makes it more difficult for the Bank of England to achieve a sustained reduction in interest rates.
Mr. Denis MacShane (Rotherham) (Lab): While my right hon. Friend is on the subject of themes raised by Labour Members, may I ask him whether he saw the interesting article in the New Statesman that reported on the conversation between the Leader of the Opposition and President-elect Obama? The Leader of the Opposition condemned Europe and the European Union and Mr. Obama said afterwards that he was a lightweight. We do not want a lightweight Leader of the Opposition at this time of grave economic crisis.
David Miliband: My right hon. Friend makes a good point. I thought that he would refer to one of his own New Statesman articles, which I am delighted to commend to the House. I am happy to confirm that the report in the New Statesman, an august journal of record in many ways, did indeed use the word lightweightnot about the European Union, but about the Leader of the Opposition.
No. I did say that I would make progress, and I really must. The package also sends a clear signal that the European Unions response to the
crisis must lie in openness, not protectionism. That point was raised by my now-departed right hon. Friend the Member for Leicester, East (Keith Vaz). [Interruption.] Oh, there is he is; he is still here.
The clear lesson of the 1930s is that the response to the banking crisis, not the crisis itself, will determine the depth and duration of this recession. We will continue to resist pressure to raise barriers to trade and investment and vigorously promote market access for all businesses. The second main item on the Councils agenda is the climate and energy package. If we are to avoid dangerous climate change, it is vital that the European Union should work towards finalising the details of its ambitious climate leadership programme.
The aspirations that European Union leaders signed up to in March 2007to cut carbon emissions by 20 per cent. by 2020, and by more if there was a global dealhave placed the European Union firmly at the forefront of the battle against climate change and the drive to build a low-carbon economy. We need to sustain the European Unions leadership to capitalise on President-elect Obamas promise to green the US economy and build momentum globally towards a deal at Copenhagen. It is fair to say that the difficult economic context has made that agenda more challenging; some have argued that we cannot now afford to be so ambitious. They see climate change as a second-order priority, to be deferred until the global economy gets back on track.
The Government are clear that the argument that I have just mentioned would be the wrong response to the slowdown, because only a low-carbon recovery will be a real recovery. Oil prices may have fallen in recent months, but as and when demand picks up they will rise again. The International Energy Agency believes that oil prices will remain volatile for some time, and that by 2030 rising demand could push them to more than $200 a barrel. Unless we act decisively now, we will emerge from the credit crunch only to face a more fundamental resource crunch, which will fuel inflation and act as a brake on growth. That is why the fiscal stimulus package needs to be smart to rebuild the economy on low-carbon lines.
Ms Stuart: Is my right hon. Friend troubled by reports in the European pressnot just in Germanythat some of the Heads of State and Prime Ministers are arguing that climate change has to take second place and that fighting it should not be done on the back of a risk to competitiveness? Will my right hon. Friend be careful to resist allowing climate change to take second place, as the issue is very important for the long term?
David Miliband: I am troubled by that, and I will do my best with my right hon. Friend the Prime Minister to resist those pressures. It is evident to me that unless we build a low-carbon recovery, it will not be a sustainable recoveryeither in economic or financial terms. That is why we must achieve such a recovery.
Jo Swinson (East Dunbartonshire) (LD): Does the Foreign Secretary see the irony in the fact that, at the very time when the climate change conference is happening in Poznan in Poland, Poland is one of the countries that is reported to be dragging its feet and arguing that we do not need such deep cuts in emissions? What steps is he taking to try to convince our European partners that Europe needs to continue the leadership that it has shown on this issue if we are to ensure that we have a successful result in Copenhagen next year?
David Miliband: The hon. Lady makes an important point. I had a long and detailed bilateral meeting with the Polish Foreign Minister about this last month in Brussels. Poland is very dependent on coal. I therefore hope that what I am about to say about carbon capture and storage speaks directly to her point.
The Prime Minister will argue at the Council for a durable funding mechanism to encourage investment in carbon capture and storage. The 2007 agreement included a commitment to build up to 12 demonstration plants by 2015. With global emissions from coal set to increase by 73 per cent. to 2030, it is critical that we develop the technology and apply it at scale. The European Parliament has proposed that allowances from the new entrant reserve of the emissions trading scheme should be set aside to support CCS projects. We have given this proposal our full support, and it goes a long way towards meeting the Polish fear about its very unusual coal dependency and offers a way to square the circle of energy security and tackling carbon emissions.
David Miliband: The particular accounting standards for Northern Rock are the subject of a long and detailed debate. I am happy to write to the right hon. Gentleman about that, but I will not get into it now. I would just say that the Government have been defending the current state aid regime precisely because of the balance that it seeks to strike and the limits that it places on Governments right around Europe.
Let me make the point about the link to the economic recovery plan. The European Commission document puts on the table a €5 billion public-private European green cars initiative. It proposes to focus structural funds on new energy-efficient buildings, with an increase of up to €6 billion a year in the European Investment Bank financing for climate change, energy security and infrastructure investment. This is precisely the sort of transformational change that the European economy needs.
Rob Marris: Could my right hon. Friend say a little more about what the European Union is doing on the other side of the equation to adapt to climate change? For example, almost every member state of the EU has a land border with another member state, as does the United Kingdom in Ireland, and there are issues to do with water flows, flooding and such like. What is the EU doing to assist with the co-ordination of adaptation policies for climate change?
David Miliband: My hon. Friend makes an important point. It is fair to say that we have only scratched the surface of this, but the European budget review from 2013 provides a major opportunity to green the European budget as regards not only the mitigation of climate change but adaptation.
Andrew Miller (Ellesmere Port and Neston) (Lab): My right hon. Friend will be aware of meetings that have taken place between the Society of Motor Manufacturers and Traders and my right hon. Friend Lord Mandelson. Will he ensure that the weight of his Department is put behind those talks? It is vital to the British economy that we have some genuine partnerships that will bring this green transformation in the vehicle industry into our UK plants. In my constituency, we need to get less of the nonsense that we have had from The Times about secret meetings that did not take place and more positive action such as that coming from the SMMT.
David Miliband: My hon. Friend is a doughty fighter for a modern car industry, and therefore, by definition, a green car industry. The €5 billion public-private green cars initiative in the European Commissions proposals speaks directly to that.
I need to address some of the external relations issues that will be tackled this week. The modern insecurities of terrorism, the chaos in parts of Africa and the long-standing challenges of the middle east will dominate foreign policy discussion on Thursday and Friday. I attended the General Affairs and External Relations Council in Brussels yesterday in preparation. We discussed and denounced the attacks in Mumbai, and agreed that the European Union needed to enhance its relationship with Pakistan given the economic and political problems there. The potential for political co-operation, improved trade relations and development assistance with the still relatively new civilian Government in Islamabad more than merits EU attention, and I welcome the prospect of an EU-Pakistan summit next year.
Across Africa, there are deep-rooted problems in Zimbabwe, Somalia, Sudan and Congo. I hope that we can have more thoroughgoing discussion tomorrow in our debate on the Humble Address, but I welcome the additional EU sanctions on individual members of the Mugabe regime. His is a rogue Government spreading death and destruction around his country, not just a rogue state spreading disease to its neighbours. Our humanitarian aid now totals £47 million, and it is helping 3 million people, but none of us can rest until the people of Zimbabwe get the real hope that comes from a Government of their own, delivering for them. That requires the active engagement of African states and the UN, which will be our continuing focus.
Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): Apart from the Zimbabwean diplomats and politicians with whom the European Union has dealt already this week, have the Government received any representations from the South African Government, or other Governments contiguous to Zimbabwe, on the efforts that they believe the EU can make to tackle the cholera outbreak?
David Miliband: There is certainly discussion about European humanitarian aid, but beyond that and the sanctions, my answer is no, not to my knowledge. That reveals the centrality of those neighbouring African states. In all of our extensive discussions, the levers are in their hands, rather than those of the European Union. We do supply humanitarian aid, however, and we have imposed sanctions on individual members of the regime. My hon. Friend will remember that we tried to get global sanctions imposed on the regime in July at the UN Security Council, but we were rebuffed by two vetoes. We warned at the time that Mugabe was playing for time, and I am sorry to say that we have been proved right.
Lembit Öpik: On terrorism, I would like to ask the Foreign Secretary to consider whether the forthcoming EU summit is a good opportunity to consider whether collectively we might seek to address the motives of terrorism without condoning its methods. It seems to me that on a collective basis, it would be a good strategic opportunity to apply the lessons of Northern Ireland on an international basis.
David Miliband: The hon. Gentleman makes a profoundly important point, but it is not what I was actually talking about. The way in which the European Union can play its greatest role is to help the weak statesnotably Afghanistan and Pakistan, but also others elsewhereto build some sort of national capacity for good governance.
That point relates directly to the issue of Somalia, where today is a significant day. Although the problem of piracy is one of the oldest foreign policy problems in the world, today there is a very modern variant in the gulf of Aden. Yesterday, the EU launched its European security and defence policy mission, with contributions of ships and aircraft from eight EU member states, under British command. The aims and objectives of the mission are to safeguard the delivery of humanitarian supplies to Somalia and to protect other vulnerable shipping by deterring and disrupting piracy in the region. At the moment, 19 ships have been taken hostage in the bay of the gulf of Adentestimony to the current insecurity of shipping that affects all of us through its impact on global trade. This ESDP mission is no substitute for a political and security process on the ground in Somalia, but it is vital none the less. I look forward to a wider discussion of Somalia as a whole in due course, but the mission ultimately depends on proper political progress on the ground in Somalia.
The Foreign Secretary is right to say that the ESDP mission is the first naval deployment of European forces, working together. Is that not exactly the sort of operation that people in his party and in mine foresaw, with European nations working together in a military formor in this case a naval formfor the benefit of all our communities? It is exactly the kind of operation that the ESDP is designed for, and I hope that it will be successful.
David Miliband: The hon. Gentleman has long taken a principled stand in favour of the ESDP, and I applaud him for it. In Aceh, the west bank, Darfur, Bosnia, Afghanistan and Chad, the ESDP is proving its worth and I will say more about that in a moment.
In the middle east, all sides recognise that the promise a year ago of a Palestinian state in 2008 will not be delivered this year. That means more misery for Palestinians and more insecurity for Israelis. However, as well as continued suffering, in the past year there have been serious talks across the Israel/Palestine divide, a new Israel/Syria track, and progressnotably in the west bankon economic development and security. EU Foreign Ministers will discuss on Thursday night the role of the EU in 2009. I will advocate the following points. First, we need continued clarity that security for Israel and a state for the Palestinians, based on 1967 borders, are key to a stable middle east. Secondly, there must be continued focus on all meeting their road map commitments, including practical help on the ground for humanitarian assistance, economic development, including through next weeks Palestinian investment conference in London, and Palestinian security capacity. Thirdly, renewed engagement with Arab states in the region is key to a comprehensive process and a comprehensive peace. That is what I call a 23-state solution, not just a two-state solution, using the Arab peace initiative as an important building block.
Leaders summits are also an opportunity to take a step back from the immediate problems and crises and adopt a more strategic view. On Friday, High Representative Javier Solana will report to the Council on the implementation of the 2003 European security strategy. That will show how closely the EUs security strategy is aligned with ours. Like the UKs national security strategy, it will address the wide range of security threats that we now facefrom terrorism and nuclear proliferation to economic and energy insecurity.
An ESDP with only soft power is not enough...the US needs, the UK needs, NATO needs, the democratic world needs a stronger, more capable European defence capacity.