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I welcome the Prime Minister’s saying that the Irish have received the reassurances that they sought on the impact of the Lisbon treaty. Does he agree that if the Lisbon treaty is finally ratified this autumn, Europe should then get on with tackling the problems that really matter to people—climate change, the economy and crime—and that any attempts by any future UK Government to reopen the terms of membership would be self-indulgent and self-defeating?

The summit was particularly important for setting out the framework for a European Union response to any future banking crisis, and I welcome the agreement. But does the Prime Minister not see—I have raised this with him before—that however strong the EU regulatory framework is in that area, unless the Government here act to disentangle the banking system, separating high-risk casino investment banking from the day-to-day business of high street savings and mortgages, our economy will continue to be vulnerable to a repeat of the banking crisis?

With recent reports suggesting that the impact of climate change may be even worse than we had feared, does the Prime Minister agree that the EU must be in the vanguard for an ambitious and comprehensive deal at the Copenhagen summit in December? Is he concerned, as I am, that the recent summit was light on detail on the crucial question of how much EU states will pay to assist adaptation to climate change in developing countries? It is those countries that will bear the brunt of the dangerous effects of climate change.

I am glad that the summit conclusions referred to the need for the EU to tackle cross-border crime, which I do not think the Prime Minister mentioned. Does he agree that it is essential that this country and our Government play their full role in measures such as the European arrest warrant and co-operation through Europol and Eurojust? Does he agree that rejecting those measures would be a betrayal of the British people, putting Eurosceptic dogma over the safety of British communities?

Finally, the summit text included declarations on Pakistan and Afghanistan. It is vital that there is adequate security in Afghanistan for the elections in August, and that Britain continues to play its role in Helmand province. In that context, will the Prime Minister confirm recent reports that he rejected the advice of his military commanders that there should be an increase in British troop numbers in Afghanistan? Can he not see that it would be the worst of all worlds to ask our troops to do their very difficult job in Afghanistan without committing enough resources for them to do that job properly?

The Prime Minister: I am grateful to the right hon. Gentleman for his remarks in support of the decisions of the European Council. I shall start where he ended, on Afghanistan. Let me make it absolutely clear that the number of troops in Afghanistan, as a result of decisions we made a few months ago, has risen over the course of this year from 8,100 to 9,000. That will be the case until after the Afghanistan elections take place over the summer and autumn months. There has been an increase, not a decrease, in the number of troops that we have set aside for the vital purpose of defending democracy in Afghanistan. I know the sacrifices that our British forces have made and the difficult terrain in which they operate, and I think the whole House will want to give them support in the magnificent efforts in
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which they are engaged to keep the peace in Afghanistan, bring stability to the region and ensure that democratic elections take place.

The right hon. Gentleman mentioned law and order, and I want to remind him of one justice and home affairs issue. As part of the Lisbon treaty negotiation, we secured an extension of our existing opt-in to asylum and migration measures, but we remain ready to co-operate on issues to deal with crime, so that we can deal particularly with the problem of organised crime across Europe.

We are in agreement on the importance of climate change, and indeed of the new evidence that is now available to us about the seriousness of the problem. The challenge for us is to get an agreement internationally on two big issues, and hopefully we can make progress even before Copenhagen. The first is to get intermediate targets so that countries are bound not simply to long-term targets but to intermediate ones—2020, 2025 and so on. I believe that we are making progress, but a number of countries have still to make their announcements on what they are prepared to do. The second thing is financing and the energy efficiency measures that have to be taken in developing countries, which do not have the money to move from, say, coal or other relatively cheaper sources to the energy-efficient investment that we are asking them to make. The world will have to make available the necessary resources, which is part of the discussion that we must have in the run-up to Copenhagen.

I agree with what the right hon. Gentleman says about the importance of financial services to our economy, but as I said to him last week, I do not think that he can assume that high street or ordinary retail banks and investment banks are not both sources of the problems that we have had, because high street banks had problems and investment banks had problems. His determination to separate the two is perhaps not the best way to move forward. In both cases, what we need is proper supervision, but we need it now, at a cross-border and international level. That is the purpose of the European measures that we have brought forward. I know that he wants to support greater co-operation in Europe, and this is one way in which British banks and British financial institutions can benefit from greater European co-operation.

Mike Gapes (Ilford, South) (Lab/Co-op): The Prime Minister referred, in the context of the welcome agreement with Ireland, to the prospects for a future accession treaty. Can he say whether there was any discussion, either in the meetings or in the margins of the meetings, about the application by the new Social Democratic Government in Iceland for accelerated membership of the EU or about the difficulties between Croatia and Slovenia, which could block future enlargement in the Balkans?

The Prime Minister: I am grateful to my hon. Friend, who is an expert on both those areas of the world. Croatia was a subject of discussion. We hope that the differences between the two countries will come to be resolved, so that Croatia can accede to membership of the European Union. We know that Iceland is seeking to apply for membership of the European Union, but that was not discussed at the meeting.

Several hon. Members rose

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Mr. Speaker: Order. A very large number of Members are seeking to catch my eye. I am keen to ensure that as many as possible can participate, so I appeal to Members to ask one brief supplementary question.

Mr. John Redwood (Wokingham) (Con): Over what time period does the Council think that quantitative easing and excessive budget deficits should be brought under control?

The Prime Minister: The Council said that we have got to do what it takes to restore jobs and growth in the economy. Given that the problem that we have is not one of inflation or excessively high interest rates, it is right to take the fiscal action that is necessary. I do not think that any serious governing party in Europe agrees with the position taken by Opposition Members, which is that we should cut public expenditure at this time.

Tony Lloyd (Manchester, Central) (Lab): Given that the Prime Minister has outlined his view that European co-operation is fundamental, whether on building and maintaining jobs in this country, combating climate change or helping the developing world, can he tell me whether he really believes that retreating into Euroscepticism would be anything other than not only self-defeating self-indulgence, but massively damaging for Britain and the world?

The Prime Minister: I think it is damaging for our country that the main Opposition party cannot ally with the German Christian Democrats, the French party on the right or the Italian party on the right. The Opposition are out of touch and out of step. They are not in line with some of the major centre-right, Christian democrat or other right-wing parties in Europe, and I think that does Britain no good at all.

Sir Peter Tapsell (Louth and Horncastle) (Con): Before we can judge whether President Sarkozy was right in claiming that the Prime Minister had changed gears on European financial regulation, ought we not to resolve the problem, which emerged clearly at the Mansion House, of the disagreement between the Chancellor of the Exchequer and the Governor of the Bank of England about the necessary changes to our regulatory system, in order to replace the disastrous one that the Prime Minister introduced in 1997?

The Prime Minister: We have a tripartite system, where the Bank of England, the Treasury and the Financial Services Authority work together. [ Interruption. ] The Leader of the Opposition mentions the Fed. It is exactly a tripartite system that is being proposed in America as well, and it is right to have a financial services authority, a central bank and the Treasury of every country working together.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): Can the Prime Minister confirm that the people of Ireland are to be asked to vote on exactly and precisely the same wording of a treaty that they previously rejected?

The Prime Minister: The Irish brought forward concerns about abortion, family law, taxation and neutrality. In the protocol, it is made clear what the treaty means in those areas. The protocol that they are to receive is exactly similar to the protocol that we have received.

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Angus Robertson (Moray) (SNP): The Prime Minister is quite right to highlight the view of the Irish Government and people that they wanted safeguards relating to their ability to set their own taxes and to make their own defence commitments and other policies. Does he agree that their having won guarantees on those issues at the EU summit is proof of a small country exercising significant diplomatic clout at the top table of the European Union?

The Prime Minister: The hon. Gentleman used to talk about an arc of security—[Hon. Members: “Prosperity.”]—an arc of prosperity that included Iceland, Scotland and Ireland. He must understand that the economic problems in Iceland and Ireland and the economic problems of the banks in Scotland were very big indeed.

Keith Vaz (Leicester, East) (Lab): The presidency’s conclusions call for strong action against criminal networks involved in human trafficking. On 20 May, the Prime Minister gave a commitment that the budget of the Metropolitan police trafficking unit would be increased. Is that going to happen soon?

The Prime Minister: I think that my right hon. Friend will find that there are very large resources going into this issue, but I will write to him with the details.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): Why does the Prime Minister think that handing over the regulation of the City of London to countries that either have no experience of regulating large financial sectors or have been so conspicuously unsuccessful that none has a financial system even a quarter the size of our own will be beneficial to London?

The Prime Minister: Because we are in a global economy and we need to work with other countries to secure the prosperity of our country. As 400 financial institutions from the rest of Europe are based in London, it is in our interest that there is co-operation with other regulatory authorities in Europe. I hope that the right hon. Gentleman does not fall for the argument that Britain is somehow better off isolated from the rest of Europe. We are better off co-operating with Europe.

Mrs. Louise Ellman (Liverpool, Riverside) (Lab/Co-op): Does the Prime Minister consider that current developments in Iran have any implications for Iran’s policy of destroying the state of Israel?

The Prime Minister: We remain concerned about events in Iran and their implications for the rest of the world, but the most important question in Iran at the moment is that the views of the Iranian people as shown in an election should be properly fulfilled. The debate in Iran at the moment shows that people want greater transparency in the publication of the election results, so that it can be clear that the results reflect the will of the Iranian people.

Sir John Stanley (Tonbridge and Malling) (Con): With regard to Iran, does the Prime Minister agree that, coming from the present Iranian regime, Britain’s having been dubbed the embodiment of evil is actually a considerable compliment? Does this not reflect the
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admirably steadfast service provided by the British ambassador in Tehran and all his staff, including the two diplomats who have just been unjustifiably expelled? Does it not also reflect the admirable decision by the BBC to establish the Persian language service, and also the professional contribution that has been made by British journalists overseas in Iran over a considerable period—

Mr. Speaker: Order. I think that the Prime Minister has got the gist of the question.

The Prime Minister: I am grateful for that question, because it allows me to put on record my tribute and my thanks to the ambassador and all his staff in Tehran, and to all those who are working for the United Kingdom Government. I also want to put on record our appreciation of the work that is being done in pursuing the freedom of the press by the BBC and other journalists. I believe that the reporting by the BBC is important now to the people of Iran.

Kelvin Hopkins (Luton, North) (Lab): My right hon. Friend rightly refers to unemployment as a great danger, and it is indeed rising unemployment that poses the greatest threat with regard to prolonging and even intensifying the recession. Was there any discussion about what member states can do to intervene in their economies to create jobs directly and to avoid this mass rise in unemployment?

The Prime Minister: The summit said that we would do what is necessary to restore growth and jobs, and that is the message that other countries in Europe have heeded from the recession. As there is not a problem with inflation or with high interest rates, it is right to take fiscal action to intervene to help move growth forward and, at the same time, to create employment. We have ourselves taken measures to create 150,000 extra jobs. I believe that without the action that we have taken to combat the recession, 500,000 more jobs would be lost. I believe that other countries recognise that it is necessary to intervene to deal with the problems created by the recession, and that we cannot adopt a do nothing approach and walk away.

Mr. William Cash (Stone) (Con): Will the Prime Minister understand, contrary to what he has just stated, that the Irish arrangements amend the Lisbon treaty and fundamentally and greatly extend the Irish treaty protocol of 1992 so that these arrangements affect all member states and therefore require re-ratification now and must be enacted by a Bill in this Parliament, in Ireland and in all the member states?

The Prime Minister: I know that, whatever was decided at the European Council, the hon. Gentleman would be calling for exactly that. Let me just read to him what was said:

[Interruption.] That was stated by the Council, including the Irish. The sole purpose of the protocol will be to give full treaty status to the clarification set out in the decision to meet the concerns of the Irish—

Mr. Cash: You’re just parroting!

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Mr. Speaker: Order. The hon. Gentleman has asked his question, and he must listen respectfully and silently to the answer.

The Prime Minister: I would simply ask the hon. Gentleman to read the decisions of the European Council.

Mr. Andy Reed (Loughborough) (Lab/Co-op): The Council was right to commit itself again to reaching the millennium development goals. However, non-governmental organisations have recently highlighted that previous promises made by the Council and the G8 have largely not been met by other European countries, although a green light was given to the UK’s performance. What commitments were given and what future remains for the poorest people and the rest of the planet when so many previous promises have been lost?

The Prime Minister: My hon. Friend is absolutely right that the European Council, the G8 and then the G20 will have to continue to focus on how we achieve the millennium development goals. There are 40 million more children at school than in 2000, so progress is being made in a number of areas, including infant mortality as well as education, but there is a long way to go. That is why when we come to the G8 in a few weeks’ time, I will press for further action on famine and malnutrition, which has tragically risen over the last year, as well as continuation of the necessary action to meet the millennium development goals on infant and maternal mortality and education, as well as on the whole issue of poverty.

Mr. Paul Keetch (Hereford) (LD): Given that the Zimbabwean Prime Minister, Morgan Tsvangirai, has been in Europe, including London, over the last few days, was Zimbabwe discussed at the European Council? Given the fact that we and other European countries are rightly increasing the amount of aid given to the country, should we not expect at the very least that all European broadcasters, including the BBC, should be able to broadcast freely from Zimbabwe?

The Prime Minister: I met Morgan Tsvangirai on Monday and I raised with him precisely that question about access for the BBC and other broadcasters in Zimbabwe. A media commission has been set up to register people who wish to broadcast from within Zimbabwe, and Mr. Tsvangirai assures me that action is being taken on that. We will have to follow it up, but that was the intention he stated to me.

As to the general issue of Zimbabwe, we have provided additional aid on a humanitarian basis to people who are suffering in Zimbabwe, but we must be sure that the promised reforms, constitutional changes and end of repression are actually happening before we can enter into long-term agreements about the reconstruction of the country.

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): May I welcome the announced creation of a single market in financial services and the improved co-ordination of supervision, recognising the potential that it offers to the City? In the event of tension between national and European supervision, will my right hon. Friend explain how he feels the mediation service will be sensitive to the specific needs of the British financial services industry?

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