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The Council expressed its deep condolences to the families of those killed in last week's Taliban attack in Kabul. We reaffirmed our determination to fight terrorism in every part of the world and our resolve to see our commitments through in Afghanistan. We emphasised our,

We welcomed EU plans to,

something that has been at the heart of British efforts in recent years. The Council expressed its concern about the security situation in Pakistan and reiterated Europe's readiness to assist further the affected population. This afternoon, I have spoken to President Karzai and discussed the importance of moving quickly to set out a unity programme for the future of Afghanistan. Afghanistan now needs new and urgent measures for tackling corruption, strengthening local government and reaching out to all parts of Afghan society, and to give the Afghan people a real stake in their future. President Karzai agreed with me that Afghanistan now needs to strengthen its army and police numbers so that over time we can reduce our troops.

Finally, on Iran, the Council expressed its,

and called for their 'prompt and unconditional release'. We also reaffirmed our,

Once again, we in Britain have shown that by acting not alone but together, by working not against our mainstream European partners but with them, and by putting Britain not on the fringes of Europe but at its heart, Britain will be stronger. I commend this Statement to the House".

My Lords, that concludes the Statement.

4.05 pm

Lord Strathclyde: My Lords, I join the Prime Minister and the Minister in mourning another death of a fine soldier in an explosion in Helmand.

I shall start where the Prime Minister's Statement finished, on Afghanistan. I have three questions for the Minister. What did EU leaders agree as the strategic objective of the Afghan war? What further commitment of troops was made by any EU state? In view of the continuing deaths and injuries as a result of the lack of airlift capacity, did the Prime Minister ask our EU partners for any help with this problem, and, if so, what was their response?

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Paragraph 42 of the presidency conclusions says:

"The European Council stresses the need for the second round of the Presidential election to be credible, inclusive, secure and reflect the will of the Afghan people".

How can the EU, or indeed the UK Government, believe that, after a man whose win we dismissed as corrupt was returned unopposed?

Beyond the tragic news from Afghanistan, I thank the Minister for repeating the Statement. However, this is yet another Statement reflecting the declining UK influence in Europe that has flowed-

Lord Tomlinson: So now you're an expert?

Lord Strathclyde: My Lords, I will come to the charge sheet in a moment. Our declining influence has flowed from 12 years of policies that have been commended to the House by this Government. We signed the Social Chapter for no gain in return. We gave up our budget rebate for nothing in return. We broke our promise of a referendum on the EU treaty, yet again for nothing in return.

The Prime Minister skulked on the fringes of this summit. Perhaps, before being so censorious about the policy of this party, his party might reflect on some of the defects of its own. The Financial Times reported that the Prime Minister left a meeting of his fellow socialists "in a foul mood".

The Swedish presidency made some welcome progress in promoting action on climate change, something to which the Lisbon treaty is totally irrelevant. We welcome the commitments on carbon reductions that were repeated yet again at the summit, but where, on the 80 per cent to 95 per cent emission reduction target by 2050, did the UK Government commit us? Discussing a €100 billion annual payment to developing countries by 2020, Mr Barroso said that EU payments should be between €22 billion and €50 billion a year by that year. How much of that will be paid by the UK? What firm figure did our Prime Minister put on the table?

The Prime Minister told a press conference that he had agreed a target of 10 million new jobs in Europe by 2014. However, is the problem in Britain not that unemployment is now far higher than it was in 1997, with 5 million people on out-of-work benefits, the highest youth unemployment in Europe and the highest proportion of children growing up in homes where no one works? Is it not therefore high time that we had a Government in this country who addressed the plight of the poor that this Government's policies have left behind? With the presidency country Sweden, France, Germany and others out of recession while the UK economy still contracts, how can a Prime Minister who boasts that Britain is leading the world out of recession hope to be taken seriously?

The Council conclusions promote a so-called "complete package" on the microsupervision of financial institutions. It is no comment on the EU but a blunt fact of international finance that nothing would give more pleasure to financial circles in Paris and Frankfurt than seeing the world's greatest financial centre outside the US bound in red tape. Will the Minister assure the House in the most unequivocal terms that the Government reject EU microsupervision and that they will not buy

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credit in Brussels by selling the independence and competitiveness of the City of London? It would be a dereliction of duty if they let that happen.

Finally, will the noble Baroness tell us whether the UK Government are 100 per cent behind Tony Blair as president of Europe? Who in Britain will have a say on Tony Blair or indeed anyone else as president-perhaps two, three or maybe even a dozen? It is unacceptable to have an unpopular, unelected president imposed on the British people under a treaty on which, thanks to the shameful betrayal of their election promises by both the Labour Party and the Liberal Democrats, no one was allowed to vote?

Whether or not the Lisbon treaty is completed by the year end, never again will a Conservative Government allow such major transfers of power to be approved without a referendum. There are plenty of good UK candidates whom we could all advance and support; there are even some that the British people might willingly accept; but Tony Blair is not one of them. Perhaps we can content ourselves with this: ever since the Prime Minister backed Mr Blair with such fired-up enthusiasm, his campaign has hit the rocks. On this one issue, on this one occasion, we may take comfort in the hopeless lack of influence this Prime Minister now wields.

4.11 pm

Lord McNally: My Lords, first, I join both the Leader of the House and the Leader of the Opposition in expressing our condolences for the family and friends of Staff Sergeant Schmid. On the matter raised on Afghanistan, I follow the questions put by the noble Lord, Lord Strathclyde, because it must be made clear to President Karzai that he is very much on probation if we are to sustain the commitment in this country to fighting the war in Afghanistan. The messages on Pakistan and Iran were clear and understood. Sometimes I think we talk in this House of places and conflicts which Mr Gladstone would have known about and understood, but everything is not all the same.

This morning I walked across the grounds of Westminster Abbey where they were knocking in all the crosses of those who died in the two World Wars. Especially when there is a European Council so close to 11 November and Remembrance Sunday, I think that we of this generation should take some pride in the fact that we have replaced the conflict and carnage of the first 50 years of the 20th century with systems of governance built on democracy, respect for human rights and the rule of law. It has not all been bad news. Indeed, Europe now stands as an example to the world of how old enemies can put their enmity aside and build something better and new.

I have two small pieces of advice in the form of questions. First, would the Prime Minister be better employed using his influence to keep Europe co-ordinated in its response to global recession rather than touting Mr Tony Blair around like a political David Beckham looking for some new lucrative spot to occupy? Secondly, would the Leader of the Opposition be better employed spelling out how he intends to deal with climate change, our energy needs, agreements on trade and financial services, the fight against drug smuggling, people

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trafficking and organised crime? The time is perilously close to when he will have to do that, but how will he do it when he seems to be concentrating on sending billets-doux to one of the more eccentric national leaders in Europe, and making common cause with the European far right? How will the Conservatives pursue these vital British national interests from a position of splendid isolation? As the great John Junor used to write in his editorials in the Sunday Express:

"I think we should be told".

On Copenhagen and climate change, the Leader of the House is well aware that we are signed up and enthusiastic to make progress there yet, clearly, there is a great deal of work still to be done in a perilously short time. I have only one little worry about this; the Council says, quite rightly, that there is now a real opportunity to create whole new industries and many more jobs from the challenge posed by climate change. If I might tell this story, however, last night I received a phone call from an American friend who told me that he had just been engaged by a large German company that was involved in developing wind energy technology. It wanted his advice on how best it could exploit demand in the British market for that technology.

What really worries me is: where is the evidence that Britain is investing in the industries and know-how that will create the jobs and make use of the opportunities where these commitments to climate change are concerned? Otherwise, we shall be signing up for targets, then relying on German or Danish technology while getting none of the promised job benefits. Those are my short interventions on what was also, by prime ministerial standards, a very short Statement.

4.16 pm

Baroness Royall of Blaisdon: My Lords, first, on Afghanistan, our priority clearly is and must be that of the whole international community-to drive forward the process of Afghanisation by working with the new Afghan Government to bolster up their security forces, to make progress on reintegration, to improve local governance, to deliver services for all Afghans and to continue to expand the economy and tackle corruption. As I said when repeating the Statement, that is exactly what my right honourable friend the Prime Minister was speaking to President Karzai about earlier today. I am sure that he will continue to have conversations with President Karzai. It will be a difficult job but, together with the rest of the international community, we have to keep him on track. That is important not just for Afghans but for the whole world.

In response to the noble Lord, Lord McNally, on the Social Chapter that he ridicules, as his whole party does all the time-

Noble Lords: Oh!

Baroness Royall of Blaisdon: I am sorry; I do this all the time. I meant to say the noble Lord, Lord Strathclyde. The Social Chapter has been a fundamental benefit to many working people in this country. If it were to be endangered by a future Conservative Administration, many people in this country would lose a great deal, and we have to inform them of that point. On the referendum, I am not going to go there, as we have had

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those arguments so many times before. However, the fact of the matter is that we almost have a treaty of Lisbon. We are not there yet but we almost are, and if it is ratified in the next few days this Government will celebrate that.

On action on climate change, I tell both noble Lords that the Prime Minister has been working with his colleagues over the last days and months, and it is a mark of his determination that he is one of the four Prime Ministers in the European Union who have said that they will, if necessary, go to Copenhagen. It is also a mark of how the Prime Minister is working with his colleagues in the European Union, which is precisely how the advances that were made at the European Council came about. He was not on its fringes, but in the mainstream. On the funding issues, and as an indication of the amount that the UK would contribute to the €22 billion to €50 billion range put forward at the Council, my right honourable friend the Chancellor has put forward that our share of that public finance should be in the range of £7 billion to £10 billion per year. That is what he has said and it is on record.

Of course, the noble Lord, Lord Strathclyde, is right to be concerned about unemployment, but I respectfully point out that unemployment in the United Kingdom is still less than it is in France and is certainly a great deal less than it is in Spain. Despite the fact that there may be more unemployed people than there were in 1997-I think that is what the noble Lord said-a lot more jobs have been created, so a lot more people are working in this country than was the case in 1997.

The financial package to which the noble Lord referred will not be agreed until December. A great deal of work is still continuing. The Government are continuing to make representations and work with colleagues in the Council and the European Commission precisely to ensure that the City of London is not endangered and remains a jewel in our crown.

The treaty is not yet ratified and Tony Blair has not yet put his name forward to be president of the European Council. However, I emphasise that we need a strong European Council president. That is why, if Mr Blair put himself forward as a candidate, he would be supported.

In relation to influence, you can see the Prime Minister's fingerprints, as it were, all over the Council's conclusions as regards the jobs and growth strategy and what is happening in Copenhagen. He has shown real leadership at the European Council and it is a testament to him that it has got so far.

Like the noble Lord, Lord McNally, when I walk through the poppy field at Westminster Abbey it revitalises my enthusiasm for the European Union, because it is precisely the values we all share as a European Union which have ensured peace and stability in this part of western Europe for so long. I look forward to enlargement to include the Balkan countries, because I believe that until they are in the European Union there will not be true peace and stability in the whole continent.

The UK, together with France, Sweden and Denmark, is now maintaining a diplomatic push to try to ensure within the next 40 days that we get good conclusions

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at Copenhagen. There again it is a case of working with people, not in isolation; I must keep stressing that. I take on board the noble Lord's point about industries and his concern that our industries are not up there, gaining all the necessary jobs and future work in new technologies and green industries. However, my noble friend Lord Mandelson has a very interventionist industrial policy and will come back to noble Lords in writing about the specifics relating to new technologies and green technologies.

4.23 pm

Lord Kinnock: My Lords, the Council's agreements on a schedule for cuts in carbon emissions and on adaptation aid to developing countries represent substantial and encouraging progress and a very good basis for further development at Copenhagen. Is it not clear to my noble friend-it certainly is to me-that these advances owe much to the sustained commitment of our Prime Minister and the British Government, and to their firm, unwavering and effective engagement with the European Union? Does she share my view that such beneficial outcomes could never be secured by British representatives who profess complete commitment to climate security, but make that commitment impotent by Europhobia which corrodes trust and repels allies?

Baroness Royall of Blaisdon: Yes, my Lords, I certainly agree with every point made by my noble friend. I add that one of the regrettable things about the Conservatives' new grouping in the European Union is that so many of their allies in it seem so sceptical about climate change. We throughout this House, as a body, are not sceptical.

Lord Lea of Crondall: My Lords, does my noble friend agree that there are two historic commitments in this Statement that are worth spelling out? The first is what I would call the innovative way in which we will provide a financial mechanism on climate change, to which my noble friend Lord Kinnock has referred. I describe this as a carbon equalisation tax, whereby those who are using a lot more carbon will transfer some ration cards, as it were, to those who use below the average amount of carbon. This is where the European Union is showing leadership in the world, in a way that no single European country could on its own.

A second example is the new European Systemic Risk Board, where Britain is for the first time getting into a formal relationship, among other things, with the European Central Bank. The Government are helping the European Union get back on track, in a way which-now that we have shot the fox that the Conservative Party has been hanging on to-shows that this is the only Government in sight in this country who can give a credible position to Britain's role in the world.

Baroness Royall of Blaisdon: Yes, my Lords, I agree with the comments made by my noble friend and a number of my other noble friends. With the world working in blocs-with a powerful United States and a powerful China-with climate change, and with what we have gone through in the economic crisis, it is

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important precisely at this time that we work together as a European Union. I am very proud that that is what this Government are doing. I hope that it will not be endangered by any future Government because that would certainly not benefit the people of this country.

Lord Tomlinson: My Lords, is the Minister aware that I am somebody who approaches Europe with a fairly open mind and wants to listen to constructive views, from wherever they come? Does she share my dismay that, having listened to what I can only describe as the diatribe from the noble Lord, Lord Strathclyde, he was clearly talking about aspects of Europe other than that which happened in Brussels this weekend? There was no mention of most of the issues that he raised either in the communiqué or in the Brussels discussions. Does she share my concern that it is a pity that people outside this Chamber who are equally concerned about Europe do not have any constructive views from the leader of the Opposition as to what he thought of the essential issues that were discussed this weekend?

Baroness Royall of Blaisdon: My Lords, I have an awful lot to agree with this afternoon. Yes, it is a great shame because there is much substance in the conclusions of the Council. That is the case at every Council but, globally, this Council is particularly important because it was dealing with the key issues of climate change and economic recovery. It is a great shame that Her Majesty's Official Opposition do not have very clear plans and questions on these fundamental issues.

Lord Anderson of Swansea: My Lords, we are perhaps six months from an election in which the Official Opposition hope to become the Government. It is therefore rather sad that the spokesman for the Opposition, the noble Lord, Lord Strathclyde, could not bring himself to say anything positive-not a scintilla-about the European Union, an attitude that will not go unnoticed by centre-right Governments in Europe, particularly in France and in Germany.

Clearly, there was a welcome agreement on climate change that shows what can be done when we work together as Europeans. At long last there appears now to be closure to the institutional debate, yet the noble Lord, Lord Strathclyde, talked about the declining influence of this country. Does he not recall that in the years before 1997 we were surly, on the sidelines and isolated, wholly contrary to our own national interests? Is there a danger of that recurring unless the Official Opposition are willing to look objectively at how best we can pursue our national interests within the European Union? Are we going to have the latter-day Bourbons who have learnt nothing and forgotten nothing about that period, when it was so contrary to our national interest to be so isolated? Is there not a danger, if they were to be in the unwelcome position of succeeding in six months' time, of not letting matters rest? There is also a danger of gestures for the benefit of the Europhobe Back-Benchers, which would again be wholly contrary to our national interest.

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