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The Prime Minister: My hon. Friend is right. Over the past 13 years, we have had a succession of treaty changes, whether Nice, Amsterdam or Lisbon, but we
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have not had the action that we needed to complete the single market to make the differences that would help our economy. We should aim for fewer institutional changes-not more treaties-and getting things done in Europe that will benefit the British economy.

Huw Irranca-Davies (Ogmore) (Lab): Understandably, much of the discussion focused on economics and the financial situation, but may I ask whether, in his discussions with Iceland, and in future discussions at the International Whaling Commission, the Prime Minister will make sure that the previous Government's long-standing position on a moratorium on whaling is upheld, and that there is no diminution to allow a resumption of commercial whaling?

The Prime Minister: Yes, I can give the hon. Gentleman that assurance. Two things stand out. First, if Iceland is to join the European Union, which has a ban on whaling in its waters, it must accept that what it does is incompatible with membership, so that would have to change. Secondly-I raised this in my meeting with the President of the European Commission-it is important that, if Europe discusses its position on whaling, countries should be able to vote against any form of resumption of commercial whaling without being in danger of some sort of infraction proceedings. I made that position absolutely clear.

Jason McCartney (Colne Valley) (Con): May I ask the Prime Minister how warm a welcome he received in Europe, bearing in mind the fact that he went over there to get commitments on our behalf, whereas his predecessor used to travel over there to concede our powers?

The Prime Minister: My hon. Friend makes a good point. We must take a clear approach and talk with other European leaders about our concerns, as it is an organisation in which people are fundamentally trying to help one another, rather than do one another down. If we are clear about why we have red lines and what they mean, it is perfectly possible, when we have built up alliances, to get them agreed. This country should always stand up for itself in Europe. We do not aim to be isolated, but there will be occasions when we are on our own. It is important that we are prepared to stand up and say what we think when that happens.

Stella Creasy (Walthamstow) (Lab/Co-op): May I press the Prime Minister to say a little more about his discussions in the European Council on the banking levy, and where that leaves those of us who are desperate for action on global poverty and climate change, particularly the introduction of a so-called Robin Hood tax?

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The Prime Minister: I am grateful for that question. There was a long discussion about the issue of a transaction tax, and great support for that within the European Council. I was keen to make sure that countries such as the UK that want to introduce a banking levy, and that would like international agreement but nevertheless want to go ahead in any event, should be able to do so without being bound by the EU to introduce a particular sort of tax or to spend the money in a particular sort of way. That was achieved.

If the hon. Lady looks at the EU Council's conclusions, she will see that they say that we should continue to explore and develop the case for a transaction tax, which is sensible. However, I must tell her that it will be difficult to get international agreement for such a tax, which is why Britain is right to take the approach that it has taken.

Mr Philip Hollobone (Kettering) (Con): There did not appear to be any agreement on the future shape of the European External Action Service. How can Britain's best interests be advanced in that respect?

The Prime Minister: My hon. Friend makes a good point. Obviously, our party did not support the Lisbon treaty or the creation of the European External Action Service. I am very keen that resources are not badly spent or badly used on the service. Not much progress has yet been made. We will work to try to ensure that the service increases nation states' ability to project themselves in the world, and does not become an expensive bureaucracy.

Mr Speaker: Last but not least, I call Nadhim Zahawi.

Nadhim Zahawi (Stratford-on-Avon) (Con): Will the Prime Minister tell the House the number of countries in Europe that have understood the difference between emergency financial help and structural change of their economy? The only party left to understand the difference is the Opposition.

The Prime Minister: My hon. Friend makes a good point. All the countries of Europe understand the need for action to reduce budget deficits and have signed up to the 2020 document, which, as I said, has good things in it, but the real action that we all need to take to make sure that the countries of Europe are not stuck in a slow-growth uncompetitive position as against Brazil, Russia, India, China and all the future fast growers, is to look at our real problems-our structural problems, our high costs, our high taxes-and to work out that we will have to take difficult decisions to make Europe more competitive, so that we can pay for the public services and the higher living standards that we all want.

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Points of Order

4.41 pm

Jo Swinson (East Dunbartonshire) (LD): On a point of order, Mr Deputy Speaker. May I ask your advice? Tomorrow the House will vote for the Chair of the new Backbench Business Committee. Given that the aim of the Committee is to give Back Benchers control over non-Government business, would it not be inappropriate for members of the Government and Opposition Front-Bench Members to vote in the election tomorrow?

Mr Deputy Speaker (Mr Lindsay Hoyle): The hon. Lady makes an interesting point. The advice is that on the one hand, there is no provision in the Standing Orders barring any Member from taking part in the proceedings; on the other hand, voting is not compulsory. I am sure that Members will listen to that advice. This is ultimately a matter for individuals to decide for themselves, rather than for the Chair to decide.

The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): Further to that point of order, Mr Deputy Speaker. It may be helpful to the House to know that the business managers on the part of the Government-my right hon. Friend the Leader of the House, myself, the Chief Whip and the Deputy Chief Whips-will not take part in that election.

Mr Deputy Speaker: I think the answer has been made clear. It will be interesting reading for other hon. Members to take that advice on board.

Vernon Coaker (Gedling) (Lab): On a point of order, Mr Deputy Speaker. I received an answer today to a parliamentary question to the Treasury on the distributional impact of a 1% rise in VAT. The Treasury answered me by saying that it cannot provide that information. Is it in order for me to ask for a Treasury Minister to come to the House urgently to explain what the distributional impact of a 1% rise in VAT would be? Is it not extraordinary that, on the day before the Budget, the Treasury seems unable to give that information?

Mr Deputy Speaker: I am sure that, with his experience, the hon. Gentleman knows that that is not a point of order for the Chair, but he has got it on the record, and no doubt if he puts a message in to the Speaker tomorrow, it could be looked at in due course.

Ed Balls (Morley and Outwood) (Lab/Co-op): On a point of order, Mr Deputy Speaker. May I welcome you to the Chair? On the basis of my experience, there is no doubt that the Treasury has that information. The only question is why it is unwilling to bring it to the House. On a different issue, may I seek your guidance on urgent questions? I asked the Education Secretary a particular question, which was whether private schools could reopen as free schools and then pass on their school fees to be paid for by the taxpayer, rather than by parents. Is there any obligation on the Secretary of State to answer an urgent question in the House, or will the Department follow the path of the Treasury and not answer the question even when it knows the answer?

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Mr Deputy Speaker: The right hon. Gentleman has put his point on the record. It is not a matter for me, but I am sure that it will be read tomorrow.

Barbara Keeley (Worsley and Eccles South) (Lab): On a point of order, Mr Deputy Speaker. At 9.25 this morning, the Department of Health announced a major revision of the NHS operating framework, and the story ran in the media all morning. I checked repeatedly for a written ministerial statement; it did not appear. There was no copy of the announced changes until 12.40 pm, more than three hours later. The statement deals with major changes in health policy, including the removal of guaranteed access to a general practitioner and the guaranteed 18-week waiting time for hospital treatment, and the lowering of the threshold of four-hour waits at accident and emergency. Should there not have been an oral statement to the House on these major NHS policy changes, not a written statement issued three hours late?

Mr Deputy Speaker: That matter is now on the record. If the hon. Lady were to table an urgent question, I am sure it would be considered through the usual channels.

Chris Bryant (Rhondda) (Lab): Further to the point of order made by the hon. Member for East Dunbartonshire (Jo Swinson), Mr Deputy Speaker. It is surely right that the Backbench Business Committee should be elected predominantly by Back Benchers, not by Front Benchers. I fully understand and accept the point made by the Deputy Leader of the House that the Leader of the House and the business managers will not take part in that vote, but may we publish not how people vote, but whether they vote tomorrow, so that we can know whether Ministers vote?

Mr Deputy Speaker: The hon. Gentleman rightly makes his point, which I am sure will be taken on board and considered in due course, but it is not for the Chair to make that decision today.

Mr Tom Watson (West Bromwich East) (Lab): On a point of order, Mr Deputy Speaker. Yesterday, the Chancellor announced on the BBC a major review of public sector pensions, but today the Prime Minister was unable to confirm the terms of reference for that investigation. Have you received representations from the Chancellor or the Secretary of State for Work and Pensions to come to the House to tell us the terms of the review, or would the Secretary of State for Defence like to enlighten us in the next debate?

Mr Deputy Speaker: Many points of order are being made that are not a matter for the Chair. Once again, the matter has been put on the record.

Dr Alan Whitehead (Southampton, Test) (Lab): On a point of order, Mr Deputy Speaker. On 10 June, I asked the Minister for Housing a question concerning the powers that Southampton city council has concerning homes in multiple occupation, and in regulation. The answer I received that those powers would be maintained has proved not to be true and to be seriously misleading. Is it in order for you to ask the Minister to come to the Chamber to give me an answer that is both true and not misleading?

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Mr Deputy Speaker: The point has been well made and it is on the record. It is not for the Chair to decide, but I am sure that the usual channels will pick up that point.

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Strategic Defence and Security Review

4.47 pm

The Secretary of State for Defence (Dr Liam Fox): I beg to move,

On this sad day when the House has heard the news of the 300th member of the armed forces losing his life in Afghanistan, our thoughts and prayers are with his family and friends, as well as with all those other service families who are mourning their losses. It is also appropriate to remember the families of the victims of violence from 9/11 to the present day. We did not initiate this cycle of violence, but we will certainly confront it.

I am pleased to open this debate on the Ministry of Defence contribution to the strategic defence and security review. All parties in the House committed themselves at the election to holding this review. The Green Paper from the previous Government, with its all-party approach, produced broad agreement on the need for fundamental reform, and I am sure that all Members will agree and reiterate that the defence of the nation should be above the worst excesses of partisan party politics.

In this review, we will need to challenge many preconceptions and think clearly about what we as a country want and need from our armed forces, and what we can afford. I want to ensure that we benefit from the expertise in the wider defence community, including partners in industry, academia, non-governmental organisations and the charitable and voluntary sector.

It is also essential that members of the House of Commons have a proper opportunity to make their views known on behalf of themselves and those whom we represent. In that light, Members submissions on the defence review should be made directly to me at the Ministry of Defence. Those in the other place with specialist interests will also be especially welcome to make submissions. Most importantly, the Prime Minister and I are determined that members of the armed forces and their families have an opportunity to contribute, and the service chiefs will set out shortly how that will be achieved. There has already been a lively debate about the choices that we face, and the MOD will continue to engage. Today, I shall set out the coalition Government's broad approach to the defence review, an assessment of the financial backdrop, a description of the strategic environment and, finally, the way ahead.

Conducting a defence review while fighting a war in Afghanistan is rather like trying to build a ship while still at sea. Afghanistan must remain our priority, and as part of the international coalition of 46 nations we must prevail. None the less, after 12 years without a defence review, when our armed forces have at times been overstretched, with some current equipment overused or out of date, with programmes from the cold war that are of less relevance today, and in our dreadful economic and financial circumstances, it is clear that change must come. The review will need to provide a step change, not salami-slicing. We will have to bring defence policy, plans, commitments and resources into balance, confront the harsh facts of the economic climate in which we operate and make a clean break from the military and political mindset of cold war politics.

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Let me give the House just one example. In the past, military might has been measured by conventional capabilities, such as tanks, aircraft and ships that we can inspect and review; but technology is already moving on at such a rate that there are new domains of warfare, such as cyber and space, where we will require capabilities in which the Government will have to invest but which the public might not be able to see. We also see the development of asymmetrical capabilities that serve to deny us the effectiveness of our conventional capabilities. It makes sense for any adversary to develop what are commonly referred to as area-denial or anti-access strategies in order to deny us the use of our conventional military capabilities without matching us tank for tank, ship for ship or jet for jet. We should not hope that our adversaries do not do so; we should expect and plan that they will; and it is vital that the review consider that point.

Angus Robertson (Moray) (SNP): I congratulate the right hon. Gentleman on his new position. Ministry of Defence statistics show that since the previous strategic defence review there have been more than 10,000 defence job losses in Scotland and an under-spend of more than £5.6 billion. What consideration will be given in this SDSR to ensure a fair and balanced defence footprint throughout the nations and regions of the United Kingdom?

Dr Fox: The point of the review is to ensure that we have the proper defence for the United Kingdom. We will have further things to say about the defence industrial strategy and how we will take that forward, not least because it represents high levels of employment in some economically less well-off parts of the United Kingdom, and we will come to the House with those proposals in the near future.

Chris Bryant (Rhondda) (Lab): I, too, welcome the right hon. Gentleman to his new post. I could make a similar point about St Athan with regard to Wales and, for that matter, more deprived areas of the country. However, that is not the point that I want to make about St Athan. Rather it is that, in the light of what the right hon. Gentleman said about the changing nature of warfare, technical training is far more important now than it was 30 or 40 years ago. Is it not absolutely vital that one of our highest priorities be to ensure that such training is improved for all our troops? Does that not mean that we should support and he should support-this is my submission-the St Athan defence training college?

Dr Fox: Given my experience of the hon. Gentleman, I would be extremely surprised if that were the end of his submission, and I look forward to an undoubtedly weighty document landing on my desk. I understand his points, and training is absolutely vital, particularly given the increasing professionalism in the armed forces and the increasing complexity involved. None the less, he will understand that, while that project is being considered as part of the SDSR, it would be inappropriate for me to give him even a hint of our position on it, but if he makes a personal submission, I shall certainly ensure that I read it-undoubtedly at length.

Mr Tom Watson (West Bromwich East) (Lab) rose-

Dr Fox: I give way to the Labour party election godfather.

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