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That must surely be the right approach for any sensible Government. We on the Opposition Benches certainly share that view, for Europe and the global economy going into the G20. Deficits need to be brought down, but Europe also needs to think about generating growth, not simply stymieing demand through cutting too fast and too far. We urge the Government to push that argument, as well as that expressed by President Obama's Administration.

The European Council has an extremely important role in agreeing ways of supporting European economic growth and better governance, and in fostering understanding between some of the strongest economies in the world. The last European Council meeting in March agreed, at the instigation of the then Prime Minister, a series of propositions on competitiveness, the prospects for European growth and the state of preparedness for the G20 summit.

Mr Cash: In the context of what the right hon. Gentleman has just said, will he concede what Lord Mandelson said about the extent of over-regulation that comes from European directives and the like, which is that 4% of the European Union's GDP is absorbed in unnecessary and burdensome regulation? That is the real reason why the eurozone is imploding. It simply does not have the capacity to produce enterprise and jobs. Indeed, enlargement, to include Bulgaria and Romania, is extremely suspect, because those countries have acted as a drag on the opportunity for the rest of Europe to prosper.

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David Miliband: The hon. Gentleman asked almost exactly the same question of the Foreign Secretary. Difficult as it is for me to say it, the Foreign Secretary gave him rather a good answer, which is that a lot of the regulation to which he referred is, in fact, national regulation, not simply European regulation.

Mr Cash: Four per cent. of GDP.

David Miliband: I am sorry that the hon. Gentleman was unable to listen properly to what his right hon. Friend the Foreign Secretary said, but in this case what he said was actually true.

Mr Deputy Speaker: Order. I am sorry to interrupt the shadow Foreign Secretary, but let me just say to the hon. Member for Stone (Mr Cash) that he is setting an awfully bad example to hon. Members who are waiting to make their first speeches by conducting a sedentary commentary, which he knows the Chair strongly deplores.

David Miliband: I am sure that my hon. Friends will come to learn that the contributions-not sedentary, but standing-of the hon. Member for Stone (Mr Cash) are an important feature of these debates. The consistency of his remarks is at least one model for us all to follow, even if that cannot always be said of their content.

Mr John Spellar (Warley) (Lab): Or their length.

David Miliband: Indeed, as my right hon. Friend also says from a sedentary position.

We look to the new Prime Minister to continue to show the level of engagement seen in the past on European economic issues. Of the many hard lessons that Europe has learned, the most significant is the importance of collaboration in the global economy. The "Europe 2020" growth strategy will be formally adopted at the Council. It was the previous Government who led on the development of those proposals, during the financial crisis that Europe faced last year, and who pushed for many of the positive solutions. We support a strong external dimension, to ensure that the EU is promoted on the global scene, notably through engagement with the so-called BRIC economies-those of Brazil, Russia, India and China.

We also support the expansion of research and development, increasing the share of renewables in final energy consumption to 20% and moving towards a 20% increase in energy efficiency. We also look to the Prime Minister to make the case for longer-term reform in the European Union, particularly in areas such as energy liberalisation and the completion of the single market in areas relatively untouched, such as e-commerce.

There was one country that the Foreign Secretary did not mention, but which it is appropriate to do so. He rightly talked of the importance of the rising powers, but he did not mention Russia. The EU is by far Russia's largest trading partner, with three quarters of all Russia's direct foreign investment coming from EU member states. The EU-Russia summit-the first since Lisbon came into force-took place on Tuesday, I think. I look forward to hearing further from the Foreign Secretary about how he sees Europe's relationship with Russia. He will know-he referred to this in the debate on the Gracious Speech-that Britain's relations with Russia over the past three years have been extremely testing.

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The then Opposition supported the Government in the measures that we took in respect of Russia. However, when it comes to helping the modernisation of Russia, the European Union should be our best instrument. That is why we agreed to the opening of the so-called partnership and co-operation agreement negotiations-I think against the advice of the then Opposition. I hope that the Foreign Secretary will seek to use those discussions to help the process of engagement with Russia. We have a lot to gain, not least on issues to do with energy supply, on which the whole of the EU is a significant partner for Russia.

The European Union also has an important human rights dimension to its work in Russia. Indeed, it is appropriate that the Secretary of State for International Development should be in the Chamber now-he missed the Foreign Secretary's speech, but I am glad that he has come in at this moment. He made great play during the election campaign of what he called the absurdity of the Department for International Development funding work in China or Russia. Let us leave China to one side. The work that the Department for International Development was funding in Russia was vital human rights work in Chechnya and Ingushetia, parts of Russia that are extremely poor and extremely riven with human rights abuses.

I hope that the Foreign Secretary will talk to his right hon. Friend the Secretary of State for International Development, because the important work that was being done with DFID money-relatively small amounts of money, compared with the multi-billion pound DFID budget-was supporting human rights issues that the Foreign Secretary said in his speech in the Loyal Address will be a vital part of his Department's work. We have heard a lot of words about joined-up government from the new Administration, and this is one area where the price of a campaign commitment to an across-the-board cut in the work done in Russia will be borne by people trying to do brave and important work, in an important country in an important part of the world.

Mr Robert Walter (North Dorset) (Con): I am pleased to hear what the shadow Foreign Secretary is saying, but could he explain to the House why under his Administration the funding for the Council of Europe-and, implicitly, for the European Court of Human Rights-was basically frozen, while he allowed the European Union to spend hundreds of millions of pounds creating a fundamental rights agency that has nothing whatever to do with human rights in Russia or anywhere else?

David Miliband: I am sorry that the hon. Gentleman's intervention had so little to do with what I was talking about, which was a serious point about the development of human rights support in Russia. As he knows, the Council of Europe continues to receive generous support from the United Kingdom. The fact that we froze our budget is an example of the sort of efficiency and drive that he has often preached about. However, there is an important point there for the Foreign Secretary to address.

Keith Vaz: "Europe 2020" is the successor to the Lisbon agenda. What went wrong with the Lisbon agenda was that European countries did not acknowledge and achieve their benchmarks on certain aspects of
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policy. Before the shadow Foreign Secretary finishes the economic section of his speech, will he say whether he agrees that, as we focus on the new European Council, it is extremely important that there should be credible benchmarks? There has to be a proper understanding from European countries that those benchmarks are not pie in the sky; rather, they actually have to meet them if Europe is to become truly competitive.

David Miliband: I fear that there is a rather more fundamental problem than the one that my right hon. Friend has addressed. Although it is right to have a single European growth strategy, there is not a single European Government, nor is there a single European economic policy. We have nation states of Europe that pursue their own policies, and the vast majority of right hon. and hon. Members across the House would support that. The benchmarks that he talks about could not be enforced by the European Commission, or by anyone else, in those areas that were not within the competence of the European Union. I do not think the lesson from that is that we should centralise all work on universities or other supply-side issues. However, the structural problem remains, whereby the European Union operates by agreement, but implementation in significant areas is carried out by nation states.

Mr Ellwood rose-

David Miliband: I want to make some progress, but I will see whether I can squeeze the hon. Gentleman in a bit later.

I want to cover the important issue of the banking levy, which the Foreign Secretary did not mention. The last European Council's conclusions noted

We have consistently been in favour of such a banking levy. The UK was the first major country to push for such a levy, at the G20 Finance Ministers' meeting in St Andrew's last November. We have also been clear about the need for such a levy to be agreed internationally. The former shadow Chief Secretary to the Treasury-now the Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond)-agreed with that, saying:

Now is the time for the Prime Minister to follow through on that commitment.

We urge the Government to concentrate on finding consensus for a global levy. The G20 summit will provide another opportunity to build such agreement. I hope that the Minister for Europe will address that issue when he replies to the debate, as it was not addressed by the Foreign Secretary. He might also like to confirm that there is cross-party agreement on the suggestion that a banking levy should operate as some form of insurance fund. We have some concerns about that. We believe that the way in which any proceeds from a levy are spent should be a matter for individual countries to decide.

The European Council also has on its agenda the important preparations for the United Nations high-level plenary meeting on the millennium development goals.
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The Government have our full support in this area, and we are proud of our record on international development, to which the Foreign Secretary referred. The outlook for the goals is mixed. The right hon. Gentleman was poetic about his Government's commitments, but he also pointed out that some other European countries were falling back in their commitments. For example, the proportion of children under five who are undernourished has declined from 33% in 1990, but it remained at 26% when the last figures were taken. According to the UN's figures, the number of children in developing countries who were underweight still exceeded 140 million. There has been success in tackling hunger in parts of east Asia, but in sub-Saharan Africa, the poverty rate has remained constant at approximately 50%. These are issues on which Europe's development budget, and its development work, have an important role to play, and I hope that we shall get a report back from the right hon. Gentleman, or from the Prime Minister when he returns from the European Council.

On climate change, which the Foreign Secretary mentioned in passing, the Commission report presented by new Commissioner, Mrs Hedegaard, was important. We on this side of the House are committed to increasing the EU's target on emissions cuts as we move forward to a more comprehensive global agreement for the period beyond 2012. Figures released yesterday show that EU member states are halfway to cutting their emissions by 20% by 2020, which shows good progress, but that represents progress over a 20-year period, and we have only 10 years to go. We also need to ensure that the targets are not shirked, and that loopholes are closed.

In the light of the discussion yesterday, and of the terrible events that took place on Monday, it is right that I should dwell for a moment on the situation in the middle east. The European Heads of Government decided last year to devote one meeting a year to foreign policy, but that cannot lead to the exclusion of foreign policy from every other meeting. The Foreign Secretary spoke, quite legitimately, about the next meeting of the Foreign Affairs Council, but the European Council has especial weight when it comes to choosing some foreign policy issues and dedicating time to them. I would not support the development of a Christmas tree approach, whereby every foreign policy issue was discussed at every European Council, but I do believe that the crisis in the middle east that was catalysed by the events on Monday deserves the attention of the Heads of Government.

We know that the EU is a big funder of humanitarian work on the west bank and in Gaza. We also know that it funds work for the Palestinian security forces on the west bank. Those are two ways in which the European Union makes like better for people in the occupied Palestinian territories. In political terms, however, Europe has not been a player of equivalent strength. The tragic events of this week bring into stark relief the consequences of stasis on the political track. These include limited progress on the implementation of resolution 1860, stalled proximity talks, and EU relations with Syria that are going backwards after the outreach early last year. Discussion has also been diverted from the important Iranian nuclear issue.

International engagement in this arena is not blocked by a lack of consensus; in fact, there has rarely been consensus on the long-term solution to the Israel-Palestine issue. However, the engagement has not been turned
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into action on the ground. This is a massive test for the foreign policy of all four members of the Quartet, but we on this side support a stronger role for the Quartet as a representative of the international community, and more structured links with the Arab Quartet, which needs to be part of any drive to reverse the slide in confidence and commitment that has been evident for some time, and which will be accelerated by this week's events. The Foreign Secretary talked yesterday about making his and Britain's voice heard. The European Council offers a chance for Europe's voice to be heard, and I hope that the Prime Minister will take it. Europe needs a strong Britain, and we need a strong and successful Europe.

Mr Davidson: Given that the role of an Opposition is to oppose, is it the intention of the comrade leader aspirant that we should attack the Government for being insufficiently pro-Brussels? That was the position traditionally adopted by the Liberals, and it did not do them any good at the last election. I wonder whether we ought to learn the lessons of the general election and adopt a somewhat different position. For example, perhaps we should say that, if there is to be any more accession, there should be an end to unfettered immigration from the EU.

David Miliband: First, we will attack the Government for being insufficiently pro-British, and not for being insufficiently pro-Brussels. When they are insufficiently strong in their defence of the national interest, in regard to any aspect of European policy, we will attack them for that. Let me address my hon. Friend's last point. His new ally, the Prime Minister, repeated in each of the prime ministerial debates that Britain needed a policy in which new entrants to the European Union had transitional arrangements for labour market access. That exists today for Romania and Bulgaria, precisely because we are learning the lessons of the past 10 years. I would say to my hon. Friend that, when our comrade party has done something right, it would be worth his while to recognise that. In this case, we have got it right.

Keith Vaz: Please could the shadow Foreign Secretary explain to our comrade from Glasgow-this now seems to be the parlance on these Benches-that this is not actually immigration? Once the treaty has been signed, people from the European Union have a right to come and work here unless there are transitional arrangements. Furthermore, there are 1 million British citizens working in mainland Europe in exactly the same way.

David Miliband: It is important to point out that there is now a net outflow of European workers from the UK, according to the latest figures, which were published at the end of last month. That reflects quite a lot about our economy. It is also important to say that other European citizens are required to work and pay taxes for 12 months in the UK before they are entitled to claim benefits. That is an important part of the compact. I accept that there are rights, but it is important not to forget that there are also responsibilities attendant on migration within the European Union.

Michael Connarty: It is also worth putting on record that the Single European Act, signed by Margaret Thatcher, gave people the right to travel and work within the
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European Union. That changed the fundamental structure in which people now operate in the EU. It was not the Labour Government who decided that; it was decided long before we came to power.

David Miliband: My hon. Friend makes an important point. I want to refer back to the exchange between my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and the Foreign Secretary. It is not often that he is stalled in his stride, but my hon. Friend managed to stall him by pointing out that his new-found enthusiasm for referendums on any transfer of competence, however small, stands in stark contrast to his loyal vote for the Maastricht treaty under his then Government. It also stands in stark contrast to all those Conservative Members who were in the House during the passage of the Single European Act and who loyally stuck to British parliamentary convention. That is, that we are a parliamentary democracy and that when there are fundamental transfers of power around the euro, for example, there should, of course, be a referendum, as all parties have agreed. It is the job of this Parliament, however, to scrutinise, debate and to vote on any other matters.

Although I shall not devote a long section of my speech to this subject today, we look forward to long debates about how the Foreign Secretary will justify spending £80 million to £100 million on referendums, for example, on a change in the organisation of the pension committee of the European Parliament, which is one consequence of the new-found policy adopted by the Government. We will have particular fun in asking the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who has long stood for a high degree of European integration, to explain why that is a good use of taxpayers' money.

Ms Gisela Stuart: Will my right hon. Friend give way?

David Miliband: My comrade friend from Birmingham, Edgbaston is always too tempting for me not to give way to her.

Ms Stuart: Although this grieves me, let me put on the record that when it comes to referendums, all three parties have nothing to be proud of. We all went into the 2005 election promising one: Conservative Members kept saying "Oh, well, if it is passed, we cannot have one", but they could perfectly well have had one; the Lib-Dems said, "Oh, we change the question; it should be in or out"; while we said that the document was different from the treaty. None of us came out of this with glory, and I think that we should recognise it.

David Miliband: I want to put on record the fact that my hon. Friend did cover herself with glory in respect of the consistency of the positions she took on European issues and- [Interruption.] I have to say to the Foreign Secretary that we have been working on that through separate channels. My hon. Friend achieved a remarkable result in the general election and her result was testimony to what independent-minded and strong constituency MPs can achieve in this country. I am very pleased that she will be applying her independent mind not only to everything that I say, but to everything that the Government say on European issues as well, pointing out the inconsistencies as they develop.

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