23 May 2012 : Column 1113
House of Commons
Wednesday 23 May 2012
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Occupied Palestinian Territories
The Secretary of State for International Development (Mr Andrew Mitchell): Both the Minister of State, who is today attending the Friends of Yemen meeting in Riyadh, and I keep a close eye on the effectiveness of our programme in the Occupied Palestinian Territories.
Guto Bebb: I thank the Minister for his response. On a trip to Israel and the west bank earlier this year, I saw education materials that incited violence and the use of Palestinian Authority broadcast media to glorify conflict, not least relating to a group of children singing about the aim to saturate their land with blood. Will the Secretary of State provide assurances that our aid donations do not contribute towards such incitement? Will he highlight what steps the Government are taking to deter the Palestinian Authority from supporting such publications and broadcasts?
Mr Mitchell: I can give my hon. Friend that assurance. I would be very interested to see the material he describes. I can tell him that numerous credible studies show no evidence of incitement or anti-Semitism in Palestinian Authority textbooks, so if he ensures that we get a copy of what he has seen, we will take the appropriate action.
Richard Burden (Birmingham, Northfield) (Lab): Has the International Development Secretary joined the Foreign Secretary and, curiously, the Education Secretary in meeting Israeli Foreign Minister Lieberman during his visit to the UK? Irrespective of whether he meets him, will the right hon. Gentleman transmit to the Israeli Foreign Minister the concerns of the United Nations Assistant Secretary-General for Humanitarian Affairs and Deputy Emergency Relief Co-ordinator, who visited the west bank last week and said:
“I am extremely concerned about the humanitarian impact of demolitions and displacement on Palestinian families. Such actions cause great human suffering, run counter to international law and must be brought to a halt”?
23 May 2012 : Column 1114
Mr Mitchell: I do not have any current plans to meet the Foreign Minister from Israel, although I met a series of Israeli Foreign Ministers when I was there just before Christmas. I will ensure that the hon. Gentleman’s comments are passed on to the Foreign Secretary.
Sir Bob Russell (Colchester) (LD): I also visited the west bank and East Jerusalem last year and I saw the consequences of ethnic cleansing and apartheid. Will the Secretary of State assure us that Church groups will be urged to get the Government of Israel to follow the parable of the Good Samaritan?
Mr Mitchell: I raised the issue of religious tolerance when I visited the west bank and Israel at the end of last year. The hon. Gentleman’s comments will have been heard by the Foreign Office, which I have no doubt will pursue them.
Mr Andy Slaughter (Hammersmith) (Lab): We need to focus on the real issue of aid, not on red herrings about its misuse by the Palestinians. The fact is that Israel has blockaded Gaza and the checkpoints in the west bank are stifling any attempt by the British Government to bring aid to the Palestinians. What is the Secretary of State doing to make the Israelis co-operate in respect of the aid that Britain and the EU gives to the Palestinians?
Mr Mitchell: Britain has an extremely well-targeted aid and development programme in the Occupied Palestinian Territories. It focuses on building the capacity of the Palestinian Authority to provide good government and support for the two-state solution. It focuses, too, on wealth creation and economic growth, which are important. The third strand principally supports the United Nations Relief and Works Agency, and ensures that we fulfil our humanitarian responsibilities. The programme is very well placed, and we make certain that it achieves all three of those things effectively.
Mr Matthew Offord (Hendon) (Con): The next generation of Palestinian peacemakers and state builders are too frequently exposed to messages of hate and violence rather than of peaceful co-existence. What measures are in place to ensure that aid is used to teach mutual understanding and reconciliation?
Mr Mitchell: My hon. Friend makes an important point. A recent study was set up by the Americans to look at the content of textbooks and teaching both in Israel and in the west bank for precisely the reason that he sets out. We take this issue very seriously. I will ensure that my hon. Friend receives a copy of that report when it is published.
Dr Eilidh Whiteford (Banff and Buchan) (SNP): Control of international arms transfers is essential to the effectiveness of aid-related conflict resolution measures in the occupied territories and other places. The UK has a key role to play at the UN arms trade treaty negotiations next month. Will the Secretary of State—
Mr Speaker: Order. I am trying to be generous, but I think allowing latitude would be excessive in this case. I am afraid that the hon. Lady’s comments do not relate sufficiently closely to the question on the Order Paper.
23 May 2012 : Column 1115
Clean Water and Sanitation
The Secretary of State for International Development (Mr Andrew Mitchell): The British Government consider that access to clean water, sanitation and hygiene is among the most basic of human needs. At the recent summit in Washington, I announced this Government’s intention to double the commitment on water and sanitation that we made last year.
Chris Kelly: I welcome the Department’s commitment to doubling the provision of water and sanitation so that it reaches 60 million people, but will my right hon. Friend assure me that sufficient priority is now being given to sanitation? Too often in the past, priority has been given solely to the provision of clean water.
Mr Mitchell: My hon. Friend is entirely right to draw attention to the importance of sanitation. That is why the International Development Committee called its report on these matters “Sanitation and Clean Water” rather than referring to WASH—water, sanitation and hygiene. As he says, for every UK citizen we will provide clean water or sanitation for someone in the poor world who does not have it today. That is an important priority for Members on both sides of the House, and Britain is honouring it.
Mr Gregory Campbell (East Londonderry) (DUP): The Secretary of State will be aware of the tremendous work done by charities such as Excellent Development which supply clean water to many regions in Kenya and Uganda at a fraction of the normal cost. Will he ensure that the Government do what they can to assist such tremendous and cost-effective work?
Mr Mitchell: We make it an absolute priority to ensure that British taxpayers’ money goes as far as it possibly can, and that we secure 100p of delivery on the ground for every pound that we spend. We continue to ensure that we deliver clean water and sanitation at the lowest possible price.
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien): The situation is extremely grave. Eighteen million people across the Sahel are at risk of food shortages, and 8 million of them are now in need of immediate assistance. The British people, through the UK Government, have responded swiftly to the crisis, providing aid for over 400,000 people who have been caught up in this disaster.
Amber Rudd: The United Kingdom has been admirable in its support for the region, but with 18 million people vulnerable to the impact of the crisis, which is due to peak in about six weeks’ time, and with further delays to the donor conference, what can the UK Government do now to invest in the region and help those people?
23 May 2012 : Column 1116
Mr O'Brien: My hon. Friend is entirely right. Like her, I fear that the worst is yet to come. The hunger season in July and August is imminent. The United Nations, with which we are working extremely closely and consistently, is revising its appeals from about £452 million to about £1 billion as a matter of urgency in response to the growing need in the Sahel, and the final appeal for Mali is due to be released at the end of this month. The Department has a special team in place, and we are monitoring the situation closely. That includes assessing the appeals. My ministerial colleagues and I are keeping an extremely close eye on the position.
14.  Chris Evans (Islwyn) (Lab/Co-op): Given recent reports that the African Union has delayed the pledging conference to deal with the crisis until June, what assurances can the Minister give that the UK Government are doing all that they can to establish a date, and who will represent the UK at the conference?
Mr O'Brien: I can give the hon. Gentleman an absolute assurance that we are sparing no effort whatever in seeking to persuade all the various parties and stakeholders who can provide assistance to meet the emerging humanitarian crisis. The amount that the UK people have already provided through our humanitarian support has staved off some of the worst, but the trouble is that the crisis continues to escalate.
Dr Andrew Murrison (South West Wiltshire) (Con): The deteriorating security situation in northern Mali around Timbuktu has caused the European Union to reduce severely the amount of aid that it feels able to give. Given that the UK donates a great deal of its aid through the European Union, will the Minister say what continuing aid we will be able to provide for the people of Mali?
Mr O'Brien: My hon. Friend is entirely right. Because of the conflict, the situation in northern Mali is extremely grave, especially around Timbuktu. That is in addition to intense pressures in areas across the Sahel such as Niger and northern Nigeria. However, I can assure my hon. Friend that work is being done both through our bilateral humanitarian system and, in particular, through European support which has already contributed some £106 million to help with the Sahel crisis. We will continue to work very closely with those involved, not least because of the attribution of the contribution that we make.
Tony Cunningham (Workington) (Lab): In view of the widespread recognition that there is an urgent food and security crisis in the Sahel, will the Minister tell me what criteria were used to determine that UK aid to the region should be halved between 2010 and 2012?
As I hope the hon. Gentleman is aware, there is a difference between the humanitarian response and programme issues. I think that he was referring to Niger, where we supported a programme led by the French which served the purpose for which it was intended. As for the humanitarian process, we continue to work with a range of international partners in trying
23 May 2012 : Column 1117
to ensure that the donor burden is spread fairly and equitably, while also ensuring that we in the UK step up to our responsibilities.
Official Development Assistance
Gregg McClymont: The Minister’s answer is welcome, but given the Government’s failure, in what is a rather thin legislative programme, to embed that 0.7% investment in law, can he give a guarantee that there will be the same level of investment in those less fortunate than ourselves in 2014 and 2015?
Mr Mitchell: The Government have been very clear, as have all Members of the House, about our commitment to the poorest in the world and not to balance the books on the backs of the least fortunate. We are the first Government ever to set out clearly how we will meet our 0.7% commitment. On the hon. Gentleman’s specific point about the law, the Bill in question has been drafted, the Prime Minister and I have said that it will proceed, and it rests with the business managers to decide the date for that.
Mr James Gray (North Wiltshire) (Con): Does the Secretary of State agree that in response to those who, rather facilely, argue that charity should begin at home and that we should not be spending this money, it should be pointed out that not only do we have a moral obligation to people around the world who are less fortunate than ourselves, but we are spending the money firmly in Britain’s best strategic interests?
Mr Mitchell: My hon. Friend makes an excellent point. For a spend of less than 1% of gross national income, we are investing in our future prosperity and our security, as well as doing the right thing by the least fortunate in the world.
Women’s Health (Egypt)
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien): I am mindful of the fact that the first round of presidential elections in Egypt is taking place as we speak. My Department is focused on economic and political transition in Egypt through the Arab Partnership. We do not have a health programme there, but the Department is committed to improving women’s health across the world, with particular focus on the poorest countries and the most vulnerable women. Over the next five years, our support will help to save the lives of at least 50,000 women in pregnancy and childbirth.
23 May 2012 : Column 1118
Helen Goodman: The rate of female genital mutilation in Egypt is now 70%. Some in the country’s political parties want to change the constitution to end all legal restrictions on the practice. I am sure that if the proposal was to chop off part of men’s genitalia, the Minister would put this issue at the top of his agenda. Will he prioritise ending this barbaric human rights abuse?
Mr O'Brien: I absolutely agree that it is a wholly unacceptable and barbaric practice. It is a custom that has survived for millennia, and I assure the hon. Lady that I have taken up this issue on many occasions, and that I seek to ensure it is highlighted. It is genuinely one of the issues that we have put at the top of our agenda, and I discuss it whenever I get the chance to do so in the many countries of Africa where it is prevalent. I assure her that we are committed to this very important project.
Jo Swinson (East Dunbartonshire) (LD): The best guarantee of making women’s health a priority, and ending the barbaric practices to which the hon. Member for Bishop Auckland (Helen Goodman) alludes, is making sure women are actively involved, and listened to, in the political process. In what ways is the Department working with women’s organisations and democracy-building organisations to support Egyptian women in making sure their voices are heard?
Mr O'Brien: The hon. Lady makes a very important point. I hope she recognises that the Department has put girls and women front and centre of everything we do. We want to ensure that girl’s and women’s voices are heard, particularly as we develop our various future programmes, not least post-2015.
Occupied Palestinian Territories
6. Karen Lumley (Redditch) (Con): What support the Arab Partnership Participation Fund has provided to projects on political reform and free and fair elections in the Occupied Palestinian Territories. 
The Secretary of State for International Development (Mr Andrew Mitchell): The Arab Partnership Participation Fund has supported political participation in the Occupied Palestinian Territories. It has funded a variety of civil society projects.
Karen Lumley: Democracy is something that we in this country take for granted. Will the Minister assure me that, as part of our future campaign, we will promote democracy and the rule of law in the occupied territories?
Mr Mitchell: My hon. Friend puts her finger on a key ingredient of development. Promoting democracy and the rule of law in the Occupied Palestinian Territories is central to our engagement in the region, as I described in answer to an earlier question.
Mr Mitchell: The British Government’s position is clear and unequivocal on this, as the Foreign Secretary has assured the House on many occasions. Our commitment to promoting the two-state solution and to promoting democracy in this troubled area is absolute.
23 May 2012 : Column 1119
Copenhagen Consensus Recommendations
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien): The Copenhagen Consensus 2012 is a valuable contribution to the development debate, particularly given its focus on getting the best value for money and greatest impact from aid. This is of course also a major priority for the coalition Government, and DFID’s programme priorities are closely aligned with the recommendations from the Copenhagen Consensus. I find the analysis compelling, and I have been working with the Consensus since 2004.
Harriett Baldwin: The economists and Nobel laureates of the Copenhagen Consensus have found that spending on tackling malnutrition provides the most value for money in terms of economic development. How much of the Department’s budget is spent on bundled micronutrient interventions?
Mr O'Brien: My hon. Friend makes an extremely important point, and she is right to say that the Copenhagen Consensus puts bundled micronutrient interventions to fight hunger and improve education at the very top of its list of the most desirable activities to achieve maximum impact. Right across our programmes, we have been increasing the delivery of nutrient supplements and fighting hunger. My right hon. Friend the Secretary of State announced in Washington last week that we will be supporting the new alliance for food security and nutrition in order to improve food supply and farming across Africa and help to pull 50 million people out of chronic poverty over the next 10 years.
Keith Vaz (Leicester East) (Lab): How will these excellent priorities help the people of Yemen, almost half of whom are starving? [Official Report, 12 June 2012, Vol. 546, c. 1-2MC.]
Mr O'Brien: In Yemen, many of the current challenges are humanitarian. Today, we have announced £26 million of humanitarian support and aid to ensure that some of the needs of the population—nearly half of whom, as the right hon. Gentleman rightly observes, are starving—are met. While we are in the humanitarian phase, that is patently the most important response, but we also need to look at the future of governance and resilience in order to improve the lot of the population.
Post-MDG Framework (Women and Girls)
8. Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): What steps he has taken to ensure that women and girls are central to any consultation on a post-millennium development goals framework. 
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien):
We are very pleased that my right hon. Friend the Prime Minister has been asked by the United Nations Secretary-General to co-chair the high-level panel on a framework to replace the millennium development goals. That process will of course need to be open and consultative, and I
23 May 2012 : Column 1120
am confident that the voice of girls and women, who are often among the world’s poorest people, will be heard.
I thank the Minister for his response and welcome the UK’s customary leadership on this issue. He mentioned the voice of the poorest, among whom the hardest to hear are often women and girls. I am sure he agrees that their voice is the most important one that needs to be heard in order to develop the framework following the millennium development goals. What plans has he in place to ensure that their voice is heard, and what is his timeline for such a framework?
Mr O'Brien: The hon. Lady will be aware that this is work in progress and that a series of meetings and consultations is being initiated. I can give her an absolute assurance that we are building on the success of the current MDG framework, but we also need to learn from its gaps and weaknesses. Part of doing so is making sure that, in addition to providing simple and clear aims, we consult widely and ensure that we reflect the fact that the world has changed, rather than the past. That includes the importance of the views of girls and women in the future.
Mr Ivan Lewis (Bury South) (Lab): As the Minister knows, I have welcomed the Prime Minister’s appointment to co-chair the UN panel on the new millennium development goals framework. However, unlike his predecessors—Tony Blair and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown)—this Prime Minister has shown no inclination at the G8, G20 or EU summits to champion the importance of development. Will the Minister explain the core values that will underpin the UK’s approach to a new global development framework, and can he bring himself to utter the words “social justice and human rights”?
Mr O'Brien: In an area where normally there is a degree of consensus across the House, I am deeply disappointed that the hon. Gentleman should choose to suggest that there is any diminution in our effort. I would argue that the opposite is the case; at the first G8 meeting, there was a clear focus on development by the Prime Minister, and only last week we had the whole focus on food and nutrition. It does not serve the hon. Gentleman well to seek to make a political point out of something that simply has no legs.
The Secretary of State for International Development (Mr Andrew Mitchell): My Department is very focused on delivering the results of the family planning summit that will take place in London on 11 July, chaired by our Prime Minister and Melinda Gates. We have been very focused on the food agenda at the G8 Development Ministers meeting last week, and I will shortly be visiting Malawi.
23 May 2012 : Column 1121
Ian Lucas: Two weeks ago, I visited a charitably funded Bedouin school in the west bank that was threatened with demolition by the Israeli Government. This is not the way to make progress, so will the Secretary of State make urgent representations to the Israeli Government to prevent the demolition of places of learning?
Mr Mitchell: The hon. Gentleman rightly says that almost all these demolitions are illegal, and that is a point that the Foreign Secretary has made regularly in his meetings with the Israeli Government.
T6.  Gavin Barwell (Croydon Central) (Con): I congratulate my right hon. Friend on ensuring that the taxpayer benefits from the sale of our remaining stake in Actis. Is that not in sharp contrast with the shameful way in which the previous Government allowed Actis to be spun out of CDC in such a way that the British taxpayer did not receive a single penny?
Mr Mitchell: I am afraid that my hon. Friend is entirely correct; the shameful way in which the previous Government sought to privatise Actis has meant that the taxpayer has received nothing at all from this management company. Thanks to the changes that the coalition Government have made, it is estimated that the taxpayer will receive between $100 million and $200 million.
Rushanara Ali (Bethnal Green and Bow) (Lab): The forthcoming Rio+20 conference is an important opportunity for this Government to show international leadership on climate change, green jobs and sustainable development. Will the Secretary of State tell the House how many meetings have taken place between his Department and other relevant Departments to ensure a joined-up British approach to the Rio conference? Will he write to me with more details?
Mr Mitchell: I can tell the hon. Lady that meetings are taking place every week and every day, most recently yesterday. The delegation will be led by my right hon. Friend the Deputy Prime Minister, and I have discussed this with him within the past 24 hours.
T7.  Bob Blackman (Harrow East) (Con): I warmly welcome the dramatic increase in aid to our Commonwealth partners, including the funding for the Queen Elizabeth Diamond Jubilee Trust. Will my right hon. Friend inform the House of the type of projects we are funding that are much-needed by our Commonwealth allies?
Mr Mitchell: The whole House will be grateful to Sir John Major for chairing the Queen Elizabeth Diamond Jubilee Trust. The British Government have put in £50 million to the match fund for these projects. Under the previous Government, support for the Commonwealth declined from some 45% of our development budget to 35%, whereas under this Government, over five years, it will increase to 55%.
23 May 2012 : Column 1122
T2.  Fabian Hamilton (Leeds North East) (Lab): The situation in Syria continues to take lives, as well as to produce instability in the region. Will the Secretary of State update the House on what action the British Government are taking to help with the humanitarian crisis in that country?
Mr Mitchell: The hon. Gentleman will have heard what the Foreign Secretary has been doing at the United Nations. On humanitarian support, I can tell the hon. Gentleman that we are supporting the United Nations, its Office for the Co-ordination of Humanitarian Affairs and a number of international non-governmental organisations on dealing with the consequences both outside Syria—on the borders and in the surrounding countries—and internally, within that country.
T8.  Amber Rudd (Hastings and Rye) (Con): In the context of the NATO summit and the planned withdrawal from Afghanistan, what assessment has the Secretary of State made of the provision for women’s rights after our departure?
Mr Mitchell: My hon. Friend is entirely right to focus on the role of women in Afghanistan. On my recent visit to Afghanistan, I launched a new civil society fund that will directly address her point. Additionally, the fact that the international community has helped to secure places for 6 million children in school in Afghanistan in recent years will have a transformational effect on the role of women in Afghanistan.
T3.  Graham Jones (Hyndburn) (Lab): South Sudan is slipping towards war. Recently leaked documents from the World Bank have highlighted the fact that the south could be completely bankrupt by July as a result of the oil dispute. With countries such as China moving to fill the democratic gap, there should be concern that good democratic governance could slip off the agenda in South Sudan. What is his Department doing to ensure that that does not happen?
Mr Mitchell: Ministers in my Department have had robust meetings with the Government of South Sudan and that of Sudan. The message we give is that it is important that oil should be brought back into commission and exported from Sudan and it is very important that the African Union road map should be adhered to by both sides.
The Prime Minister was asked—
Karen Bradley: People in Staffordshire Moorlands recognise that the Government need to take difficult decisions to deal with the deficit, but does the Prime Minister shiver when he thinks about what would have happened had he not put a credible fiscal plan in place?
23 May 2012 : Column 1123
“when I think back myself to May 2010, when the UK deficit was at 11% and I try to imagine what the situation would be like today if no such fiscal consolidation programme had been decided...I shiver.”
That is what she said and we should remember who is responsible for leaving that situation, doubling the national debt and leaving a record debt and a catastrophic inheritance—one for which we still have not had an apology.
Edward Miliband (Doncaster North) (Lab): Adrian Beecroft, the Prime Minister’s adviser, says that the law should be changed to allow employers to fire people at will. The Business Secretary says that that is the last thing the Government should do. Who does the Prime Minister agree with?
The Prime Minister: We need to make it easier for businesses to grow, for businesses to take people on and for businesses to expand. The Beecroft report, which I commissioned, had a number of excellent ideas that we are taking forward. We are doubling the qualifying period for unfair dismissal, exempting businesses with fewer than 10 people from new EU regulations and exempting 1 million self-employed people from health and safety. We are consulting on no-fault dismissal, but only for micro-businesses. It was a good report and it is right that we should take forward its best measures.
Edward Miliband: The Prime Minister did not answer the question about the proposal—[ Interruption. ] No, he did not answer the question. Mr Beecroft made a proposal that employers should be able to fire their employees at will. The people sitting behind the Prime Minister think that the Beecroft proposal is a great report—that it is the bee’s knees—and they support the proposal. The people over there on the Liberal Democrat Benches think it is a bonkers proposal and the Business Secretary has been going around saying that. We just want to know where the Prime Minister stands. Who does he agree with?
The Prime Minister: It is rather sad; the right hon. Gentleman did not listen to my answer. We have a call for evidence on no-fault dismissal for micro-businesses and we are not proceeding with it for other businesses. That is the position. I am not surprised at the question, as I know he worries about being fired at will for being incompetent.
“some people would be dismissed simply because their employer did not like them. While this is sad I believe it is a price worth paying”.
23 May 2012 : Column 1124
have cut the deficit by 25%. Let me explain to him what the Government and the Business Secretary are doing. We are cutting regulation by £3 billion, we are scrapping 1,500 regulations, we are looking at introducing fees for employment tribunals. We are taking all these steps, which led last year to the greatest number of small business start-ups in the country’s history. Of course, the right hon. Gentleman cannot support any changes to employment regulation because he is in the pocket of the trade unions.
Edward Miliband: In case the Prime Minister has not noticed, his Business Secretary does not support his proposal. What double standards. When it comes to ordinary—[Interruption.] Oh yes. When it comes to ordinary workers, the Prime Minister wants to make it easier for employers to sack them. When it comes to Andy Coulson and the Culture Secretary, it is all about second chances. Can the Prime Minister tell us what impression he thinks it gives about his Government that he commissions advice from a multi-millionaire who recommends making it easier to sack people on low pay, at the same time as giving people like him tens of thousands of pounds in a millionaires’ tax cut?
The Prime Minister: I will tell you what we do on the Government Benches. We commission a report, we accept the bits that we agree with and we reject the bits that we do not agree with. What the right hon. Gentleman does is take instructions from his trade union paymasters and he cannot accept any changes. He asks what we are doing for the poorest people in our country. It is this Government who are taking 2 million people out of income tax, who have increased tax credits for the poorest, who have got more people in work with 600,000 new private sector jobs, and who have frozen the council tax. His record was completely the opposite.
Edward Miliband: This is not about the trade unions. It is about millions of people up and down the country in fear for their jobs, and the only answer that this Prime Minister has is, “Make it easier to sack them.” This proposal is a symbol of the Government’s failure on growth. We are in a double-dip recession, unemployment is high, businesses are going bust, there are bad retail sales figures today. Does not the Prime Minister understand how out of touch he sounds to families when he says, as he did last week, that things are moving in the right direction?
The Prime Minister: I have to tell the right hon. Gentleman that this is about the trade unions. Let me tell him why. He is getting £900,000 from Unite, and that union is threatening a bus strike during the Olympics. What have we heard from him? Silence. He is getting £400,000 from the GMB. That union is holding a baggage handlers strike over the diamond jubilee weekend. Absolute silence from him. People need to know that there are two parties on the Government Benches acting in the national interest, and an Opposition party acting in the trade union interest.
Let us talk about donations. On 21 March the Chancellor cut the top rate of income tax. Then the money comes flooding in from the Tory millionaire donors. It tells us all we need to know about this Government. They stand up for the wrong people.
23 May 2012 : Column 1125
The Prime Minister may have changed the image of the Tory party, but the reality has not changed: tax cuts for millionaires; making it easier to sack people—the nasty party is back.
The Prime Minister: It is this Government who cut corporation tax, who set up the enterprise zones, who are reforming the planning law, who boosted the apprenticeships, who scrapped Labour’s jobs tax and who cut taxes for 24 million working people, and it is only Labour that thinks the answer is more borrowing, more spending, more debt—exactly the problems that got us into this mess in the first place.
David Mowat (Warrington South) (Con): In 1993 the IRA bombed Warrington, killing two small boys and injuring more than 50 other people. Last week a memorial plaque with a scrap value of about £40 was stolen. The Government have already legislated to prevent the sale of scrap metal for cash. Will the Prime Minister consider further legislation making the theft of such memorials an aggravating factor?
The Prime Minister: My hon. Friend makes an extremely important point. I know that the whole country was shocked by the theft of that memorial; everyone remembers the Warrington bomb and the people who died in it. He is right to say that we have already legislated and made this an offence. We are also doing everything we can to sort out the problems of the scrap metal trade. I will look at his suggestion of an aggravated offence, but clearly any court can hand out exemplary sentences in these sorts of circumstances because public justice is important, and the public are absolutely appalled by what has happened.
The Prime Minister: There are two ways of measuring youth unemployment: first, the International Labour Organisation definition, which includes both full and part-time students and gives a figure of just over 1 million; and secondly, the claimant count, which currently stands at 466,000. Clearly youth unemployment is too high on either measure, although I note that it rose by 40% under the previous Government. Recently it fell by 17,000 in the last quarter. If we look at the claimant count and include people on out-of-work schemes, we see that the number of young unemployed people has actually fallen since the election.
The number of young people in my constituency who are unemployed, underemployed and have fewer opportunities has greatly increased in the past year. Therefore, today we are setting up a taskforce specifically to deal with this increasing scourge. Will the
23 May 2012 : Column 1126
Prime Minister commit to the active participation of every relevant Government Department in our taskforce’s work?
The Prime Minister: I certainly will do that, because there is vital work to be done to help young unemployed people. What we are finding with all the schemes we have, whether the Work programme or the youth contract, is that the most useful thing is actually the work experience scheme, because it gives young people a real leg-up and experience of the workplace and, therefore, removes some of the disadvantages they face as against older workers. We are finding that it has a much better record than other schemes, so I hope that the hon. Gentleman will be able to push that and pioneer it in his constituency with the help of all the agencies, as he has said.
Q3.  Mr Gary Streeter (South West Devon) (Con): Did my right hon. Friend see the figures released last week showing that since May 2010 the number of people waiting for an operation on the national health service has fallen by over 50,000? Does that not demonstrate that our commitment to increased health funding and our health reforms are beginning to bear fruit?
The Prime Minister: I am grateful to my hon. Friend for his question. We made an important and difficult decision that, while other budgets were being cut, we would protect the NHS budget. That was not supported by the Labour party, but the fact is that we now have the best ever performance for patients waiting over 18 weeks, the numbers for those waiting more than 26 weeks and 52 weeks have also reached record lows, and average waiting times for both in-patients and out-patients are lower than they were in May 2010. The Labour party often asked whether the test should be the number of people waiting over 18 weeks. Well, if that was the test, we have passed it with flying colours.
Q4.  Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Just over a year ago the Prime Minister launched his flagship export enterprise finance guarantee scheme. We now learn that only five companies have benefited from the scheme. Hard-working businesses in Birmingham that would like to export but cite lack of export finance guarantee as a problem are keen to know who those five lucky companies are and why the scheme has been such a dismal failure.
The Prime Minister: I will certainly write to the hon. Lady, because the truth is that that export scheme has been rolled into the export guarantee scheme more generally and the amount of export support is massively up on the last election, with billions of pounds in extra money being spent. The other point I would make is that exports, compared with 2010, were up by over 12% last year.
Andrea Leadsom (South Northamptonshire) (Con):
Will the Prime Minister join me in congratulating the Northamptonshire Parent-Infant Partnership on its sell-out conference on early years intervention last week, where 27 local authorities were represented? Does he agree that, if we are serious about
23 May 2012 : Column 1127
strengthening our society, providing psychotherapeutic support for families struggling to bond with their new babies is absolutely key?
The Prime Minister: I know that my hon. Friend speaks with a lot of personal experience, having set up a project in Oxfordshire, the county I represent, that has had a major impact. I think that her work does her huge credit. The truth is that all the studies show that real disadvantage for children kicks in right from the moment they are born if they do not get the love, support and help they need. That is why the projects she is talking about, along with the expansion of the health visitors scheme—4,200 extra health visitors—which can make a real difference, are so important. I will also point out the measure we took last week to make sure that new parents get proper contact with and information from their midwife both before and after their child is born so that we do everything to remove that disadvantage in the early months and years.
Mr Nigel Dodds (Belfast North) (DUP): Will the Prime Minister give an undertaking that he will not succumb to the diktat from the European Court of Human Rights in relation to prisoners voting, that he will stand up for the resolution that was agreed in this House by an overwhelming majority and that he will stand up for the sovereignty of this House and the British people?
The Prime Minister: The short answer to that is yes. I have always believed that when someone is sent to prison they lose certain rights, and one of those rights is the right to vote. Crucially, I believe that it should be a matter for Parliament to decide, not a foreign court. Parliament has made its decision, and I completely agree with it.
Q6.  Jeremy Lefroy (Stafford) (Con): Today, Alstom is opening in my constituency a new facility for the engineering, manufacturing and export of power electronics, in which Stafford is a world leader. Following the news of the first trade surplus in motor vehicles for more than 30 years, what measures does my right hon. Friend consider to be essential to continue and to increase investment in manufacturing?
The Prime Minister: I very much remember visiting GEC Alstom when I contested my hon. Friend’s constituency rather unsuccessfully in 1997, but what is absolutely essential for such manufacturing, engineering and technology-based businesses are the support that we are giving to apprenticeships, whereby we achieved more than 450,000 apprenticeship starts last year; the lower rate of corporation tax; and the links between our universities and the new catapult centres in order to ensure that technology goes into our businesses and makes them world-beating. If we look not just at our exports overall, which were up 12% last year, but at exports to India, China and fast-growing markets, we find that they are up 20%, 30%, 40%, 50%.
Jack Dromey (Birmingham, Erdington) (Lab):
The Prime Minister pledged to give England’s great cities a seat at the heart of government. Yesterday, Labour took control of Birmingham city council, and the first thing that the new council did was agree to ask the Prime
23 May 2012 : Column 1128
Minister to receive a delegation from the council and Birmingham’s MPs on a fair deal for Birmingham. Will the Prime Minister make good on his pledge and agree to meet that delegation?
The Prime Minister: Of course, I am happy to meet leaders of Birmingham city council, as I meet leaders of councils up and down the country. What is important is focusing on what needs to be done in Birmingham to drive economic growth and to make sure that we provide good services, but I very much hope that the new council will match the record of the old council in providing value for money.
Q7.  Paul Maynard (Blackpool North and Cleveleys) (Con): Child neglect is a sad fact in all our constituencies, and in Blackpool we await the sentencing of two parents who pleaded guilty this week to keeping their 10-year-old son in demeaning circumstances in a coal bunker. At the same time, the charity Action for Children has highlighted the fact that the law on child neglect dates from 1933 and no longer corresponds to the demands of modern parenting. Does the Prime Minister not agree that it is time to ask the Law Commission to look at this law once again?
The Prime Minister: My hon. Friend is right to raise that completely shocking case, and for anyone trying to understand how a parent could treat that child that way, it is just completely unfathomable. I will obviously look at what he says about the Law Commission and modernising the law, but in dealing with such appalling cases of child neglect and with families that have completely broken down, we have so many agencies currently working on this, including, crucially, social workers, and the most important thing is to have a real system of passing on information and passing on concerns rapidly—and then acting on them. Just passing another law will not make up for the common sense and action that we require our agencies to deliver.
Stella Creasy (Walthamstow) (Lab/Co-op): I thank the Prime Minister and the Chancellor for joining so many of their colleagues yesterday in abstaining from the vote against my “Save Bianca” amendment. Given that 65% of the public want to see caps on the cost of credit, when does the Prime Minister think his Ministers will finally give in and do something about ending legal loan sharking in the UK?
The Prime Minister: As the hon. Lady knows, we have a new power for the Financial Conduct Authority, which has been established, and the Office of Fair Trading has powers as well, so it is very important to talk to those agencies and to make sure that they can act.
Q8.  Christopher Pincher (Tamworth) (Con): The local council tax frozen for two years, the lowest inflation rate in three years and the biggest monthly fall in local unemployment in five years is great news for jobseekers, pensioners and savers in Tamworth. Does my right hon. Friend agree that, although times are tough and much still needs to be done, this Government and this country are on the right track?
23 May 2012 : Column 1129
The Prime Minister: Clearly, we face difficult economic times. We will go on in a minute to talk about the growth plans that are required in Europe, but what we have to do in this country is rebalance our economy, which had become over-reliant on the public sector, over-reliant on financial services and not fairly spread around the country. We need a growth of the private sector and of manufacturing and technology, and we need it to be more fairly spread across the country, including in the area that my hon. Friend represents. What we see from the employment figures is, yes, a decline in public sector employment, which would frankly be inevitable whoever was in power right now, but the 600,000 net new jobs in the private sector show that some firms are expanding and growing, and we must be on their side.
Q9.  Mr Iain Wright (Hartlepool) (Lab): Unemployment in Hartlepool and the north-east is higher now than in May 2010. How much of that increase is down to the Prime Minister’s Government’s policies?
The Prime Minister: The point that I made to the hon. Member for Bassetlaw (John Mann) is that the last Government excluded from the unemployment numbers people who were on temporary employment schemes. We include those people. People on the Work programme are included in the unemployment numbers. We measure these things accurately, and comparing like for like, youth unemployment has fallen since the election.
Dr Julian Huppert (Cambridge) (LD): Britain has an excellent track record in scientific research and development, despite historically low levels of funding. For this to continue, and to continue to drive so much economic growth, sustained funding is required. Can the Prime Minister assure me that this will be delivered in this Parliament and the next comprehensive spending review?
The Prime Minister: Obviously, I cannot bind the hands of the next comprehensive spending review, but in this spending review we made an important decision to protect the science budget. It would have been an easy target for reductions, and perhaps we could have spent the money on politically more attractive things, but we decided to take the long-term view and to save the science budget because it is a key part of Britain’s future.
Q10.  Chris Evans (Islwyn) (Lab/Co-op): The Home Office recently announced that 800 front-line police officers would be cut in Wales, while Jeff Mapps, the chair of the Welsh Police Federation, says that the figure will be closer to 1,600, which would be the equivalent of the entire Gwent police force. Who is right?
The Prime Minister: The truth is that whoever was in government right now would be having to make cuts to police budgets. The Labour party is committed to a £1 billion cut in the police budget; we have made reductions in police budgets. The key to having police officers on the streets is to cut the paperwork, reform the pensions, and deal with the pay issues. We have the courage to do that, and the hon. Gentleman’s party should support it as well.
23 May 2012 : Column 1130
Mike Weatherley (Hove) (Con): Last weekend, the Squatters Network of Brighton and Hove invited its anarchist friends from around Europe to campaign against what they call Weatherley’s law. Will the Prime Minister condemn, with me, the Green party’s support for squatters and welcome, as I do, the criminalisation of squatting?
The Prime Minister: I certainly support what my hon. Friend says. This law was long overdue. It is very important that home owners have proper protection from people, in effect, stealing their property, which is what squatting is. It is a criminal act and it is now a criminal offence.
Q11.  Keith Vaz (Leicester East) (Lab): Last week, it was revealed that officials at the UK Border Agency received bonuses of £3.5 million. Given the horrendous queues at our airports, the fact that 100,000 files have now been archived by the UKBA, and the fact that in the past six months 185 people have absconded having been given limited leave to remain, does the Prime Minister agree that in future we should reward success, not failure?
The Prime Minister: I completely agree with the right hon. Gentleman. There is absolutely no place in the modern civil service for a presumption of good performance. I believe in paying people bonuses if they perform well and meet their targets, but if they do not perform well and do not meet their targets, they should not get a bonus.
In terms of Heathrow and our airports, it is vitally important that we continue to make progress. This is an urgent issue for Britain. It is vital for our trade and vital for inward investment that people have a decent experience when they arrive at our airports. A new control room is opening at Heathrow this month, there are an extra 80 staff for peak times at Heathrow, and an extra 480 people will come on stream during the Olympic period, but I am still not satisfied as to whether we need to do more, including this week and next week, to really get on top of this problem.
Q12.  Sajid Javid (Bromsgrove) (Con): My constituents in Bromsgrove are relieved to learn that the Government have already cleared one quarter of the record, irresponsible deficit left by the Labour party. They understand that you cannot keep spending what you do not earn, but what they would also like to know is: has the Prime Minister received just one quarter of an apology from the Labour party?
The Prime Minister: My hon. Friend makes a good point. I notice that the Labour party did not want to go anywhere near the International Monetary Fund today. Perhaps that is because of something else that its director said yesterday: “You have to compare” the British deficit situation
“against other countries which experienced severe deficit numbers, did not take action right away and are now facing very, very stressful financing terms that is putting their situation in jeopardy”.
23 May 2012 : Column 1131
Q13.  Nic Dakin (Scunthorpe) (Lab): Electoral Commission figures show that the Conservatives have received more than half a million pounds already this year from people who have attended secret soirees at Downing street or Chequers. Is the reason why the Prime Minister is out of touch that he listens to those cliques, rather than to decent, hard-working people such as those in Scunthorpe?
The Prime Minister: There is a very big difference between the money that the Conservative party raises from business and individuals, and the money that Labour gets from unions, which determines its policies, sponsors its Members of Parliament and elects its leaders. They own you lock, stock and block vote.
Stephen Williams (Bristol West) (LD): The coalition Government have restored order and stability to the public finances, and have therefore won us international confidence. Is not now the right time to put renewed effort and vigour into returning growth to the economy, by the Government facilitating and guaranteeing investment in housing and infrastructure?
The Prime Minister: The hon. Gentleman is entirely right. I am sure that he welcomes the enterprise zone in Bristol and the support for the animation and television industries. What we need to do, both in Britain and in Europe, is to combine the fiscal deficit reduction that has given us the low interest rates with an active monetary policy, structural reforms to make us competitive, and innovative ways of using our hard-won credibility—[ Interruption. ] Which we would not have if we listened to the muttering idiot sitting opposite me—[ Interruption. ]
Mr Speaker: Order. [ Interruption. ] Order. I am very worried about the health of the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), who is so overexcited that he might suffer a relapse. I am a compassionate chap, so I do not want that to happen.
Q14.  Sheila Gilmore (Edinburgh East) (Lab): After six months in government, the Prime Minister announced that his Government had created 500,000 private sector jobs. After two years, he is giving us the figure of 600,000 jobs since the election. Why has the rate of growth slowed down so much?
The Prime Minister: There were 100,000 extra people in employment over the last quarter, and in the last two months we have seen repeated falls in unemployment and increases in employment. I would have thought that the hon. Lady would welcome that.
23 May 2012 : Column 1132
Q15.  Eric Ollerenshaw (Lancaster and Fleetwood) (Con): With unemployment down in Lancaster last week, I visited A & G Precision and Sons in Preesall in my constituency. It is a family-run company of only 40 employees that supplies components for the Hawk. It does high-precision work that is required nationally and internationally. I was told that it had turned two work experience places into full-time company-paid apprenticeships. Does that not show that things are moving in the right direction in Lancashire?
The Prime Minister: I am grateful to my hon. Friend for what he says. I am sure he will be pleased, as well, with the order that BAE Systems had today from Saudi Arabia for Hawk aircraft, which is more good news for British jobs, British investment and British aerospace.
Mr Frank Field (Birkenhead) (Lab): Some of our constituents would be hungry today if it were not for the work of Foodbank and similar organisations in our constituencies. If current trends continue, Foodbank reckons that by the next election it will be feeding half a million of our constituents. Might I therefore ask the Prime Minister, before he completes his engagements today, to plan what the Government might do to counter that terrible trend and report back to the House?
The Prime Minister: First, let me join the right hon. Gentleman in welcoming the work that Foodbank does. I have visited one of its sites myself to see what it does. What is absolutely vital in these difficult economic times is that we do what we can to protect the poorest people in our country. That is why we have frozen the council tax, increased the basic state pension and uprated benefits in line with inflation, which has protected the people who need protection the most. Yes, we have had to cut tax credits for those people on £30,000, £40,000 or £50,000, but we have actually increased the tax credits that the poorest people receive.
Philip Davies (Shipley) (Con): The Prime Minister and I might not agree about everything, but we do agree about certain things. For example, we agree that I should never be promoted. [Laughter.] Another thing that we agree about is the need to put public sector pensions on a sustainable and affordable footing. In that context, judges are being asked to pay just 2% of their salary towards their pension, whereas the taxpayer pays 33%. That is neither affordable nor sustainable. Given the increases in pension contributions that we are expecting from other, lower-paid public sector workers, will the Prime Minister ensure that we apply the same tests and requirements to judges, too?
The Prime Minister: My hon. Friend makes an important point. Judicial pensions have always been treated separately, because of what judges do for our country, but on public sector pensions more generally we have managed to—[Interruption.]
23 May 2012 : Column 1133
On public sector pensions more generally, we have reduced the future cost by half while maintaining a public sector pension system that is more generous than what people are able to access in the private sector.
23 May 2012 : Column 1134
Husband has given me information that suggests that senior figures in the establishment knew what was going on. The Crown Prosecution Service refuses to pursue these matters, and instead the Home Office has sought to issue compensation payments. Young men were detained by the state and then abused by the state. Does the Prime Minister agree that a full inquiry is necessary, to ensure that justice is done and is seen to be done?
The Prime Minister: The first thing that the hon. Gentleman should do—I am sure he already has—is make sure that any evidence that he has of abuse, cover-ups of abuse or compliance with abuse is given to the Crown Prosecution Service and the authorities so that it can be properly investigated. The Home Affairs Committee, on which I sat, looked into the issue in years past and made a number of recommendations. I will look carefully at what he says and see whether there is more advice that I can provide.
23 May 2012 : Column 1135
Mr Speaker: I have a short statement to make. Colleagues will be aware that the Prime Minister has extended a formal invitation to Nobel prize winner and newly elected parliamentarian Daw Aung San Suu Kyi to visit the United Kingdom next month. At my request and that of the Lord Speaker, she has kindly agreed to address Members of both Houses in Westminster Hall on Thursday 21 June at 3 pm. Further details about applications to attend will be sent to Members in due course.
23 May 2012 : Column 1136
G8 and NATO Summits
The Prime Minister (Mr David Cameron): I welcome your announcement, Mr Speaker. Daw Aung San Suu Kyi is a remarkable woman, who for so many years has been effectively imprisoned in her own country. It is an incredible testament to change in that country that she is now able to travel and speak freely, including in this Parliament.
With permission, Mr Speaker, I would like to make a statement on the G8 and NATO summits, which I attended in America last weekend. The common theme across both summits was economic stability and international security.
Deficit reduction and growth are not alternatives. We need the first to deliver the second. There was absolutely no debate about this: it was my view, Chancellor Merkel’s view, President Obama’s view and President Hollande’s view. Indeed, France will balance its budget at a faster rate than Britain.
In Britain, in two years, we have cut the deficit we inherited from the last Government by more than a quarter. Our approach has been endorsed again by the International Monetary Fund this week, and by the OECD. At a time of tight budgets, a proper growth plan requires not just a credible fiscal policy, which secures the low interest rates about which I was speaking just a moment ago, but structural reforms to make our economies more competitive, active monetary policy, and innovative use of our hard-won credibility to ensure investment in long-term infrastructure. We are taking all those steps in the UK and promoting them in Europe as well. In every area, we need to do more.
Prime Minister Monti and I have gathered 10 other EU leaders to call for the completion of the single market in digital and services—classic structural reform to our economies. President Hollande is coming forward with creative proposals, such as project bonds, and, as the House knows, in recent months the European Central Bank has helped supply liquidity to European banks. I will pursue all those elements at the informal European Council tonight, and at the formal Council in June, after which I will of course make a statement to the House.
Growing our economies also means doing everything we can to get trade moving. At the end of the G8 meeting, there was a serious and substantive discussion about the potential for an EU-US trade deal. The EU and US together make up half the world’s GDP. There is a huge amount of work to be done—and a further effort will be made and a report will be produced at the G20 next month—but that could have a positive impact on both sides of the Atlantic.
The greatest risk facing the eurozone and, indeed, the world economy, is clearly the situation in Greece. The future of Greece is for the Greek people to determine. It is for them to decide what is best for their country. However, we cannot afford to allow that issue to be
23 May 2012 : Column 1137
endlessly fudged and put off. The Greek election should in effect be a straightforward choice between staying in the eurozone—with the responsibilities that that entails—or taking a different path. The eurozone—and Europe as a whole—needs to have contingency plans in place for both eventualities. That should involve strengthening banks, protecting financial systems and ensuring decisive action by European institutions to prevent contagion. Whatever the outcome, this Government will do whatever is necessary to protect this country and secure our economy and financial system.
Alongside the discussion on the economy, I had two further priorities at the G8: to continue the good work of the G8 on development, and to support the Arab spring and the promotion of democracy and reform.
On development, the New Alliance for Food Security and Nutrition is an important initiative that aims to help 50 million people lift themselves out of poverty over the next 10 years. For countries to receive help, they need to show a real commitment to transparency and good governance. In return, they get substantial support to generate private sector investment in food production. I believe that that is a great combination of promoting good governance and helping Africa feed its people. I will be building on this with a major event on hunger during the Olympic games in the UK.
Encouraging the private sector to create jobs is one of the best routes to sustainable, equitable growth in poorer countries. However, aid still has a vital role to play. For the first time in a decade the amount of aid given by the world’s richest countries to the world’s poorest countries has fallen back. Promises are being broken, and that is wrong. Britain continues to honour its commitments. Other nations should do likewise, and in the G8 that we will chair next year, we will once again produce the report that shows who has and who has not kept their promises.
The G8 also reached important conclusions on Libya, Iran and Syria. Specifically on Syria, there was backing for the Annan plan, and for further UN measures if Assad does not change course. It was significant that the Russians agreed to that text.
I raised Burma and the need to support the foundations of a lasting and irreversible transition to democracy. I want to make that a feature of our G8 next year. I am sure the whole House looks forward to welcoming Aung San Suu Kyi when she addresses Parliament next month.
Let me turn briefly to the NATO summit. Some people write off NATO as a relic of the past, but I believe it is vital to our future security. The threats NATO countries face largely come from beyond our borders—from failed states, terrorism and nuclear proliferation. Because of that, it makes sense for NATO to be prepared, to link up with partners around the world, to act out of area, and to spend less on the weapons of past conflicts such as battle tanks and more on the technology needed for tomorrow’s conflicts. All those things were agreed at the summit.
That is not to say that NATO should not take steps to defend Europe and north America—it should, and we declared at the summit that the interim ballistic missile defence capability to protect Europe is operational. It was particularly good to have a special session with the partners who work with NATO around the world, and in particular the 50 countries that make up the NATO-led alliance in Afghanistan.
23 May 2012 : Column 1138
NATO’s military commanders set out the progress in the campaign. Attacks by insurgents are down and transition to Afghan control is on track. Over the next few weeks, we will reach the point at which 75% of the population will be living in areas where Afghan forces are in the lead for security. The vital next steps are to deliver the final stages of transition, and to continue the build-up of the Afghan national security forces and ensure they are properly funded for the future. Britain is pledging £70 million—$100 million—a year, but it is right that other countries should step up and contribute to the future of Afghanistan, irrespective of the role they have played so far. The summit marked a turning point in those contributions, with almost $1 billion being pledged to support the Afghan national security forces.
Britain has played a leading role in the alliance for reasons of our own security. Three years ago, some three quarters of the most serious terrorist plots against Britain had links to Afghanistan and Pakistan. I am now advised that that figure has fallen to around a half. Our aim is an Afghanistan that is able to take care of its own security without the need for foreign troops, and an Afghanistan that can prevent al-Qaeda returning and posing a threat to us and to our allies around the world.
The tremendous hard work of our courageous servicemen and women is making that possible. After 10 long years, they will finally be coming home. I pay tribute to them. Their service and their sacrifice is beyond measure. We remember in particular all those who have given their lives in this vital task to keep our country safe, and I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab): I am grateful to the Prime Minister for his statement. Let me start with the NATO summit. On Afghanistan, the Opposition welcome the summit’s confirmation that the transition of full security responsibility from the international security assistance force to the Afghan national security forces is set for completion by mid-2013, and that British combat operations are set to end by the end of 2014.
Let me echo the Prime Minister’s words about our troops. They have served heroically in Afghanistan for more than a decade now, and we owe them enormous gratitude. I am sure I speak for the whole House and the Prime Minister when I say that we want to see them home with their families in the right way—one that respects the professionalism they have shown and the sacrifices they have made. To that end, will the Prime Minister give the House a clear indication of the timetable for the expected draw-down of British combat troops between now and 2014? Will he tell us how many British service personnel he expects to remain in Afghanistan after 2014 and which services they are likely to be drawn from, and will he confirm that they will remain under a NATO command and control structure? Will he also tell the House whether he has had discussions with President Zardari on the important issue of land access across Pakistan, which is so vital for British military and ISAF supplies?
23 May 2012 : Column 1139
there as seriously as we take the military challenge? Given that the final stage of the military campaign is under way, what concrete steps will now be taken that were not already in place before the Chicago summit to secure an inclusive political settlement within Afghanistan and between Afghanistan’s regional partners? Does he agree that the international community has talked for a long time about talks about talks on the political settlement we need, and that we need far greater urgency in seeking that settlement for when our troops come home?
On the global economy, we desperately needed a plan for growth, for both Europe and the international community. The Prime Minister entertained Opposition Members with his description of President Hollande as his new best buddy, given that he endorsed the President’s opponent in the most fulsome terms. The Prime Minister told Le Figaro:
“Nicolas Sarkozy has my support. I say it clearly.”
“We put all the chips on one card and it turned out not to be the ace...It was an error of judgment and not what was advised”.
“The Prime Minister has a habit of shooting from the hip.”
In reality, we did not get the conclusions and action we needed from the summit because the international community is divided—not united, as the Prime Minister said—between those who believe we must have a decisive shift towards growth, such as President Obama, now joined by President Hollande, and those who believe that the answer lies in more of the same, such as the German Chancellor and this Prime Minister. For two years he has been the high priest of austerity, telling the world that austerity alone is the answer, but now the recognition has dawned that it is not working, and he finds himself on the wrong side of the argument. That is why he is desperately scrabbling around to say that President Hollande is his great friend.
What has the Prime Minister delivered at home? The recovery has turned to recession, there has been no growth for 18 months and 1 million young people are out of work. He was fond of quoting yesterday’s IMF report, but he did not quote this from Christine Lagarde:
“Growth is too slow and unemployment—including youth unemployment—is too high.”—
“Policies to bolster demand before low growth becomes entrenched are needed”.
23 May 2012 : Column 1140
What did the Prime Minister actually achieve at the summit? We know some of the things he did. He watched the football—nice pictures! He went to the gym. He even squeezed in some sight-seeing. The only thing there is not a photo of is of him making a difference to the world economy—in other words, doing his job. At the G20 last November, he signed a communiqué stating that if “global conditions materially worsen”, countries will take action “to support domestic demand.” Well, global conditions have worsened, so where is the action for growth? Where is the decisive shift we need across the global economy? Why has he not delivered it? He has not delivered it because he does not believe in it.
The Prime Minister is actually making things worse, not better. Last Sunday, the Chancellor went on television and said that speculation about the break-up of the euro was damaging Britain’s economy. He said that
“it’s open speculation…about the future of some countries in the eurozone which I think is doing real damage”.
Will the Prime Minister explain, then, why he decided to do just that last Wednesday and say, “Make up or break up”? It might have rhymed, but does he not understand that it did nothing to help our economy or anyone else’s?
Given the seriousness of the position in Greece, does the Prime Minister really believe that for him to deliver an ultimatum to Greek voters over the weekend about their election was such a good idea? I would have thought that after his experience of the French election, he might have realised it was not such a good idea to get involved.
Finally, on tonight’s European summit, euro bonds are important and a stronger firewall would make a difference, but the crucial thing is demand. Does he not accept that without a plan for growth and demand in Europe, we cannot get a solution on deficits across Europe that is either politically or economically sustainable? The problem with this Prime Minister is that he can only offer more of the same. He cannot be part of the solution because he is part of the problem. All he offers is more austerity. It is not working in Britain, and it is not working in Europe. It is a failed plan from a failing Prime Minister.
The Prime Minister: Five minutes and absolutely no plan! The Leader of the Opposition had nothing positive to say. It was a good joke about Sarkozy, but let me say this: we all have our faults, but I would rather have a reputation for being loyal to my friends than for knifing my brother.
The right hon. Gentleman started with NATO and asked some serious questions, so let me give him some serious answers. He asked for a clear indication about the draw-down. We will go down to 9,000 troops by the end of this year. Clearly, we need to set out a pathway between now and the end of 2014. I want it to be based on the conditions on the ground and on how well the transition is going in the three provinces for which we are responsible. Obviously, I will keep the House updated on that. We do not want a great cliff edge at the end.
The right hon. Gentleman asked what would be left at the end of 2014. We have made a clear decision on this. President Karzai asked us to provide an officer training college in Afghanistan and we will be doing that. We have the assistance of the Australians and the
23 May 2012 : Column 1141
New Zealanders on that, and we hope that others will be joining in. That is the baseline of our commitment, but clearly we will listen to any other requests. The right hon. Gentleman asked whether it would be a NATO-led operation in terms of training: yes it will, but there will not be NATO combat operations after 2014.
The right hon. Gentleman asked about the relationship with Pakistan and about the vital issue of the ground lines of communication—the so-called GLOCs. It is essential that they are reopened. I spoke to Prime Minister Gilani about this when he visited the UK a week or so ago, and I spoke to President Zardari at the conference. I am confident that progress will be made but, frankly, it needs to be made more rapidly than is currently the case.
The right hon. Gentleman asked about the political challenge, and he is right about that. I have said all along that, alongside the military surge, we need a political surge. We are working very hard with the Afghans and the Pakistanis to deliver that. We have made a very clear offer to the Taliban that if they lay down their weapons and join a political process, that process will be open to them. But we have to be prepared for the political process not advancing as far as we would like, and that is why we must ensure that the build-up of the Afghan national security forces goes according to plan so that we can hand over in good order, as I believe we will.
I welcome what the right hon. Gentleman said about Syria and Burma. On President Hollande, let me make this point. President Hollande said something that I think the right hon. Gentleman should perhaps adapt slightly, then repeat. He said:
“The national debt is the enemy of the left and of France.”
“The means cannot be extra public spending, since we want to rein it in”.
The right hon. Gentleman asked about our approach on growth. We agree with the Italian Prime Minister that we need structural reform in Europe. We agree with the French President that we need a more active monetary policy in Europe. We agree with the German Chancellor that deficit reduction is vital in getting interest rates down. The problem is that Europe has not had all three, but we support all three of those things.
Finally, I would just say to the right hon. Gentleman that nobody I can find in Europe, not even the left-wing party in Greece, backs his idea of putting an extra £200 billion of borrowing into the British economy. That is the Labour policy. It would put up interest rates, it would wreck our economy and it would wreck our prospects—which is exactly what Labour did in office.
Sir Peter Tapsell (Louth and Horncastle) (Con): Did anyone at the G8 summit emphasise that the basic cause of the economic and political crisis in Europe was not the Greek debt but the single European currency and its lack of a lender of last resort, which is now a threat to the global stability of the banks? May I put it to the Prime Minister that, until the leaders of the great nations grasp that fact and act upon it, the turmoil in Europe will continue?
23 May 2012 : Column 1142
The Prime Minister: My right hon. Friend makes an incredibly important point, which is that a single currency requires an active, interventionist central bank behind it. That is something that we have been saying for a very long time, and it is one of the reasons I have always been sceptical about the single currency. There is a growing realisation that, alongside plans to deal with deficits to provide fiscal credibility, there is a need for a more active monetary policy. That is what we have in the UK, with our single currency across our nations, and if Europe is to have a working single currency, it needs that sort of monetary policy too.
Mr Alistair Darling (Edinburgh South West) (Lab): While I welcome the change of rhetoric over the weekend, particularly from the Prime Minister, in recognising that austerity alone will not work—at least, from his point of view, in Europe; he might apply that here, too—will he tell us whether the German position has changed at all? It does not seem to have done so, but until it does, I shall find it hard to believe that the eurozone can come up with anything convincing or credible before the Greek elections on 17 June.
The Prime Minister: I have great respect for the right hon. Gentleman, and he raises absolutely the right point. I would say that the German approach is changing, to an extent, because the Germans know that alongside deficit reduction plans, in a single currency, there needs to be greater co-ordination of that single currency. Their concern is that they do not want to take their foot off the deficit reduction until they have more of a political system around the single currency. I understand their concern. This is one of the reasons that I never wanted to join a single currency; I have always believed that a single currency involved a sort of single economic government. The struggle is to try to convince countries in Europe that, alongside deficit reduction, they need a more active monetary policy, a European Central Bank that stands behind the currency, and the structural reforms, such as completing the single market, that we have always argued for.
Mr John Redwood (Wokingham) (Con): I welcome the emphasis on growth. Does the Prime Minister agree that the Bank of England and the banking regulators in the UK need to amend their method of operation to ensure that sufficient money and credit are available to fuel a private sector-led recovery, rather than simply providing more cheap money for the state? Could they not learn from America, which is doing that very well, in order to avoid the problems that Europe is being plunged into by doing it far worse than we are?
The Prime Minister: My right hon. Friend makes an important point. When I say “active monetary policy”, I do not simply mean a central bank that engages in quantitative easing, or whatever. We need to ensure that all the monetary institutions of a country, including its banks, are properly capitalised and properly working. Around Europe, there is a lot of work that needs to be done on that.
Sir Gerald Kaufman (Manchester, Gorton) (Lab):
With regard to the Prime Minister’s discussion with the President of Pakistan, does he deplore Barack Obama’s offensive discourtesy towards the President, the sovereignty
23 May 2012 : Column 1143
of whose country the United States has violated with deadly effect? Will he confirm that Britain stands shoulder to shoulder with our Commonwealth partner in defying American colonialism?
The Prime Minister: I have to say that I would not put it like that. We need to work very closely with our American allies, within our special relationship, to try to deal with the terrorism that has come out of Afghanistan and is still coming out of parts of Pakistan. It is in our national interest to do that, but I always urge all international friends and partners to show patience and understanding with Pakistan because it is the biggest victim of terror of all. It has complex politics, and it needs to be given the space to resolve some of those issues. It also needs to know that its friends, such as Britain, will not leave it after the Afghan conflict is over, and that we are there for long-term partnership, friendship and support.
Simon Hughes (Bermondsey and Old Southwark) (LD): Of course I associate myself and my colleagues with the tributes to our serving forces, particularly in Afghanistan, and to those who have given their lives. On the global economy, will the Prime Minister continue to make it clear that, although we are not in the eurozone and should not wish to join the eurozone, it is in our interests that we support the other countries in Europe that are in it—including, as the Father of the House said, by supporting their structural reform? Does he also agree that an increase in the internal market across Europe is in their interest and ours, and that construction at home is the best way of creating the growth that we need in this country as an immediate priority?
The Prime Minister: My right hon. Friend is entirely right. It is in Britain’s interests that the problems in the eurozone are dealt with. We have consistently made a whole series of suggestions about firewalls, about strengthening banks and about consistent and strong contingency plans. The point that I was making at the weekend is that it has become ever more urgent to make those contingency plans because, frankly, it is not in our power to determine whether Greece decides to stay in the eurozone. We have to prepare for every eventuality, however difficult that might be.
Hywel Williams (Arfon) (PC): This morning, the European Parliament passed, by a very large majority, a call for a financial transactions tax. Can the Prime Minister foresee what his stance, and that of other leaders, will be on that matter this evening?
The Prime Minister: My view is very simple: I am against a financial transactions tax, for the simple reason that the European Commission did a piece of research into such a tax and found that it would cost hundreds of thousands of jobs. While it might sound as though it would tax the bankers and all the rest of it, it would actually put up the cost of people’s insurance policies and pension policies and drive all that activity offshore. I am not surprised that some other European countries support it, because they see it as a good way of taking a lot of tax out of the UK and spending it in Europe. Well, I am not falling for it.
23 May 2012 : Column 1144
Mr William Cash (Stone) (Con): There is increasing pressure for political union between certain member states. Whether this is achieved by enhanced co-operation, by separate intergovernmental treaty or by other stealth measures, does my right hon. Friend accept that, irrespective of the European Union Act 2011, such a fundamental change in the relationship between such member states of the European Union and the United Kingdom would necessitate a referendum?
The Prime Minister: I do not agree with that position. I think the right position for the UK is to say that we should hold a referendum only if power were to pass from Westminster to Brussels or if we were to join some new treaty or political construction that involved the passing of that power. I agree with my hon. Friend, however, that the single currency clearly has within it the seeds of greater political union, so we have to work out—in this country, in our coalition and in the Conservative party—how to respond to that and how to get the best deal for Britain as the situation develops.
Mr Bob Ainsworth (Coventry North East) (Lab): The Prime Minister talks about the continued importance of NATO and about some of the things that have been agreed, but the agreed changes are largely peripheral and the need for reform is profound. Is there not a danger that the understandable focus on the economic crisis is sucking the life out of the need for reform in NATO? Will he focus on that? Notwithstanding the understandable needs of the economy, will the Prime Minister make sure that the change programme that is so badly needed to get decent interoperability within NATO does not lose its momentum?
The Prime Minister: The right hon. Gentleman speaks with great knowledge of this subject. I would be a little more optimistic: one NATO reform, which I know he would welcome, aimed to cut the bureaucratic and headquarters posts around Europe. To be fair to Secretary-General Rasmussen, he has done an excellent job in delivering that. We have also delivered the ballistic missile defence in interim capability, which is another important step forward for NATO. Where I am perhaps more optimistic than the right hon. Gentleman is that I think the reality of the situation will drive us towards reform. Everyone faces tough budgets, and the fact that America is now providing almost three quarters of NATO’s funding and assets is unsustainable, so other countries are, frankly, going to have to step up to the plate, look at their arrangements and co-operate more, as we are with the French, to deliver more of the teeth and less of the tail.
Nicholas Soames (Mid Sussex) (Con): May I warmly endorse the Prime Minister’s view that NATO is vital to our security and congratulate him on the very positive role he played at the summit as the leader of one of NATO’s most important countries? Does he agree that the Secretary-General’s programme for smart defence is key to the future reform of NATO and that the right hon. Member for Coventry North East (Mr Ainsworth) spoke a great deal of sense?
23 May 2012 : Column 1145
We need all countries to undergo the difficult and painful things we have done in strategic defence reviews to work out what weapons and systems are needed for the conflicts of the future, recognising that NATO is less likely to fight land invasions and much more likely to have to deal with failed states and terrorism, so the needed capacities are different. Even that will not be enough, as we then need a lot more co-operation—particularly, I think, between the leading members of NATO, which is why we are working so closely with the French—so that we can deliver complementary capabilities and get more done as a result.
Mr George Mudie (Leeds East) (Lab): With the aim of achieving growth, the IMF specifically recommended yesterday that UK banks slow their acquisition of capital buffers, thereby making more money available to British businesses and small businesses. Do the Government agree with that recommendation, and will they work with the Bank of England to implement it as soon as possible?
The Prime Minister: The hon. Gentleman raises an important point. This is a difficult issue to get right. We are rightly discussing two problems: the need for growth, and the need for financial stability and ensuring we are safe, with the headwinds of a potential eurozone storm approaching. I think the best approach is to work hand in glove with the Bank of England and the Financial Services Authority to get that balance right. That is what the Government will do.
Richard Ottaway (Croydon South) (Con): I congratulate the Prime Minister on his stamina, as I calculate that by this evening he will have done three summits in two continents in five days. I reiterate the points made by my right hon. Friend the Member for Mid Sussex (Nicholas Soames) and the right hon. Member for Coventry North East (Mr Ainsworth). We have to impress on NATO members that the conclusion of the Afghanistan campaign is no justification for cutting defence budgets. It is essential to have a full-blooded review of NATO strategy, with a full-blooded commitment from all its members.
The Prime Minister: I thank my hon. Friend for his remarks about my summitry. By the end of tonight, that will be enough summits for quite some time, although the G20 will soon catch up on us. What he says about NATO is right. We need reviews from all NATO countries, which need to go through their budgets and work out what is necessary for national defence. We need to ask what more we can all do to make sure that NATO has the capacities it needs for the future.
Mr Nigel Dodds (Belfast North) (DUP): I endorse what the Prime Minister said about the importance of NATO to our national security and the need to spend more on the technology of tomorrow. Cyber-terrorism poses an ever-greater threat. Will the Prime Minister assure us that within NATO intense focus will be devoted and resources given to that big and growing problem across the world?
The Prime Minister:
One of the things the UK did in the strategic defence review was to invest some of the savings made—from memory, I think it was £900 million—in a cyber-defence programme. That is being
23 May 2012 : Column 1146
co-ordinated with GCHQ, but also involves the private sector. We hope to work with other NATO members on that capability to make sure that we share best experience and endeavours, and that should lead to savings for us and for others.
Mr Peter Bone (Wellingborough) (Con): The euro is as dead as Monty Python’s parrot: it is no more, it has ceased to be, it has expired. So why do the euro elite continue to claim that it is alive and well? Is it not essential that Europe implements an orderly break-up of the eurozone before the markets force an economic tsunami?
The Prime Minister: Like my hon. Friend, I have always been a genuine euro-sceptic—sceptical about the euro—which is why I did not want to join it. We have to recognise, however, what is in this country’s interest, which is for the eurozone to sort out its issues and difficulties. I believe that will involve greater fiscal transfers and it must involve eurobonds over time. As I have said, it involves a more active monetary policy in Europe. We should encourage our European partners to go down this road to make sure that their system works properly. There are real dangers from disorganised exits from the euro. It is not just that countries would devalue, which would have an impact on us, as we have to think about the impact on financial institutions and banks around Europe, including on British banks. It is very important that the eurozone takes the necessary steps to put in place the contingency plans to keep it safe.
Mr Dennis Skinner (Bolsover) (Lab): Now that the Prime Minister is lecturing Greece about the need for growth and that we need a little bit in Spain and the eurozone, so he says, for the sake of clarity can we get to the bottom of growth here? Will he repeat these words after me: “I’m going to drop the austerity plan and go for growth in Britain”? Now’s your chance.
The Prime Minister: I am afraid that I do not agree with the hon. Gentleman. I deeply regret that my last encounter with him was perhaps a bit sharper than it should have been, and I hope he will accept my apology. He is a tremendous ornament to this House, and that will always remain the case. I do not agree with him because I think a deficit reduction plan is necessary to deliver the low interest rates we need, which are essential for growth. I make the point again that when this Government came to power, our interest rates were the same as those in Spain. Today, ours are less than 2% and Spain’s are over 6%. One reason for that is that we have a credible fiscal policy.
Andrew Selous (South West Bedfordshire) (Con): Will my right hon. Friend give the House an absolute cast-iron assurance that while he is Prime Minister this country will never, ever join the euro—unlike the Leader of the Opposition, who seems very open to the idea?
The Prime Minister: I am very happy to give that pledge. I note that the Leader of the Opposition said that whether we joined the euro would depend on how long he was Prime Minister; I am not sure which prospect is the more terrifying.
23 May 2012 : Column 1147
huge unemployment rates among young people in Greece and Spain. Will the Prime Minister say specifically what discussions he had with G8 colleagues about infrastructure development as part of a global plan for growth?
The Prime Minister: We did discuss the issue of infrastructure development, because I think that it can be part of what needs to be done. The rise of unemployment is tragic in any country, but the figures in Greece, Spain and elsewhere in southern Europe are eye-watering: 50% of young people are unable to find work.
As I have said, I think that the elements of the plan that we need are the fiscal credibility that provides low interest rates and the active monetary policy that supports demand in the economy, as it has in the UK, but combined with structural reforms. There is a need for proper structural reforms in Greece and other countries so that they can have competitive economies. The extra element is using the credibility that we have earned, and the strength of the Government’s balance sheet, to try to deliver innovative finance to infrastructure and credit. That is obviously an option that is open in Europe as well, and I think that it is what President Hollande is referring to when he talks about project bonds. Those are the elements of a growth plan. We have them all in the UK, and we need them in Europe as well.
Mr Julian Brazier (Canterbury) (Con): Does my right hon. Friend agree that when we look at the scale, and the time scale, of the burden that fell on what was then West Germany at the time of German reunification, we have a sense of the awesome challenge that would face any German Chancellor trying to achieve fiscal union in Europe?
The Prime Minister: Yes, I think that my hon. Friend is entirely right. Some people imply—it was implied in the question from the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling)—that German stubbornness is unreasonable. It is understandable. Obviously, for the success of the eurozone we need everyone to adopt approaches such as those I have described in terms of monetary policy, eurobonds and the rest of it, but it is important to understand people’s motivations and difficulties, because they are what lie behind the current impasse.
Chris Bryant (Rhondda) (Lab): It is good that the Russians shared in the motion on Syria, but even if we leave aside the rigged elections in the Russian Federation, there are still major human rights abuses in Russia. For instance, Mikhail Khodorkovsky’s second trial has been universally condemned by every international organisation in the world and, indeed, by many organisations in Russia. He tried to secure an appeal, but it was turned down only last week by Judge Alexander Voronov, who is not an ordinary judge but a military judge in the military chamber of the Supreme Court. When the decision was handed down that there could be no appeal, it was done on the Russian armed forces website. Does that not show that Russia has a great distance to go before it can really embrace being part of the humanity of nations?
23 May 2012 : Column 1148
The Prime Minister: We discuss the importance of freedom, human rights and democracy regularly with Russian colleagues. When I visited Russia, I met civil society organisations to discuss precisely those issues. However, I think that it is very worthwhile to have Russia in the G8. When we are discussing issues such as Iran and Syria, in which Russia has an interest—and, frankly, we want it to join in the efforts we are pursuing—I think that it is helpful to have the Russians there.
Joseph Johnson (Orpington) (Con): In the absence of progress towards a global trade deal through the Doha round, an EU-US deal could be a decent second-best if it meaningfully reduced tariff and non-tariff barriers to trade. Can the Prime Minister give an indication of a plausible time frame for the conclusion of such a deal, and perhaps also an indication of how much the UK economy in particular might benefit from it?
The Prime Minister: I think that there is still something salvageable from the Doha round—all the elements of trade facilitation, such as helping to reduce customs times and charges, rather than the bigger Doha package—and I think that we should pursue that. We had a conversation at the end of the G8 in which we agreed to go away and look at our “issues paper” for the G20, and to establish whether there was a small enough distance to be closed between the EU and the US to make a deal worthwhile. I am very hopeful. Britain is one of the most open trading nations. There are real concerns on both sides—obviously there is a French position on agriculture, and an American position on many services and other issues—but I think that we will have a good look at this at the G20 and see whether we can fast-track it.
Mr Denis MacShane (Rotherham) (Lab): Is the Prime Minister aware that Greece spends 50% more on defence than ourselves, France or Turkey, and is the biggest arms importer in Europe? Is he aware that the Greek shipping industry, which accounts for 7% of Greek GDP, and the Greek Orthodox Church, which is the biggest land and property owner, do not pay a penny in tax? When he talks to the Greek Prime Minister, will he ask him to scale down defence spending and get the oligarchs and the Orthodox Church to pay a little bit to solve the Greek crisis?
The Prime Minister: The right hon. Gentleman makes a good point. However much one can look at the Greek situation and feel for the people who are suffering as a result of unemployment and living standards, there is a crying need for genuine reform in Greece, and for more straightforward and honest politics when it comes to dealing with those problems. That means making sure that people do pay their taxes, and making sure that industries are competitive.
The issue of defence spending is obviously more complex because of the relationship between Greece and Turkey, but as we are now both NATO members and Turkey is an aspirant EU nation, there should be an opportunity to decrease Greek spending on national defence, while of course encouraging it to be a good NATO member at the same time.
Matthew Hancock (West Suffolk) (Con):
At the G8 summit, did any of the leaders advance the argument that dealing with the deficit and supporting growth were alternatives, or did they argue that it was necessary
23 May 2012 : Column 1149
to bring about growth through monetary policy, by supporting the banks and by getting trade going? Did anyone advance the argument that it was necessary to borrow one’s way out of debt?
The Prime Minister: My hon. Friend makes a very important point. Absolutely no one suggested that dealing with deficits and securing growth were alternatives. They are complementary: we need both. That is the view of everyone around the G8 table. There is only group of people who have their heads in the sand and are complete deficit deniers, and they are the people who gave us the deficit in the first place.
Jeremy Corbyn (Islington North) (Lab): The Prime Minister rightly drew attention to the level of youth unemployment in Greece, which is more than 50%. More than a quarter of adults are unemployed, and the economy is set to contract by a further 6% in the current financial year. The Prime Minister has preached austerity in this country and all around the world. That is exactly what has been done in Greece, and that is exactly what the result has been. Is the Prime Minister prepared to put pressure on the European Central Bank, in so far as he can, to stop the austerity oppression in Greece and start supporting the needs of ordinary people who have worked very hard and do not deserve this misery?
The Prime Minister: This is where I part company with the hon. Gentleman. In this country, we have consistently said “You need to have deficit reduction, which delivers low interest rates and enables your central bank to pursue an active and expansionary monetary policy”—which is what we have had in this country—“and at the same time you need the structural reforms to ensure that your businesses are competitive and can take on more people and grow.” That is what we are seeing in Britain, with 600,000 more private sector jobs. It is a world away from what is happening in Greece or in many other parts of the eurozone, which do not have the monetary policy accompanying the fiscal policy and which have not undertaken the structural reforms we are undertaking.
Alec Shelbrooke (Elmet and Rothwell) (Con): I am sure that my right hon. Friend will agree that the biggest threat to our country at present is indeed the crisis in the eurozone, but almost parallel with that is the possible pending crisis in the middle east. Given that a very important conference begins today in Baghdad, did my right hon. Friend manage to find time at the weekend to emphasise to the Russian and Chinese leaders the importance of their role in trying to ensure a peaceful outcome of the Iranian situation?
The Prime Minister:
My hon. Friend is right to raise that issue. A good portion of the G8 was spent discussing the situation in Iran, and specifically discussing the talks that are under way in Baghdad today. It was heartening that the Russians signed up to a pretty tough text on Iran, and I think that the path is very clear. Europe has rightly adopted the oil sanctions, and the pressure is beginning to tell on the Iranian economy. This is the moment at which to maximise the pressure, to encourage other countries around the world to join in with the sanctions, and to say to the Iranians “There is a different pathway. You can have civil nuclear power; you can have a more decent relationship with other
23 May 2012 : Column 1150
countries of the world; but you must give up the ambition of enriching uranium to such an extent that it could deliver a nuclear weapon to you.”
Derek Twigg (Halton) (Lab): Whatever the structural deficiencies and other problems that exist in Greece and have existed there for a number of years, this problem was not caused by that; it was caused by the banking and economic crisis in the world, and the way in which the eurozone has dealt with it. The suffering and austerity in Greece is on a completely different scale from what we have even envisaged in this country, and it is untenable for it to continue. Will the Prime Minister go back and ask the euro partners—not least, of course, the Germans—to think again about what we can do to bring about a different plan there? I remind him that Greece is a very proud nation. It is a very important ally of ours, it stood by us alone in 1941 against the Nazis, and we should do what we can to help it.
The Prime Minister: Of course I agree that Greece is an important ally. Relations between Britain and Greece are very strong, and the historical analogy the hon. Gentleman draws is absolutely right. I do not agree, however, that the problems in Greece are caused only by the euro or by the banking crisis. There are deep and profound problems in the Greek economy that need to be dealt with. There must be the right combination: there need to be deficit reduction plans; there needs to be an active monetary policy; there need to be reforms to the eurozone; and there need to be structural reforms. In the end, however, it will be for the Greek people to decide whether they want to do these things inside the eurozone our outside the eurozone. Clearly, a disorderly exit would be very bad for Britain, and we should do everything we can to avoid that, but we need to plan for every eventuality and have proper contingencies in place.
Mr John Baron (Basildon and Billericay) (Con): In the absence of much-needed supply-side reforms in the eurozone, I suggest a day of reckoning is fast approaching. Given that since the second world war there have been 80-plus cases of countries leaving a currency bloc and the vast majority of them have benefited from that, does the Prime Minister think that we are fast approaching a time when we should stop talking about the need to save the euro, because it can create uncertainty and hit confidence and investment in this country?
The Prime Minister: My hon. Friend makes an important point, but I am not entirely sure I agree. There are, of course, examples of countries that have left currency pegs, and suffered in the short term but then recovered. There have also been countries that split their currency in two; Czechoslovakia managed that process well. There is a substantial difference, however, between such cases and situations where there is a potential breakaway from a currency zone with a single currency. That is a different situation because the banks are so intertwined. That is why we must think very carefully about the contingency plans for such situations.
Jim McGovern (Dundee West) (Lab):
The Prime Minister paid tribute to the troops who have come home from Afghanistan. Recently, my wife, Norma, and I welcomed a Black Watch battalion home to Dundee. Can the Prime Minister assure me, current serving personnel in
23 May 2012 : Column 1151
the Black Watch, Black Watch veterans, my family and my constituents that on his watch there will always be a Black Watch?
The Prime Minister: I very much want us to keep the regimental structure; that is very important. At the same time, however, we need to deliver this big change in our armed forces—which, actually, will deliver a larger Army, but also a better balance between a professional Army and a territorial Army. We are looking at exactly how that can be done, while saving the important regiments about which people rightly feel so strongly.
Mary Macleod (Brentford and Isleworth) (Con): At the G8 summit, my right hon. Friend the Prime Minister discussed development, with the aim of lifting 50 million people out of poverty in the next 10 years. May I therefore urge him to do even more in respect of microfinance as a way of creating sustainable economies over the long term, and to use charities such as the MicroLoan Foundation in Chiswick, which gets a 99% return on the money it gives to women in Africa to create businesses for themselves and their families?
The Prime Minister: My hon. Friend makes an important point. We are, of course, committed to aid and development, and to expanding the new alliance for food security and nutrition programme that Barack Obama launched. Microfinance is important because it not only helps to grow small businesses, but it empowers women, which can make an enormous difference to the success of development.
Keith Vaz (Leicester East) (Lab): Was there any discussion about the situation in Yemen? The Prime Minister will know that on Monday a bomb exploded in the middle of the unity day celebrations, killing 96, and this morning aid agencies have said that half the population is going to starve to death. I appreciate what the Prime Minister and his Government—and successive Governments—have done. However, while the Prime Minister has made Burma a priority for his chairmanship of the G8—I also acknowledge your role, Mr Speaker, in championing the cause of Burma—can he not also find a little space for Yemen, because a stable Yemen is in our interests? If we do not support that country, al-Qaeda will take it over and it will bleed to death.
The Prime Minister: The right hon. Gentleman knows that I absolutely agree with him on this. At the G8 summit, I talked about the next G8 and said it was very important that we address the security and development priorities of the future. I think both Yemen and Somalia fall squarely into that bracket. The recent hideous bomb attack and loss of life in Yemen was extremely distressing. We must focus a huge amount of effort on the country. A development effort is going in: I think the Department for International Development will today announce an investment of £26 million in that country. We must also give an enormous amount of national security assistance to the country, and I discussed that in my bilateral with President Obama.
23 May 2012 : Column 1152
stability to Afghanistan? Sadly, agreement was not reached on reopening the supply routes through Pakistan. Will the Prime Minister comment further on that, and on the role of Pakistan as a key ally in our efforts to leave Afghanistan on a stable footing at the end of 2014?
The Prime Minister: That is a key point. We need to ensure we have northern routes as well, of course, and I had a good meeting with the President of Azerbaijan to discuss that issue. On Pakistan, Members are absolutely entitled to feel frustrated. We are enormous aid donors to Pakistan, and we have a very strong relationship with the country. It is frustrating that the lines of control are still closed, but there are ongoing discussions and I am confident they will be reopened. We have to show an understanding about how this country has suffered from terrorism, about the complexities of its politics and about the need to show real respect for its sovereignty and its democracy. The message we must give to both Afghanistan and Pakistan is that long after this war is over, we will be there supporting both of them as strong independent countries, diplomatically, politically, through trade, through aid—through all the means we have—and we will not desert them.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): In a recent visit to Nigeria, I saw at first hand the great opportunity for agri-investment in that amazing country. However, the all-party group that I chair has heard a lot from British businesses about the logistical challenges and security concerns of investment in Nigeria. While the new alliance for food security and nutrition is a good step, what support will the Prime Minister pledge to British companies looking to invest there, so we get the win-win of both growth in British business and food and jobs for Nigerians?
The Prime Minister: When I went to Nigeria and met the UK Trade & Investment team in Lagos, I was hugely impressed by its work and its dedication, and also by the incredible links between British Nigerians and Nigerian British, as it were, working between the two countries. We work very closely with the Nigerian Government on security, because there are considerable security challenges, particularly in the north of the country. Security training and counter-terrorism co-operation between the UK and Nigeria can help produce major dividends both for that country and for trade and investment.
Alok Sharma (Reading West) (Con): Given that increasing exports to emerging economies needs to be a key part of the growth strategy of many of the G8 nations, will the Prime Minister update us on any discussions he has had with other European leaders on progress on the pending free trade agreement between the EU and India?
The Prime Minister: We had a number of discussions about the free trade agreements. There is a series of such agreements: the Indian one; the Canadian one; the chance of getting one going with Japan. My view is that all of them are good news. The Korean one has been a success, and we need to drive them all forward—and we are certainly in the vanguard of doing that.
23 May 2012 : Column 1153
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): May I echo the comments of those colleagues who expressed concern at the scale of the cuts and the retrenchment being forced on Greece—the ordinary people of Greece, not the Greek Government? While I agree with the Prime Minister that there need to be structural reforms and the changes he has suggested, would it not be better to have a bit more flexibility—a bit more European solidarity—rather than end up forcing Greece into a situation that leads not only to the collapse of that country, but immense consequences for the eurozone and the entire world economy?
The Prime Minister: Obviously, we are not a participant in the eurozone bail-out of Greece. We are supporting Greece through the IMF, however. The hon. Gentleman must consider this point: other European and eurozone countries, some of which are not particularly rich themselves, have had a series of agreements with Greece about what needs to be done and what money will be put in, and effectively he is asking them to go back repeatedly to their own Parliaments and say, “Well, I promised I wouldn’t ask for any more for Greece, but here I am again asking for more.” That is very challenging for them. As I have said, in the end it will be for the Greek people to decide, in their election, whether they want to stay in the euro and keep to the undertakings they have given, or whether they want to choose a different path. We in this country must be clear that we should support all and any contingency plans to make sure that either scenario can be safely delivered.
Mr Robin Walker (Worcester) (Con): The Prime Minister cited in his statement the extraordinary statistic that the EU and the US together make up more than half the world’s gross domestic product. Does he accept that this may well be the last generation for whom that is the case, and that it is therefore more vital than ever that we reach out further and faster into developing markets to support our exporters and build on our strengths as a country?
The Prime Minister: My hon. Friend is right that the share of world trade and the share of the world economy taken by the EU and America together is likely to decline as that of China and India rise, but I was always taught in business that going back to one’s best and biggest customer to get that extra deal is often a very good strategy, so we should be thinking exactly about that in terms of EU-US trade.
Hugh Bayley (York Central) (Lab): At a time when defence budgets are constrained right the way across the alliance, is it not important for NATO itself to demonstrate, in the same way as its member states, that every pound it spends is well spent? Will the UK therefore support proposals being considered by the NATO secretariat to ensure that the external audit service for NATO is entirely independent of NATO, that accounts are published in a timely fashion—say, within six months of the year- end—and that they are available for parliamentarians in this and other Parliaments in NATO states to scrutinise, in the same way that we scrutinise our own defence expenditures?
23 May 2012 : Column 1154
them. Let me again commend Secretary-General Rasmussen for what he has done in reforming the huge number of command posts and headquarters posts in NATO. I suspect that there is more to be done on that front, as well.
Julian Smith (Skipton and Ripon) (Con): Currently, Britain has only some 3% of the European market in services. Can the Prime Minister confirm just how important completing the services market is for British services?
The Prime Minister: On completing the single markets in digital, in services and in energy, each of them can add, I believe, more than a percentage point on European GDP. The services market is particularly important because it is an area that Britain excels at—not just financial services but everything, including construction and architecture. On opening up services in other countries, a number of countries are currently in breach of their undertakings, so the pressure for this, particularly in countries such as Germany, should be very great.
Geraint Davies (Swansea West) (Lab/Co-op): We all know the expression, “Give a man a fish and he can eat for a day; give him a rod and he can eat for life.” Therefore, why is some of the money being used to pay down the debt in Greece and not instead being invested in solar forests across Greece so that they can provide Europe with energy; being invested in rail links, so that people can travel between Greece and other European countries and thereby boost tourism; and being invested in universal broadband, so that we can connect Greece to the world? We have a politically acceptable and economically sustainable solution, instead of putting half a fish on the table, leaving the Greeks hungry and angry by lunch time.
The Prime Minister: The Greeks have had a very special deal—an enormous private sector haircut on their debt, through which creditors have been asked to take a share of the burden. The money that Greece has received in the last decade from the European Union could have gone into many of the projects that the hon. Gentleman points out. Part of the problem in parts of the eurozone is that the early years of the euro saw wage rates and unit costs of labour rise, rather than their being fundamental changes to make these countries more competitive.
Glyn Davies (Montgomeryshire) (Con): It seems that there is a strong possibility that Greece will be forced out of the eurozone, and we are obviously concerned about the impact on the economy that a disorderly exit may have. Does my right hon. Friend agree that we need to hold discussions with our European partners and develop contingency plans to ensure that such an exit has the minimum possible impact on the United Kingdom?