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The Council encouraged the International Monetary Fund in its review to

There are very few moments in history when nations are together summoned to make common decisions that will reshape the lives of every family, potentially for generations to come. Our aim must be an ambitious climate change deal in Copenhagen that will enable the European Union to make good its commitment that we
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in carbon emission levels

The agreement in Copenhagen must also include a clear financial framework for the short, medium and longer terms. This financial agreement must address the great injustice that is climate change: that those hit first and hardest by climate change are those who have done least harm; and that, in fact, 98 per cent. of those most severely affected and dying live in the poorest countries, which account for only 8 per cent. of global emissions. So it is essential that we honour our responsibility for helping meet the costs they face in adapting to, and mitigating the consequences of, climate change.

I can report to the House that, to assist in adaptation and mitigation, the European Union has pledged €7.2 billion-or £6.6 billion-over three years; that is €2.4 billion for each of the years 2010, 2011 and 2012. This should enable the world to reach its aim of $10 billion in climate change help for each year until 2012. Let me say that this financial agreement could not have got off the ground without the strongest European co-operation.

Britain will contribute £1.5 billion, but there must also be additional and predictable finance in the medium term to 2020 and beyond. The figure of €100 billion has been set for the long-term climate change needs of developing countries by 2020, and the European Council reconfirmed its commitment to "provide its fair share" of this international public support. I can say to the House that from 2013 the UK will provide additional climate finance over and above our 0.7 per cent. overseas development commitment, and that the European Council reaffirmed its "official development assistance commitments" in view of the

There is an urgent need to support rainforest countries. Twenty per cent. of early finance should be allocated to forest protection. To achieve a reduction in deforestation of 25 per cent. by 2015, leading to a 50 per cent. reduction in 2020 and a complete halt in 2030, will require global financing of about $25 billion over the period 2010-15. A majority of that should come from developed countries, to support the rainforest countries' own efforts.

Today, we send a message to all of Europe and to the world: there is work to do. We are only halfway to an agreement. Now is the time for developed and developing countries not to divide among each other, but to do what no conference of 192 countries has ever achieved before: to come together with a forward-looking programme to advance our shared goals.

This week, world leaders are gathering in Copenhagen and, as I have indicated to the House authorities and Opposition leaders, I will join global leaders in Copenhagen, starting from Tuesday with meetings with leaders from the African Union and the European Union, and the UN Secretary-General and the Danish presidency, as well as representatives from the hard-hit small island states.

The agreement at Copenhagen must be ambitious, global, legally binding within months, consistent with a maximum global warming of 2° C and ensure the fairest financial settlement for the poorest countries.
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Britain, our European partners and the Commonwealth will continue to work tirelessly for the best result at Copenhagen, and I commend this statement to the House.

Mr. David Cameron (Witney) (Con): The European Council covered three main areas: foreign affairs, the environment and economic issues. I want to ask about all three, as well as the vital issue of Afghanistan.

On Afghanistan, as the Prime Minister knows, we have supported the increase in US and UK troop numbers, and, as the Prime Minister has said, at Christmas time we should all be thinking of our forces and their families. I would like to pay tribute to all those charities and organisations sending gifts, cards and presents to our forces in Afghanistan. Our forces should be on our minds for all that they are doing.

On strategy, we believe that this is the last best opportunity to get this right. Does the Prime Minister not agree that everything now needs to be brought together, including having the right concentration of troops in every part of southern Afghanistan? He talked about thickening the troop presence in central Helmand, and we look forward to hearing more about that. Perhaps he can tell us when he will be able to update the House on what is being done specifically to make sure that British troops cover fewer areas, in greater density-we believe that that is vital.

On the issue of the Afghan national army-the Prime Minister, like me, saw it being trained at first hand, and it is incredibly impressive-does he agree that we are now probably going as fast as we can and that to go any faster would involve a danger that the quality of recruits would suffer? Can he tell the House a little about what is being done to make sure that those Afghan national army recruits who are trained and then sent to the south of Afghanistan actually go to the south of Afghanistan, and that the units function properly?

On the London conference, about which the Prime Minister said quite a lot, could he give clarification about the new individual working on behalf of the UN Secretary-General? Does he still agree with us that it would be good to have someone over and above that to co-ordinate all the civilian side, rather in the same way that Stanley McChrystal is co-ordinating all the military side? That is what we have been pushing for, and perhaps the Prime Minister could clarify whether that is still the Government's position.

On Iran, does the Prime Minister agree that the time has come for the EU to take a much stronger line? It is clear that talks with Iran are not moving, but the summit just referred to "considering", as the Prime Minister said, options for next steps. Should not those specifically include three things at the very least: a tough new inspections regime on Iranian cargo; a ban on any new European investment in Iranian oil and gas; and serious financial sanctions like those that exist in the United States? We have been here before. The Prime Minister said in June 2008 that

Can he assure the House that this time the essential measures will be finally agreed and put into place?

On Copenhagen, can the Prime Minister be clear about what he thinks can now be achieved? Does he agree with Yvo de Boer, the UN's chief climate negotiator,
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that achieving a full legally binding agreement is no longer possible at Copenhagen itself? If he is right about that, is it not essential that we see a full political declaration agreed this week? Is that not the minimum that the world has a right to expect? Does the Prime Minister agree with us that it is vital that any agreement is consistent with keeping global warming below the 2° C threshold?

On the issue of funding, the Prime Minister gave us the figures, but could he tell us a bit more about where the money is coming from? The UK's contribution was originally £800 million, then it was £1.2 billion and then it was £1.5 billion. Can he tell us where this is coming from? If, as the Prime Minister's spokesman said on Friday, it is coming from the aid budget, can the Prime Minister tell us whether this will have any impact on other aid programmes?

Turning to economic issues, this Prime Minister once described the UK budget rebate as "non-negotiable"-that was before he gave £7 billion of that rebate away. When he did so-this is the reason for asking the question today-Tony Blair said that the Government had obtained in return a review of the EU budget. That was meant to start in 2008 and to finish by the end of 2009, but it is absolutely nowhere near finishing. Indeed, in the draft summit conclusions the deadline slipped to next July, and in the final conclusions it slipped another six months, to the end of 2010. At a time when budgets are being cut in the UK, does the Prime Minister agree that in reviewing the EU budget, the main purpose should be to push for a real-terms cut in that budget? Does he also think that while public servants in this country are getting low pay increases or even, in some cases, pay freezes, it is completely wrong for EU civil servants to receive a 3.7 per cent. pay rise?

Turning to the new Commission, is it not the case that the Prime Minister's whole approach to this has been wrong from start to finish? He started by spending valuable political capital on a completely misconceived plan to make Tony Blair President of Europe and ended with Britain having none of the key economic portfolios. Indeed, the Government became so dysfunctional that at one stage Peter Mandelson tried to land himself the job of High Representative. The Prime Minister shakes his head, but perhaps he should just nod. Did Lord Mandelson try to get the job? Is there anybody in there? He was frantically hitting the phones, apparently-the rat was trying to leave the sinking ship, but he is still on board.

Friends of Lord Mandelson, which always used to mean Peter Mandelson himself, said that he thought the whole thing not pathetic, but "botched". That was his word. Is that not the right description for the Prime Minister's handling of this affair?

On financial services, cross-border co-operation is clearly vital. However, will the Prime Minister confirm that Britain has effectively given up its veto on blocking regulatory decisions in times of crisis when there is a disagreement over whether there are financial consequences for the taxpayer? He did not mention that in his statement-perhaps he can answer it when he has finished chuntering from a sedentary position.

The summit conclusions also called for the restoration of sound public finances. May I ask the Prime Minister whether he ever expected to come back from a European summit as Prime Minister after 12 years' stewardship of
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Britain's finances with the biggest deficit of any major economy, with Britain the only G20 country still mired in recession and with the worst outlook for public finances in a generation? Is that what he meant by leading the way in Europe?

The Prime Minister: I am surprised that the right hon. Gentleman spent most of his time raising issues that were not even discussed at the European Council. It would have been better if he had addressed in a bit more detail all the issues that I put to the House this afternoon.

The first issue was those matters that relate to Afghanistan. It is very important to recognise that there is all-party agreement on these matters and not to exaggerate any differences between us at this particularly sensitive time, when more troops are going into Afghanistan, when we are persuading the Afghan forces to increase their numbers in Helmand province, and when we are trying to extend civilian and military co-operation so that we can tackle the Taliban insurgency effectively by weakening them and strengthening the Afghan state.

I said to the right hon. Gentleman that we were increasing our presence in Helmand, but so, too, is the American presence in Helmand increasing. The number of troops in Helmand will go up from something in the order of 20,000 to 30,000 over the next few months. That will include, of course, the Afghan army's making a bigger contribution in Helmand. Over time, the balance will change between the alliance forces-if I can put it that way-and the Afghan forces. By 2011, across the whole of Afghanistan, the Afghan forces will exceed the alliance forces. On top of that, we have the Afghan police numbers, too. That is our policy for the gradual Afghanisation of security control. In that way, district by district and province by province, we can transfer to Afghan control. I have to say to the right hon. Gentleman that when I met the Afghan forces in Helmand yesterday, who were training on anti-explosive devices, those whom I talked to came from all different parts of the country to Helmand, both to be trained and to form part of a more effective army for the whole of Afghanistan in the long run.

I said that we were proposing that humanitarian and civilian issues related to the co-ordination of the effort of Afghanistan were to be a main feature of the London conference. Now that Mr. Kai Eide has resigned as the UN representative-I believe that he will stay on until March, but he is retiring after that-we will, in my view, have to appoint both a representative from ISAF and one from NATO. I talked about this to the Secretary-General of NATO this afternoon. There will be a UN appointment and there will also be a NATO appointment. It is important to recognise that all these interests must be represented, but there must be greater co-ordination at the centre.

As far as Afghanistan in general is concerned, I hope that Members of the House will feel that the measures that we are taking to deal with IEDs are important in protecting our troops and in destroying the morale of the Taliban. I have to say that when I was in Afghanistan yesterday, it was reported to me that 1,500 IEDs had been detected and dismantled through the expertise of our forces and, in particular, that of the engineers, who do such important work. If we can continue to defuse and dismantle, and therefore disable, these IEDs, we
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can reduce the rate of casualties that we have suffered over the past year-80 per cent. of casualties throughout Afghanistan and among British forces are due to IEDs. It is therefore absolutely essential that we take all the measures that I announced today to increase our effort to deal with them.

I turn now to Iran. It is true that we have been at the forefront of proposing sanctions on Iran, but it is also true that taking unilateral action without getting European support and the support of the rest of the world would not yield the impact that we want. We are working with our European partners and with the rest of the international community so that the agreed and unanimous approach to what Iran has done can yield practical results in sanctions that actually work.

The right hon. Gentleman also raised issues regarding the European Council. At the Council, we discussed a timetable for resolving budget issues, we discussed economic co-operation across Europe and we discussed the fiscal stimulus that has been necessary to bring the economy forward and to move economies out of recession. I have to tell him that there are 12 European economies still in recession and that a number of economies, including Germany, have suffered a far worse recession than we have. We have the highest employment rate in the G7, and unemployment here is lower than in most other countries that are comparable to us, as a result of the action that we have taken. I have to say to the Conservatives that there is agreement at the European Council that we needed fiscal stimulus so that the economy could move forward, agreement that we should have taken action to restructure the banks, agreement that the fiscal stimulus should continue, and agreement that we must all take action against unemployment and to help small businesses in these difficulties by providing Government funds. The only group that seems to stand outside that agreement within Europe and the rest of the world is the Conservative party that is represented on the Opposition Benches.

On climate change, it is incredibly important that the voice of this House, from all parties in the House, says that we want developing and developed countries to work together to secure an agreement. That is why our offer of support is right if we are to get an agreement that shows developing countries that we mean business in tackling the issues that they face most of all as a result of climate change. That is why we were the leaders in a European agreement that has ensured that very substantial funds-about $3.5 billion a year-will go to helping developing countries adapt to and mitigate climate change, including through action on forestry. But we have a great deal of work still to do, because we have to get an agreement about the longer term as well as the short term. We have to get an agreement about intermediate targets and about transparency in all the issues that we undertake. I think that we in Britain have led the way with a climate change Act, and we have led the way with an announcement that we will be active in providing long-term finance to help developing countries. We have suggested a figure of $10 billion as a fast-track initiative for both the European Union and the rest of the world to follow, and there is now virtual agreement on that.

We will continue to press for a just and fair settlement at Copenhagen. The reason why I want to go there tomorrow is to talk to all the parties about what we can
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do together. The reason why I think the Opposition should support Britain's being present is that we have led the way on the millennium development goals, we have led the way on debt relief, we have led the way on international economic co-operation, we have led the way on the restructuring of the banks and we are leading the way on climate change-something the Opposition could never do.

Mr. Nick Clegg (Sheffield, Hallam) (LD): I would like to thank the Prime Minister for his statement, and of course to add my expressions of gratitude to our armed forces who are serving so bravely and selflessly in Afghanistan. With families across the country preparing to come together for the Christmas holidays, may I also pay tribute to the families and friends of our servicemen and women? The enormous sacrifices they are also making for this war are uppermost in all our minds at this time of year.

I am grateful to the Prime Minister for his detailed statement on Afghanistan, but I should like to seek clarity on two points. First, will he clarify what he believes to be the role of China, Russia and Iran? Whether we like it or not, those nations are absolutely crucial in securing long-term stability in Afghanistan. I was not quite sure, from what he said, whether any or all three of those nations will be represented at the London conference. If they will not, will he provide us with some detail about how we might engage with all three of them to help to stabilise Afghanistan, notwithstanding the other major differences that we have, particularly with Iran at this particular time?

The second point is this. We all know that the war in Afghanistan will be won only if we win the battle for the hearts and minds of the Afghan people. In turn, that is heavily dependent on the legitimacy of President Karzai and his Government in Kabul. The Prime Minister referred to President Karzai's efforts against corruption, but could he tell me how exactly he will judge progress on good governance and against corruption in Afghanistan by the time President Karzai comes to the London conference in January?

Given that the resources allocated and the strategy we have been pursuing in Afghanistan during the past eight years were so heavily influenced by the war in Iraq, I should like to know what the Prime Minister thought of his predecessor's admission this weekend that he would have invaded Iraq whether there were weapons of mass destruction or not. The Prime Minister not only supported his then boss in taking us to war, but he also signed all the cheques, so people have a right to know: does the Prime Minister agree with Tony Blair that the invasion would have been justified even without the paper-thin excuse of weapons of mass destruction?

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