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Mr. Bob Ainsworth: I know that my hon. Friend follows that issue closely, and he will therefore know that there has been some delay in our ability to reach a maingate proposition. That will now, I think, take place around about the end of the year.

Angus Robertson (Moray) (SNP): Last Friday at RAF Kinloss, the Nimrod MR2 fleet was retired, and we pay tribute to all the personnel and families associated with the mighty hunter. But, given the importance of search and rescue top cover, will the Ministry of Defence provide some detailed assurances, stating that there will be no capability gap until the introduction of the MRA4?

Bill Rammell: I reiterate to the hon. Gentleman what I said earlier: the MRA4 will bring a substantial enhancement of capability, and in the transition period until the MRA4 enters service we intend to, and will, use other assets, as available, in the long-range search and rescue effort.

Ms Dari Taylor (Stockton, South) (Lab): Army, air and sea cadets deliver an excellent service within many of our communities in the UK. Is it not time that the House acknowledged this and that the team from the MOD initiated a debate so that we can all celebrate everything that they deliver to our communities?

Mr. Kevan Jones: I congratulate the cadet force on its 150th year. I thank my hon. Friend for her involvement in her local cadet force. Cadet forces are a force for good in local communities. I also put on record our thanks to the thousands of adult volunteers who make the cadet experience possible. If she suggested a debate in the House, I would be very pleased to celebrate the fantastic job that cadet forces do.

T8. [324475] Mr. Edward Timpson (Crewe and Nantwich) (Con): What progress is the Ministry of Defence making in negotiating a settlement with the atomic veterans claimant group before the Government return to the High Court on 4 May, at yet further vast expense to the taxpayer?

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Mr. Jones: As the hon. Gentleman will know, I have announced a review into the health needs of nuclear test veterans. There is ongoing litigation. We have had talks between the two sides to see whether a settlement can be reached. Unfortunately, that has not been possible. However, I am determined to ensure that I continue to work with nuclear test veterans' groups to ensure that the support that we can give to nuclear test veterans for their health needs, and generally, continues.

Mr. Denis MacShane (Rotherham) (Lab): When I asked the Library about defence spending from 1997 to 2003, I was told that it had gone up by 17 per cent. in real terms-an extra £7 billion. Is not the responsibility for how that money is allocated really with our commanding officers and senior MOD bureaucrats rather than being something to be blamed on the Chancellor of the Exchequer at the time, whoever he was?

Mr. Bob Ainsworth: As I have said, and as we have repeated a number of times over the past hour but received no effective response, the defence budget has gone up by almost £1 billion on average per year-a substantial real-terms increase under the Labour Government, in marked contrast to what happened in the last couple of years of the Conservative Government who preceded us.

T10. [324477] Michael Fabricant (Lichfield) (Con): Defence Ministers have rightly praised the work of doctors and nurses at Selly Oak. Ministers will know that the Defence Medical and Education Training Agency is about to move to Whittington barracks near Lichfield. Will someone please make a statement on the progress on that installation?

Mr. Kevan Jones: I thank the hon. Gentleman for his support for Defence Medical Services and the move to his constituency. Plans are ongoing. The budget as regards accommodation is in place for this year, and the plans should come to fruition at the end of this year to ensure that we have not only support for our injured servicemen and women but world-class defence medical services.

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European Council

3.33 pm

The Prime Minister (Mr. Gordon Brown): With permission, Mr. Speaker, I would like to make a statement on the European Council held in Brussels last Thursday and Friday.

First, I am sure that the whole House will join me in paying tribute to Lance Corporal of Horse Jonathan Woodgate from the Household Cavalry Regiment and Rifleman Daniel Holkham from 3rd Battalion the Rifles. They lost their lives fighting in Afghanistan. We owe them the greatest debt of gratitude for their courage and their service.

Their sacrifice reminds us that terrorism is an ever-present danger which requires vigilance and the willingness to take tough action in all areas where terrorist groups operate. So I know also that the thoughts of the House-and indeed our country-are with the Russian people today after this morning's terrorist attack on the Moscow transport network. I have written to President Medvedev this morning to send our condolences to the victims and their families. I pay tribute to the Russian emergency services and the people of Moscow as they have responded to this appalling attack.

The focus of the European Council last Thursday and Friday was on actions needed to secure growth for the future and on Europe's determination to bring new impetus and momentum to the international negotiations on climate change. Last week's Budget set out our proposals for the next stage of economic recovery. It made it clear that the risks to recovery remain real and that we must avoid a premature withdrawal of stimulus measures, instead seeing through our commitment to halving the deficit over four years without choking off the recovery itself. The European Council agreed that

It concluded that while deficit reduction plans must go ahead, measures to reduce the stimulus should be taken only once recovery is secured. That is the position that we, like our European partners, will continue to follow.

In our Budget, we also set out the actions that we must now take to secure jobs and growth by investing in the key growth sectors for the future. The Council's conclusions agreed that Europe needs

to boost European competitiveness and productivity. Before the financial crisis, the imbalances within Europe were at an all-time high. The Council agreed that

It also agreed to develop a new strategy to deliver higher levels of long-term growth and recognised that the key elements of increasing productivity and growth include action on employment, on research and development, on reducing greenhouse gases to boost low-carbon industries and on education and social inclusion. The European Council will now, once a year through a leaders' annual economic summit, assess the progress achieved at both national and European level in delivering those objectives.

The Council also discussed the economic situation in Greece. Agreement has now been reached by the euro area member states on a set of guidelines for Greece,
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and I am encouraged by the statement from the eurozone leaders that the eurozone will meet its responsibilities. There was no request for the United Kingdom to make any contribution to that programme, and none of the arrangements agreed by the European Council will see any powers being ceded from Britain to the European Union.

One year on from the G20 summit in London, we also discussed Europe's plans for the next G20 summit, which is to be held in Toronto. The Council agreed that "rapid progress" is now required on strengthening financial regulation and supervision within both the EU and the G20, while we also need to ensure a level playing field for financial centres worldwide. In particular, we agreed that progress is needed on the issues of capital requirements, systemic institutions, financial instruments for crisis management, transparency on derivative markets and the implementation of internationally agreed principles for bonuses in the financial services sector. The Council agreed to make rapid progress on those issues, concluding work on the new European supervisory framework in time for the European systemic risk board and the three European supervisory authorities to begin work in early 2011.

We must also agree in Toronto a co-ordinated approach to levies on the banks to deliver a fairer balance of risk and reward in the financial system. That is something that I have been advocating for some months, and the Council agreed that as part of the G20's work:

The Council also discussed climate change, ahead of the first meeting of the advisory group on climate change financing, established by the United Nations Secretary-General, which I am co-chairing with Prime Minister Meles of Ethiopia. Our pledge on climate change finance is a vital first test of the commitment of the developed countries to meeting the promises made in Copenhagen. The Council concluded that Europe would rapidly and unconditionally implement its commitment to providing €2.4 billion annually for fast-track financing for developing countries, and to that end the EU

to implement that in specific areas. There will be a presentation on those commitments at the Bonn summit. The Council confirmed that Europe's objective remains a

and that Europe will "strengthen its outreach" to other countries to galvanise negotiations in the coming months.

The euro area's economic growth is predicted to be just 0.7 per cent. this year and next, recovering to 1.5 per cent. in later years. By contrast, world growth is projected to be 3.5 per cent, so we need stronger European growth to help deliver stronger growth and new jobs here in Britain. Europe is the world's largest trading bloc and also the world's largest internal market. It offers 500 million consumers for British companies. With 3 million UK jobs linked to the EU, and still more than half our exports going to the EU, Britain's livelihood is inextricably linked to the success of the European economy. Distancing ourselves from Europe makes no sense and would hold back our economy, our companies and people in work. It is by working with, not against,
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our European partners to deliver jobs and growth for Europe that we will help to deliver jobs and growth for Britain. I commend this statement to the House.

Mr. David Cameron (Witney) (Con): I join the Prime Minister in paying tribute to Rifleman Daniel Holkham and Lance Corporal of Horse Jonathan Woodgate, who have been killed in Afghanistan in the past few days. When one thinks of what Jonathan Woodgate had already been through, it is a reminder of what an exceptionally brave young man he was. It also reminds us that what we ask of our servicemen and women today is exceptional; we need to refresh and renew the military covenant in every way that we can.

I also agree with the Prime Minister that we should send a clear message of sympathy and solidarity to the Russian people after the appalling outrage on the Russian metro. We are tragically familiar with such an event in this country, too.

I want to ask about three issues that were discussed at the summit-the EU economy, financial regulation and climate change. First, on climate change, the summit rightly said that we must redouble our efforts to achieve the global deal that we all want and push ahead with practical action to cut emissions. The UK has the lowest contribution from renewable energy of any major EU country-just 6.8 per cent. of our electricity and, in total, 2.5 per cent. of our energy comes from renewable sources. Why has so little progress been made?

Secondly, on financial regulation, President Obama spoke about a tax on wholesale funding, but, as the Prime Minister has said, the summit conclusions referred to a transaction tax. Would not a tax on wholesale funding rather than a transaction tax be more likely to help keep business here in Britain?

The summit conclusions mention the need for greater economic co-ordination. There was some controversy about whether we will end up with any new treaty changes. Should not the Prime Minister make three things clear today? First, any talk of "economic government" in Europe is wrong. If he agrees, can he explain why the phrase remains in the French version of the eurozone statement? Secondly, should we not rule out any new treaty change that increases EU control over our economic policies? Thirdly, should we not change the law in the UK so that any treaty that proposed handing over new areas of power from Britain to Brussels would automatically be subject to a referendum, as is the case in Ireland?

It is good to see the Prime Minister smiling so nicely, as he does on all our posters-it is good to see him in that sort of positive mood. There are plenty more where they came from. [Interruption.] If he will not put himself on posters, we have just got to do it for him.

On economic policy, does the Prime Minister agree with the Europe 2020 strategy document, which says that

Given that, will he comment on the serious news today that Standard & Poor's has stated yet again that the outlook for Britain's triple-A credit rating remains "negative" and that

to tackle the debt burden?

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Europe's leaders talked about a bail-out for Greece, and Portugal's credit rating is being downgraded. However, is not Britain borrowing more this year as a share of our economy than either Greece or Portugal? Did not the same agency that downgraded Portugal's credit rating say last week that Britain's finances are "vulnerable"?

The European Commission says that "a number of countries" may have to start tackling their deficits this year. Given that Britain and Ireland have the worst budget deficits in the OECD, to which countries does the Prime Minister think it was referring?

On unemployment, business closures and the decline of manufacturing, the UK clearly has some real problems. Why, therefore, does he propose to raise taxes on small businesses and hike national insurance on everyone earning more than £20,000 and on every single new job in this country?

The Chancellor admitted in the Budget that there was £11 billion of waste in Government spending, but he proposes to do nothing about it until 2011. Why is not he tackling the waste this year rather than putting up national insurance for hard-working people next year? Have not the Prime Minister and his Chancellor created one of those great dividing lines that they like so much? Labour stands for waste and taxes, and the Conservative party stands for efficiency and aspiration. As the Prime Minister contemplates his national insurance increase on employees and employers, what on earth makes him think that the way to rescue an economy from the longest and deepest recession on record is a tax on jobs that hits every single business in the country? [Interruption.] He says that he wants to talk about Europe-I am talking about our economy in Europe and our failure in Europe.

The Prime Minister used to go to European meetings to lecture others about their economic policies; now the reverse happens. He thought boom and bust had been abolished and that he could borrow with impunity; he never prepared for a rainy day. Were not those catastrophic misjudgments? Will not the British people be paying for those misjudgments for another generation? Is not his latest misjudgement to sit back and let the waste, the taxes and the debt pile up even more? Is it not the case that we need a Government who will get on with tackling the waste, stopping the tax rises and securing growth for the future?

The Prime Minister: First, let me share with the right hon. Gentleman our sympathies, as I mentioned earlier, for those families whose loved ones have died in Afghanistan, and our sympathies for the Russian people as they face a terrorist incident of very substantial proportions today.

Let me also agree with the right hon. Gentleman that climate change is an important issue that Europe and the rest of the world must continue to address, that we must move forward on the Copenhagen summit, and that we must get a worldwide framework for a climate change agreement. He asks that renewables should be at a higher level in this country, and I agree with him that we should have higher investment in renewables. That is why we are making plans for public investment in renewables at the same time as the Conservatives oppose them. If I may say so, that is why we are asking councils to approve wind farms, while just about every Conservative council is trying to hold back that policy.

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