took to the summit? Europe urgently needs co-ordinated action to boost demand, with those countries with the scope to do so taking action, but yet again there was nothing from the summit.

Secondly, on the single market—which the Prime Minister makes great play of—he admitted that this summit simply reaffirmed what was agreed in June, but will he agree that the situation is actually slightly different

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from then? On energy, will he confirm that the conclusions were exactly the same as the Council’s conclusions 18 months ago? On digital, they sounded familiar to me, too, and there is a reason: they were exactly the same as they were in October 2011—a year ago. So when he said at his summit press conference, with characteristic humility:

“Who is driving that agenda”—

on energy, on digital—

“which has made so much progress this year? It’s Britain”,

what did he mean by that, because there has been no progress over the last year?

Thirdly, on banking, there are big issues facing financial services as others move towards a banking union, but the summit conclusions are vague at this stage. So can the Prime Minister clarify for us what his key demands are in relation to the crucial issue of voting rights, as banking union goes ahead? Can he tell us what specific safeguards he will be seeking, and can he tell us how he will be building support for his position among our allies—using his enormous popularity, which he has built up over the past two and a half years?

That takes me to the real problem the Prime Minister faced at this summit. At home last week, he was starring in his own version of “The Thick of It”. In Europe he was offering another chapter in his handbook of “How to Lose Friends and Influence”. This is what Finland’s Europe Minister said—[Interruption.] Those on the Government Benches do not like to hear about their lack of influence in Europe. This is what Finland’s Europe Minister said at the summit:

“Britain is…putting itself in the margins...the boat is pulling away and one of our best friends is somehow saying ‘bye bye’ and there’s not really that much we can do about it.”

[Interruption.] Some on the Government Benches are saying, “Hear, hear,” about leaving Europe; there is the problem for the Prime Minister.

That is not the French or the Germans talking—it is Finland. Even the Prime Minister cannot be glorying in fisticuffs with Finland. It is the land of the Helsinki accords, reindeer and the Moomins. Its Europe Minister is an anglophile; he is one of Britain’s friends. The Prime Minister does not seem to realise that all his bluster about fighting for Britain is meaningless if he alienates our natural supporters. Will he confirm that he really has become the guy who goes to Europe and picks a fight in an empty room? That is just as well, because he normally finds himself in an empty room.

The Prime Minister was asked about his isolation, and this is what he had to say:

“We are actually a very, very important and influential player…right there in the vanguard.”

If he thinks that, the problem is not that he is isolated, it is that he is completely deluded about the arguments going on in Europe. Last October, he said:

“This is not the time to argue about walking away”.—[Official Report, 24 October 2011; Vol. 534, c. 27.]

But that is exactly what his Cabinet is now doing. [Interruption.] The Education Secretary has chosen to walk away from this statement, but the Eurosceptic beauty contest has begun, with the Education Secretary, the party chairman and others joining the fray. The

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reality is that the Prime Minister has lost control of his party on Europe. We have a Prime Minister who is outside the room looking in at Britain’s empty seat at the table. There is one thing that our allies in Europe and the British people can agree on—his Government are a shambles and it is Britain that suffers.

The Prime Minister: I am sure that there was a question in there somewhere. Frankly, I am not going to take any lectures on Europe from a party that gave up part of Britain’s rebate and got nothing in return; that gave up the social chapter and got nothing in return; and that joined the EU bail-out fund and got absolutely nothing in return. It is this Government who introduced the referendum lock, who got us out of the bail-out mechanism and who will always stand up for Britain in Europe.

I think that the right hon. Gentleman did ask a question somewhere at the beginning: what did Britain bring to Europe’s growth crisis? We brought, last week, falling unemployment, falling inflation and a million more people in work. He asks what we want in terms of banking union safeguards. We want single market safeguards, but I note that he had absolutely nothing positive to suggest on any of these agendas at all.

The right hon. Gentleman talks about Britain’s influence in Europe. The single market in digital, in energy and in services is a British agenda that we are driving forward. He says that there has been no progress. There were never, under his Government, dates and specific actions for completing these markets, but there are now. Oil sanctions on Iran is a British agenda that we have succeeded in driving forward; pressure on Syria and support for the Arab spring countries is a British agenda; and trade deals with the US and with Japan, not just with Canada and Singapore, is a British agenda.

What else did we get from the right hon. Gentleman? He talked about what I was doing at the European Council, but it is worth remembering that when I was there he was, of course, preparing for his great trade union sponsored march. I thought that the House might welcome an update on how the sponsored walk went: Unite union—£6 million; Unison—£3.2 million; and the GMB—£3.2 million. That is what he was doing—calling for general strikes and disruption—when we are fighting for Britain.

Sir Peter Tapsell (Louth and Horncastle) (Con): When the Prime Minister made it admirably clear to Chancellor Merkel that Britain would not permit the European Banking Authority or the European Central Bank to have any control or oversight of the Bank of England, what was her response?

The Prime Minister: The point I would make to Chancellor Merkel—we do not actually fundamentally disagree about this—is that the single currency needs a banking union. At the heart of that banking union will be the ECB, with a new role as a banking regulator. But clearly as this country is not in the single currency our banking regulator will continue to be the Bank of England, and there will not be any question of the ECB having a say over the Bank of England—that is not the situation. Strangely enough, in a way the challenge is to persuade countries of the eurozone to go far enough in having a banking union that will help to break the link

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between banks that are in difficulty and sovereigns that are in difficulty. Just as we have a solid banking union for our single currency in the United Kingdom, they need a solid banking union for their single currency in the eurozone.

Kate Hoey (Vauxhall) (Lab): Did the Prime Minister make it clear—by the way, his use of “United Kingdom” versus “Britain” is improving, but it is not yet good enough—to the other European leaders that we would not contribute towards any of the millions of pounds that the European Commission wishes to spend to tell every European Union citizen how wonderful the EU is? Is that not a ridiculous waste of money?

The Prime Minister: I am very grateful to the hon. Lady for her school report and I shall continue to try to improve on my use of “United Kingdom” rather than anything else. On the issue of what the European Commission and European Union spend, as we get into this budget debate we should still look at the 6% of the money spent on the EU’s central costs and the fact that, as I said at the weekend, some 16% of Commission officials are paid more than €100,000 a year. Okay, 6% is a small percentage of the total but it is still meaningful in getting a good budget deal.

Mr William Cash (Stone) (Con): I commend my right hon. Friend and the Financial Secretary for so far complying with the European scrutiny rules on these banking proposals. Now my Committee has been able to recommend them for debate, and an early debate at that. However, given the reported advice of the Council’s legal adviser and the inherent impact of the proposals on our national interest, will he veto the proposals, not least because the proposed voting changes would expose the City of London to qualified majority voting, which would be very damaging to it?

The Prime Minister: The European Union is going about this change to banking union through a treaty base that requires unanimity, so Britain has a full part in the discussions; but I do not want us to veto proposals for a banking union for the eurozone because I think the eurozone needs a banking union. We should be putting our negotiating heft, as it were, towards ensuring that those of us remaining outside the banking union have proper safeguards. Let me make one last point: I am sure that my hon. Friend knows that a lot of financial services regulation in the European Union is already done by qualified majority voting.

Mr Denis MacShane (Rotherham) (Lab): If a referendum were held tomorrow, the Prime Minister would be in my camp in voting to stay in the European Union. According to one of Lord Rothermere’s organs, the Secretary of State for Education said that if there were a referendum today on whether the UK should cut its ties with Brussels, he would vote to leave. What is the Cabinet position? Is it that of the Secretary of State, who is an out-er, or that of the Prime Minister, who, like me, is an in-er?

The Prime Minister: I hate to disappoint the right hon. Gentleman, but we are not having an in-or-out referendum on the European Union tomorrow. I want us to achieve a new settlement between Britain—the

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United Kingdom—and the European Union and to put that new settlement to fresh consent. That is what should happen. I think that the idea of an in/out referendum is wrong, because I neither support the status quo nor think that leaving is the right answer.

Mr John Redwood (Wokingham) (Con): I warmly welcome the Prime Minister’s wish to have a new settlement with the European Union and encourage him to negotiate just that. Is not our veto over a six-year budget perspective for which the others want a huge expansion of spending the opportunity to negotiate that new settlement?

The Prime Minister: The point about the European budget is that we need to maximise our negotiation leverage on that specific issue, as we are part of this union and we want it to have a sustainable budget. As I wrote in the letter of 18 December 2010,

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives”—[Interruption.]

The shadow Chancellor asks from a sedentary position what our leverage is, and it is very simple. The decision must be agreed by unanimity. Tony Blair, when he sat in that seat, gave up our rebate without any need, but we will not do that.

Keith Vaz (Leicester East) (Lab): Were there any discussions, either at the summit or in the margins, about the acute immigration crisis facing Greece? As the Prime Minister knows, last year 100,000 illegal migrants crossed from Turkey to Greece. This year, 100,000 Syrians have moved into Turkey. Would the Prime Minister be prepared to contribute to additional rapid border intervention team—RABIT—forces on the border between Greece and Turkey to try to ease that crisis?

The Prime Minister: The Greek Prime Minister, attending his first European Council, raised that issue, which is clearly putting pressure on Greece. As the right hon. Gentleman knows, the British Government’s position is that we should continue to support the organisations that deal with these issues, such as Frontex. If there is pressure for more resources, we can consider that. We should always bear in mind, however, that when it comes to migration into Europe it is the countries of the north, including Britain, that face the greatest pressure from asylum claims.

Martin Horwood (Cheltenham) (LD): Since the Government have raised the possibility of opting out of the European arrest warrant, which is vital for tackling human trafficking, organised crime and terrorism, did any of our European partners at the summit express the worry that Euroscepticism might make the UK go soft on crime?

The Prime Minister: No one mentioned that to me, no.

Mr Dennis Skinner (Bolsover) (Lab): Has the Prime Minister not realised yet why those others in Europe do not take very much notice of what he has to say? Does he not realise that they work it out that this Prime Minister is being constantly undermined by the antics of his Chancellor of the Exchequer, the ex-Chief Whip, Boris Johnson—it goes on for ever? This heir to Blair has suddenly become like John Major all over again.

The Prime Minister rose—

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Mr Speaker: Order. I know the Prime Minister will reply with very specific and focused reference to the deliberations of the European Council.

The Prime Minister: Those are all subjects that were not discussed in any great depth at the European Council.

Jacob Rees-Mogg (North East Somerset) (Con): I am sorry not to be able to follow the humorous line that we had from the hon. Member for Bolsover (Mr Skinner), but in the unanimous negotiations required for a European banking union, will the Prime Minister try and repatriate powers that are currently subject to qualified majority voting?

The Prime Minister: My hon. Friend asks an important question. We need to see how the banking union proposals develop. We do not yet know whether it will be a full-on banking union or a restricted banking union. We do not know for certain the treaty base that will be pursued. If it is pursued on a basis of unanimity, it is absolutely key to make sure we safeguard the single market. I am very conscious of the fact, sitting round that table, that I am responsible for 40% of the European Union’s financial services industry. That, I think, must be our focus during these negotiations.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): Could the Prime Minister clarify whether he intends to opt in or out, or out and back into the European arrest warrant, bearing in mind that it was recently used to bring Jeremy Forrest, the maths teacher who disappeared with Megan Stammers, back to the UK?

The Prime Minister: This issue has been discussed at great length by the Home Secretary, who set out in great detail in the House of Commons recently that we are minded to exercise the opt-out that the previous Government put in place, but there are safeguards that we want to seek for the arrest warrant.

Mr Bernard Jenkin (Harwich and North Essex) (Con): Does my right hon. Friend share my concern that the development of a eurozone banking union demonstrates how the UK is increasingly finding itself in the worst of all possible worlds—bound and directed by a qualified majority that is solid in the eurozone? May I remind him that we already have a European Banking Authority which is based in London and operates by qualified majority vote?

The Prime Minister: I go a certain way with my hon. Friend, but the point is that the proposals for banking union have to be agreed by unanimity, so that is an important safeguard for Britain. But I do not think it would be in our interests to stop the eurozone putting in place something that a single currency needs in order to function. Our economy is suffering today because of uncertainty in the eurozone. Those high interest rates in Spain, Italy, Greece and Portugal affect us too, and they need action, including a banking union. We in the United Kingdom have a single currency—the pound sterling—and we are going to keep it. It works—and it works partly because we have a banking union. The countries of the eurozone need one too, so blocking it just for the sake of it does not make sense.

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Wayne David (Caerphilly) (Lab): On completing the single European market in energy and digitalisation, there has been no change. Is that what the Prime Minister considers progress?

The Prime Minister: I think the hon. Gentleman is wrong, in that for the first time there is a series of actions and dates that have to be completed by a specific time. If he reads the growth pact, it is all set out in huge detail. In previous Council conclusions, there have just been warm words, rather than the dates and the actions, and that will make a difference.

Conor Burns (Bournemouth West) (Con): My right hon. Friend will be aware that the biggest issue confronting families in Britain and across the European Union is the cost of living, with rising fuel and food prices and utility bills. In that context, he will have the strong support of Government Members in making it clear to our European partners that large increases in the EU budget would be utterly unacceptable to the British people.

The Prime Minister: I am very grateful for my hon. Friend’s support. If anything, since December, when Chancellor Merkel and the French, Finnish and Dutch leaders all signed the letter, along with me, the debt situation—the deficit situation—has got worse, so the pressure to make sure that we deliver a sensible settlement for the European budget has got even greater. That is why we will be sticking to our guns.

Kevin Brennan (Cardiff West) (Lab): Did the EU deserve the Nobel peace prize?

The Prime Minister: There is a case for saying that the institutions that Europe put in place after the second world war—and I would include NATO as well as the European Union—have played a role in making sure that we settle our problems around conference tables rather than on the fields of Flanders. To that extent, yes, I think that it is right. [Interruption.] Someone says, “Why not go?” We already have three of the five European Presidents going to Oslo to collect this prize, and I suggested that alongside them should be 27 schoolchildren —one from each country.

Mr James Clappison (Hertsmere) (Con): I welcome my right hon. Friend’s statement. When there is a danger of eurozone members taking a common position or, indeed, being required to do so, as is the case with the European Central Bank regulation, is it not absolutely essential that he stands up for Britain’s interests and insists on the safeguards that we need to protect our position in the face of a Europe that is increasingly divided between eurozone and non-eurozone countries?

The Prime Minister: My hon. Friend has absolutely hit the nail on the head. We want the eurozone banking to go ahead, but there are dangers, because if the ECB members voted en bloc in the European Banking Authority, they would automatically have qualified majority voting—that is the problem. That is why the conclusions of the summit include these words:

“An acceptable and balanced solution is needed regarding changes to voting modalities and decisions under the European Banking Authority…Regulation.”

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That is very important conclusions language that we fought quite a battle to secure. My point is that I do not want to veto the banking union, but unless this problem is properly sorted—and Britain has a totally legitimate argument about why it needs to be sorted—we cannot allow it to go ahead.

Gavin Shuker (Luton South) (Lab/Co-op): The Prime Minister has said before that he brings something significant to the EU growth party. Can he inform the House what it is?

The Prime Minister: Among the most important things that Europe can do for growth are trade deals with the fastest growing parts of the world, completing the single market, and deregulating and cutting costs. All those are the agendas that Britain is driving forward and having greater success with than we have had for many years.

Mr Charles Kennedy (Ross, Skye and Lochaber) (LD): On maximising British influence within Europe, in the early days of this Administration the Foreign Secretary gave voice to the aim and ambition of seeing more UK citizens secure positions within the European Commission. Can the Prime Minister give us an update as to how that strategy is working?

The Prime Minister: We are making some progress on this issue. I discussed it specifically with Martin Schulz, the President of the European Parliament, who wants to see more British people involved in the Commission. I do not believe that it has to do with issues about pay; as I pointed out, Commission officials are rather better paid than members of our own Foreign and Commonwealth Office. However, we are looking at all the potential barriers to make sure that Britain is punching its weight in the Commission and elsewhere.

Toby Perkins (Chesterfield) (Lab): As the Prime Minister said goodbye to his Chief Whip, did it occur to him that he might have some difficulty persuading the rest of Europe to listen to what he was saying if he could not even convince his own Back Benchers?

The Prime Minister: This, obviously, was all discussed at great length at the European Council in all sorts of forums. I am delighted to welcome the new Chief Whip, who is in his place and is already doing a great job.

Andrea Leadsom (South Northamptonshire) (Con): Does my right hon. Friend agree that the Leader of the Opposition’s remarks show how completely hopeless he would be at negotiating anything with the EU since he has no policies and his only strategy is to be best mates with them? Does he also agree that it will be essential, with European banking union, that we put in place safeguards against any financial transactions tax for British banks?

The Prime Minister: My hon. Friend makes a good point. Do we know where the leader of the Labour party stands on the EU fiscal treaty? We do not know. Do we know where he stands on the financial transactions tax? We have not got a clue. Do we know what he would do about the banking union? We have absolutely no idea. The Opposition have no positive message, but I

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know what they are up to in Europe. They are members of the European Socialists party, whose president is a Bulgarian who opposes gay pride marches. They have also signed up to scrapping the UK rebate—that is your official policy—and to increasing substantially the EU budget and introducing new EU taxes. They are your mates and that is your policy.

Mr Speaker: Order. I remind the House and the Prime Minister that I do not have any policy on these matters, so I would be very grateful if he did not involve me in this exchange. Secondly, I gently and politely make the point that we are here to talk about the policies of the Government.

Nic Dakin (Scunthorpe) (Lab): Talking about mates, which parties from Latvia did the Prime Minister meet at the Council?

The Prime Minister: I can certainly give a list of people I did not meet—the parties of the European Socialists party, which include the Polish communists, whom the Opposition sit alongside. They also sit alongside Romanian holocaust deniers, and, as I have said, the party’s Bulgarian president opposes gay pride marches. I will not refer to your mates again, Mr Speaker; they are the hon. Gentleman’s mates.

Mr Peter Bone (Wellingborough) (Con): The whole country will be grateful for what the Prime Minister has done, especially because he has said, if I have understood him correctly, that when he is returned as Prime Minister, without the pesky Liberal Democrats in coalition, he will renegotiate with the European Union and put a referendum to the people in which they can vote yes for the renegotiation or no to come out.

The Prime Minister: As I was at the European Council meeting, I am afraid that I missed my hon. Friend’s 60th birthday. I am extremely sorry about that, but I hope that he and Mrs Bone got my belated card.

I think that Europe is changing. The deepening of the eurozone, which will inevitably happen as a result of the problems of the single currency, will open up opportunities for a different and better settlement between countries such as Britain and the European Union. We should pursue that. I have said that we should have both strategic and tactical patience, because the priority right now is dealing with the problems of the eurozone and the firefighting that has to take place, but I think it will be possible to draw up that new settlement and then, as I have said, seek fresh consent for that settlement.

Huw Irranca-Davies (Ogmore) (Lab): On the subject of how to win friends and influence people, there were 15 Heads of State present at a European People’s Party meeting on Thursday night. Having walked away from that group, how many heads of nations did the Prime Minister seek to influence at his dinner later the same evening?

The Prime Minister: I did not have a dinner that evening, so the hon. Gentleman’s question was wrong. [Interruption.] The dinner was all 27 Heads of State and Heads of Government, and I can inform him that it started at 6 o’clock and went on until 3 am. I remind the hon. Gentleman that, when it comes to mates, he has to

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explain why his mates want to scrap the UK rebate, increase the EU budget and introduce new EU taxes. If they are your dinner companions, I would rather not turn up.

Philip Davies (Shipley) (Con): Did the Prime Minister discuss his plans for an EU referendum at the European Council? He may find an in/out referendum undesirable, but I find his in/in referendum equally unacceptable. Only an in/out referendum will do for the British people and it would be very much in the Prime Minister’s best interests if he stopped resisting it.

The Prime Minister: I agree with my hon. Friend about many things, but on this one we do not agree. The problem with an in/out referendum is that it would put two options to the British people, which I do not think really complies with what people want. Many people, me included, are not satisfied with the status quo, which is why the “in” option is not acceptable; but many people—also like me—do not want us to leave altogether, because of the importance of the single market to Britain, a trading nation, so they do not want to be out. That is why I think that an in/out referendum is not the right answer.

Paul Blomfield (Sheffield Central) (Lab): Even before the budget negotiations have begun, the Prime Minister has threatened to veto them. Does that not say volumes about even his lack of confidence in his own powers of persuasion?

The Prime Minister: What I have done before these budget negotiations is work together with other European leaders to set out what I think is acceptable. In the letter that we published on 18 December 2010, we said that

“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives.”

In these negotiations we are dealing with taxpayers’ money and we are already a massive net contributor to the European Union. It is right to set out your position and stick to it, knowing that you have a veto if you need to use it.

George Eustice (Camborne and Redruth) (Con): May I commend the Prime Minister’s decision to stick to his guns and show consistency over the budget by insisting on a real-terms freeze? Does he agree that we will never drive reform in the EU if we continue to give it a blank cheque and allow it to spend whatever it likes?

The Prime Minister: My hon. Friend is absolutely right. Even if there is tough control over the European budget, as I say there should be, there is plenty of room to ensure that the cohesion countries receive the support that they need as their economies develop, to crack down on the administrative central costs, and to continue to reform the common agricultural policy and reduce the agriculture budget, which still makes up about a third of EU spending. There is plenty that can be done to get more money out of what is already spent and to use it more wisely.

Mr Ronnie Campbell (Blyth Valley) (Lab): Surely the Prime Minister must be aware that the vast majority of his Back Benchers are clamouring for a referendum. Why does he not get the money from Ashcroft to pay for it? He gives them millions.

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The Prime Minister: I have explained the position on a referendum. I do not think that an in/out referendum is the answer. The vast majority of the British people want us to be in Europe, but to have a better deal in Europe. That is what we stand for.

Mark Reckless (Rochester and Strood) (Con): So, the Prime Minister wants to renegotiate our membership of the EU and put the new terms to a referendum. However, will that be an in/in referendum or will a no vote end Britain’s membership of the EU?

The Prime Minister: We are getting slightly ahead of ourselves. We need to use the development of the European Union to seek a fresh settlement. There must then be fresh consent for the fresh settlement. There is time to elapse before that can happen because of the immediate firefighting in the European Union, and we can go on discussing it between now and the next election.

Alex Cunningham (Stockton North) (Lab): We have heard a lot today about protecting British interests, but will the Prime Minister set out how he expects to protect those interests from being harmed by closer European fiscal integration, when he did not even guarantee us a seat at the table for the negotiations?

The Prime Minister: My view is that it is inevitable that the eurozone countries will have to integrate further. As a country that is not a member of the eurozone, we must recognise that if those countries are to have a working single currency, they will have to make some changes. I therefore do not think that it would be right to stand in the way of everything that they need to do to build a currency that works. However, as that goes ahead, it is important that we safeguard our interests as a member of the European Union and, as I have said, seek a better settlement for the future.

Sir Tony Baldry (Banbury) (Con): Has my right hon. Friend had the opportunity to see today’s edition of Le Figaro? Its front page declares that punitive taxation has killed the little attractiveness that remained for Paris as a financial centre against the City of London. Will my right hon. Friend continue to be a champion for London?

The Prime Minister: I have not seen that front page, but given all the other front pages that there have been recently, I think that I should go away and read it at once. It is important that Britain remains attractive for investment, business, enterprise and start-ups. We are in a global race—a competition—and that gives us a head start.

Mr William Bain (Glasgow North East) (Lab): What advice did the Prime Minister seek from the Education Secretary and the third of the Cabinet whose policy it is to withdraw from the European Union before he attended the Council? Is it not the case that if we became the new Norway or Switzerland and had their policies, we would still be net contributors to the EU budget, but have little say over how it was spent, and we would still be bound by the rules of the single market, but have no influence over what those rules said?

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The Prime Minister: I always listen carefully to all my Cabinet colleagues, especially the Education Secretary. However, the Leader of the Opposition has to answer the question himself. The shadow Defence Secretary has said that it is time for a referendum. Is that Labour policy or not?

Edward Miliband indicated dissent.

The Prime Minister: No, it is not. Well, the right hon. Gentleman has clarified one thing this afternoon. That is very good.

Neil Carmichael (Stroud) (Con): Does the Prime Minister agree that the best way to protect British interests is to strengthen the single market? By doing so, we might find some allies who are interested in a competitive and powerful single market monitored, ironically, by the European Commission.

The Prime Minister: My hon. Friend is entirely right. In today’s European Union, it is not just the northern countries—the Dutch, the Danes and the British—that are fighting for the single market. Italy is now run by Mario Monti, who is very pro completing the single market; the Spanish, under Mariano Rajoy, support the single market; and the former Baltic states in the east of Europe back this agenda. The balance within the European Council has shifted more in favour of single-market and competitive measures, which is good news for Britain.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): The Prime Minister says that he wants a freeze on the EU budget. Does he think his chances of achieving that are greater when he is in the room negotiating or after he has stormed out in a huff?

The Prime Minister: I have never stormed out of any European negotiations, but what I have done is that when a treaty was on the table that was not in British interests, I vetoed it.

When it comes to the future financing framework, I have studied very closely what the last Labour Prime Minister who went through the process did, in 2005. To start with, he said, “I’m not going to sign up to this new financial framework, because it means losing the British rebate.” But then they gave him a bit of pressure, and he completely backed down and gave up almost half the rebate. In return, he got a promise of a discussion on reforming the common agricultural policy, and that discussion never even properly happened.

Mr Robert Buckland (South Swindon) (Con): Motor manufacturers such as Honda will be very pleased to hear that progress is being made on negotiations with Japan. Does my right hon. Friend agree that only through Britain’s positive engagement in and continuing membership of the EU will we negotiate effective and comprehensive trade agreements?

The Prime Minister: My hon. Friend is entirely right. If Britain was not at the table, I do not believe a free trade agreement would have much chance at all. There are countries alongside us that are in favour of it, but we are probably one of the most enthusiastic. I met the Japanese equivalent of the CBI last week at No. 10 Downing street with the Business Secretary, and I said

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that I would push hard for a free trade agreement with Japan. We have got a change in the language of the conclusions to talk about starting the negotiations in the coming months. However, it is hard work pushing and driving that agenda, because many countries would rather not see that happen. We think it is good for Britain. One of our selling points is being the most open trading economy in Europe, and we need to keep that up.

Chris Bryant (Rhondda) (Lab): The Prime Minister has said a lot about mates this afternoon. Was there any discussion about the relations between the EU and Russia? Russia’s activities, or intransigence, on Syria have made the situation immensely worse there and infected the situation in the Lebanon. If there was any such discussion, can he explain why his mates—not just the members of Putin’s party but his own Conservative Members of Parliament and two Conservative peers—voted against the resolution at the Parliamentary Assembly of the Council of Europe condemning Russia’s human rights activities?

The Prime Minister: I am afraid we did not get the apology that we were waiting for. We will have to be very patient.

I am afraid that the hon. Gentleman is wrong on a key detail. The Conservative representatives at the Council did vote for the report to which he refers.

Henry Smith (Crawley) (Con): I very much congratulate my right hon. Friend on his work on expanding trade with non-EU countries, but does he share my concern about the EU’s procrastination on completing free trade agreements with countries such as Canada and Singapore?

The Prime Minister: Good progress is being made on Canada and Singapore, and I believe that as the conclusions of the Council say, the negotiations will be completed “in the coming months”. The bigger challenges will be getting properly started on Japan and the US, which, as two of the world’s biggest economies, have the greatest potential of all.

Andrew Bridgen (North West Leicestershire) (Con): The Government are committed to resisting the transfer of any further powers to Europe. Given that money is power, will my right hon. Friend commit to resisting any attempts to increase the size of the EU budget and therefore the UK contribution to it?

The Prime Minister: We are one of the countries in Europe that stand up for fiscal discipline and restrictions on the EU budget. I remind my hon. Friend that the annual budget negotiations are carried out under qualified majority voting. Last year we achieved a real-terms freeze in the European budget, and the year before we did not. Discussions and negotiations are under way for the 2013 budget, but the multi-year framework, which will control the budgets between 2014 and 2020, requires unanimity. That is where we can insist on the greatest possible discipline.

Miss Anne McIntosh (Thirsk and Malton) (Con): On that point, will the Prime Minister assure the House that he will get the toughest possible deal, particularly on farming policy, given the poor deal for farmers from the revisiting of the Fontainebleau agreement and the

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review of the budget rebate? We need to ensure that our farmers, who are already greening our economy, get the best possible financial outcome for the next six years.

The Prime Minister: Obviously we will look carefully at this issue and at how it will affect our farmers. As my hon. Friend knows, the last Government basically disapplied the rebate from the spending on cohesion countries, which had some perverse effects as far as our farmers are concerned. What matters is that we do a good deal for Britain in the round, including our farmers.

Charlotte Leslie (Bristol North West) (Con): As the Prime Minister will know, I wrote to him over the weekend about the European Parliament’s extraordinary two-seat operation between Strasbourg and Brussels, which costs over £1 billion of taxpayers’ money and emits 100,000 tonnes of CO2. Does he agree that the so-called Strasbourg circus is an enormous waste of resources, and at the next Council of Ministers meeting in November will he push for an end to the farce, as in our coalition agreement?

The Prime Minister: I am grateful to my hon. Friend for raising that issue. It has long been our position that that system should cease and that we should have one seat for the European Parliament, and we continue to make that point.

Gavin Williamson (South Staffordshire) (Con): Labour Members of the European Parliament want my constituents to pay more taxes so that the European Union can spend more of our money. Will my right hon. Friend assure the House that such crackpot ideas from the Labour party will be kicked into touch?

The Prime Minister: My hon. Friend is absolutely right, and Labour Members who say that that is not the case clearly have not read the policy document of the European Socialists party to which they belong, which calls for scrapping the UK rebate, increasing the budget, and imposing new EU taxes. That is what the Labour Members’ group stands for.

Mr Julian Brazier (Canterbury) (Con): On the subject of influence within the EU, does my right hon. Friend agree that quite a number of countries in the eurozone might benefit from talking to a country that has generated 1 million private sector jobs over the past three or four years?

The Prime Minister: My hon. Friend makes an important point: there is a big range across Europe in how effectively our labour markets function, and if we look at unemployment rates—particularly youth unemployment— we see that the contrast between some of the best performing countries such as Holland, and the worst such as Spain and Italy, is very marked. The UK is not, I am afraid, among the best performing countries, but we should aim to be.

John Glen (Salisbury) (Con): Many of my constituents tell me that they wish to see the future of this country far less closely tied to that of continental Europe, but they are increasingly cynical about how that will take shape. Will the Prime Minister reassure my constituents that he will lead us in the right direction?

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The Prime Minister: I would say to my hon. Friend’s constituents, as I would say to everybody, that I think Britain benefits from having a positive and strong relationship with our European allies and partners. We are a trading nation and have been throughout our history. Some 50% of our exports go to European countries and we need not only those markets to be open, but to have a say in how the rules of those markets are written. That is in Britain’s interest. As the European Union changes, and particularly as the eurozone becomes a tighter bloc with its own banking and fiscal union, the relationship between those outside the single currency and those inside is clearly going to change. We as a country should be thinking about how we can maximise the interests of the United Kingdom as that happens.

Christopher Pincher (Tamworth) (Con): The German Chancellor, Angela Merkel, is reported to have said that there is little point in holding the next EU summit if Britain wields its veto on the budget. Does my right hon. Friend agree that there is also little point in holding a summit if all the countries of Europe voluntarily surrender their vetoes? Is it not right to negotiate with our competitors from a position of strength, and use the tools of influence rather than the tools of effluence favoured by the Leader of the Opposition?

The Prime Minister: My hon. Friend makes an important point. We obviously need an agreement over time about the future funding of the European Union, and it makes sense to have a discussion about that. I am very clear about where that discussion needs to lead, and my view on that is not going to change. If we can come to an agreement in November, so be it, and if we cannot, so be it—happy to talk, but not happy to spend a lot of money.

Michael Ellis (Northampton North) (Con): The French press are today criticising their own Government, and talking about a financial exile because of punitive tax rates. Does the Prime Minister agree that it would be a good idea for Labour Front Benchers to take out a subscription for some of the French press, so that they understand how significantly poor punitive tax rates are for the economy?

The Prime Minister: That is an absolutely excellent suggestion. Labour Front Benchers also ought to consider the effect of a financial transactions tax, because that will be pushed ahead by some EU members. It would be a great mistake to start piling on extra taxes—[Interruption.] “Is that our policy?” I have no idea what the policy is of the right hon. Member for Morley and Outwood (Ed Balls). The real problem is that neither does he.

Stephen Mosley (City of Chester) (Con): One area that has been missed in the Punch and Judy show that we have seen in the Chamber is the impact on foreign affairs. The Prime Minister spoke about additional measures on Syria. What additional measures is he planning?

The Prime Minister: A very successful Foreign Affairs Council met before the European Union Council. As I have said, the language on Iran was very tough—if there was not movement on the nuclear issue, the sanctions

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would be tightened up; and the language and conclusions on Syria were about further steps to put restrictions on the regime. Whether in discussing Syria or Iran, or indeed EU relationships with countries such as India and China, Britain is making a lot of the policy and a lot of the approaches.

Bob Stewart (Beckenham) (Con): All EU members are having to take cuts in their spending domestically. When possible, can we insist that further payments from this country to the EU should be proportionate to the cuts we are taking domestically?

The Prime Minister: This is an ingenious idea that others are also pursuing. It is a complex picture, because Britain is one of the few net contributor nations. We need to look at the starting point. We are the second largest net contributor, which is why our rebate and our tough position on that policy is completely justified.

Dr Thérèse Coffey (Suffolk Coastal) (Con): The Prime Minister is being accused of being an isolationist, when, in fact, we do not need to be part of the banking union discussions because we are never going to enter the currency. Will he confirm that, on a lot of other points, we are at the heart of the discussion, including on keeping the European budget down?

The Prime Minister: My hon. Friend makes an extremely intelligent point. The creation of the single currency has created a different dynamic in Europe. Inevitably, if countries are not in and do not want to join the single currency, they will not be involved in every single discussion about the future of the single currency. That is what has created different pathways in the European Union. We must be mature about and accept that fact, and think, “Now we know it, how can we best protect and defend the British interest in the EU?” She makes a very important point.

David Mowat (Warrington South) (Con): Much of the discussion this afternoon has been on the need to protect our banking industry from regulation. For the avoidance of doubt, will the Prime Minister confirm that all our other exporting industries, such as pharmaceuticals, energy and oil, will be given the same respect in our negotiating position?

The Prime Minister: Of course—my hon. Friend makes an important point. I am not saying that we should stand up just for financial services and not for other industries. The industries he mentions are extremely important. However, we account for around 40% of the EU’s financial services, so it is an important industry. I am not a mercantilist, but it is one industry segment in which we have a substantial positive trade balance with

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the EU. A British Prime Minister, Foreign Secretary or Business Secretary would not be doing their duty if they did not speak up and point out some of the dangers of not having reasonable outcomes on those issues, but my hon. Friend is absolutely right that many other industries benefit from being members of the EU and from ensuring that we are writing fair rules for the single market.

Mr Marcus Jones (Nuneaton) (Con): My constituents will be horrified at any suggestion to increase the EU budget or the UK’s contribution to it at a time of such austerity here. I can assure my right hon. Friend that the vast majority of my constituents want him to stick to his guns on the multi-year settlement, to get a good deal for the UK, and to do what is best for the UK. Will he assure my constituents that they will be pleased with the outcome when the time comes?

The Prime Minister: I can certainly give my hon. Friend the assurance that we will stick to our position on that. I cannot tell him when a deal will be done—it does not have to be done this November. The important point is that the British position on not wanting real-terms increases will stay in place whether the deal is done in 2012, 2013, 2014 or at any point in future. That is the key thing that everyone needs to know.

Mr Speaker: The moment has arrived for the good doctor.

Dr Julian Lewis (New Forest East) (Con): Thank you, Mr Speaker. Can the eurozone have a banking union that works without that leading to economic and political union too?

The Prime Minister: I think that the short answer to that question is no. Over time, the more there is a banking union and a fiscal union, the tighter the political union will be drawn, because—for instance—German voters having to stand behind Greek deposits, or French voters having to pay for the restructuring of a Spanish bank are deeply political questions. In my view, as the eurozone deepens its commitments, as is inevitable for a working single currency, there will be pressures for further political union, and for further treaties and treaty changes. That is why I believe it is possible for Britain to seek a new settlement and seek fresh consent on that settlement, but we have to show some patience, because right now the issue in Europe is how to firefight the problems of the eurozone—get down interest rates and get the eurozone economy moving—rather than thinking through all the consequences of banking union and fiscal union in the way that my hon. Friend suggests.

Mr Speaker: I thank the Prime Minister and all colleagues for their succinctness, which enabled all 49 Back Benchers to contribute in well under an hour.

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Points of Order

4.25 pm

Wayne David (Caerphilly) (Lab): On a point of order, Mr Speaker. The Prime Minister said that I was wrong when I asserted that there had been no progress in completing the single market in energy and digital. However, his statement says that between June and October there was no progress—the statements are exactly the same. That shows clearly that I was right and he was wrong.

Mr Speaker: I think that is a matter of debate. The hon. Gentleman has clearly satisfied himself of his own position, which I am sure will be reassuring to all his friends and family. The point is on the record, but it is not a matter for the Chair.

Chris Bryant (Rhondda) (Lab): On a point of order, Mr Speaker. It is a shame that the Prime Minister has scurried out of the Chamber. Successive Speakers have made it clear that no Minister, including a Prime Minister, can opt out of parliamentary scrutiny and that answers to written parliamentary questions have to be timely and substantive.

Last week, as I am sure you are aware, I tabled five parliamentary questions for named day answer on Friday regarding the secret e-mails and texts between the Prime Minister, Rebekah Brooks and Andy Coulson, which a Downing street official has described as salacious and deeply embarrassing for the Prime Minister, and the deliberate attempt by No. 10 to cover up their existence. Following your ruling last Thursday, the Prime Minister “replied” last Friday afternoon. The answer said:

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“I refer the hon. Member to my letter to the right hon. and learned Member for Camberwell and Peckham (Ms Harman), of 18 October 2012. A copy has been placed in the Library of the House.”—[Official Report, 19 October 2012; Vol. 551, c. 449W.]

Leaving aside the fact that it is dodgy to refer hon. Members to a letter that is not available to them, which has been deprecated by successive Speakers in the past, the only supposed answer that one could possibly conceive of there being in that letter to my right hon. Friend is:

“I am, however, happy to respond to your questions in full. As you know, I set up the Leveson Inquiry. I have co-operated fully with the inquiry and given them all the material that they have asked for.”

That is not in any shape or form an answer to any of the five questions I have tabled. It does not even pretend to be an answer to me—it is meant to be an answer to somebody else.

Can you please confirm, Mr Speaker, that it is an important principle of this House that Ministers have to reply to hon. Members? They cannot have hissy fits and decide who they are going to reply to and who they are not going to reply to. Every single Member of this House has to be answered properly and fully.

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. Let me say at the outset that I stand by every word of my response to the hon. Gentleman last Thursday. In responding to his point of order then, I said that questions should receive a substantive answer, and that also reflects the resolution on ministerial accountability that is set out on pages 201 and 202 of “Erskine May”. I believe that the hon. Gentleman has been advised how he may follow up his questions, and I will study both the present exchange and the further exchange. I will leave the matter there for the moment.

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4.29 pm

The Secretary of State for the Home Department (Mrs Theresa May): I beg to move,

That this House has considered the matter of the Hillsborough Independent Panel Report.

The Hillsborough independent panel published its report on 12 September. Alongside the report, it launched an archive consisting of hundreds of thousands of pages of records. The report and the archive reveal the truth about the Hillsborough disaster and its aftermath. What the panel has uncovered is shocking and disturbing, and it was right for my right hon. Friend the Prime Minister, having read the report, to apologise to the families of the victims. In addition to that apology, however, there must be accountability. The bereaved families deserve a proper response to what is a comprehensive report. So today I want to set out the shape of that response and how we can, in the words of some of the families, move from truth to justice.

Before I do so, however, I want to remind the House of some of the panel’s findings. First, it found that the safety of the crowd entering Hillsborough’s Leppings Lane terrace was “compromised at every level”. The capacity of the terrace had been significantly over-calculated, meaning that hundreds more tickets were sold than the area could safely accommodate. Crush barriers were lower than set out in safety rules. Their layout was also inadequate. The small number of turnstiles meant that delays were always likely at a capacity match. There were three times more people per turnstile at Leppings Lane than at the opposite end of the ground.

Previous instances of crushing had not been recognised or acted on. Lessons had not been learned. When the disaster happened, neither the police nor the ambulance service properly activated their major incident procedure, which meant that command and control roles were not properly filled. The panel found

“repeated evidence of failures in leadership and emergency response coordination”.

There was no systematic triage of casualties and a lack of basic equipment. None of this takes away from the heroic work of spectators and individual members of the emergency services who fought to save lives, but the panel is clear that a swifter, better-equipped and better-focused emergency response could have saved more people.

The original inquests heard that the victims of Hillsborough suffered traumatic asphyxia leading to unconsciousness within seconds and death within a few minutes, but the detailed medical analysis produced by the panel tells a different story. The panel considered that there was definite evidence in 41 cases, and possibly in a further 17 others, that those who died did so after having survived for a longer period. In these cases, their condition was potentially recoverable, and they might have survived had there been a more effective emergency response. It is difficult to imagine how the families of those who died must feel hearing that fact after 23 years.

The truth, however hard to bear, should not have taken so long to be told. The panel’s report shows that the coroner at the original inquest acted on the medical advice of pathologists and after seeking the views of colleagues, but it also shows very clearly that the structure

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of the inquest and the imposition of a 3.15 pm cut-off of evidence meant that a false picture was presented and accepted as fact.

The panel’s report makes it clear that South Yorkshire police in the last couple of years have set an example in terms of the process of disclosure to the panel. However, its findings about South Yorkshire police in 1989 are stark. The panel’s report lays bare the reaction of the police in attempting to shift blame for the disaster on to the fans. Lord Justice Taylor’s report into Hillsborough found that the disaster’s main cause was