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28 Jun 2010 : Column 576

The Prime Minister: My hon. Friend is right to ask that question. A discussion has been held. However, I think we should put on record the fact that no one can accuse Canada of not playing an incredibly positive role in NATO. It has experienced a very large number of casualties in relation to the size of its population. It has made its decision about 2011, and we should not seek in any way to gainsay it over that. Of course we can all do what we can to encourage it to go on playing a role of some kind, perhaps medical or related to training, and obviously it will play a role in terms of development. However, I think that my hon. Friend's point was well made.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I realise that watching the football with Angela Merkel cannot have been much fun for the Prime Minister, not least because-I think-he was not even born in 1966, and therefore could not console himself with the memory of that achievement.

In his statement, the Prime Minister mentioned Turkey and its important role in relation to the middle east process in Iran. Has he had any discussions with fellow European heads of state about the fact that if we go on making it difficult for Turkey to accede to the European Union, it may well turn its back on Europe, in which case we will be the losers?

The Prime Minister: I have had those conversations at both the G8 and the G20. It is good that there is all-party agreement in this House that we should do everything we can to encourage Turkey into the European Union, to anchor her into the west in all the ways we can. Clearly there is a disagreement-a disagreement that is not going to go away-between France and Germany on the one hand and Britain on the other about Turkey and the EU, but irrespective of those positions we should all be doing what we can to encourage Turkey to feel part of Europe and of the direction we are taking. The role she can play in terms of Iran and the middle east peace process is very important, but she will not be so inclined to play that role if Europe turns her back.

Mr John Baron (Basildon and Billericay) (Con): I am sure my right hon. Friend will agree that if we are to succeed in Afghanistan, we need unity of purpose. How concerned is he, therefore, by the resignation of General McChrystal and of key Ministers in President Karzai's Government, and by the extended leave being taken by the UK special representative to Afghanistan?

The Prime Minister: On the issue of the Ministers resigning from President Karzai's Government, he has put in place quite talented replacements. On the issue of Stanley McChrystal, he is a very talented general who we believe had delivered the right strategy. I was consulted on the issue twice by President Obama, but in the end it was about what General McChrystal had said about the US Administration in the interview in Rolling Stone magazine, so it was an issue between the US Administration and Stanley McChrystal, rather than necessarily a matter for me.

Mr Denis MacShane (Rotherham) (Lab): The Prime Minister has had three international outings and he has acquitted himself very well; it would be churlish not to
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acknowledge that. Ahead of them, he wrote in the Financial Times on 17 June:

Will he therefore agree, in this spirit of bipartisanship, that having the gender pay audits that have been suggested in both the public and private sectors would be a way of getting rid of that huge problem?

The Prime Minister: We have supported-and, indeed, before the election we put forward a case for-gender pay audits, particularly based on those companies where any unfairness is found. The right hon. Gentleman makes a good point, quoting from my FT article, which is that that is one of the structural reforms that we in the west in the developed world should be carrying out in order to increase our growth rates, and as the right hon. Gentleman is being so friendly, I shall have to take away his thoughts and think about them again.

Mr Tobias Ellwood (Bournemouth East) (Con): Whether it be Afghanistan, the global economy or, indeed, tackling climate change, the G8 and G20 summits are becoming useful vehicles for tackling global issues, but they make decisions that are then passed on to an organisation created just after the war, the United Nations, which is woefully out of date. Were there any discussions about updating the United Nations so that it can tackle these issues much better?

The Prime Minister: I am grateful for my hon. Friend's question. The UN Secretary-General was, of course, at the G20 meeting and made a number of contributions, but my hon. Friend is right that the architecture of international relations is badly out of date. We have the rise of India, we have the enormous strength of Germany and Japan, and we have the great growth of Brazil, yet none of those countries is on the Security Council. We have to recognise that it is all very well all of us-we all do this-saying that we must share global leadership with India and China, but if we are going to share global leadership we need to change these institutions. This was discussed. It is fantastically difficult because people have so many vested interests-as, indeed, do we-but I do think that it is absolutely right for countries such as India and Brazil to have the sense that they should be on the UN Security Council.

Mr David Winnick (Walsall North) (Lab): I praise, of course, the troops who have died and those who, sadly and unfortunately, are likely to die in the future, but is it not the case that there can be hardly a single Member who believes that a military victory in Afghanistan in any meaningful sense is likely to come about even in another nine years? Therefore, is it not all the more important to start negotiations sooner rather than later, as suggested by General Richards? I think the Prime Minister should recognise that there is growing concern in the country at large about what is happening and the number of deaths in Afghanistan.

The Prime Minister: The hon. Gentleman is right. We are all concerned about the number of casualties in Afghanistan. He is also right in that when we look across history at fighting insurgencies, in very few of
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them has there ever been a complete military victory-it is a combination of what happens militarily and in the country at large and what happens in terms of some sort of reconciliation process. That is important. We are committed to the reconciliation process and would like to see it go further and faster, but as I said, it is important to maintain a distinction between Taliban linked to al-Qaeda, who would have the terrorist training camps come back and who want world terrorism, and people involved in insurgency for any number of other reasons. Yes, of course there must be a political track and of course we should develop it, but we need to differentiate the sorts of Taliban we face.

Andrea Leadsom (South Northamptonshire) (Con): Does the Prime Minister agree that our global banking system remains incredibly risky, and that bearing in mind how long it has taken to get previous Basel agreements in place, it may be necessary to take steps to protect our particular vulnerability to the banking sector before then?

The Prime Minister: My hon. Friend is right. We are trying to put in place a system whereby banks have to ask themselves whether they have enough capital to withstand the sort of shock they suffered in 2008 and 2009. That is what needs to take place, and it is being put in place relatively quickly, but the rules need to be drawn up and agreed, and there may then be a pause before they are actually introduced, because at the moment the great risk is shrinkage of the monetary base-a shrinkage of bank lending-at this very sensitive time in our recovery.

Paul Flynn (Newport West) (Lab): How can the Prime Minister retain his optimism after 11 British deaths in 10 days? How can a stable Afghanistan be built on the crumbling foundations of an election-rigging president and his criminal family, on an Afghan army that is mercenary and drug-addicted and on a police force that is depraved and entirely corrupt? We are in the end game position, as Canada and the Netherlands have explained. At the end of the Vietnam war a question was asked that should haunt us all now: who will be the last soldier ordered into battle to die for a politician's mistake?

The Prime Minister: The hon. Gentleman has long taken that view, but even though he makes that case he wildly overstates it. If we talk to British soldiers who serve with the Afghan national army they say that those soldiers are brave, they work hard and they are committed. Yes, of course we need to improve recruitment from all parts of the country, but I do not think it is fair to characterise the army as he does. There have been problems with the Afghan police force, but when we go to Afghanistan we see police trainers from European and American countries doing good work. I do not accept that all is as bleak as the hon. Gentleman puts it. We have had a number of casualties, which are heartbreaking in every individual case and it is heartbreaking that there are so many, but we have to remember what we are doing in Afghanistan. It is not creating the perfect society; it is training up the Afghans so that they can take care of their own security and we face fewer attacks from terrorist groups trained in the Afghanistan-Pakistan border area. The hon. Gentleman
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shakes his head, but the fact is that today the number of threats coming from that area is reduced, because of what we have done in Afghanistan and because of what the Pakistan Government are doing in Pakistan. Of course we should not be blind to people's concerns, but we should try to take people with us on the success there has been in reducing those threats.

Mr Brian Binley (Northampton South) (Con): The Prime Minister will know that business growth is vital for the Chancellor's plans and that credit is vital to business growth. The Governor of the Bank of England warned on Friday that lending to business remained weak and there was a risk of "disruption of credit". The G20 proposals could cause banks more serious concern in that respect, so what will the Prime Minister and the Government do to make sure that small and medium-sized enterprises receive the credit they need to ensure growth in this country over the next three years?

The Prime Minister: My hon. Friend makes an extremely good point, and the concern that we should have about the economy is not the fiscal tightening that needs to happen, but to ensure that the banks are lending and that monetary policy is working effectively. Of course, monetary policy is not just interest rates-the price of money-but we also have to think about the quantity of money, which is bank lending. My right hon. Friend the Chancellor in the Budget made a number of improvements to the credit lending schemes. I think that we can look to see whether there is even more that should be done, but let me repeat that the key thing that we were trying to do at the G20 was not to enforce credit rules now that would restrict lending, but to put in place the measures for the long term that will stop the catastrophe that we suffered in 2008 and 2009. That is the key. In Europe, we are stress testing the banks to ensure that they have adequate capital. Again, that is important: we need to ensure the soundness of the banking system, because that is part of the key to recovery.

Michael Connarty (Linlithgow and East Falkirk) (Lab): The Prime Minister mentioned that he had four useful bipartite meetings. Did he meet Juan Manuel Santos-the President-elect of Colombia-or did he indicate that he would meet him when he goes on tour? He is a gentleman who, as Defence Minister, dressed his troops as members of the International Committee of the Red Cross, carried out the extra-judicial murders of 2,000 innocent civilians and bombed Ecuador, where there is, I believe, a murder warrant out for him. Did the Prime Minister, or will he, raise those issues on behalf of concerned people in the UK who follow them very closely?

The Prime Minister: I did not meet the President-elect; I did meet the current President, President Uribe, who was at the G8 session on tackling corruption and the drugs trade, where there was a presentation from him and I had a conversation with him. I will take away the points that the hon. Gentleman makes and reflect on them when I have the conversation-I am sure that I will-with the President when he is not just the President-elect but the President.

Alec Shelbrooke (Elmet and Rothwell) (Con): Did the Prime Minister find time during the G20 summit to
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speak to the leaders of Russia and China about the ongoing diplomatic issues with Iran? May I urge him to work closely with those traditional allies of Iran to ensure that we try not to go anywhere near the military action that some hawkish nations want?

The Prime Minister: I had very positive meetings with President Hu of China and President Medvedev of Russia. We discussed, particularly in the Russian meeting at quite some length, the Iranian situation. It is encouraging that the Russians have voted for the sanctions resolution in the UN-resolution 1929-and it is important to show a united face to the Iranians about the unacceptability of their acquiring a nuclear weapon. The point is that nobody wants military action, by Israel or anyone else, to take place, and that is all the more reason for taking the sanctions route and trying to maximise the pressure and change the balance for Iran, to raise the costs for it of having a nuclear weapon. That is what this is all about.

Kelvin Hopkins (Luton North) (Lab): Almost 80 years ago, countries across the world adopted policies of fiscal tightening and gave us the inter-war depression-the slump, with millions of people thrown out of work. We are now adopting policies of collective deflation. Is the Prime Minister not at all fearful that history might repeat itself and that we might see millions back unemployed?

The Prime Minister: It is quite difficult to talk about deflation when monetary policy is as loose as it is and when interest rates are as low as they are. This is where, with respect, the Labour party has not understood enough of the argument. We have to tighten fiscal policy in the UK. We are borrowing 11% of our gross domestic product. If we started borrowing more, or indeed we stood still, we could face the situation that others in Europe face-it is that serious-so where the demand should come from is by the combination of a fiscal tightening but with loose monetary policy. That is not the same thing that happened in the 1930s. The additional mistake made in the 1930s was to have trade wars, and hon. Members could hear from my statement just how hard this country is fighting to ensure that that does not happen.

Jason McCartney (Colne Valley) (Con): As one of the many millions of disappointed football fans around our country today, may I thank the Prime Minister for raising the issue of goal-line technology? Does he agree that, when it comes to tackling the deficit, it is the Opposition who have taken their eyes off the ball?

The Prime Minister: That was an ingenious way of bringing goal-line technology into a statement on the G20, and I am amazed by your latitude, Mr Speaker- [ Interruption. ] There was no point blaming the referee; as I said, we were not robbed, we were beaten. However, to Chancellor Merkel's credit, every time Germany slotted another one past us, she apologised.

Barry Gardiner (Brent North) (Lab): Will the Prime Minister confirm that the only occasions in the past 25 years when England have beaten Germany at football have been under a Labour Government? When does he expect that we will be able to do that again?

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The Prime Minister: At the rate you are going, never.

Guy Opperman (Hexham) (Con): In the Prime Minister's absence last week, he might have missed two surprising events. First, the shadow Chancellor made a speech that contained lots of criticism, but not one recommendation for reducing the deficit. Secondly, we saw a five-minute silent cameo from the former Prime Minister, although amazingly, for such a fiscal champion, it was during Environment, Food and Rural Affairs questions.

Mr Speaker: Order. It is always a pleasure to listen to the hon. Gentleman, but the Prime Minister is not responsible for speeches made by the shadow Chancellor, nor even for the former Prime Minister, so I think that we will leave it there.

Derek Twigg (Halton) (Lab): The Prime Minister said in his statement that the G8 sent a collective signal that "we want the Afghan security forces to 'assume increasing responsibility for security within five years'"-he did not say "full responsibility". He said later on that he wanted to give an indication that we will be out of Afghanistan in five years. Does that mean that we will be out of Afghanistan regardless of the situation in that country in five years' time-full stop?

The Prime Minister: The point is that for many years after our troops have left, we will have a strong relationship with Afghanistan that will involve diplomacy and aid, and perhaps even helping to continue to train Afghan forces. However, in answer to the question of whether we should be in Afghanistan by then in the way that we are now, with large-scale military deployment and all the rest of it, no we should not. We should by then have trained up the Afghan army and police force, and seen an improvement in governance, so that we can bring our troops back home.

Claire Perry (Devizes) (Con): I read on page 3 of the G20 communiqué that fiscal consolidation plans should be credible and clearly communicated. Did the Prime Minister get the chance to read any of the weekend papers that suggested that the majority of the British people support the Budget and agree with some of the spending plans, which shows that our message is definitely getting across to all but Labour Members?

The Prime Minister: My hon. Friend makes the important point, which the International Monetary Fund also makes, that if we carry out fiscal consolidation and demonstrate that we have a plan and are getting on with it, that can enhance confidence. Confidence is the key to growth. If we are going to get people to spend and invest, they need to know that the Government have a plan for getting us out of the mess that we inherited, so that is key to getting our economy moving.

Chris Leslie (Nottingham East) (Lab/Co-op): When the Prime Minister was discussing the banking levy at the G20, did he explain to his colleagues why he was so lenient on the banks? Instead of taking the axe to public services, he should be asking the banks to contribute more to address the mess that they created, instead of letting them off the hook.

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The Prime Minister: I know that the hon. Gentleman missed the previous Parliament, but he could have read about some of the things that took place. During that Parliament, we argued for the introduction of a banking levy even if others did not follow suit. The position of the Labour party, although I am sure that it is changing by the minute, was that, under the great disappeared-the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)-we had to wait for full agreement from every single country in the world. That was not our policy. We have introduced a banking levy, and quite rightly too.

Philip Davies (Shipley) (Con): May I urge caution on my right hon. Friend when it comes to Turkey's membership of the European Union? Unless we have already left the EU by that stage-I can but hope-Turkey's membership could lead only to the British taxpayer being asked to put his hand further in his pocket and further strain on immigration into this country.

Chris Bryant (Rhondda) (Lab): Not complete agreement.

The Prime Minister: As the hon. Gentleman says, there is not quite complete agreement on this issue, but as I would say to the French President or German Chancellor, even if people do not agree with me that Turkey should be a member of the EU, we should be straining every sinew to think of ways of encouraging Turkey to play a full role in the affairs of our continent. It is a member of NATO, and we have a strong bilateral relationship and a trading relationship with the country. Turkey wants those relationships with us, and we should do everything that we can to enhance them.

Mr Andrew Love (Edmonton) (Lab/Co-op): Has not the Prime Minister been a little selective in his quotes from the IMF? Did it not say clearly that there is a lack of co-ordination at the G20, that there are premature consolidations, particularly in Europe, and that if there were greater co-ordination between the G20 and other economies it would add 2.5% to world growth and create 8 million jobs?

The Prime Minister: The hon. Gentleman is right in one regard: the upside scenario posed by the IMF adds to growth and to jobs, but that scenario includes fiscal consolidation by countries such as Britain. I do not want to bore him with quotes from the IMF, but it said:

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