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23 Jun 2009 : Column 673

The Prime Minister: I believe that the mediation service is in the interests of London, where 400 institutions from the rest of Europe are operating, as I said. We need the co-operation of other regulators to make sure that things are in order. Mediation can therefore take place in only two specific areas: first, to ensure that the rules—that is, the rulebook—are being observed; and, secondly, if there is a dispute between home and host country. In both cases, I believe that that mediation will be in the long-term interests of Britain.

Mr. Bernard Jenkin (North Essex) (Con): Will the protocol in question be justiciable by the European Court of Justice?

The Prime Minister: In the same way that our protocol is.

Martin Linton (Battersea) (Lab): In looking forward to Sweden’s presidency, with its emphasis on climate change and the economy, will the Prime Minister tell the House how much easier it will be to bring Europe out of what we all recognise as a Europe-wide recession by engaging with mainstream European leaders such as Chancellor Merkel and President Sarkozy rather than by throwing away our influence by joining up with the fruitcake fringe of climate change deniers, Obama-haters and commemorators of the Waffen SS?

The Prime Minister: It is in British interests that our parties work with Chancellor Merkel, President Sarkozy, Prime Minister Berlusconi and other leaders in Europe. It is sad that the Conservative party has rejected that centre-right grouping in favour of another grouping that contains a number of people with whose views I certainly could not agree and most people in this House would find it difficult to agree.

Mr. Michael Fallon (Sevenoaks) (Con): Beyond the need for more co-operation and closer financial surveillance, has not the Prime Minister now conceded that the mediation proposed on cross-border supervision will in fact now be binding on our national regulator?

The Prime Minister: No, Mr. Speaker. Only in two instances is the mediation binding and these two instances are in the interests of Britain. The first is if there is a dispute between home and host country. I can think of many instances where the possibility of such mediation would be in the interests of our country. The second is in the application of the rules. If we have common rules—we want common rules not just in Europe, but around the world—it makes sense to show that these rules are being observed.

Dr. Gavin Strang (Edinburgh, East) (Lab): On jobs and the leadership that the Prime Minister has provided, not least at the G20 summit, to help us get through this international recession, are there now grounds for cautious optimism that the Government’s measures have in fact saved the British banking system? Is it not worth noting in passing that as far as lending for investment is concerned, a number of British companies are having successful rights issues for this purpose?

The Prime Minister: I am grateful to my right hon. Friend for raising these issues. It is fair to say that we have gone further than other countries in the agreements
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that we have signed with the major banks in our country. The major banks have agreed to £70 billion of extra lending over the next year from 1 March and another £70 billion in the year after that. That additional money will become available to small businesses as well as large businesses and mortgage holders in this country. We have taken action not only to recapitalise the banks, but to make sure that the banks are in a position to lend to business and have agreed to do so. That is the difference between what was happening a few months ago and what is happening now.

On jobs, I repeat that the best estimate is that without the action that we have taken, 500,000 more jobs would have been lost. Any unemployment is to be regretted but surely it is our responsibility in a time of recession to do our best by helping unemployed people to get back to work. That demands the expenditure of money and that is the choice between ourselves and the Opposition; we are prepared to invest the money to help people back to work.

Mr. James Clappison (Hertsmere) (Con): The Prime Minister has said that the guarantees to the Irish people will be given effect in protocols but these, apparently, are to be added to a completely different treaty as and when further countries accede to the European Union at some uncertain time in the future. In the meantime, do the guarantees have legal effect and if so, how?

The Prime Minister: They will be deposited, in the way that often happens, at the United Nations, and will have legal effect from the time the Lisbon treaty is in force.

Clive Efford (Eltham) (Lab): Do not the people of this country have every right to expect that the Government place themselves in a position where they can maximise their influence on issues such as regulation of the financial services market, creating jobs and stimulating the economy, rather than marching themselves off to the fringes of the debate in Europe with some flaky right-wing group? Should not the Government be in the vanguard of discussions and make sure that they address issues of concern to all my constituents?

The Prime Minister: I know that some parties are happy to be in concert with the Polish Law and Justice party, the Czech forum, the Motherland party— [ Interruption. ] The Leader of the Opposition is saying that we are meeting the President of Poland; that is absolutely right, but we are not going into a grouping that takes extreme right-wing— [ Interruption. ]

Mr. Speaker: Order. Mr. Kawczynski, I am keen to call you but if you keep yelling from a sedentary position, it does not advance your chances.

The Prime Minister: We are not going into a grouping with extreme right-wing groups who have views that not many people in this House would ever support.

Mr. Andrew Mackay (Bracknell) (Con): In the light of the clear statements of informed observers that the presidential election result in Iran was hopelessly flawed, was not the Prime Minister somewhat embarrassed by the lukewarm statement from the European Council, and did he try to amend it?

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The Prime Minister: No. The outcome of the elections in Iran is a matter for the Iranian people. We wish to ensure that the democratic rights of the Iranian people are upheld. We do not wish to have a quarrel with Iran. We wish to work with it on international matters that require the attention of both of us, but, of course, we cannot stand by when there is repression, and when there is violence and intimidation against the people of Iran.

Barry Gardiner (Brent, North) (Lab): Interim targets on climate change suggest that by 2020 there must be a reduction of 17 gigatonnes from business as usual. Given that only 5 gigatonnes are achievable within the developed world, at a cost of less than €60 per tonne, what assessment has the Prime Minister made of the amount of funds that will need to be made in offsets to achieve the required reduction?

The Prime Minister: This is a matter that the whole world will have to look at in the run-up to Copenhagen. We are going to need to provide finance in the same way that we provide overseas development aid, to ensure that the poorest countries are able to invest in energy efficiency. The first thing to do is to recognise the importance of climate change, the second thing to do is to get the intermediate targets, and the third thing to do is to get the finance that is necessary. I look forward to working with other countries, including America now, to get that climate change agreement.

Mr. David Heathcoat-Amory (Wells) (Con): Is the Prime Minister aware that very recently the Treasury Minister Lord Myners gave evidence to the European Scrutiny Committee in which he gave an unqualified assurance that the Government were strongly against giving EU financial authorities powers over national regulators? Why then do the conclusions to the summit agree to give the European system binding decision-making powers over national regulators in several important respects? Why do Ministers give an assurance to this House in one respect and then break that word a few weeks later?

The Prime Minister: But the principle that the right hon. Gentleman does not support is that we should co-operate and work with other authorities in Europe to deal with financial sector problems. If we are to co-operate with other authorities—and 400 other European institutions are based in London—it is in our interests that there is a mediation system to deal with disputes between the home country and the host country, and that is why it is in the British national interest to have that agreement. Equally, it is in our national interest to see the rules that are agreed being observed. These are the only two instances in which we have agreed to have mediation, but it is the right thing to do for Britain.

Andrew Miller (Ellesmere Port and Neston) (Lab): When my right hon. Friend was Chancellor, he will remember his Hungarian counterpart Bokros and the Bokros austerity measures. Now that he is a member of the MDF—the Hungarian Democratic Forum—and part of the Conservative grouping in the European Union, will this not make for a collision between the Council and the Conservative grouping in the European Parliament?

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The Prime Minister: This new grouping in the European Parliament is, I believe, an embarrassment to all of us, but I have to say that even the Polish Law and Justice party supports a cut in VAT and is against a cut in spending. Even within their own new grouping, the Conservatives do not have a majority.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): Does the Prime Minister not realise the extraordinary damage that his undiplomatic language is causing to Anglo-Polish relations? His comments on the Law and Justice party are an absolute disgrace and an affront to the Polish people who voted for that party and the President. Will he apologise to the Polish President and the Polish people, and categorically state that the Law and Justice party is not a fringe party?

The Prime Minister: I think the hon. Gentleman is getting too embarrassed by this new political grouping. I pointed out that the Polish Law and Justice party supports the cut in VAT and is against cuts in spending. I have praised it for those two policies; unfortunately, the Opposition party cannot accept those policies.

Dr. Stephen Ladyman (South Thanet) (Lab): The poisonous influence of Iran continues to be spread around the middle east even as its Government oppress their own people and press ahead with plans to build nuclear weapons. What firm plans does the EU have to escalate the pressure on the Iranian Government to make sure they never get hold of nuclear weapons?

The Prime Minister: Iran has a choice: it can either become a full member of the international community by respecting human rights and its international obligations, or it will become increasingly isolated from the international community. I think that everybody in this House knows that that is the choice the Iranian Administration and the Iranian people have to make.

Mr. Peter Bone (Wellingborough) (Con): The House of Commons Library confirms that last year, the UK’s contribution to the European Union was £3 billion. Next year, it is going to be £6.5 billion. At a time when the Prime Minister’s Government are having to cut public expenditure in real terms, why is our contribution to the European Union more than doubling?

The Prime Minister: It is to pay our share as part of a European Union that includes the Czech Republic, Poland, Latvia and many of the other countries with which the Conservative party wants to be associated. I believe that it is right that we share the burden of membership of the European Union, so that every part of the European Union can look forward to prosperity.

Mr. Christopher Chope (Christchurch) (Con): Will this House have the opportunity to debate and vote on the protocol before the next Irish referendum?

The Prime Minister: The protocol will come before the House at the time of the next accession treaty. That is what was decided at the European Council and that is what I recommend to the House.

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Mr. Crispin Blunt (Reigate) (Con): Who make the better allies for Britain—veterans of the Polish Solidarity movement, or veterans of Poland’s authoritarian communist Government?

The Prime Minister: If the hon. Gentleman wants to look at the new membership of the right-wing grouping that the Conservative party is now part of, I think he will be increasingly embarrassed by some of the views that are put forward by members of that grouping. They have rejected the mainstream in Europe as a Conservative party and are now isolated on the fringes of Europe and out of touch with European opinion.

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Parliamentary Standards

4.21 pm

The Leader of the House of Commons (Ms Harriet Harman): With permission, Mr. Speaker, I wish to update the House on the issue of parliamentary standards, but first I would like to offer you congratulations on your election yesterday. I look forward to working with you on issues of concern to members of the public and Members of this House.

The public want to have full confidence in the parliamentary system. Members want there to be full confidence in the system, so that the cloud of suspicion is lifted and the reputation of the House can be restored. Like you, Mr. Speaker, I strongly believe that the overwhelming majority of Members of Parliament are decent people who work hard to serve the public interest, not to serve their own self-interest, but that is not the impression the public have, and so we are taking action.

It is the actions that are under way that I want to set out to the House today. They are the changes to our allowances that we have already made; the publication last week of our last four years’ allowances; the publication of our 2008-09 allowances; a revised code of conduct for Members, updated by the Standards and Privileges Committee and published today; the introduction later this afternoon of the Parliamentary Standards Bill; the proposal, to be debated this Thursday, for a new Committee of the House, chaired by my hon. Friend the Member for Cannock Chase (Dr. Wright), to strengthen the role of Parliament; a new registration system, starting on 1 July, for full transparency on Members’ second jobs; the work of Sir Thomas Legg, who is leading a team to establish what might need to be paid back from claims over the last four years; the work of the Committee on Standards in Public Life to propose a new allowance system; and then, the new independent parliamentary standards authority, which is starting work and taking over the whole of our allowances system and running it.

First, changes have already been made to our allowances system. Since 19 May this year, and arising out of the meeting between the then Speaker and the party leaders, there can now be no claiming for furniture and no changing the designation of a main home. There is a cap on monthly rent or mortgage payments, every claim must be backed up by a receipt, and MPs who are couples can only claim for one second home.

On publication, last Thursday, every claim by and payment to all Members over the last four years was published by the House authorities on the House of Commons website. Of course, we must protect Members’ security, but for the publication of the 2008-09 receipts this autumn, the question of redaction will be looked at again, having considered the advice of the Information Commissioner.

On payback, work has begun by Sir Thomas Legg, who has been contracted by the House authorities to lead a reassessment of all claims over the past four years and, having reconsidered each claim and the evidence submitted to support it, to report whether it was within the rules as they obtained at the time, with a view to ensuring that where there has been overpayment, it is paid back. The public expect that over-claims will be paid back, and that will happen, together with any necessary disciplinary action.

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Work is under way by the Committee on Standards in Public Life, which, with Sir Christopher Kelly as chair, is undertaking a root-and-branch review of the allowances and will make recommendations. It is taking evidence and will complete its work in the autumn. I have already given oral evidence to the committee, and set out for it the principles that I believe that the House would want to underpin a new allowance system. Those principles are that the system should be simple and transparent; that it should reduce the cost to the taxpayer; that second-home arrangements should be consistent as between the allowance system and the tax system; that the system should sustain the all-important constituency link; that it should sustain our ability to work effectively on behalf of our constituents and communicate with them; that it should support the inclusion, as Members of this House, of those with family responsibilities and those with disabilities; that it should allow us to decide for ourselves how we do our work and not put us in a straitjacket; that it should protect the ability of those on low incomes to come into the House; and that it should command public confidence.

This afternoon, the Parliamentary Standards Bill will be published. It will establish a new, wholly independent authority to take over the role of the Fees Office in authorising Members’ claims, overseeing a new allowance system, following proposals from the Committee on Standards in Public Life and maintaining the Register of Members’ Interests. I assure the House that as the new independent authority for allowances is established, we will work closely and sympathetically with the House authorities on the future of the staff currently working in the Department of Resources.

The Bill will also create new criminal offences of knowingly making a false claim for an allowance, failing without reasonable excuse to register a relevant interest, and contravening without reasonable excuse the rules on paid advocacy. That will put Members of the House on the same footing as we have, in legislation, put local councillors and Members of the Scottish Parliament. I shall set out in my business statement the date for Second Reading of the Bill, but the House should know that we intend its Committee stage, as well as Report and Third Reading, to be taken on the Floor of the House. We hope that there is sufficient consensus, following the consultation that has been led by my right hon. Friend the Justice Secretary, for it to gain Royal Assent by the time the House rises for the summer recess. The new authority could then be ready to start work with the Kelly committee’s recommendations by the end of this year.

The Justice Secretary and I are grateful for the constructive cross-party discussions that preceded the Bill’s introduction. A number of those on the cross-party group, including the Government, are prepared to go further. The Bill is the first stage of legislation, and covers the specific but important and urgent task of setting up an independent authority to run our expenses system.

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