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European Council

Oral Answers to Questions — Work and Pensions – in the House of Commons at 3:30 pm on 24th October 2011.

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Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party 3:30 pm, 24th October 2011

With permission, Mr Speaker, I would like to make a statement on recent developments in Libya and yesterday’s European Council.

Yesterday in Libya, after 42 years of tyranny and seven months of fighting, the national transitional council declared the formal liberation of their country. Everyone will have been moved by the pictures of joy and relief that we saw on our television screens last night. From Tripoli to Benghazi, from Misrata to Zawiyah, Libyans now dare to look forward, safe in the knowledge that the Gaddafi era is truly behind them.

This was Libya’s revolution, but Britain can be proud of the role that we played. Our aim throughout has been to fulfil the terms of the UN Security Council resolution, to protect civilians, and to give the Libyan people the chance to determine their own political future. With the death of Gaddafi, they now really do have that chance. The whole House will join me in paying tribute to our armed forces for the role that they have played—over 3,000 missions flown and some 2,000 strike sorties, one fifth of the total strike sorties flown by NATO. As the Chief of the Defence Staff has written this morning, it has been

“one of the most successful operations NATO has conducted in its 62-year history”.

I believe it is something the whole country can take pride in.

The decision to intervene militarily, to place our brave servicemen and women in the line of fire, is never an easy one. We were determined from the outset to conduct this campaign in the right way, and to learn the lessons of recent interventions, so we made sure the House was provided immediately with a summary of the legal advice authorising the action. We held a debate and a vote in Parliament at the earliest opportunity. We made sure that decisions were taken properly throughout the campaign, with the right people present, and in an orderly way. The National Security Council on Libya met 68 times, formulated our policy, and drove forward the military and the diplomatic campaign. We took great care to ensure that targeting decisions minimised the number of civilian casualties. I want to pay tribute to my right hon. Friend Dr Fox for his hard work on this issue.

It is a mark of the skill of RAF, British Army and other coalition pilots that the number of civilian casualties of the air attacks has been so low. The military mission is now coming to an end, and in the next few days, NATO’s Operation Unified Protector will formally be concluded. It will now be for Libyans to chart their own destiny and this country will stand ready to support them as they do so.

Many learned commentators have written about the lessons that can be learned from the past seven months. For our part, the Government are conducting a rapid exercise, while memories are still fresh, and we will publish its key findings. For my part, I am wary of drawing some grand, over-arching lesson—still less to claim that Libya offers some new template that we can apply the world over. I believe it has shown the importance of weighing each situation on its merits and thinking through carefully any decision to intervene in advance. But I hope it has also shown that this country has learned not only the lessons of Iraq, but the lessons of Bosnia too. When it is necessary, legal and right to act, we should be ready to do so.

Let me turn to yesterday’s European Council. This Council was about three things: sorting out the problems of the eurozone, promoting growth in the European Union, and ensuring that as the eurozone develops new arrangements for governance, the interests of those outside the eurozone are protected. This latter point touches directly on the debate in the House later today, and I will say a word on this later in my statement. Resolving the problems in the eurozone is the urgent and overriding priority facing not only the eurozone members, but the EU as a whole and indeed the rest of the world economy.

Britain is playing a positive role proposing the three vital steps needed to deal with the crisis: the establishment of a financial firewall big enough to contain any contagion; the credible recapitalisation of European banks; and a decisive solution to the problems in Greece. We pushed this in the letter we co-ordinated to the G20 and in the video conference between me, Angela Merkel, Nicolas Sarkozy and President Obama last week. We did so again at the European Council this weekend and will continue to do so on Wednesday at an extra European Council meeting.

Ultimately, however, the way to make the whole of the EU, including the eurozone, work better is to promote open markets, flexible economies and enterprise. That is an agenda that Britain has promoted, under successive Governments and successive Prime Ministers, but it is now an agenda that the European Commission is promoting, too. We have many differences with the European Commission, but the presentation made by the Commission at yesterday’s Council about economic growth was exactly what we have been pushing for, driving home the importance of creating a single market in services, opening up our energy markets and scrapping the rules and bureaucracy that make it take so long to start a new business. Both coalition parties are pushing hard for these objectives.

This may sound dry, but if we want to get Europe’s economies moving and to succeed in a competitive world, these are the steps that are absolutely necessary. These are arguments that Margaret Thatcher made to drive through the single market in the first place, and which every Prime Minister since has tried to push. If the countries of the EU were as productive as the United States, if we had the same proportion of women participating in our economy, and if we were as fast and flexible at setting up new businesses, we would have the same GDP per capita as the United States. That is an aim we should adopt.

The remainder of the Council was spent on the safeguards needed to protect the interests of all 27 members of the European Union. The Council agreed that all matters relating to the single market must remain decisions for all 27 member states and that the European Commission must

“safeguard a level playing field among all Member States including those not participating in the Euro.”

That leads me directly to the debate we will have in the House later today. Members of my party fought the last election committed to three things: stopping the passage of further powers to the EU; instituting a referendum lock to require a referendum, by law, for any such transfer of powers from this House; and bringing back powers from Brussels to Westminster. All three remain party policy. All three, in my view, are in the national interest. In 17 months in government, we have already achieved two of the three. No more powers have gone to Brussels. Indeed, the bail-out power has actually been returned and, of course, the referendum lock is in place. I remain firmly committed to achieving the third: bringing back more powers from Brussels.

The question tonight is whether to add to that by passing legislation in the next Session of this Parliament to provide for a referendum that would include a question on whether Britain should leave the EU altogether. Let me say why I continue to believe that this approach would not be right, why the timing is wrong and how Britain can now best advance our national interests in Europe.

First, it is not right because our national interest is to be in the EU, helping to determine the rules governing the single market, our biggest export market, which consumes more than 50% of our exports and drives so much investment in the UK. That is not an abstract, theoretical argument; it matters for millions of jobs and millions of families and businesses in our country. That is why successive Prime Ministers have advocated our membership of the EU.

Secondly, it is not the right time, at this moment of economic crisis, to launch legislation that includes an in/out referendum. When your neighbour’s house is on fire, your first impulse should be to help put out the flames, not least to stop them reaching your own house. This is not the time to argue about walking away, not just for their sakes, but for ours.

Thirdly, and crucially, there is a danger that by raising the prospect of a referendum, including an in/out option, we will miss the real opportunity to further our national interest. Fundamental questions are being asked about the future of the eurozone and, therefore, the shape of the EU itself. Opportunities to advance our national interest are clearly becoming apparent. We should focus on how to make the most of this, rather than pursuing a parliamentary process for a multiple-choice referendum. As yesterday’s Council conclusions made clear, changes to the EU treaties need the agreement of all 27 member states. Every country can wield a veto until its needs are met. I share the yearning for fundamental reform and am determined to deliver it.

To those who support today’s motion but do not actually want to leave the EU, I say this: I respect your views. We disagree not about ends, but about means. I support your aims. Like you, I want to see fundamental reform. Like you, I want to re-fashion our membership of the EU so that it better serves our nation’s interests. The time for reform is coming. That is the prize. Let us not be distracted from seizing it. I commend this statement to the House.

Photo of Ed Miliband Ed Miliband Leader of Her Majesty's Official Opposition, Leader of the Labour Party

I thank the Prime Minister for his statement. On Libya, I join him in expressing deep and abiding gratitude to members of the British armed forces. Over the past seven months, once again, our servicemen and women have been a credit to our nation, exercising our responsibility to the Libyan people and to uphold the will of the United Nations. That is why I have supported the Government in their actions, and I commend the Prime Minister on the role that he has played in taking the right and principled decisions on the issue.

There are difficult days ahead, and it is for the Libyan people to determine their future, but I agree with the Prime Minister that, alongside the responsibility to protect, which we exercised, is the responsibility to help rebuild—in particular, to help provide the expertise that the new Libya will require.

Let me now turn to Europe, and here my opening remarks reflect some of the things that the Prime Minister said. We are clear, and have been consistently, that getting out of the European Union is not in our national interest. Cutting ourselves off from our biggest export market makes no sense for Britain, and the overwhelming majority of British businesses, however unhappy they are with aspects of the EU, know that, too.

What is more, at this moment of all moments, the uncertainty that would ensue from Britain turning inwards over the next two years to debate an in/out referendum is something our country cannot afford. The best answer to the concerns of the British people about the European Union is to reform the way it works, not to leave it. We should make the completion of the single market, common agricultural policy reform, budget reform and reform of state aids the issue. That is why we will vote against the motion tonight.

This is the context for the European Council that the Prime Minister went to this weekend: growth stalled in Britain since the autumn; growth now stalling in Europe; unemployment rising; and the threat of a new banking crisis. That is why yesterday’s summit was so important.

I listened carefully to the Prime Minister’s statement, and it sounds like he now believes that Britain should play an active role in solving this crisis, but the truth is that month after month the Prime Minister and the Chancellor have chosen to grandstand on the sidelines, not to help sort out the issue. The Chancellor even refused to go to the initial meetings that he was invited to on the issue. They have shown no will to try to find the solutions.

Let me ask where the Prime Minister now stands. On banking, does he believe that the amount of recapitalisation being discussed is sufficient to ensure financial stability throughout the European banking system, particularly in the light of the International Monetary Fund’s larger estimates of capital required? On Greece, does he believe that the lessons of previously announced Greek bail-outs are being learned and will provide a genuinely sustainable solution? On growth, does he now understand that Europe will not get to grips with its debt problems until it get to grips with a crisis of growth and the immediate lack of demand in the European economy?

I suppose we should be pleased that the Government have moved from the Chancellor being empty-chaired at the meetings to the Prime Minister at least wanting to get into them, but he will have to do better than yesterday, because he was surprisingly coy about his one real achievement at the summit. In a few short hours, he managed to write the euro version of “How to Lose Friends & Alienate People”. He went into the summit lecturing the Germans; he came out of it being shouted at by the French. Apparently, President Sarkozy, until recently his new best friend, had had enough of the posturing, the hectoring, the know-it-all ways. Mr President, yesterday you spoke not just for France but for Britain as well.

The Prime Minister was in Brussels, but his mind was elsewhere. The Tory party on Europe is suffering another nervous breakdown, with a Prime Minister making frantic phone calls home, Parliamentary Private Secretaries threatening to resign, and it is not just the Stone Roses on a comeback tour, because Mr Redwood is back among us, touring the television studios.

All the Prime Minister’s present difficulties are of his own making. What did he say in 2006? He said that instead of talking about the things that most people care about, we were banging on about Europe. However, he spent the last five years telling his Back Benchers that he may not be banging on about Europe but that, deep down, he is really one of them. He was warned that he might start by dabbling with Euroscepticism, but that it was a slippery slope. That is exactly what happened.

Does the Prime Minister regret getting out of the European People’s Party in favour of the right-wing fringe—[ Interruption. ] He says no, but I do not know whether he was aware that there was a dinner for EPP leaders on Saturday night. The German Chancellor was there, the French President was there, and the President of the Commission was there—mainstream centre right Europe—but the Prime Minister was not invited. He is the person who kept telling us that he was a Eurosceptic, who at the election promised renegotiation of the terms of Britain’s membership of the EU. His party is paying the price because it believed what he told them. The country is paying the price because we are losing influence.

Yesterday, the Prime Minister was at it again, and we heard it again today. He is locked in a row with his Back Benchers, and what do we see? We see the resurrection of the old classic to get out of the social chapter, and withdraw employment rights. The coalition agreement is clear. That option is off the table. The Deputy Prime Minister is nodding from a sedentary position. That option—the third option in the Prime Minister’s statement—is off the table, and the Foreign Secretary confirmed that again this morning. Let the Prime Minister answer this question. At the December summit, what position will he take? Will he be for renegotiation or against? The coalition agreement says that that option is off the table. He said in his statement that it is on the table. The position is totally unclear.

This goes to the heart of the Prime Minister’s ability to fight in Europe on behalf of this country. Like his predecessors, he is caught between the party interest and the national interest. We see a rerun of the old movie—an out-of-touch Tory party tearing itself apart over Europe—and all the time the British people are left to worry about their jobs and livelihoods. The Prime Minister should stop negotiating with his Back Benchers, and start fighting for the national interest.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

First, I thank the right hon. Gentleman for his kind words on Libya. I agree that, as well as the responsibility to protect, we have a responsibility to help rebuild, and we will certainly do that.

What he said about Europe started well with praise for the importance of completing the single market, something he is in favour of and I am in favour of. He did not tell us about all his views on Europe. Yesterday, he was asked repeatedly whether Labour would join the euro, and the answer was instructive. He said:

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

I am not sure which prospect is more terrifying.

The right hon. Gentleman accused the Government of not going to meetings in Europe. We have been going to meetings in Europe to get us out of the bail-out mechanism that Labour put us into. He asked what we are doing to make sure that bank recapitalisation is credible. My right hon. Friend the Chancellor spent 10 hours in an ECOFIN meeting on Saturday ensuring that that happened. It would not have done without his intervention.

On Greece, we certainly want decisive action. Let me be clear about that. The right hon. Gentleman then said an extraordinary thing about the French President—that he thought the French President spoke for Britain—[ Interruption. ] That is what he said. It is difficult from opposition to sell out your country, but he has just done it.

I struggled to look for a question to answer—there were not very many. The right hon. Gentleman talked about the importance of global leadership. Let me just remind him that one of the absolute keys is going to be the role of the IMF. Let us remember that he led his Back Benchers and all his Front Benchers through the Division Lobby to vote against the IMF deal that his own former Prime Minister had negotiated in London. That was a complete absence of leadership, like so much we see from the right hon. Gentleman.

Several hon. Members:

rose —

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons

Order. A very large number of right hon. and hon. Members are seeking to catch my eye. I am keen to accommodate them, but I remind the House that we have a very heavily subscribed debate to take place afterwards. Therefore, brevity from Back Benchers and Front Benchers alike is of the essence.

Photo of Malcolm Rifkind Malcolm Rifkind Chair, Intelligence and Security Committee of Parliament

I agree with the Prime Minister’s view on the debate this afternoon. However, has he had drawn to his attention the terms of the third option in the motion, which is to

“re-negotiate…membership in order to create a new relationship based on trade and co-operation”?

Is that not purely the situation of Norway and Switzerland, is that not incompatible with membership of the European Union, and should not anyone who is interested in renegotiation that will enable us to stay within the Union oppose this motion?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I think the vital interest for the UK is belonging to the single market—not just being able to trade in that single market but having a seat at the table where you can negotiate the rules of that single market, which of course countries like Norway are not able to do. One of the other problems with the motion—I completely understand the frustrations that many of my colleagues have about Europe—is that if you have a three-way choice, you could find that 34% of the country voting to get out of the European Union would be enough to deliver that or, indeed, that 34% voting for the status quo, which many of think is unacceptable, would be enough.

[Interruption.]

I think we have tried the alternative vote, and a pretty clear decision was made.

Photo of Mike Gapes Mike Gapes Labour, Ilford South

How would the Prime Minister characterise his relations with President Sarkozy?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

If you have a good relationship with someone, you can have frank discussions with them. I can tell the hon. Gentleman exactly what happened at the European Council yesterday. On the issue of Libya, Britain and France have worked together probably more closely than we have worked together at any time in the last 40 years, and on defence co-operation, we will continue to do that. I do not for one minute resile from the need sometimes to speak clearly and frankly on behalf of Britain and to stand up for the British national interest. It is in our national interest that the eurozone deals with its problems, and it is right that we make that clear.

Photo of Menzies Campbell Menzies Campbell Liberal Democrat, North East Fife

My right hon. Friend deserves great credit for the determination and leadership that he showed in relation to Libya. He will understand that his views and mine on Europe are hardly identical, but, at the very least, can we not agree that in opposing President Sarkozy abroad, and in opposing the motion to be discussed here at home, he is clearly acting in the national interest?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I am very grateful for that compliment. The fact is that my right hon. and learned Friend is right to make the point. This is a coalition. There is not complete agreement on European policy between the parties of the coalition, but the coalition came together in the national interest and is acting in the national interest, and I think it is right to oppose this motion tonight, partly on the grounds that he puts forward.

Photo of Gisela Stuart Gisela Stuart Labour, Birmingham, Edgbaston

It is a shame that the Prime Minister spent only 10 minutes on Libya, the European Council and the motion. On reflection, I hope that he will think that he should have paid more attention to the European Council.

US Secretary Geithner said that even if all Greece’s debts were repaid, we would still have the same problem. Could the Prime Minister tell the House how he thinks that Greece will regain competitiveness?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I have probably made more statements on European Councils over the last 16 months than many Prime Ministers, and I have always committed to come back and report to the House.

The point that the hon. Lady makes is absolutely right. Greece is just the most glaring problem that the eurozone has to deal with. As I have said, that has to be dealt with decisively. It needs to be backed by a firewall, and it needs to be backed by the recapitalisation of banks. But the fundamental problem of the eurozone is the issue of competitiveness and the very large current imbalances that are building up in some of the member states, particularly those in the south. As a result, what needs to happen above all, as I said in my statement, is an advance in competitiveness, in trade, and in completing the single market, which will help all those economies in the longer term.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee

The Prime Minister has made it clear that he advocates fiscal union within the eurozone. Can he explain to the House how it is that fiscal union of that kind is not a fundamental change in our relationship with the European Union, bearing in mind that it is established that the constitutional position is clear that where there is fundamental change, there must be a referendum? How can he square that circle?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

Let me be clear with my hon. Friend. I think that fundamental changes are coming in Europe; they are clearly coming in the eurozone. That may lead to pressures, as we saw over the weekend, for treaty change. That will present opportunities for Britain and we should respond to those opportunities. The question for the House tonight is whether it is right to go off down the path of having a referendum that includes an in/out option, just when there are big opportunities as the eurozone and the EU are changing.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee

I join others in congratulating the Prime Minister on his stance on Libya, but remind him that there are other countries, such as Yemen, that need to be focused on. The Lisbon agenda set out the benchmarks for economic growth, which were replaced by the 2020 strategy. Is the Prime Minister confident that, despite the eurozone crisis, those targets will be achieved?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

First, the right hon. Gentleman is right on Yemen. As he knows, the National Security Council is spending an increasing amount of time on examining how we can best help that country not only to achieve a transition to greater democracy and freedom, but to tackle the security concerns that we have about it. He is right that we have had the Lisbon process and the 2020 process. The problem is that although this agenda gets pushed forward, in too many cases the targets and measures are not met. After 16 or 17 months of going to Council meetings, I am seeing a change of heart in the European Commission, not least because everyone recognises that the priority in Europe is now growth. The Commission has to stop adding expensive regulations to business and start deregulating, which is exactly the agenda that we are putting forward.

Photo of Richard Ottaway Richard Ottaway Chair, Foreign Affairs Committee

Does the Prime Minister agree that not only in Libya, but in Tunisia and Egypt there is an opportunity for reconstruction and a transition to democracy? To what extent will that be dealt with on a bilateral basis or in conjunction with our partners through the European External Action Service?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The first thing that we have done is to help to change the European neighbourhood policy to ensure that it is much more engaged with Libya, Tunisia and Egypt, and to put in much more conditionality so that there is progress towards rights and democracy in the countries that we are helping. In addition, we have a significant bilateral programme. It is essential to help those countries develop the building blocks of democracy, such as political parties, and understand the importance of civic society. The Department for International Development and others can help with that.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Justice), Shadow Spokesperson (Foreign and Commonwealth Affairs), DUP Westminster Leader

I join others in paying tribute to the bravery of our servicemen and women over Libya and to the work of NATO. I particularly commend the Prime Minister for his leadership on Libya. I am afraid that on Europe, the same cannot be said. The people of Britain will today be asking why he has he decided to firmly set his face not only against his own Back Benchers, but against the settled will of the British people for a referendum on Europe.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

First, I thank the right hon. Gentleman for what he said about Libya. As I have said, the country can be proud of what our armed service personnel have done. On Europe, I am clear about what Parliament should do about a referendum. We do not come to this place to give away powers that belong to the people, not to us. It is wrong that we did not have a referendum on Maastricht, Lisbon and those other treaties. My clear view is that it is when this Parliament proposes to give up powers that there should be a referendum. That is the guarantee that we have written into the law of the land.

Photo of Philip Davies Philip Davies Conservative, Shipley

As global traders, our future prosperity lies in improved trade with China, India, South America and emerging economies in Africa, and not in being part of the backward-facing, inward-facing protection racket that is the European Union, which is propping up inefficient businesses and French farmers. The Prime Minister’s objection to tonight’s motion seems to be about timing. Will he give us a timetable for getting powers back from the European Union?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

First, where I have some disagreement with my hon. Friend is that, although we of course want to export more to China, India, Brazil, Russia and Turkey—the fast-growing countries of the future—we have to recognise that today, 50% of our trade is with European Union countries. It is therefore in our interest not only to keep those markets open and have a say about their regulation, but to further open them up. That is what we should be pushing for and are pushing for in the European Union. As I say, there is a case for a referendum if ever this Parliament proposes to give up more powers. Otherwise, it is clear what the country wants us to do: it wants us to stay in the European Union, but to retrieve some powers and ensure that we have a better relationship with Europe. That is the commitment that we have made.

Photo of Tony Lloyd Tony Lloyd Labour, Manchester Central

The Prime Minister must recognise that whether we are talking about Greece, Italy, Spain, Portugal or Ireland, only growth will make a real difference to the financial crisis. Why did he not advocate policies of growth at the heart of these debates and, in that way, give a lead to the British people about why Europe is so important?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

We have been doing exactly that, but one reason some of those countries have got into difficulties is not just the shortage of growth and competitiveness, though that has been key, but the fact that they have built up very large budget deficits. That is the lesson right across Europe—you have to make sure that you cut your cloth according to what you can afford. That is a lesson that we are tragically having to learn in this country, too.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

My constituents in Dover were very pleased and heartened to see the Prime Minister standing up to the French.

When it comes to the national interest, is not a key point that we need action on budgets and action on getting us out of the bail-out fund, not action selling us down the river, joining up with the euro or selling down the £7 billion rebate that we used to have?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

My hon. Friend makes an important point, which is about what the British people want us to do specifically with respect to Europe. The biggest danger, they sense, is getting drawn into further bail-outs. That is why, in the treaty change that has already come forward, that was the price that we exacted—to get out of the EU bail-out fund by 2013. We have returned that power to the UK. We should also be taking action on the European budget, and we have secured agreement with some of the large countries in Europe on a real-terms freeze this year. Those priorities, plus the referendum lock, are what this Government have already been able to deliver.

Photo of Denis MacShane Denis MacShane Labour, Rotherham

The Prime Minister prayed in aid Margaret Thatcher, but she put her money where her mouth was in the sense that the UK contribution to the European Community went up from £656 million in 1984 to £2.54 billion in 1990—a fourfold increase. Then, it was to help Greece, Spain, Portugal and Ireland. Does the Prime Minister plan to emulate her to help Poland, Latvia and our poorer friends in the new Europe?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The right hon. Gentleman reminds us that Margaret Thatcher did indeed put her money where her mouth was. The only trouble was the next Government came along and gave it away when they gave up the rebate for absolutely nothing in return.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

Will my right hon. Friend speculate on what the cost would have been to the taxpayer if he and my right hon. Friend the Chancellor had not negotiated to get Britain out of the bail-out mechanism?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The point about the bail-out mechanism is that we were left exposed by the last Government because of the existence of the European financial stabilisation mechanism. Although we are still at risk between now and 2013, what we have secured is that we have ended that from 2013. That is an achievement. We also stayed out of the second Greek bail-out, and that was an achievement. Those things have saved real money, and it is really important for people to understand that the Government have been focused on delivering something really concrete and important for the British people at this time.

Photo of Gerald Kaufman Gerald Kaufman Labour, Manchester, Gorton

As a Member who voted for the implementation of Security Council resolution 1973, and who as shadow Foreign Secretary refused to meet Gaddafi when he invited me to go to Libya to collect financial compensation—blood money—for the family of WPC Fletcher, may I state my disgust and revulsion at the murder, and the nature of the killing, of Gaddafi? May I ask the Prime Minister to emphasise to the national transitional council that the future for democracy in Libya lies in reconciliation, not revenge?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The right hon. Gentleman makes an important point, and I can announce to the House that Chairman Jalil, leader of the national transitional council, has announced today that there will be an inquiry into the circumstances of Colonel Gaddafi’s death. Clearly, we wanted him to face justice. That is what should have happened, and it is important that that inquiry goes ahead. However, I do not stand back for one second from what I said in my statement—that because the Gaddafi era is over and he is gone, the Libyan people, who genuinely feared that as long as there was a prospect of his coming back there was a difficulty in building their future, can now get on with that future.

Photo of Jo Swinson Jo Swinson Liberal Democrat, East Dunbartonshire

I greatly welcome the Prime Minister’s leadership on Libya. Its liberation is a success not only for the Libyan people but for proving that the international community can act together to implement the responsibility to protect. However, does he agree that we must also exercise caution? Intervention under R2P must be used sparingly and only in cases that meet all the relevant criteria, such as there being a serious threat to human rights, the response being proportional and there being clear support for action internationally, regionally and within the country.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I very much agree with how my hon. Friend puts her question, but I would add something important to that: we should intervene only if we believe we are capable of doing so and of bringing about the effect that we need. There is a very important issue there. It is about seeing not only what is legal and necessary, but what we can do.

Photo of Kate Hoey Kate Hoey Labour, Vauxhall

The Prime Minister must know of the growing division between the public and politicians. Does he have no concern at all about what will happen at 10 o’clock tonight, when all three party leaders will whip their Back Benchers in a Division on a motion that is not binding, and that seeks a referendum and future legislation in—probably—2013? Does that mean that once again, the public will say, “Seventy-five per cent. of us would like a referendum at some stage. This Parliament is not listening”?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The hon. Lady asks a very important question, so let me try and answer it. I absolutely believe it is right to have public petitions in the way that we now do, and that it is right to give time to Back-Bench motions—this Government have brought that reform about. However, the issue of Europe is not a side issue, but an important one, and it is important that political parties and Governments make their views on it known. I do not accept the idea that somehow we can have a vote on something as important as this on a Thursday and hope that it will go unnoticed. I believe in the importance of Parliament, but I cannot believe in a sovereign Parliament on the one hand and on the other say that some of its votes and decisions do not matter. I simply do not think that that is consistent.

Photo of Mark Reckless Mark Reckless Conservative, Rochester and Strood

The Prime Minister tells The Daily Telegraph today that we should use any treaty change to shore up the euro to get powers over employment and social policy back, yet on 25 March, he agreed to precisely such a treaty change, but did not ask for anything in return.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I have to take issue with my hon. Friend. The very limited treaty change that is about to be debated in, and hopefully passed by, the House of Commons, gets us out of the bail-out mechanism that the previous Government got us into. I thought, and I still think as Prime Minister, that that was the single most important price that we could exact for that treaty change—that was the biggest concern of the British public. The point I made yesterday and that I will make again today is that I believe that huge changes will take place in the EU and the eurozone. That will give us opportunities to maximise the national interest, which is what we should be talking about and debating in the Conservative party, the coalition and the House of Commons as a whole. We will not further that by having a referendum that includes an in/out option. As I have said, that would be like walking away from a burning house. We should deal with that first, then talk about the future.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

As I said yesterday, the eurozone crisis has clearly had a chilling effect, not only on eurozone economies, but on our economy, the American economy and economies elsewhere in the world. The eurozone is a huge market for the world’s goods, and clearly there has been a slow-down, partly because of the lack of confidence in the eurozone. We must also be clear that a break-up of the eurozone would have severe consequences for neighbouring countries and banks. That is why it is very important that we work with eurozone partners to try to sort this issue out.

Photo of Bernard Jenkin Bernard Jenkin Chair, Public Administration Committee

May I join others in commending my right hon. Friend for his leadership on Libya, for which he deserves considerable credit? May I also thank him for the constructive tone that he is adopting towards those of us who will support today’s motion? So many parties have again and again promised a referendum, and the British people clearly want a say over our future relationship with the European Union. Does he understand our anxiety that it is ironic that the House of Commons is likely to vote heavily against what the British people want?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I thank my hon. Friend for his kind remarks about Libya and my tone, which I shall try to keep constructive throughout. I completely understand people’s frustrations: they were promised a referendum on the Lisbon treaty, but they did not get it because the treaty was put in place by the previous Government, which meant that it was not then possible to hold the referendum. However, the answer to the frustration in the country over not having a referendum on the last thing is not to offer one simply on the next idea. The most important thing is to deliver what people want, which is to ensure that we get the best out of the EU and that, where there are opportunities as Europe changes, we take those opportunities. That should be the focus in this Parliament and beyond.

Photo of Stuart Bell Stuart Bell Labour, Middlesbrough

The Prime Minister rightly said that the 27 nation states will make any decision on the single market. He has not told the House that the President of the European Council, Herman Van Rompuy, has been elected president of the 17 nation states within the eurozone, with France on one shoulder and Germany on the other. The President has said that he will inform the British Government prior to any summit meetings and inform them of the results. Does the Prime Minister think that to be “informed” is the same as to be “consulted”?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The hon. Gentleman makes an important point: as the eurozone comes together and the governance arrangements change, it is important that those countries that are not in the eurozone—and, in our case, do not want to join—have their interests protected. That is why, in the Council conclusions, I secured specific language about ensuring a level playing field and that countries outside the eurozone are protected. This is a journey. The eurozone is going on one journey, where it sees closer collaboration and co-operation, but I believe that countries outside the eurozone will be looking for further protections to ensure that some of our vital national interests—things such as financial services—are properly protected and not put at risk by what is happening in the eurozone.

Photo of Mark Lancaster Mark Lancaster Conservative, Milton Keynes North

History tells us that following military victory, such as in Iraq and Afghanistan, we have just 100 golden days to deliver stabilisation before the joy of victory turns to despair among the local population. The clock is now ticking, so will the Prime Minister say a few words about how we will deliver this stabilisation?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

We worked closely with others on a stabilisation and reconstruction plan for Libya. A lot of work went into that. I am optimistic because we have seen how the national transitional council is genuinely national and bringing the country together, not wanting a division between Benghazi and Tripoli. It is transitional, and the clock is now ticking for it to set up a genuine transitional Government within 30 days. Everything that I have seen of the Libyan leadership shows that it wants to get on with rebuilding its country, and because of its oil wealth and the size of its sovereign wealth fund, it has the means by which to do it.

Photo of Fiona Mactaggart Fiona Mactaggart Labour, Slough

In the Prime Minister’s statement, he suggested that the EU economies could be as productive as the US economy if we had the same proportion of women in the work force. However, with unemployment among women in the UK higher than at any point since 1988, will he tell us three things that he has done to increase the proportion of women in the work place?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

We have increased the hours available for free nursery care for three, four and two-year-olds. That is what we have done.

Photo of Nadhim Zahawi Nadhim Zahawi Conservative, Stratford-on-Avon

Will the Prime Minister tell the House whether the President of Switzerland and the Prime Minister of Norway were at the table arguing with the French? I suspect that the answer is no because their relationship is different from ours. [Hon. Members: “They are not in the EU.”] That is absolutely right. They are not in the EU, which is why amendment C to the motion is completely the wrong option for our country to pursue.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

My hon. Friend makes an important point. We have to ask clearly, “What is in the UK national interest?” At the heart of our national interest, when it comes to the EU, is not only access to that single market but the need to ensure that we are sitting around the table of the single market determining the rules that our exporters have to follow. That is key to our national interest, and we must not lose that.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

That one obviously took a long time to construct. I believe that the eurozone countries are coming together and seeing the need for a big and bold solution. That needs to happen. It will not solve the problem—because there are still major stresses and strains within the eurozone that need to be dealt with in the long term—but I think that it will happen this week. It is up to the House of Commons how it votes tonight, but I am clear that it is in our interest to be in the EU but seeking our national advantage and national interest at all times.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

May I congratulate the Prime Minister on his leadership on Libya? Returning to fiscal union, may I ask him what part of fiscal union he believes could trigger the European Union Act 2011?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The key point about the European Union Act 2011 and the referendum lock that we put in place is that any passage of powers from Britain to Brussels results in a referendum. That is the key thing that we have delivered, which means that never again can we have a situation where, as with Maastricht or Lisbon, a treaty is passed that transfers powers from this House to somewhere else without the British people being asked first. I sometimes think that we have lost the ability to make clear what a significant change that is. That is the key thing that the referendum lock delivers, and I think everyone on this side of the House can be very proud of it.

Photo of Wayne David Wayne David Shadow Minister (Justice) (Political and Constitutional Reform)

Following on from the last question, just a few months ago this House spent 42 and a half hours debating the European

Union Bill, the purpose of which is to allow for referendums on the EU. Is there any chance of seeing a referendum in the near future on the EU at all?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The point is that if a Government propose to pass powers from this House to Brussels, they should ask the British people first. That is the simple principle that we have put into law. It is important that we try to establish clear rules for the use of referendums in a parliamentary democracy, and I absolutely believe that rule 1, line 1 is: “If you’re giving up powers that belong to the British people, you should ask them first.”

Photo of Richard Harrington Richard Harrington Conservative, Watford

I commend the Prime Minister on his statement, not least because it will reassure the thousands of my constituents who work for companies whose European headquarters are based in Watford. Can he reassure me that the things that my constituents do not like about Europe—for example, bureaucracy, reckless profligacy, gross overspending and too much regulation—will be dealt with to the best of his ability in the course of this Government?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I can absolutely give my hon. Friend that assurance. If he looks at what we have achieved in a relatively short time—getting out of the bail-outs, getting agreement among the big countries for a freeze in the European budget this year and getting the European Commission to focus on deregulation rather than regulation—he will see that they are all important. I agree with his first point. A lot of companies come and invest in Britain not just because of our economic strengths, our flexible labour markets and all the rest of it, but because of access to the world’s biggest single market, which is important for investment into Britain by American, Japanese and other firms, creating the jobs and wealth that we need.

Photo of Michael Connarty Michael Connarty Labour, Linlithgow and East Falkirk

With some financial analysts saying that banks holding sovereign debt might have to take a 25% to 60% write-down on that, can the Prime Minister elucidate for the benefit of the House what he means by a “financial firewall big enough to contain any contagion”, and say whether he thinks that the IMF needs to be involved and that the problem cannot be solved in Europe?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

There are two issues if we are going to see a decisive resolution of the Greek situation. Obviously we need a recapitalisation of Europe’s banks, so that they have sufficient capital to withstand the losses that would otherwise affect them. Credible stress tests are crucial to that: there has been round after round of stress tests in Europe, but they have not been robust and credible enough. I believe that that has now been secured, not least because of my right hon. Friend the Chancellor’s work in the ECOFIN meeting. The second thing we need—the firewall; what I called the “big bazooka”, which the shadow Chancellor referred to the other day—is to ensure that we have a mechanism big enough to help to stop contagion to other countries. There will be discussions in the eurozone and outside it about how big that needs to be, but the answer is: bigger than is currently proposed, and they need to keep working on it.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth

I very much welcome the possibility that treaty changes will be needed in the next few months. Will the Prime Minister assure me and businesses the length and breadth of this country that he will use that opportunity to get rid of ridiculous regulations and laws that are impeding growth and job creation in our country?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I agree with my hon. Friend’s approach. We should use these opportunities as the European Union changes and the eurozone changes to maximise Britain’s national advantage. We have to be clear: we do not yet know how much of a treaty change will be proposed by the Germans and others, or how extensive it will be. We shall have to look carefully at that to see what is right for Britain in response. However, I should say to my hon. Friend that, so far in this Government, one treaty change has been proposed and we exacted an important price, which was to get us out of the bail-out funds from 2013, which was a clear and present danger to the United Kingdom.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

Is not the tragedy about the Prime Minister the fact that, as Leader of the Opposition, he totally underestimated the world crisis? As a result, he has had to grow up very fast in regard to European politics. What is his next alibi going to be in regard to the postponement of a referendum? I am sure that there is going to be one.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I have not for one minute underestimated the scale of the crisis that we face in Europe and across the world economy. Sadly, that crisis has been made worse by the vast overspending that took place under the Government whom the hon. Gentleman supported.

Photo of Tony Baldry Tony Baldry The Second Church Estates Commissioner

Will the Prime Minister confirm that, at the last general election, the Conservative manifesto committed us to seeking to return powers from Europe on economic and social policy, but that nowhere did it contain a commitment to seek an in/out referendum or to seek to renegotiate our terms of membership of the European Union?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

My hon. Friend makes an important point. We did have a commitment to seek the return of important powers from the European Union, such as the social and employment legislation. Obviously, we are in a coalition, but as Conservative leader, I remain committed to achieving that, because it is in the British national interest to do so. My hon. Friend makes the important point, however, that it was not part of our manifesto or our policy to seek a referendum that included an in/out option. I completely respect the fact that there are Members, not only on this side of the House but on the Labour side as well, who have long wanted an in/out referendum, not least because some of them would like us to get out of the European Union altogether. But that is not our policy, and that is the reason we having the debate on this on a Monday, on a proper motion, in the proper way. This is not some side issue; it is an important issue. As I said before, I believe in the sovereignty of Parliament. To me, all decisions of Parliament matter, and the idea that we could sweep this off into a debate on a Thursday and that no one would notice is wrong. What Parliament decides matters, and that is why the Government are taking the motion seriously.

Photo of Michael McCann Michael McCann Labour, East Kilbride, Strathaven and Lesmahagow

A few weeks ago, I visited the Weir Group in my constituency. Its representatives explained the difficulties that they had had in evacuating British staff from Libya. They also told me of their keen desire to get back to working on vital infrastructure projects there as soon as possible. Will the Prime Minister tell us how he is going to ensure that that can happen?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I completely understand why the hon. Gentleman has raised that issue. It is important to his constituents and to that business, and, frankly, it is important for British investment in Libya. I can tell him that Stephen Green, Lord Green, has already held a Libyan investment conference and has plans to travel to Libya. I recommend that the hon. Gentleman contacts that Minister, and I will make sure that that happens so that we can help the Weir Group with the important work that it does.

Photo of Robert Halfon Robert Halfon Conservative, Harlow

Many of my constituents who have contacted me over the past few days tell me that they lost their trust in politics because the previous Government refused to give them a referendum on the Lisbon treaty. What substantive message can my right hon. Friend give me to take back to those constituents?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I completely understand their concerns, but just because the last Government failed to hold a referendum on the Lisbon treaty does not mean that we should vote tonight for a referendum on an in/out option that was not in any of our manifestos. The reassurance that I would give to my hon. Friend’s constituents is that the Government are doing all the things that people care about most in Europe, such as constraining the European budget, getting out of the bail-out funds and cutting unnecessary regulation. We are doing all those things, and there will be more to come.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

Did I hear the Prime Minister correctly when he said earlier that he now believes that there should have been a referendum on the Maastricht treaty? In the light of the Foreign Secretary’s well-rehearsed opposition to that, will he tell us exactly when he changed his mind?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I have always felt that, and our Bill is clear. Under our Bill, Maastricht or any of those treaties would have triggered a referendum. That is the point. I do not think that the hon. Gentleman has been keeping up. I hope that Labour will commit to that legislation, which will mean that if any Government ever try to give away powers from this House, they will have to ask the British public first.

Photo of Harriett Baldwin Harriett Baldwin Conservative, West Worcestershire

Has the Prime Minister noticed that, while this Government have ruled out joining the euro, it is the continued policy of Her Majesty’s Opposition, regardless of who is leading them?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

There was an interesting series of interviews with the Leader of the Opposition over the weekend. As well as saying that if he were Prime Minister for long enough, he would like to get us into the euro, he responded to being asked whether he thought that Brussels had too much power by saying:

“No, I don’t think Brussels has got too much power”.

That is the official position of the Labour party: wrong about the euro, wrong about Brussels, wrong about Britain. Wrong about everything!

Photo of Naomi Long Naomi Long Alliance, Belfast East

I share the Prime Minister’s optimism at the formal liberation of Libya, and I pay tribute to the role our armed forces have played in that process. Is the Prime Minister as concerned as I am, however, at the allegation of the summary execution of any human being—even of a violent tyrant such as Gaddafi? Does he share my view that there is a need urgently to re-establish the rule of law and proper democracy in that country?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I think the hon. Lady makes an important point. We all saw those pictures on our televisions and newspapers; they were not pleasant images. I think everyone understands that that is not what should have happened; it should have ended in a trial and in Gaddafi facing justice. As I said earlier, Chairman Jalil has announced that there will be an inquiry, and I think it is important that the Libyans carry it out properly.

Photo of Rory Stewart Rory Stewart Conservative, Penrith and The Border

May I respectfully disagree with the Prime Minister’s idea that there are no lessons from Libya? The lesson from Libya, which could be applied to Europe, is that what matters is not what you ought to do, but how you do it, with whom and when.

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I did not say that there are no lessons to learn; I think there are lessons to learn. The Government are carrying out a lessons learned process and will be announcing the key results from it. The point my hon. Friend makes about what you are able to do and how you build alliances to do what you want to do is absolutely vital—and was vital in this case. What I was trying to say—perhaps I did not put it across properly—is that we have to be careful not to say that because Libya was successful in this way, we can read that across to every single other proposed intervention. We cannot do that. As a liberal Conservative, I believe that a bit of scepticism should be brought to these schemes before we embark on them.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

For the sake of absolute clarity, is it now this Prime Minister’s position that he could accept substantial German-led changes to the Lisbon treaty without it requiring the referendum he promised the British people?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

The key point is this. If there is a proposal for moving powers from this House of Commons to Brussels, there is a referendum guarantee. It is absolutely vital that people understand that; it is the promise that we make. We do not yet know whether treaty change will definitely be proposed; we do not yet know what it will consist of or how big it will be. The pledge I can make is that we will use that opportunity to further the national interest—something that did not happen under 13 years of a Labour Government.

Photo of Duncan Hames Duncan Hames Liberal Democrat, Chippenham

Closer fiscal policy co-ordination within the eurozone marks two very different degrees of political integration among EU member states. Does the Prime Minister consider that, unlike recent referendums in other EU countries, this development, alongside the passage of the European Union Act 2011, affords the British public a more meaningful veto than before on treaty changes and their impact on our own country?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I think my hon. Friend is absolutely right. That is the assurance that people seek—you should not change the rules of the game and you should not give away powers that are not yours to give away. The British people should have a block on that; that is what we have put into place. No Government should rule out for ever putting questions in a referendum—after all, this Government had a referendum on the alternative vote—but that is not what I am saying; I am saying that the bedrock of our views about a referendum in a parliamentary democracy is that you should not give powers away from Parliament without asking the people first.

Photo of Jon Ashworth Jon Ashworth Opposition Whip (Commons)

Ahead of tonight’s vote, with a rebellion apparently looming, will the Prime Minister tell us what advice he has taken from the former Prime Minister, John Major? [ Interruption .]

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

Oh, thank you very much. Well, the hon. Gentleman can have plenty of advice from a former Prime Minister because he used to work for one.

I do not know whether it appears on his CV; my advice would probably be to leave it off!

Photo of Neil Carmichael Neil Carmichael Conservative, Stroud

With large and significant supply chains stringing across Europe and a market of 500 million people, does the Prime Minister agree that businesses across this country would be really pleased to see us further strengthen the capacity of the single market to deliver more trade?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

My hon. Friend makes an important point. All these years after the single market was started, we have still not completed the single market in services. In this country, service is one of our strongest industries, and it is actually countries like Germany that have not yet completed that single market. I know that people are bored of hearing the agenda of completing the single market in services, liberalising energy markets, deregulating in Europe, but if we want to raise our growth rate in Europe and raise our game in Europe, this is squarely in our British national interest.

Photo of Therese Coffey Therese Coffey Conservative, Suffolk Coastal

I congratulate my right hon. Friend on his leadership in the Libyan situation, when there were many doubters who have been proved unequivocally wrong. Will he assure me that he will continue to work with the President of France and others on the United Nations Security Council to address the situation in Syria?

Photo of David Cameron David Cameron The Prime Minister, Leader of the Conservative Party

I can assure my hon. Friend that, whatever our disagreements on economic policy—and, by and large, we are united on it—the French President and I will work very closely together on foreign affairs and defence issues. I think that there is a real coming together of French and British national interests, but, as I said earlier, when we do sometimes have disagreements we should not be frightened, as good friends, of airing them and discussing these matters.