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Commons Chamber

Volume 485: debated on Monday 15 December 2008

House of Commons

Monday 15 December 2008

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Home Department

The Secretary of State was asked—

Unauthorised Disclosures

1. When officials from her Department will next meet Cabinet Office officials to discuss measures to reduce the number of unauthorised disclosures of information from her Department. (242963)

3. On how many occasions there have been breaches of security involving the unauthorised disclosure of information from her Department since 2000. (242966)

6. What steps she is taking to prevent the unauthorised disclosure of restricted and confidential information from her Department. (242970)

The Home Office and the Cabinet Office take all breaches of security very seriously. Unauthorised disclosures are both a breach of security and a breach of the civil service code. Home Office and Cabinet Office officials hold regular meetings to discuss these matters. We follow all Government rules and procedures to prevent unauthorised disclosures of restricted and confidential information from Departments and we pursue unauthorised disclosures. I am advised that there have been 43 investigations into alleged unauthorised disclosures of information from the Home Office since 2000.

I am grateful to the Home Secretary for that reply. Is she aware that there is a growing consensus that the police handling of the arrest of my hon. Friend the Member for Ashford (Damian Green) was disproportionate? Furthermore, it is now apparent that the search of his offices here did not comply with Police and Criminal Evidence Act guidelines. Is she aware that concerns about those two matters have been expressed by the acting commissioner, Sir Paul Stephenson, by her permanent secretary in his evidence to the Select Committee on Home Affairs and by the Leader of the House? Does the Home Secretary share those concerns?

I am not clear that the assertion that the hon. Gentleman makes—that those concerns have been raised by the people whom he identifies—is correct, because in each case, those people have been scrupulous about not commenting on ongoing police investigations, as I will be.

Can the Home Secretary explain when a leak of information becomes a criminal investigation? When are the police involved?

In this case, the police were involved because of the systematic nature of the leaking, the concern that numerous leak investigations had not succeeded in finding the perpetrator and, as was spelt out in the Cabinet Office letter to the Metropolitan police, particular concerns about the sensitivity of information that a potential leaker may have had access to.

The 1988 White Paper said:

“The objective of Official Secrets legislation is not to enforce Crown Service discipline—that is not a matter for the criminal law”.

When Lord Hurd presented the Bill to the House, he said:

“We ask the House today to agree in principle that the criminal law should be prised away from the great bulk of official information.”—[Official Report, 21 December 1988; Vol. 144, c. 460.]

Why has that changed under Labour?

As I have just outlined to the hon. Member for Isle of Wight (Mr. Turner), the decision to refer the investigation to the police was made by my permanent secretary and the Cabinet Secretary. The reasons are spelt out in the letter from the Cabinet Office to the police, which is now available in the Libraries of both Houses. Whether criminal charges are laid is of course a matter for the police and the Crown Prosecution Service.

Does the Home Secretary not find this situation rather ironic? Here we are, on almost exactly the 23rd anniversary of the climax of the Westland affair, when the Tory Secretary of State for Trade and Industry was leaking furiously against the Secretary of State for Defence, Lord Heseltine, as he now is. Is she as unsurprised as I am that a party that had more leaks than a Rhondda vegetable show when it was in government should be actively soliciting leaks when it is in opposition, in the disgraceful way that we have seen over recent months?

Well, as I have said before, one of the things that hon. Members in all parts of the House—and certainly any hon. Member whose ambition it is to form part of a Government at any time in the future—should be wary about is undermining the impartiality of the British civil service as laid down in the civil service code, for which Governments of all persuasions have had reason to be grateful and by which the people of this country set quite a lot of store.

The former shadow Home Secretary, the right hon. Member for Haltemprice and Howden (David Davis), has said on the record that 50 per cent. of the material that he receives from moles cannot be put into the public domain because it is too sensitive in terms of national security. Does the Home Secretary agree that there is an obligation on the former shadow Home Secretary to return that material to the relevant Departments?

My hon. Friend makes an important point. There has been a suggestion throughout the whole of this case that, somehow or other, pieces of information relating to national security never get leaked, but as my hon. Friend pointed out, the right hon. Member for Haltemprice and Howden, the former shadow Home Secretary, said:

“In about half the cases we decide not”

to release information

“because we think there are reasons perhaps of national security or military or terrorism reasons not to put things in the public domain.”

In other words, the right hon. Gentleman has in his possession information that has come to him that has national security, the military or terrorism associated with it. I wonder whether he passed it on to his successor, the current shadow Home Secretary, and whether he, in turn, believes that the right thing to do might be to return it to the authorities from which it came.

I want one thing cleared up. The Home Secretary has not yet explained to the House how—on 4 December, I think—there was a difference between what she reported to the House as the reasons for the arrest of the hon. Member for Ashford and what he had received in the documentation from the Metropolitan police. That lack of precision does not increase one’s confidence in the veracity of the Metropolitan police. Will she explain to the House this afternoon why the Metropolitan police gave her duff information, and tell us what she has done about it?

I took it up, as I said I would, immediately with the Metropolitan police. They confirmed that the terms of the arrest were accurate, and I communicated that to the hon. Member for Ashford.

The Home Secretary has made it very clear that she was not informed of the arrests in relation to those leaks prior to the arrests taking place. Will she tell us whether she gave any instructions, written or verbal, to anyone in the Home Office or the Metropolitan police that she should not be informed if arrests were going to take place in respect of that matter?

Has the Home Secretary read the report by the Standards and Privileges Committee of two Sessions ago on the working of the sub judice rule? Does she accept that, in cases such as this where there is an ongoing investigation, the Committee makes it clear that Parliament has always treated that rule with discretion? It has always been a matter for the Speaker in the Chamber, and for individual Committee Chairmen in Committees, to decide how to operate it.

I have not read the specific report to which the hon. Gentleman refers, but I am sure that he will share my view that, whether inside or outside the House, the operational independence of the police force is important. It is also important, as he says, that we all exercise considerable discretion over ensuring that we do not prejudice police investigations.

I think the way in which the hon. Member for Ashford was treated by the police was disgraceful and if it turns out that my right hon. Friend had in fact been informed of the police action before it took place—something that she has denied—she would have to resign. Correspondingly, the hon. and learned Member for Beaconsfield (Mr. Grieve) has said to my right hon. Friend, in terms, that she lied when saying that she had not been informed in advance. Does she agree that, if it is proved that she had not been told in advance, the hon. and learned Gentleman should resign?

I have asked the hon. and learned Member for Beaconsfield (Mr. Grieve) and others to withdraw the allegations and assertions that they have made against me. It is up to them whether they choose to do the right thing.

There is a good deal of concern about the use of the offence of misconduct in public office in the case of Christopher Galley and the hon. Member for Ashford, particularly given the policy decision to ensure that, from 1989, the only cases in which criminal investigations are appropriate are those that involve national security. How many police investigations of Government complaints referring to misconduct in public office have there been in the past year—or two years or whatever is appropriate—and how many prosecutions and convictions have there been? Is this offence being used to intimidate civil servants, rather than to bring them to justice?

There have been several investigations, and several charges laid on the basis of misconduct in public life. I will write to the hon. Gentleman with the specific numbers. The offence has been looked at relatively recently in a case in front of the High Court.

Is not one of the reasons why there are so many unauthorised disclosures from the Home Office the fact that the Department sets an example by engaging in authorised leaking when it suits the Home Secretary’s political purpose? In that context, did she authorise the leak last week of the partial and selective knife crime statistics, in breach of the Government’s own rules and against the protests of the UK statistics authority? Or was that all down to the Cabinet Office and Downing street?

There are plenty of arguments about the definition of a leak, but I hardly think that issuing a press release counts as a leak.

I am sorry that we were, I think, too quick off the mark with the publication of one number in relation to the progress that had been made in tackling knife crime, but I commend the police and their crime-fighting partners on the impact that they are already making through the tackling knives action programme, as spelt out by the other statistics produced last week.

I note that the Home Secretary has not answered the question. Nor has she apologised to the House for this gross and deliberate breach of its own rules. Sir Michael Scholar said that the decision to release the spun propaganda was “corrosive of public trust”. If the Home Secretary was involved, why should she be trusted in future on the basis of what she says? Can she please explain? If she was not involved, does that not show yet again that she is not in charge of her Department and that, in fact, she is incapable of discharging her responsibilities properly?

Sir Michael Scholar did not use the words “spun propaganda”. He pointed out that one figure used last week had been issued prematurely. If the hon. and learned Gentleman had been listening, he would have heard me say the words ”I am sorry”: sorry that we had pre-empted the publication of that specific number. However, I hope that he will join me in recognising the considerable progress that has been made—I think that this is the most important issue—in helping to ensure that 17 per cent. fewer young people are subject to serious knife offences, that of the 10,000 extra searches being conducted each month fewer are now finding young people carrying knives, that 179 more offenders are now in prison for weapons offences, and that on average those offenders are receiving almost 40 per cent. longer sentences. That constitutes progress in keeping young people safe on our streets, which I think is the top priority for most of the British public.

Zimbabwean Asylum Seekers

The UK Border Agency only detains Zimbabwean nationals who have committed crimes within the United Kingdom, who are subject to deportation action, and who have been assessed as unsuitable for release owing to their being a threat to the public and/or likely to abscond. Anyone detained under immigration powers has his or her detention regularly reviewed, and can apply for release on bail to the independent Asylum and Immigration Tribunal.

As I am sure all Members know, according to reports from Zimbabwe, the situation is worse than ever, with oppression, political violence, beatings as an everyday occurrence, corruption and, now, the added plight of those affected by the cholera epidemic. In the light of the tribunal’s decision two weeks ago—or, rather, the Government’s response that they would not challenge it—will the Minister tell me what will happen to the other 7,500 cases? Have those people some hope now, and will he examine their situation again?

I am grateful to the hon. Gentleman for his question. I think that the whole House will share his sentiments about the situation in Zimbabwe. He referred to the country court judgment. It states that each case can be considered individually, and indeed that must be done. As I am sure the hon. Gentleman will agree, not all those presenting themselves as Zimbabwean turn out to be Zimbabwean on examination. That is why we must examine each case properly, within the rules.

In the light of the recent judgment on an Eritrean asylum seeker, will my hon. Friend consider the position of Zimbabweans and others who cannot be returned at this moment but who are not allowed to work?

I hear what my hon. Friend says. When someone cannot be returned through no fault of his or her own, having exhausted all appeal rights, it is our policy for that person to receive section 4 support from the United Kingdom Government. The overall number of people with whom we are having to deal has fallen, but that support is there.

What additional steps has the Minister taken in case the situation in Zimbabwe deteriorates dramatically and he is faced with a massive number of people trying to get into this country? What are the Government doing about that?

The hon. Gentleman has made an important point. There are also British nationals in Zimbabwe, and there is the ever-present danger of more people trying to get into our country illegally. That is why, as I am sure the hon. Gentleman appreciates, we review all the procedures not just in that part of the world, but in other countries and other circumstances.

The Minister said in response to the question from my hon. Friend the Member for Walthamstow (Mr. Gerrard) that Zimbabweans who are here and who it is intended will return but cannot currently be returned are eligible for section 4 support. However, the case to which the Minister referred suggested that, in respect of Eritrea, where people cannot be returned and have no source of support, they should be allowed to earn their own support. When will the Minister allow trapped Zimbabweans to work to earn the money to get themselves and their families a decent Christmas?

I am grateful to my hon. Friend for her points on this important matter. The case to which she refers concerned a gentleman from Eritrea, and the judgment in that case was very specific, looking at the amount of time that had been spent in this country. Having said that, it is not the Government’s policy to provide for blanket exceptions for the good reason that we must look at each case on its merits.

The Minister knows that there is a widespread view held by Members in all parts of the House—it is not a party view—that it is nonsense to require people who cannot go back, and who are qualified and could be further qualified, not to work while they are here when that will not lead to any permanent right to be here, but will give them a chance to improve their skills. Will the Minister be straightforward with the House and confirm that the Government are reviewing this matter, and will he tell us when the review will be concluded and whether he will make the intelligent, sympathetic and widely welcome decision to change the policy?

Again, I am grateful to the hon. Gentleman for making his points on this important topic. I am not sure whether he was talking specifically about Zimbabwe or in general, but on the general point we think it is right to look at each case on its merits. Those who argue for a general blanket amnesty—I accept that the hon. Gentleman is not asking for that—have to accept that it can be self-defeating as we have seen in other European Union countries, and that it can, in fact, bring about more misery and hardship and, of course, more profit for the people traffickers.

I sympathise with the Minister on the difficulties facing him, but he must concentrate on the issue of the Zimbabweans who are already in this country. The facts are that there are already more than 10,000 people here, that they cannot be returned forcibly to Zimbabwe and that the Government are preventing them from working legally while they are in this limbo. Does the Minister really think this is either economically sensible or morally acceptable, or is he prepared to use destitution as an arm of his asylum policy?

Let me reassure the House that the Government do not use, and have no intention whatever of using, destitution as policy. Indeed, the Government have on occasion been criticised by Members on both sides of the House for providing support, particularly for those people who, as I said a moment ago, through no fault of their own cannot return to their own country but where it has been deemed that they should do so. However, I repeat the point I made to the hon. Member for North Southwark and Bermondsey (Simon Hughes) that one has to strike a balance between providing proper support within the law and not having a policy that would make the situation worse. That point should be considered by the hon. Member for Ashford (Damian Green) and his colleagues.

Police Bureaucracy

It is vital that the police are able to deliver for the public in the most efficient way. That is why we are scrapping the time-consuming stop and account form, reducing by up to 80 per cent. the amount of time taken to record crimes, and investing £75 million in new technology to help officers work smarter, thereby freeing up officers to focus on addressing people’s concerns.

I thank the Minister for his reply. More specifically, can he tell me what assessment he has made of the impact of the use of hand-held high technology devices issued to front-line police officers on reducing police bureaucracy?

We think that the fact that we have made increasing numbers of these hand-held devices available to front-line officers has made a significant difference. I was recently in Staffordshire talking to police officers there, and they were demonstrating the use of these devices and talking about the difference that they were making. I should point out that 10,000 extra hand-held devices have been made available to front-line officers, and that figure will rise to 30,000 by 2010.

What specific reforms, if any, is the Minister contemplating to make local police more locally accountable, and how would such reforms allow local people, rather than Home Office officials, to set local police priorities?

If the hon. Gentleman looks at our proposals regarding the crime and disorder reduction partnerships, he will see that my right hon. Friend the Home Secretary only recently announced the councillor call for action, which will be implemented from April this year to allow local councillors to have more say in what happens with local police forces. Moreover, the policing pledge talks about the public having more chance to influence the police through face-to-face meetings; neighbourhood policing teams are out there meeting people; police community support officers get out there and deliver leaflets; and e-cops, which we see in Leicestershire, allow people to e-mail their concerns. All those things allow people to influence local policing in their area, and are very much welcomed by everybody I meet.

I thank my hon. Friend for his visit to Stafford a fortnight ago, when he met the chief constable, Chris Sims, and representatives of the senior leadership and the police authority. Crucially, he also met police officers and PCSOs. Does he agree, as a result of that day in Stafford, that Staffordshire police really are now leading the country on cutting out unnecessary paperwork, streamlining criminal justice systems and keeping police officers out on the front line for longer? Is that not why Jan Berry held the first meeting of her group that day in Stafford, to provide recommendations to police throughout the country?

Cutting bureaucracy is an essential part of the work that we are doing, and talking to front-line police officers—as both my hon. Friend and I did that day in Stafford—shows the impact that that is having. It is not me who is saying that it is having an impact, but police officers themselves. Staffordshire is one of the four crime-recording pilots, and Staffordshire police have looked at a whole range of measures—not only the use of hand-held computers, but forms relating to a variety of crimes, including stop and account. Not only Staffordshire but other police forces that have played a part in these pilots are demonstrating to forces across the country the serious inroads that can be made into unnecessary bureaucracy.

I agree with the Minister that communication with our constituents needs to improve, but I doubt whether it will come as a surprise to him to learn that most of my constituents do not see crime as virtual or in e-mails, but in reality. What they want to see is more police officers on the street and less bureaucracy, so it is very concerning that the Minister is talking about e-cops; what people want to see is real cops.

And they do see real cops. I bet that the neighbourhood policing teams in the hon. Gentleman’s constituency demonstrate such visible policing and the presence on the streets that everybody wants to see. By reducing bureaucracy and through the changes that we are making to stop and account forms, through the work that Jan Berry is doing and through crime recording pilots—which have shown that it is possible to reduce bureaucracy in respect of a whole range of crimes—not only will communication between constituents and the police improve, but we will see the increased numbers of police that everybody wants to see on the street.

Four years ago, the Home Office told us that police officers spent only 19 per cent. of their time on patrol. Can the Minister tell us what the latest figure is?

Of course, the hon. Gentleman is using one particular measure—an on-patrol measure, which, as he knows, takes no account of any interaction between police officers and members of the public; all that it counts is when somebody is actually out there on the street. It does not account for a police officer who stops and speaks to someone in a car or who speaks to someone whose shop has been robbed. Any of the normal things that we would expect a police officer to do are not counted, which is why we introduced a new measure called the front-line policing measure.

Alcohol-related Crime

The majority of people who drink enjoy alcohol sensibly, but we are determined to take action to reduce the health and social harms caused by those who do not. We have recently announced actions to combat the problem, including a new mandatory code of practice to target the most irresponsible retail practices, a £3 million cash injection for crime and disorder reduction partnerships for enforcement activities in 198 areas and a further £1.5 million for our priority areas to tackle underage sales, confiscate alcohol from under-18s and run campaigns to tell people what action is being taken locally to reduce alcohol-related crime and disorder.

I am sure we all want to find more ways of reducing alcohol-related crime in our town centres, such as the “Behave or Be Banned” campaign that is running in my area. In the light of my talks with the mayor of Llanelli about creating an alcohol-free zone in the centre of the town, may I ask the Home Secretary what success such zones have had elsewhere and what other measures she would recommend to reduce alcohol-related disorder?

First, I commend my hon. Friend for working with her local colleagues to make use of the tools that the Government have put in place—I believe she was referring to a designated public place order in this case. We take very seriously the responsibility to make clear to local partners, such as the ones to whom she refers, the tools that are available. That is why we have been running a series of regional workshops—two have taken place and one more is due to take place—which have been extremely well received. Alongside the sort of local activity that she is talking about, the use of Government-provided tools and the new initiatives that we have recently announced will help to ensure that those people who want to drink sensibly can do so, but those who cause harm to themselves or others will be prevented from doing so.

No, and nor do independent assessments, including the report on the impact of the Licensing Act 2003, which was published in 2008. It showed that the overall volume of incidents of crime and disorder remained unchanged, and that there were signs that crimes involving serious violence may have reduced and that local residents were less likely to say that drunk and rowdy behaviour was a problem. I do believe it is important that the elements of the 2003 Act that provide more opportunities for local partners and police to limit the unacceptable activities of licensed premises should be used more, and that is precisely what we are trying to enable people to do at the moment.

I wonder whether the Home Secretary has time in her busy week to come with me to visit Tesco, where she would be able to see the unacceptable practices still being conducted by the supermarkets. They are selling alcohol very cheaply—three for the price of one—and putting all kinds of promotions before people to enable them to buy more and more alcohol cheaply. That is what contributes to our disorder. Will she not accept that the Government must have a floor price on the alcohol sold at supermarkets in order to tackle this very serious problem of alcohol-related crime, especially at this time of the year?

During my busy weekend, I was able to take a trip to a supermarket. As I think I said the last time he questioned me about this, my right hon. Friend’s Committee made some important recommendations, and those have certainly fed into the proposals we are making to help counter alcohol-related disorder. We carried out a considerable research study with the university of Sheffield on the impact of minimum pricing, and, as my right hon. Friend the Secretary of State for Health has made clear, given the current economic climate in particular, we do not intend at this moment to introduce the sort of minimum price to which my right hon. Friend the Member for Leicester, East (Keith Vaz) was referring. However, we certainly have not closed off that option for the future, and the Health Secretary is already undertaking more work into the impact and consequences of that particular form of action.

I disagree with the Chairman of the Select Committee on which I serve, but I accept that there is a point to address about people “tanking up” on cheap supermarket booze at home before unleashing themselves on the streets. I agree that it would be wrong for a Government to set a minimum price for alcohol, but will she encourage the supermarkets, which talk an awful lot in our constituencies about their social responsibility to the community, to think of this issue as part of that responsibility? Perhaps, given our particular problems, they should be encouraged, voluntarily, to be a little more responsible.

Perhaps I should make it clear to the hon. Gentleman that my visit to the supermarket over the weekend was not made to “tank up” before I hit the streets. However, I agree with his point about the social responsibility of supermarkets—responsibility that I know they also take seriously and which I am sure they would want to manifest publicly.

This weekend, a further five street pastors were commissioned in Bridgend. That brings the total to 46 individuals from 17 churches giving their time to support the police in tackling antisocial behaviour and inappropriate drinking, and helping people who are distressed out on the streets of Bridgend when, on a Friday or Saturday night, they have gone out for a social occasion. Is that not another way in which we can reclaim the streets for ordinary law-abiding people so that people can enjoy a night out without having to be intimidated and threatened?

May I also advise my right hon. Friend that the street pastors are now not only covering that 10 until 4 in the morning slot, but going on to one of my estates and working from 6 until 8 with youngsters, which will also improve life on that estate?

I thank my hon. Friend for inviting me to Bridgend to see the excellent work being done by the street pastors alongside the local police force and the local authority. I was impressed by that partnership. As she says, it was already showing considerable results on the streets and I am pleased to hear that it has been expanded.

Despite the Home Secretary’s promise of more legislation, the Home Office still has not got round to implementing existing alcohol legislation on the introduction of drinking banning orders. Will she confirm whether the Home Office was unable to reach agreement with the Ministry of Justice on the cost of implementing the orders, estimated at £32.5 million under the MOJ’s controls on downstream costs on the courts and legal aid budgets, and whether the Home Office’s legislative hyperactivity is finally catching up with it and it is becoming an unlikely new victim of the economic downturn?

No, because as I announced recently we will be introducing drinking banning orders by application next year.

Migration Advisory Committee

7. What assessment she has made of the recent work of the Migration Advisory Committee on shortage occupation lists. (242971)

We are grateful for the work of the Migration Advisory Committee. The committee provides expert independent advice on where the country needs economic migration and where it does not. The Government have decided to implement the committee’s recommendations in full, and in addition to retain social workers on the UK shortage list while the MAC considers evidence of relevance to their inclusion.

I thank my hon. Friend for that answer. How does the work of the committee assist British businesses and workers, including in Scotland?

The idea, of course, is that, through the committee’s expert advice, we can identify where there are skill shortages in order to place those shortages on the migration list under the points-based system, but also, crucially, to provide for training and skilling for British workers—for my hon. Friend’s constituents—to get jobs. As part of that approach, we also have specific measures for Scotland to identify those sectors of the economy where there are particular short-term problems.

The Minister will appreciate that Scotland has different population and immigration requirements from the rest of the UK, yet the MAC list has as additional groups only care home nurses and fish filleters. In his assessment, what difference will that make to Scottish population problems? Do we not need significantly more help than that?

The hon. Gentleman is being slightly unfair, as he has missed out quality controllers in the fish processing industry, which in Scotland is extremely important. As I said, the UK list covers Scotland so that within those sectors that apply to Scotland and to the rest of the UK we can provide for training and skilling in skill shortage areas, for the benefit of his constituents. It is a fair and tough policy, but flexible for local economic needs.

Given that more than 70,000 skilled workers have come into the country in the past three years under the skilled workers scheme and that the Home Office does not know where any one of them has found a job or whether they have found skilled jobs, and given that unemployment is now rising, what steps are the Government taking to control the scheme?

I am grateful to my right hon. Friend for that question. It is precisely because of the concerns that have been raised that we have introduced the points-based system and the criteria that we can apply to skills within the different tiers of the system. As a result of that system, we can provide reassurance to our constituents that their concerns are being put foremost and we can match the skills shortages with the skills training programmes for British workers while applying the criteria of the tiers within the points-based system to control migration.

What further thought has the hon. Gentleman given to the proposals put to him by the right hon. Member for Birkenhead (Mr. Field) and me arising from the balanced migration campaign and the need to break the link between people’s coming here to work and their apparently now automatic right to settle?

I am grateful to be in the middle of a pincer movement, which is a very effective one, if I may say so. The hon. Gentleman is right. It is important to break the link between people’s coming here to work for a specific purpose under the skills shortage scheme or the high skills scheme, or under other smaller schemes, and their automatic right to settlement. It is very important that we break that link and that is what we are doing.

Asylum Seekers

8. How many asylum seekers supported under section 98 of the Immigration and Asylum Act 1999 were in emergency hotel accommodation in (a) the London borough of Croydon and (b) England and Wales in the last period for which figures are available. (242972)

As at week ending Friday 5 December 2008, there were 156 asylum seekers supported under section 98 of the Immigration and Asylum Act 1999 in the London borough of Croydon and just over 1,000 supported under the same section in England and Wales. Section 98 accommodation is predominantly provided in blocked accommodation, such as former hotels and hostels.

The Home Department should be congratulated on providing such accurate information. In the constituency that neighbours mine—the constituency of the right hon. Member for Croydon, North (Malcolm Wicks)—there was an unfortunate incident where an asylum seeker sought to be fed but ended up being involved in a contretemps where he was hit with a chain. What is done by the Government to ensure that reasonable service is provided to section 98 asylum seekers and what is done to oversee the quality of the contracts that are delivered?

I am grateful to the hon. Gentleman for raising that issue. On sight of his question, I asked for information and I shall write to him with the details of that investigation. I am satisfied that our officials and officers acted properly. It would appear that there was provocation and I shall give the hon. Gentleman details in my letter.

Would the Minister not agree that it might be better to house people in emergency or local accommodation where they are allowed to remain for some time? We all come across cases where asylum seekers are frequently moved, which means that schools for children, access to GP services and other essential services that are required are often simply not available or that the lives of those asylum seekers are subject to incredible disruption. Would it not be better if they were given a more stable living?

The best thing to do is to deal with the asylum applications quickly, effectively and fairly. The improvements that we are making in that regard have been quite rightly applauded. On my hon. Friend’s specific point, the section 98 people to whom the hon. Member for Croydon, Central (Mr. Pelling) referred are, of course, immediate applicants. The dispersal policy strives to meet the objectives outlined by my hon. Friend the Member for Islington, North (Jeremy Corbyn) and it is important that we have as many local authorities in partnership as possible in order to achieve that fairly.

Police (Beat)

The Government are committed to delivering a visible and reassuring police presence. At the end of March 2008, 64.9 per cent. of police officer time was spent on front-line duties, the fourth successive annual improvement since 2003-04. Since April 2008, there has been a neighbourhood policing team in every area. The policing pledge includes a commitment for neighbourhood policing teams to spend at least 80 per cent. of their time visibly working on their patch.

What does the Minister think the Government’s Green Paper means when it says that the target culture in the police has created a perverse incentive that is distorting police action?

It means that it is time for us to look at how we measure what the police do and the progress that has been made, particularly in terms of reducing crime across the country, including in the hon. Gentleman’s constituency. He will know that as a consequence of review we have a single, top-down target that will simply relate to the confidence of local people in their police. I think that is the target the police want and the target the general public will want as well.

My hon. Friend is aware that the general public—everybody out there—want high-visibility policing. What more can he do to ensure that there are more police on the beat and that there is less form-filling and less time taken locking people up in long-distance lock-up centres instead of using local cells more efficiently to ensure that the police are back on the streets to lock up more problems. Will he do something about it?

My hon. Friend has been a long-time advocate of ensuring that there is a greater visible police presence on the streets. In his area—as in every area across the country—there are now neighbourhood policing teams, with dedicated police officers and police community support officers, out there on the street. He will have heard earlier about the measures we are taking to ensure that we reduce bureaucracy and the amount of form-filling that police officers have to do so that they can spend more time out on the street. The work I saw in Staffordshire, which has also been going on in Surrey, the west midlands and Leicestershire, shows that we can reduce the amount of form-filling. That empowers front-line officers and means that they can spend more time out on the street, where I know my hon. Friend wants them—as indeed we all do.

Topical Questions

Domestic homicide of women is at the lowest rate for 10 years. Conviction rates for domestic violence cases have risen from 46 per cent. in 2003 to 72.5 per cent. in 2008. Between 1997 and 2007-08, there was a 58 per cent. fall in domestic violence incidents. Despite all that, we know we must do more, particularly at the Christmas period when women are at increased risk. For many, Christmas is a family time but for some it is a time of fear, violence and isolation. A new advertising campaign supported by the Home Office, Women’s Aid and Refuge begins today to encourage domestic violence victims to seek support and not to suffer in silence. It supports a Home Office-funded enforcement campaign over Christmas in 10 police force areas; it includes innovative tactics such as the use of body-worn video cameras by police, dedicated domestic abuse response vehicles and increased front-line policing, targeting the highest risk domestic violence victims and offenders.

I was very impressed that a member of the Home Office ministerial team spent a long time listening—not speaking—on the issue of knife killings in Croydon, although mentioning them is unfortunately not a proud boast for any Member of Parliament. Does anyone in the ministerial team feel that there is any good practice that could be copied in terms of providing additional resources for policing in Croydon, bearing in mind that since the Minister visited there have been two more street killings? I know that it is a devolved matter, but by following good practice elsewhere could the formula for funding for extra police officers be changed after such a significant increase in the number of street killings in a particular place?

I was delighted to visit the hon. Gentleman’s constituency and to see him talking to young people in particular about the work they are doing to tackle knife crime in their area. The work done in Croydon shows that the police cannot solve the problem on their own through enforcement. Of course, police enforcement is essential, as we have seen in the success of stop and search and the increased number of people going to prison for possession, but alongside that, we need the involvement of local authorities, local residents and young people. From my visit to the hon. Gentleman’s constituency, I learned the value that young people can bring to that process. We need to remember that the vast majority of young people are decent—they are not involved in knife crime; but in terms of the solution, if we listen to what they say, they have part of the answer. As much as anything else, that is what I learned from my visit and I know that the hon. Gentleman was impressed as well.

T2. Given the return last week of a charter flight that was taking failed asylum seekers to Iraq—it seems to have been refused permission to land; certainly it did not land—can the Minister tell us which countries are receiving charter flights of people who have been forcibly removed from the UK, and whether there have been other instances of planes being refused permission to land? (242989)

I think that the report to which my hon. Friend refers concerned the joint UK-French flight. The UK is able to return people to both Iraq and Afghanistan in that way, and we continue to work with our partners in the French and Belgium authorities towards that end.

Will the Home Secretary commend Essex chief constable Roger Baker’s policy of ensuring that a police officer attends whenever there has been a crime, and does she think that the policy could be spread to other constabularies as good practice?

I was very pleased to visit Essex constabulary at the beginning of December, and to praise chief constable Roger Baker and the Essex police force for being the first to commit publicly to the police pledge. At the heart of the police pledge is how we can ensure that local people have the information, support and ability to have an input into the policing that they want. Chief constable Roger Baker is doing an extremely good job in Essex.

T4. Has my right hon. Friend considered the damage that could be done to public confidence in policing if direct elections to the police authorities meant a rise in the sort of irresponsible behaviour displayed by the Liberal Democrat parliamentary candidate in Durham? They have sent out leaflets saying that crime has increased massively in the area, but that is not the case. Is my right hon. Friend looking at a range of measures to improve— (242991)

T3. The Home Secretary will remember the House’s overwhelming support for the idea that hon. Members’ home addresses should not be revealed in response to freedom of information requests. A consultation, organised by her colleagues in the Ministry of Justice, is under way on whether such addresses should be replaced by just the first half of the postcode, which, at election times, could be included on nomination and other relevant paperwork. Does she agree, from the point of view of her work on fighting terrorism, that that would be a good, sensible compromise that would add to the safety of hon. Members? (242990)

Clearly, I do not want to pre-empt the consultation, but the hon. Gentleman makes a very important point that I know is being borne carefully in mind by my colleagues in the Ministry of Justice. He has made it forcefully on numerous occasions, and I think that he has significant support from across the House on the issue.

T6. When people expressed concerns about the vigour shown, and resources devoted, by the police in relation to the Kingsnorth climate camp, we were told that it was justified because dozens of injuries were incurred. We have now found that those injuries were of a more prosaic origin—they were due to things such as insect stings and sunstroke. Unless the protesters are to be held responsible for wasps and the weather, are we not to conclude that the justification used at the time was wholly bogus and vacuous? (242993)

I have written to the hon. Member for Cambridge (David Howarth) on the issue. I was informed that 70 police officers had been hurt, and naturally assumed that they had been hurt through direct contact, as a result of the protest. That clearly is not the case, and I apologise if that caused anybody to be misled. I can say to my hon. Friend the Member for North-West Leicestershire (David Taylor) and other Members that the National Policing Improvement Agency is currently considering the lessons to be learned from the Kingsnorth climate camp protest. I will meet the public order lead of the Association of Chief Police Officers to discuss the report, so that we can share the lessons to be learned from Kingsnorth with police forces across the country.

T5. In an earlier answer, the Minister for Security, Counter-Terrorism, Crime and Policing said that local people’s confidence in the police was a key indicator, so can he tell me why people are increasingly not bothering to report crimes to the police? (242992)

The hon. Gentleman makes an important point. As we have frequently said, local people are one of the best weapons in helping to fight crime. It is precisely to give local people the confidence to report crimes to the police that, working alongside ACPO, we are pleased that the policing pledge, which provides monthly local information, monthly opportunities to feed in concerns, and much better communication between neighbourhood policing teams and local people, will be in place across the country by the end of the year. That will help to ensure that local people know that they can and should play their part in tackling local crime and antisocial behaviour.

T10. We have heard today how much social disorder in town centres is caused by excessive alcohol and irresponsible selling by clubs and bars, which are still doing offers such as “women get in free”, and “drink as much as you can for seven quid”. What is my right hon. Friend doing to make sure that licensing laws are enforced effectively? (242997)

I share my hon. Friend’s concerns about the sort of irresponsible promotions that she outlined, which is why, having commissioned KPMG to look at how the industry was fulfilling its responsibilities under a voluntary code, it became clear that in some cases those responsibilities were not being fulfilled, so we are now proposing to introduce in the policing and crime Bill the ability to provide a mandatory code, which would outlaw precisely the type of irresponsible promotion that she outlined.

T7. The last time that I raised an issue in topical questions with the Home Office, it was on the subject of a heavily fortified cannabis café that operates in my constituency. Alas, it is still a topical question, because 20 months on, a heavily fortified cannabis café is still a cause of blight for the local community, despite the best efforts of the police. Without going into details, because charges are pending, the café is still operating, so can the Minister give me some assurance that the law can be looked at to make sure that that nuisance can be properly addressed and the police given proper powers, because of the enormous inconvenience and concern in the local community? (242994)

The hon. Gentleman has raised this issue with me on a number of occasions, and what is happening in his constituency is absolutely deplorable, as is the inability of the law—not the police—to tackle that problem and deal with it. If it would be helpful to have a further meeting to discuss with officials what further action we might take to try to bring an end to that totally unsatisfactory situation with the cannabis café in his constituency, I am perfectly happy to have one. Where the law needs to be changed, that should be looked at, and it should be changed.

Returning to the issue of Kingsnorth policing, I thank the Minister both for what he has just said and for the letter that he wrote to me. However, in the light of the new information available to the House, would he care to revise his conclusion that the policing of Kingsnorth was proportionate and appropriate, especially as we also know that large numbers of protesters were injured at the hands of the police, especially by batons?

I have apologised to the hon. Gentleman for that, and as he quite rightly said, I have written to him. I think it would be best for me to wait for the NPIA report on what happened at Kingsnorth, and to review it with the ACPO representative responsible for public order to see what lessons can be learned. I would then be happy to share those conclusions with the hon. Gentleman.

T8. How does the Home Secretary respond to the charge that when she has good news from her Department she rushes out, for example, selective knife crime statistics, but when there is bad news, such as a cut to police funding for North Yorkshire, it is sent out in the most ponderous, opaque and obscure language that no one can understand? (242995)

There has been no cut in funding for North Yorkshire police, so I hope that the hon. Lady will make that clear as well. All police authorities are getting an increase of at least 2.5 per cent., alongside the other grants that they receive.

Does my friend intend to implement the recent ruling of the European Court of Human Rights that it is quite wrong for DNA to be taken, and held, from people who have not been convicted of any crime?

DNA and fingerprints play an invaluable role in fighting crime. We are carefully considering how best to give effect to the recent judgment of the European Court of Human Rights, but I remind the House that in 2007-08 there were more than 37,000 crimes with a DNA match, 363 homicides and 540 rapes. We will not rush to judgment, and we will not be rushed, either.

T9. We are all aware that an obesity epidemic is spreading across our country. Not only do police officers appear younger, but many of them appear larger as well. What assessment has the Home Office made of the effect of declining levels of physical fitness on the operational effectiveness of our thin blue line? (242996)

I have seen no evidence that our police officers are not able to carry out their responsibilities fully, actively and with great fitness. I am sure the hon. Gentleman did not mean to imply that, and I do not believe that it is the case.

EU Council/Afghanistan, India and Pakistan

I am sure the whole House will join me in sending our profound condolences to the family and friends of Corporal Lee Churcher, of the Royal Engineers, who died while serving in Iraq, and Corporal Marc Birch, Marine Damian Davies, Lance-Corporal Jamie Fellows and Sergeant John Manuel of the Royal Marines, who lost their lives in Afghanistan. This is a tragic loss. We owe them and all those who have lost their lives in the service of our country our gratitude for their service and sacrifice. As a House and as a nation, we will never forget them. As I saw in Afghanistan on Saturday, our troops are serving with great skill, great courage and enormous dedication. It can truly be said that Britain’s armed forces are the best in the world, and we are immensely proud of all who serve in them.

With permission, Mr. Speaker, I would like to make a statement on the European Council held last Thursday and Friday, and on my visits to Afghanistan, India and Pakistan this weekend. The European summit focused on two global challenges—economic recovery and climate change. I can report, first of all, that the Council agreed measures worth around 1.5 per cent. of European GDP—that is, around €200 billion—which will provide a fiscal stimulus for the European economy. This 1.5 per cent. fiscal boost is in addition to the work of the automatic stabilisers. The measures agreed included support for

“increased public spending, judicious reductions in tax burdens and direct aid to households, especially those which are most vulnerable”—

exactly the measures that Britain has already taken, just as France has announced a package of measures worth €26 billion, Spain measures worth €11 billion, and Germany a fiscal package worth €32 billion.

Just as Europe came together in October and November to lead the recapitalisation of the banks, so too Europe has agreed unanimously co-ordinated action which will support employment and growth. The Council agreed that its action was in a

“united, strong, rapid and decisive manner”,

and while committing to medium-term sustainable public finances, it agreed to

“mobilise all the instruments available to it.”

By acting in a co-ordinated and concerted way, the impact on jobs in each country is much greater than if we acted on our own, and the action across Europe will be of help to Britain, where nearly 60 per cent. of our trade is with the rest of Europe. The co-ordinated European action includes a speeding up of public procurement, a continued and general

“reduction in administrative burdens on business”,

and an additional €30 billion from the European Investment Bank to be invested in Britain and throughout Europe in the coming year.

So the debate about the use of fiscal policy to stimulate our economy and to give direct support for families and businesses in Europe is resolved. Europe favours substantial fiscal stimulus alongside cuts in interest rates. I am confident that the new American Administration of President-elect Obama will also introduce a large fiscal stimulus. This European set of announcements is the answer to those who said that nothing could be done and that the recession must take its course, and who believe that fiscal policy has no role to play. Indeed, even at this time of difficulty, they believe that public spending should be cut.

To back up the loan guarantee scheme, the export credits and the deferral of tax, today the Chancellor will announce new measures to speed up the resumption of lending to businesses and home owners, and the Minister for Housing will announce a £400 million package of measures which, building on our help with mortgages to avoid repossessions, will help up to 18,000 first-time buyers draw on the home shared equity scheme to get on their first rung on the housing ladder—real help to families and businesses now, possible only because we are prepared to make a fiscal stimulus in the economy.

In advance of Copenhagen next year, the summit agreed a new energy and climate change policy supported by all member states. When it is approved by the European Parliament, as I believe it will be, the programme will put into European law four far-reaching commitments: a 20 per cent. cut in greenhouse gas emissions by 2020, which, as part of the right international agreement, we will raise to 30 per cent.; a target that 20 per cent. of the European Union’s energy will come from renewables by 2020; a strengthened European Union emissions trading scheme with 100 per cent. auctioning of permits in the power sector, the introduction of auctioning for other sectors of the economy and help to ensure that businesses in international markets can adjust; and a financing mechanism to make potentially around €9 billion available for the commercial demonstration of carbon capture and storage.

Carbon capture is a transformative technology that every major economy will need, to ensure that it can continue to use coal, oil and gas without contributing to climate change. These commitments make Europe the first continent to make legally binding the detailed policies required to set itself on a path to a low-carbon economy. They provide a clear signal to the rest of the world that an international agreement on climate change can be achieved in Copenhagen next year. This was matched by agreement at the United Nations talks in Poznan at the same time, where a framework for countering deforestation was agreed. Britain will make a contribution of £100 million to that from our environmental transformation fund for sustainable forestry activities in developing countries.

At the European Council, agreement was also reached on measures to answer concerns expressed to us by Ireland. All countries were agreed that there could be no change or amendment to the Lisbon treaty and that we should proceed to ratification, with the Irish agreeing to hold a referendum within the next year. At the same time, to meet Irish concerns, it was agreed: that the Lisbon treaty, as we have always made clear, in no way affects the rights of member states to make taxation decisions; that the treaty in no way affects the individual defence policies of member states, including our obligations to NATO and Ireland’s traditional neutrality; and that because, as we have been clear, the charter of fundamental rights creates no new rights at a European Union level, the Irish constitution provisions on the right to life, education and family are not affected by its incorporation into the treaty—nor are they affected by the justice and home affairs provisions of the treaty from which Ireland has an opt-out. The Lisbon treaty allows for the Council, by a unanimous decision, to agree to ensure that each member state retains a Commissioner—and this, we stated, we would be prepared to agree to.

The Council also made an important statement on the middle east process. The Council welcomed efforts to give renewed momentum to the Arab peace initiative and affirmed that the EU will do all it can, practically and politically, to support the peace process and to urge the new US Administration to make it a major priority in the new year.

Let me turn to Afghanistan, India and Pakistan. I have already paid tribute to, and I reiterate, the service, sacrifice and dedication of our armed forces. Today, I can inform the House that the increased compensation payments have come into force—a doubling, for the most serious injuries, to a new maximum lump sum of £570,000 for armed forces personnel wounded in action or otherwise, an increase that means that around £10 million will be paid to 2,700 troops who have been awarded lump-sum payments.

While in Afghanistan, I and the Chief of the Defence Staff met President Karzai and took stock of our strategy with commanders and senior officials. We saw at first hand the hard and dangerous work that the armed forces are doing in very arduous conditions, far from home. Our goals in Afghanistan are clear: to support democracy and confront terror at its source; to build the Afghan capability by training its army and police to spread the rule of law into empty spaces on the map which shelter terrorism, narcotics and other problems; in all this, to root out corruption, respect local ways of life and strengthen traditional Afghan structures; and to give Afghan people an economic stake in the future.

Free and fair elections are an essential part of Afghans taking control of their own security and destiny. So as we approach the Afghan elections planned for next year, on top of the work that we are doing with NATO and the Afghan army to ensure security for those elections, we are pledging to contribute $10 million to help with voter registration. In return for this renewed commitment, and others, that we will make from Britain, I have asked for quicker progress on the decisions at the NATO summit on burden sharing, and I have asked President Karzai for leadership in tackling corruption. For our part, we are offering a multi-agency taskforce which we are ready to send immediately to tackle corruption.

Five years on from the first free and fair elections Afghanistan has seen in decades, we should reflect on what has been achieved. As Governor Mangal of Helmand, whom I met on Saturday, said,

“it has been a hard year for our brave police and soldiers, but it has been a much harder year for our enemies who have found through experience that they cannot defeat us.”

Today, with 5 million refugees returning to Afghanistan, 4 million more children in school, great improvements in health care, including massive reductions in child mortality, and the national income up 70 per cent., our task is to ensure that violence and insecurity do not threaten that progress.

Security depends on proper burden sharing. In recent weeks we have had to respond to the threat from insurgents in the district of Nad-e Ali near the provincial capital of Helmand. The operation involves 1,800 troops, not just from Britain but from Denmark, the USA and Estonia. It is a model of burden sharing that we need to see replicated across the whole of Afghanistan. Forty-one countries are involved in the NATO mission, but the burden is not always shared equally. As the international community and the American President-elect contemplate strengthening our commitment to Afghanistan, it is vital that all members of the coalition contribute fairly. This will be a subject of the NATO meeting on 3 and 4 April.

The second pillar of security in Afghanistan is enabling the Afghan people to take greater control of their own affairs by training thousands of Afghan soldiers and thousands of police. With our help, Governor Mangal is starting to work with tribal leaders, whom I met in Musa Qala—a place that only last year was in Taliban hands, but is now building basic services such as roads, power and water, and new schools and hospitals, which are having a tangible impact on the lives of Afghan people. This is starting to bring to Helmand the wider progress that we have seen in other parts of Afghanistan. To reinforce this progress, and having been briefed on the decision by the British commander—as is his right—to call forward reserves to work with our allies and deploy them on a temporary basis in the campaign in central Helmand, the Defence Secretary and I have decided, on advice from the defence chiefs, to approve until August, including the period of preparation for the elections, an increase in the number of British troops deployed to Afghanistan from just over 8,000 to around 8,300.

We, the Americans and the international community as a whole increasingly recognise that we cannot deal with Afghanistan in isolation from Pakistan. There is a chain of terror that links the mountains of Afghanistan and Pakistan right through to the streets of the UK and other countries around the world, and that chain of terror must be broken. On 27 November, the whole world learned that terrorists based in Pakistan can strike anywhere, when a murderous assault condemned by the whole world saw 12 terrorists kill 175 people in Mumbai, including British citizens. This weekend, I met Prime Minister Singh and President Zardari to discuss action that now has to be taken. I expressed my condolences to Dr. Singh, and through him to the Indian people, and assured him that the whole of Britain stands fully alongside India in its determination to see those responsible brought to justice.

I pay tribute to the efforts in Pakistan to deny the federally administered tribal areas as a training ground for terrorism and for the insurgency in Afghanistan and for terrorism. Indeed, more than 100 Pakistani troops have died since July this year in that area. Plots hatched in the FATA have a direct impact on the UK: of the security services’ top-priority terrorist investigations, three quarters have links to Pakistan. So our commitment to countering terrorism and the empty spaces that shelter terrorism, and to building local capacity in Pakistan to do so, must be just as strong in Pakistan as in Afghanistan. The time has come not for more words but for more action. We will offer our support to the democratically elected Government of Pakistan, but that Government must act rapidly and decisively against the terror networks based on their soil.

Pakistan’s own future depends on action against those within its borders who are bent on the destruction of its elected Government and Pakistan’s relations with its neighbours. To make this effective, Britain will work with both India and Pakistan to continue building counter-terrorism capability. Yesterday, I was able to announce more help on bomb disposal capability, scanning devices and airport security, and help to draw up new laws and to set up counter-extremism centres. Our assistance programme to Pakistan is the most comprehensive we have with any country, and will now include a programme, initially worth £6 million, to tackle the causes of radicalisation.

No matter how serious the other tasks we face, security is the first duty of Government. We will always maintain our vigilance against the evils of terrorism. I commend this statement to the House.

I join the Prime Minister in paying tribute to our servicemen Marine Damian Davies, Sergeant John Manuel, Corporal Marc Birch and Lance-Corporal Jamie Fellows, who were all killed in Afghanistan, and Corporal Lee Churcher, who was killed in Basra. It is particularly poignant talking about their families’ tragic loss at this time of year, but it should remind us of the bravery our troops show every day of the year.

Let me deal with the Prime Minister’s visits first. On Afghanistan, one of the lessons of Iraq was that the Government must give clear and frank assessments of what is happening on the ground. Does he agree that there are real causes for concern? The Taliban are operating closer and closer to Kabul, the road network is increasingly unsafe, and the number of Taliban and their armaments appear to be growing rather than shrinking. Does he agree that as well as a realistic assessment of conditions, we need a realistic mission? Should it not focus predominantly on security and rooting out terrorist training, not on an unrealistic objective of completely transforming a society thousands of miles away?

Clearly, our servicemen and women are doing a great job, but what about the others who are key to success? Can the Prime Minister tell us more about the representations he made to President Karzai, not just about fraud in his Government, but about drug dealing by those associated with them, and corruption by public officials?

On troop numbers, the Petraeus review is vital and it would be helpful if the Prime Minister could tell us about our contribution to that review, but surely we should send more troops only if there is a proper political strategy to help to deliver security, if there is more effective burden sharing with our NATO allies and if there is a corresponding increase in vital equipment, especially Chinook helicopters and armoured vehicles.

Just as important is progress in Pakistan. Does the Prime Minister agree that the British public will not understand why we are making sacrifices to prevent terrorist training camps from being established in Afghanistan if they are still operating across the border in Pakistan? He said that he received assurances from President Zardari about taking action, but what is the Prime Minister’s assessment of the ability of the Pakistan army, and the Pakistan intelligence services, to deliver on the commitments that he was given? Did he raise those matters directly with the Pakistan chief of general staff, General Kayani?

Turning to Mumbai, I know that the Prime Minister agrees that we must strengthen our relationship with India. Can he tell us more about the close co-operation we need between our security services? Clearly, this style of attack on a major city in an open society is a new tactic. Can the Prime Minister tell the House what the Government will do to address that threat here?

Turning to the European Council, on climate change we support the so-called 20/20/20 package, but will the Prime Minister confirm that the UK target for renewables is actually lower than 20 per cent., at 15 per cent. of total energy consumption by 2020? Would he accept that this environmental agreement shows that it is possible for Europe to take important decisions on important issues without new treaties and without new constitutions? The Lisbon treaty, by the way, has just seven words on the environment; that is all that it has on the subject.

On the Lisbon treaty—[Interruption.] Yes, I read it, actually—Europe’s leaders had to make a big decision: do they respect the wishes of the people? The answer was a resounding “no”. Just what is it with this Prime Minister and elections? An unelected Prime Minister wants to force the Irish people to vote twice because he did not like the result the first time, and he refuses to allow the British people to vote once because he is afraid that he would not like the result of that, either. Does he agree that one of the advantages of an early election here in Britain would be that the Lisbon treaty could be put to the people in a referendum, and we could let them decide?

Turning to the economic package, the Prime Minister makes three claims. First, he says that Britain is well prepared. If that is true, can he tell us why the pound has fallen to another record low? Is he aware that this lunchtime, his Olympics Minister said that Britain is

“facing a recession deeper than any that we have known, almost certainly”?

So is it not clear that we are not well prepared?

Secondly, the Prime Minister says that those in the EU all agreed with him that every country should take part in the same sort of fiscal stimulus, regardless of their situation. So why does the European Commission statement for the Council state:

“It is clear that not all Member States are in the same position.

Those that took advantage of the good times to achieve more sustainable public finance positions… have more room for manoeuvre now.”

The Prime Minister did not read that out. It continues:

“For those Member States, in particular those outside the euro area, which are facing significant imbalances, budgetary policy should essentially aim at correcting such imbalances.”

In other words, “If you’re in a hole like the one the Prime Minister has put us into, stop digging.”

Thirdly, the Prime Minister said that he is setting the agenda with his particular measures—he is leafing through his papers to try to find them. Let us take VAT. The French Finance Minister said:

“As far as we’re concerned…we’re not certain that when prices go down, a VAT reduction is that effective.”

The German Social Democrat budget spokesman said that the cut in VAT was counter-productive.

That brings me to the Germans. I note that the Prime Minister did not really mention them—or perhaps he did once, but he thinks he got away with it. Is not it true that the German Finance Minister—another Social Democrat, by the way—has completely blown the Prime Minister’s credibility out of the water? He described his approach as “crass” and mistaken. He criticised Britain’s debt, which he believes will

“take a whole generation to work off.”

In response, the Prime Minister claims that Germany’s fiscal expansion backs up his own plans. However, Germany went into the downturn with a budget surplus; it fixed the roof when the sun was shining. In contrast, the Prime Minister led Britain into the downturn with the largest budget deficit in the industrialised world. Next, he claimed that this was all to do with internal German politics, but has not that claim been shattered, too? The Christian Democrats’ budget spokesman said that the German Finance Minister’s comments

“have nothing whatsoever to do with internal German politics… the tremendous amount of debt being offered by Britain shows a complete failure of Labour policy”.

The Prime Minister is always telling us that he wants a consensus. He certainly got one in Germany: they all think that he has got it wrong.

With the EU Council in mind, will the Prime Minister act to deal with what the Governor of the Bank of England says is the most pressing challenge: getting banks lending again? Will he adopt our proposal for a national loan guarantee scheme? I have the draft Bill here. Will he support it, so that we can get business trading and Britain out of the recession? Instead of dreaming about saving the world, when will the Prime Minister start saving businesses here in Britain?

Let me say first of all that I agree with what the right hon. Gentleman says about the losses of life in Iraq and Afghanistan. It is particularly poignant, as we face Christmas, that so many families will be without their loved ones as a result of those deaths.

I thank the right hon. Gentleman for his support for what we are doing on Afghanistan, Pakistan and India. Our plan in Afghanistan is clear: to complement the military action that we have to take—because this is the front line against the Taliban—by helping Afghan people take more control of their lives and have a stake in the future. To do that—yes, we must tackle corruption. That is why we have offered President Karzai a multi-agency taskforce, which we will put at his side in Kabul to help him deal with the problems. It is also why we have taken the necessary action to increase our troop numbers in central Helmand so that they can deal with the Taliban in that vital area of Helmand.

When I was in Musa Qala, I could see that a place that the Taliban held a year ago is now a place where there is law and order. A school and a hospital had just been built and opened as a result of the investment that we and others are making. Afghan people are now taking control of the judiciary system and law and order in that area. If that can be done in Musa Qala, it can be done in other parts of the region.

I have to dispute what the right hon. Gentleman says about the money that we are providing for helicopters and vehicles. We announced only last week more provision for helicopters, and we have spent £1 billion on vehicles. We are determined that our troops have the best and most modern equipment.

I agree with the right hon. Gentleman that we must deal with the root of the problems in Pakistan, and I support what President Zardari is doing. I did meet General Kayani and talked to him about his responsibilities and those of the Pakistani army and the ISI to ensure that terrorists who have operated from Pakistan to do damage in India are properly rooted out, that the training camps of TEL are closed down and that order is brought back to the FATA areas. I believe that General Kayani shares President Zardari’s view that those things must be done, so that Pakistan can show the world that it is taking the action that is necessary.

I now turn to the European meeting. The right hon. Gentleman did not say much about climate change, but he questioned whether we were doing enough. I believe that the agreement that we have reached on a 20 per cent. cut in emissions by 2020 is an historic agreement. This is the first time that 27 countries have come together, and that was possible only because we are part of the European Union. It is now possible to move forward to the next stage, which is to win a worldwide treaty at Copenhagen, because the European Union—and, hopefully, the American Government—can join together in taking the action that is necessary.

As for Ireland, let me repeat to the right hon. Gentleman that the agreement to meet Irish concerns means that the Lisbon treaty in no way affects the rights of member states to make taxation decisions or individual member states’ defence policies—both things that we in Britain have always insisted on. We have also made it clear that the charter of fundamental rights creates no new rights at the EU level. That is something that we have always insisted on, and which the Irish now want as part of their protocol. Therefore, it was perfectly proper for us to support the Irish in their determination to get those three things made absolutely clear, as well as to have a Commissioner of their own.

The right hon. Gentleman talked about what the European Union is doing on the economy, but it is interesting to read what President Sarkozy has said:

“Everybody agrees that there is a need for economic recovery along the lines of the…Barroso plan, around 1.5 per cent.”

and what Chancellor Merkel has said:

“Germany has…declared its willingness with regard to this 1.5 per cent.…You know…in January we will discuss the matter of further steps”.

The one thing that the right hon. Gentleman tries to deny, by quoting people whom he would never quote in ordinary circumstances—German Finance Ministers and European Union politicians—is the one thing that is absolutely true: that the whole of the rest of Europe wants a fiscal stimulus, and wants it to complement the interest rate cuts that are being made. The Conservative party does not even have the Czech social forum with it on this occasion. Not one of the leading parties in Europe supports the position of the Conservative party.

Why is that the case? Because the Conservative party has committed itself not only to doing nothing during this period, but to public spending cuts. The Conservatives say that they will cut public spending from 2010. Just at the point when people need help, they revert to the old policies of the 1980s and 1990s. That is what made people think of the Conservative party as the nasty party. The Conservatives will give no help to home owners and no help to small businesses, because they will spend no money. They have announced support for a national business guarantee scheme, but there is no public money behind it, as a result of their decisions to cut public spending, and there is no help for the unemployed. This is the Conservative party that we are coming to see. At a time when people need help at Christmas, the Conservatives would pull the help away. It is the same old uncaring Conservative party of the past.

May I add my expressions of sympathy and condolence to the family and friends of Lance-Corporal Steven Fellows, Corporal Marc Birch, Sergeant John Manuel and Marine Damian Davies, who tragically lost their lives in Afghanistan, and to the family and friends of Lee Churcher, who, sadly, died in Iraq? We all owe them a huge debt for their service and sacrifice.

Like so many European Union summits before it, last week’s summit was stronger on words than action, richer in promises than in delivery. I welcome the summit proposals for a fiscal stimulus to boost the economy, in the shape of tax cuts and public investment. The question, then, is: why is the Prime Minister not properly practising here at home what he has preached in the European Union? Instead of having his short-term VAT cut, why will he not make the big, permanent, fair tax cuts for ordinary families that were called for at the European summit?

Instead of wasting extra borrowed money on that VAT cut, why will the Prime Minister not invest in green infrastructure for Britain’s future, creating green jobs and green growth, as were also called for at the summit? Does the Prime Minister not see that if he does not boost growth in that way—permanent tax cuts and green jobs—Britain will fall behind those countries in Europe that he has been boasting about beating for about a decade? Already, in some places one can no longer buy a whole euro for a pound. Does the Prime Minister recognise that many eurozone economies could surge ahead of Britain, under his leadership, leaving us once again as the sick man of Europe?

The summit was a wasted opportunity to defeat climate change. All those of us who want our children to have a planet worth living on will be disappointed that dirty industry has been given extra time to clean up its act. Will the Prime Minister tell us when the commitments will be reviewed, and when the loopholes for dirty industry will finally be closed?

The Prime Minister also told us about his visits to Afghanistan, India and Pakistan. I welcome his words of commitment to those countries and support the temporary increase of troops until August in Afghanistan. Does he now recognise that any lasting peace in that country will have to come from a regional agreement—like the Dayton peace accords in the Balkans—and that we need to start talking now to China, Russia and Iran? Does he also agree that, if the local pragmatists in the Taliban are to be split from the national fundamentalists, the talks with the moderate Taliban that are going on in the shadows need to be brought out into the light and given new emphasis?

Finally, I was disturbed to see that Zimbabwe warranted only a few words in the conclusions of the summit, even as millions face disease and starvation, and no words at all from the Prime Minister this afternoon. The Government have got their priorities wrong: instead of being tough on Mugabe, they are being tough on his victims, by refusing to allow Zimbabwean asylum seekers here to work, and, despite assurances to the contrary, by still deporting Zimbabweans to their fate—including Privilege Thalambo, who was arrested with her two daughters for deportation just last Friday.

The Prime Minister talks with great passion about Africa, but he is not providing the right leadership. He has given the wrong leadership on the Congo. Why, instead of encouraging EU leaders to send EU troops, has he encouraged them not to send them? He has also given the wrong leadership on Zimbabwe. Why has he not pushed for international action by the United Nations under the new doctrine of responsibility to protect?

Does the Prime Minister not agree that, on the economy, on climate change and on Africa, making the right promises is the easy bit, but delivering them is the real test?

The right hon. Gentleman’s whole theme was that the summit was stronger on words than on action; if any group in the world is stronger on words than on action, it is the Liberal party.

I shall answer individually each of the questions that the right hon. Gentleman has asked. On troops in Afghanistan, I am grateful for his support for the additional mission to ensure that central Helmand is free of the Taliban.

On Zimbabwe, I disagree that we have done little; we have done a huge amount to try to get humanitarian aid to the people who are affected by cholera, to persuade the southern African states to take the necessary action, to bring this forward to the Security Council, as we are doing, and to ensure that the whole world understands the blood-stained regime that we are dealing with in Zimbabwe. We will continue our efforts to try to persuade African leaders to take a tougher stand on the issue.

On the Congo, I think that the right hon. Gentleman realises that, in preference to rushing to deploy an EU force at the moment, the most important thing is to strengthen the UN force. It is to rise from 17,000 to 20,000, and we have put aside some money to help the recruiting of the additional troops for work in the Congo. By far the quickest and most effective way of getting help to people there, and of dealing with the incursions that are taking place, is to strengthen the numbers, the quality and the leadership of the UN force on the ground.

On climate change, I also disagree with the right hon. Gentleman. There is a debate to be had about carbon leakage, and there is to be a rigorous examination of its impact. No action will be taken to exclude the non-power sectors of the economy from auctioning until that rigorous examination has been carried out. The proposals will then go back to the Council for further discussion within six months, so that we can be clear that carbon leakage is not being used as an excuse to escape responsibility for taking action on climate change. Our objectives of a 20 per cent. cut in emissions, of 100 per cent. power auctioning and of a €9 billion commitment to carbon capture and storage were all achieved at the summit, and, for all the difficulties that the right hon. Gentleman has raised about carbon leakage—a matter that has still to come back to be discussed in full later—there have been enormous advances that will put Europe in a position to take the lead in Copenhagen in securing a climate change agreement.

I know that the right hon. Gentleman does not favour the VAT cuts that have taken place, but I believe that they are already making a difference, and I hope that he will support the increase in public spending that is taking place as a result of decisions that we have made. Not only has £5 billion already been allocated to small businesses, with a great deal more to come, but a £10 billion increase in the capital budget from last year to next year will enable us to proceed with our plans for roads, transport, schools and hospitals in a way that will employ more people. I hope that the Liberal party will continue to support that action, which is necessary to inject more capital spending into the economy at a time when it is most needed.

The fact of the matter is that monetary policy has a transmission mechanism that is impaired, and we cannot rely totally on monetary policy. No other major country in the world is saying that monetary policy alone can do this work, apart from the people who represent the Conservative party at the moment. Fiscal policy is absolutely essential, especially at a time of low inflation and low interest rates: the case for using fiscal policy is even stronger then.

It is unfortunate that the Conservatives have not learned the basic lesson of the 1970s and 1980s that a recession is prolonged by a failure to invest and a failure to use capital spending. The Liberals and I are agreed on the need for capital investment. The Conservative party should go back to the drawing board and think again.

The Prime Minister has rightly referred to his efforts to improve the climate between India and Pakistan and to secure greater co-operation against terrorism, but does he not agree that the Afghan Government also have a responsibility to improve co-operation with Pakistan so that there is a collective effort? He referred to burden sharing. What discussions has he had with his German partners in NATO about Germany’s beginning at last to pull its weight in European and NATO security, especially in the context of the dangerous areas in Afghanistan?

I should point out to my hon. Friend that the German Government have taken responsibility for the training of police in Afghanistan. They have a number of people allocated from Germany to do that, and they are taking responsibility for the rest of the European Union to do that.

If we are to succeed in Afghanistan, we will have to increase not only the number of soldiers and armed forces trained—70,000 are being trained at the moment—but the quality and quantity of police on the ground to do the job. Those who visit Musa Qala, as I did, will see that the police force is working in providing law and order. In every other part of Afghanistan we must carry out the training that is absolutely essential, and the German Government have agreed to take the lead in that.

As I listened to the Prime Minister reading out the list of reasons why we needed to be in Afghanistan, I found myself agreeing with them, but not inspired or enthused by them. Is there anything that he can do to inspire the country so that it actually starts to believe, with some enthusiasm, the reasons why we need to be in Afghanistan?

I have said before and I say again—and I think that the country understands this—that Afghanistan is the front line against the Taliban as well as al-Qaeda. If we are to prevent terrorists from Pakistan and Afghanistan from entering our country, we need to be both in Afghanistan and working with the Pakistani authorities to deal with terrorism.

Afghanistan is now a democracy. Schools have been built and young people, including girls, are going to school and receiving an education. Health centres are also being built. Yes, the Taliban have changed their tactics and it is now guerrilla warfare that is being practised through roadside devices, suicide bombings and other means, but we are in a position to turn the Taliban back in many areas in Helmand, and where we have not yet done so, we are taking action to do so. I believe that if we are to protect ourselves at home, we must remember that the terrorism that affects us in Britain starts from Pakistan and Afghanistan.

I welcome the Prime Minister’s statement that the European Council has endorsed the European Commission’s recommendation that €200 billion should be put into the European economies, building on the €62 billion from France, the €32 billion from Germany and the €2.18 billion from Portugal, as well as a future $800 billion from the United States. Given the flawed monetary policy to which the Prime Minister has referred, is it not beyond peradventure that a monetary policy plus fiscal stimulus is the only way out of the difficulties, and that to talk consistently of a national loans scheme for small businesses when one already exists is simply a camouflage for having no policy at all?

My hon. Friend is absolutely right that what used to be called the one-club policy of using only interest rates—of using only monetary policy—will not work in the circumstances that we now face. The more the Conservative party ties itself to that, the more it ties itself to the failed policies of the past. The reason why fiscal policy is important is that we are in a period of low inflation with low interest rates—low inflation next year, following the low interest rates we currently have. That is why fiscal policy can have the greatest effect. If the Conservative party is going to say that this is the right time to stop building schools, to stop building hospitals, to cut back on transport and to cut back on the roads, and to say that it will severely cut public spending from 2010 onwards, it will have to explain why it is making nurses, doctors, teachers and others unemployed. That is the policy of the Conservative party.

May I remind the Prime Minister that several years and four Defence Secretaries ago—the first of whom, the right hon. Member for Ashfield (Mr. Hoon), is now sitting next to him—when we sent our first small contingent to Afghanistan, I warned that, as the Russians had found in the 1980s, 300,000 men would not be sufficient to achieve military victory in that country, and that the Pashtun Taliban are a religious-tribal sect with no international ambitions who have always disliked the al-Qaeda Arabs and will be thankful to be rid of them if they can be rid of all foreign troops at the same time? Now that the Prime Minister has at last recognised that the threat of international terrorism comes primarily from Pakistan, why can we not have a settlement with the Afghans on that basis?

The hon. Gentleman cannot deny the evidence of the Taliban working with al-Qaeda. He cannot deny the evidence that people are coming across the borders from Pakistan to support the Taliban in action against British troops, as we saw in the suicide bombing carried out by a young child in Afghanistan last week. He cannot deny the interrelationship between what is happening in Pakistan and Afghanistan. We have got to take action to protect our troops in Afghanistan, but also to protect the democracy of Afghanistan, and we have got to take action to persuade a democratically elected Government in Pakistan and their army to take action against terrorism within their borders.

May I warmly welcome the Prime Minister’s visit to India so soon after the events in Mumbai? That underlines the fact that we have a very special relationship with India; the Prime Minister was, of course, the first Head of Government to visit India after the Mumbai tragedies. When he told the President of Pakistan that 75 per cent. of the plots being investigated were rooted in Pakistan, what was the President’s reaction? Will my right hon. Friend confirm that the Government will provide any additional resources that are necessary for our high commission in Islamabad, in order to deal with this very serious problem?

I am grateful to my right hon. Friend for his comments. I passed on the condolences of the entire British people for the loss of 175 lives as a result of the terrorist activities of only 12 people in Mumbai a few days ago. I offered the Indian Government any help with the investigations that we can give, and we talked about how we could increase our counter-terrorism activities together so that India and Britain can work more closely to identify terrorism and the sources of it.

My right hon. Friend is also absolutely right that a heavy responsibility falls upon Pakistan. It has already been identified that the terrorists who struck in India came from Pakistan. It is also true that many people from Pakistan have gone into Afghanistan and attacked British troops there. My right hon. Friend is absolutely right that the evidence suggests that three quarters of the terrorist plots we have had to investigate in Britain have links in one way or another with Pakistan. That is why I said to the President of Pakistan, and the Prime Minister, that we will be prepared to give them help to counter terrorism—help in their capabilities, in advice, in strengthening their laws, and in building up action against extremism, particularly in the education of their children, so that they can expose the perversion of Islam that is taking place. However, that requires the Pakistan Government to take responsibility by taking the necessary action, particularly in the tribal areas. The President of Pakistan assured me that he was determined to take action, and we said that we would monitor what is done over the next few days.

I fully associate myself with the words of condolence expressed by the Prime Minister earlier in his statement. On Afghanistan, he has announced the multi-agency taskforce, which as part of its remit will have some work to do rooting out fraud. Is it not therefore logical that it should also oversee the rebuilding of infrastructure?

There are other means by which the rebuilding of infrastructure is taking place in Afghanistan. The importance of clearing the roads of bombs and making the roads safe was mentioned earlier. The dam project is moving ahead as a result of international action and a lot of reconstruction is taking place in Afghanistan itself, so I do not think that a multi-agency taskforce should be the organisation that deals with corruption. The relationships at the centre of Afghanistan are trying to move forward the reconstruction, and of course, we are taking action in Helmand itself to build new facilities.

My right hon. Friend is absolutely right to ignore the siren voices who are opposing reflationary measures at this time. In talking about the Germans—or some of them—may I say how disappointed some of us are to hear that they were against a number of the measures relating to further developments on climate change? That is a marked departure from their previous record. Would my right hon. Friend like to say to them that we would like them to be where they were previously, on both economic policy and environmental policy?

I can say that Chancellor Merkel supported all the main principles of the climate change package. The issue has been how we deal with carbon leakage, and a lot more work has got to be done on that, but 100 per cent. auctioning is to take place in the power sector, and there is an agreed 20 per cent. cut in carbon emissions. To be able to do that as a European Union, and also to invest in carbon capture and storage—€9 billion is to be invested in that—is substantial progress. Everybody who looks at the history of action on the environment knows that we have to build a consensus. If we can build one in Europe and persuade America that it is right that it takes action, it is possible that we will achieve for the first time an environmental agreement that all countries are prepared to sign.

I agree with my hon. Friend on the economy that it is important that all countries support the fiscal stimulus, but he must recognise that the German Government have made a fiscal stimulus and are planning another. The only party of any significance that I can see that is against a fiscal stimulus is the Conservative party, because it made a terrible decision last week that it would cut public spending.

As it now appears from the Irish example that holding a referendum on the Lisbon treaty and voting no leads the European Union to make substantial concessions, why does the Prime Minister not, even now, take the same route and hold the referendum that he promised us before the last election?

We have had this argument in the House on many occasions, and every time that it is put to the vote, this side of the House wins and that side loses.

My right hon. Friend will know very well that after many years of military rule, Inter-Services Intelligence, Pakistan’s security service, is far from trusted as being under proper civilian control. Did he have a chance to discuss with President Zardari whether it is possible for Britain to lend assistance that will ensure that the democratic Government of Pakistan can bring the internal security service under that proper democratic control?

We did talk about how we can support the Pakistani authorities in many different ways, including helping them to rewrite laws to deal with terrorism, as we have had to do ourselves. I did offer support in a number of different ways to President Zardari. I also repeated to Mr. Kayani, who is the head of the armed forces, our offer of help to the Pakistani authorities, and we will continue to work with them to do everything that we can to support the Pakistani effort against terrorism in their own country. It is important to recognise that many Pakistan citizens have also been the victims of suicide bombings and that there have been many terrorist incidents within Pakistan itself. We want to give support to the Pakistan Government, but at the same time we are urging them to take more action, particularly against the organisation TEL, which has been held responsible for the Bombay bombings.

I understand that the Prime Minister is leading a wider review on Afghanistan within Whitehall. If he decides to deploy more troops to Afghanistan, will he consider tasking them principally with the training of more men of the Afghan army and police, that being by far the most effective way of enabling the Afghans to take some control of their own affairs?

I agree with the hon. Gentleman, because it is important that the number of Afghan troops in Afghanistan is increased. Some 70,000 are being trained at the moment and more is being done every month—about 1,500 are being trained every month—but the figure will have to be a lot higher than that for a country the size and scale of Afghanistan. A new target of 120,000 has already been set. I do not think that that is big enough for the size of the country. I saw British troops training Afghan soldiers and working with them, and the Afghan soldiers are courageous and strong, but there needs to be more of them—the hon. Gentleman is absolutely right. That is something that we continue to push on President Karzai.

The previous increase in British troops in Afghanistan two years ago resulted in an increase in the deaths of our brave soldiers, from a total of seven to a total of 132. Is there not a grave danger that an increase in the number of troops means more targets for the Taliban? Is not the best way of consolidating the gains made in Afghanistan to embark on a new policy, based not on a military victory but on tackling the causes of terrorism with a peace strategy?

I should point out to my hon. Friend that our strategy is based on complementing the military intervention that is necessary to keep peace in Afghanistan and maintain democracy with other measures that will build up the confidence of the Afghan people so that they are enabled to govern themselves. That includes, as I have just said, training the Afghan forces and police, as well as building up local government, working with the tribes to create a means by which localities are properly governed and cleaning out corruption from the centre—on which I have pressed President Karzai, and why our multi-agency taskforce is going in. It also includes giving Afghan people a stake in their future—by helping them to become wheat farmers, for example, rather than farmers of drugs and narcotics—whether they are in villages, towns or in the countryside. That is our strategy for Afghanistan. It is necessary that we have the number of troops to deal with the Taliban, but it is also necessary that we train the Afghan army and police and that we invest in building the facilities that are necessary so that people have a stake in Afghanistan’s future.

The Prime Minister says that there are more helicopters on the way, but may I ask him the same question that I asked him on 21 November 2007? When will the dedicated Chinook helicopters that were ordered by John Major for our special forces and delivered to Tony Blair in 2001 be fully available to be deployed by UK special forces in Afghanistan?

I agree that we have set aside a huge amount of money for additional helicopters. The timetable for their introduction depends on re-equipping many of them and, at the same time, training the forces to do so. I shall write to the hon. Gentleman specifically about the Chinook helicopters, but I can tell him that the money and the resources have been provided for the additional helicopters.

At this weekend’s international conference on Afghanistan in France, the Iranian Foreign Minister did not turn up, even though he was expected. Given what the Prime Minister has said about Afghanistan and the need to work with neighbouring countries, did he discuss either at the EU Council or on his visit to Afghanistan and Pakistan how to bring the Iranians into discussions about the future?

It is very difficult to say, when we are debating with the Iranians at the moment, whether they will accept that they will be under the non-proliferation treaty that they have signed up to. We have presented Iran with a choice: it can either be part of the international community and get all the advantages of being such a part, including being free of sanctions, or it can allow itself to become isolated by defying the international community on nuclear weapons. That is the choice that Iran has to make, and it affects all the other areas in which we operate.

When the Prime Minister calls upon the Pakistani Government to do more to destroy the Taliban in the frontier areas, is he aware that the Pakistani army and intelligence agencies have always been influenced by the fact that successive Afghan Governments, over 60 years, have refused to recognise the legitimacy of the international frontier between Afghanistan and Pakistan, and that they believe that that thereby gives them reason to suspect that Afghanistan harbours aspirations to incorporate those provinces into its own country? Will he therefore seek to persuade President Karzai to reconsider this policy and, in the interests of Afghanistan itself and stability in the region, to recognise the legitimate frontier as that which currently exists between the two countries?

I understand the difficulties and the challenges that the right hon. and learned Gentleman raises, which result from history, but when I talked to President Zardari he informed me that he had made big changes. There has been a change at the head of the ISI and there are further changes in the departmental heads. It remains to be seen what happens as a result of that, but President Zardari was determined to tell me that the army is dedicated to the pursuit of terrorism. We will hold him to those words.

The Prime Minister will be aware that it is now more than seven years since coalition forces were sent to Afghanistan, and he tells us today that there will be a small increase in British forces there until next August. If the situation is unchanged by then, will we have another increase? Is it not time for a complete rethink on the policy towards Afghanistan and are we not just heading down the route of the same failed philosophy that the Americans pursued in Vietnam—endlessly putting troops into a failing situation?

I have to point out to my hon. Friend that 41 countries are involved in this coalition, not just one or two. There are 41 countries determined not only to bring peace and reconciliation to Afghanistan, but to help to build a stronger democracy there. I have also to tell him that we will discuss at the NATO meeting on 3 and 4 April the burden sharing that is necessary for the future. I am determined, too, that other countries play their part in Afghanistan. This is the fundamental question, which brought us to Afghanistan in the first place: there is the front line against the Taliban. We have removed the Taliban from power in Afghanistan. I think that it is our duty to help to uphold the new democracy in that country.

How does the Prime Minister justify his endorsement of the deceitful bullying of the Irish people in these conclusions with his claim to be a democrat?

The Irish brought to the EU concerns that they had expressed about the interpretation of the treaty and the treaty. We agreed that there would be an extra Commissioner, but that is within the power of the Lisbon treaty. We also agreed to reiterate what is important to us in Britain as well: the Lisbon treaty in no way affects the right of members on taxation decisions and in no way affects our defence policy. As we have a protocol on the charter of fundamental rights, it was right that the Irish be given assurances on that as well. That is what has happened. I would have thought that people in the House would support it.

I am sure that my right hon. Friend agrees that it is necessary to see through the process of reconstruction in Afghanistan until a stable, strong and fully democratic state emerges. Will he say more about the efforts he is making to get other countries to play a greater role in burden sharing so that that state can emerge sooner rather than later?

As my hon. Friend will know, France and other countries have upped their contribution of forces during the past year. I think that we have 52,000 troops in total from a large number of countries in Afghanistan at the moment, but I have made it clear that we need further burden sharing. Whether it is by providing more forces or more help with training forces or the police, or whether it is by providing equipment such as the helicopter fund that has been formed so that people can contribute as we and others will to other countries bringing helicopters to Iraq, we are determined to continue the process. If 41 countries are part of the project, they must make a contribution to it. The burden sharing that I have talked about will be discussed at NATO on 3 and 4 April.

As the Irish people are to be made to vote again on the Lisbon treaty on the ground that they made a mistake last time, will the Prime Minister call an early general election on the ground that the British people made a mistake last time?

No, and I would have thought that when the right hon. Gentleman looked at the Irish statement as a result of the European Council, he would support most of it, not oppose it.

In relation to matters discussed at the European Council, does the Prime Minister agree that one of the things that will be vital to long-term economic recovery is ensuring that strategically important industries can weather the current storm and prosper into the future? In that context, will he say a little more about efforts being made at a European level in relation to the automotive industry, whose health is vital to many EU member states?

Decisions on the automotive industry will be made by individual countries, which will look at the situation and make their own judgments about what is likely to happen. My hon. Friend’s question prompts a more fundamental question about whether one is prepared to help families and businesses in times of great difficulty. We are prepared to do so; the Opposition would not.

The evidence is that the position of the international community, including the Karzai Government, in Afghanistan is becoming more difficult day by day. It is also evident that public support in the UK for our troops in Afghanistan is declining rather than increasing. The Prime Minister is conducting this important and much-needed review of policy towards Afghanistan. Can the House of Commons have the opportunity to contribute to the review through at least a day, but preferably two days, of debate before it is completed?

We have regular debates in the House of Commons, such as the debate on defence that took place very recently. Of course a debate on Afghanistan can take place, if the Opposition choose to propose that subject. At the same time, we will keep the House fully informed of any decisions that we propose to make on Afghanistan.

Points of Order

On a point of order, Mr. Speaker. Has any Minister indicated to you whether a statement will be made on the alleged Madoff fraud? Surely, as $50 billion is a huge amount of money, a ministerial statement to reassure the UK markets would be appropriate.

On a point of order, Mr. Speaker. Has anybody asked you for a statement on the failure of the Greater Manchester congestion charge, which affects not only the north-west but many other areas that want to bring in such a scheme? Has anyone brought that subject to your attention, and may we have a statement?

No one has brought that matter to my attention apart from the hon. Gentleman through his point of order.

Debate on the Address

[6th Day]

Debate resumed (Order, 11 December).

Question again proposed,

That an humble Address be presented to Her Majesty as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Economy, Pensions and Welfare

I wish to inform the House that I have selected for debate the amendment in the name of the Leader of the Opposition. Standing Order No. 33 provides that on the last day of debate on the motion for an address to Her Majesty the House may also vote on a second amendment, selected by the Speaker. I have selected the amendment in the name of the leader of the Liberal Democrats. The vote on the amendment will take place at the end of the debate after the amendment in the name of the Leader of the Opposition has been disposed of.

I beg to move an amendment, at the end of the Question to add:

“but humbly regret that the Gracious Speech fails to deliver a clear direction for British economic policy, does not contain measures to assist in building a low debt and low tax economy, and lacks any radical action to unblock the credit channels of our banking system; note that many individuals have seen returns on their savings severely reduced as a result of the economic downturn and regret that the Government has no plans for emergency protection of pensioners with a suspension of annuity rules; further regret the absence of a clear strategy on value added tax; and further regret the absence of measures to avoid the United Kingdom undergoing the worst recession in the G7 next year.”.

Thanks to your decision, Mr. Speaker, to grant our request for an emergency debate, it has been three weeks since we last examined the Government’s handling of the recession that is now engulfing our country. We were then told by the Chancellor from the Dispatch Box that the measures in the pre-Budget report would hasten the end of the recession by bolstering confidence at home and the credibility of British Government policy abroad.

What has been the judgment in the last week alone on the Chancellor’s claim? The pound has fallen against the euro, hitting a record low earlier today and demonstrating again the Prime Minister’s maxim that a weak currency is a reflection of a weak economy and a weak Government. The loss of international credibility has sent the cost of insuring British Government debt higher than insuring the debt of those two homes of French fries, Belgium and McDonalds. An independent survey out today says that the drop in the VAT rate seems to have made little difference in lifting consumer confidence and encouraging consumers to spend. The head of Barclays bank says that despite the measures announced by the Government over the past few weeks, such as those on stamp duty, house prices will fall by at least as much next year as they have this year.

This lunchtime, the Minister for the Olympics has contradicted every statement made by the Prime Minister and the Chancellor over the past six months by admitting, in her words, that Britain is facing a recession

“deeper than any that we have known”.

So, what about all that talk about the 1980s and 1990s now? The Finance Minister of the world’s third largest economy has described the Government’s approach as “crass” and “breathtaking” and as raising debt to a level that will take “a whole generation” to pay off. That is the problem with saving the world—sometimes the world answers back.

The Chancellor and the Prime Minister tried to dismiss the German Finance Minister’s comments—indeed, the Prime Minister again did so just a few minutes ago—as their being all to do with the internal politics of Germany. Mr. Steinbrück is a Social Democrat, and the Christian Democrats issued the statement:

“Peer Steinbrück’s comments have nothing whatsoever to do with internal German politics, as Prime Minister Brown has suggested.”

Indeed, one could feel the sense of schadenfreude after all those brusque encounters with our Prime Minister at ECOFIN meetings, when the spokesman continued:

“After years of lecturing us on how we need to share in the gains of uncontrolled financial markets, the Labour politicians can’t now expect us to share in its losses. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy.”

That is not a Conservative politician—it is not even a Liberal Democrat—but the spokesman of another Government.

Of course, this debate should be about more than the mistakes that the Government made with their pre-Budget report, serious though they are; it is about the legislative programme for the coming year, so my hon. Friend the Member for Epsom and Ewell (Chris Grayling) will speak about the welfare reform and child poverty Bills. Let me make it clear to the Chancellor that our offer of co-operation to ensure that the Banking Bill, carried over from the previous Session, passes through Parliament by next February still holds, but we expect the powers we give the regulators to be enforced in the courts if necessary, as my right hon. Friend the Leader of the Opposition made clear today.

I wish that today’s debate was an opportunity to examine the Government’s response to the Equitable Life scandal and the damning report from the parliamentary ombudsman. After all, only a couple of weeks ago the Prime Minister made an absolutely unambiguous promise at the Dispatch Box:

“There will be a statement before the House rises at Christmas. I can say to the hon. Gentleman that that will be done.”

When Members on the Opposition Benches shouted out in disbelief, the Prime Minister said:

“There will be a statement before the House rises this Christmas.”—[Official Report, 3 December 2008; Vol. 485, c. 38.]

Indeed, that was followed up by a letter from the Economic Secretary to my hon. Friends the Members for Fareham (Mr. Hoban) and for Macclesfield (Sir Nicholas Winterton), saying that the Government would give their considered response to the ombudsman’s report to the House shortly, and—in the Economic Secretary’s own handwriting—“before the recess”.

Those were the promises made to Parliament—to Members of the House—yet now it seems that the promises are to be broken. Having waited months for the Government reply—indeed, they have had a draft report for well over a year—desperate policyholders will have to wait even longer. As the Public Administration Committee put it in a report today:

“Justice further delayed will mean justice denied to even more people.”

Equitable Life policyholders have suffered enough: raising hopes and then dashing them before Christmas is a shabby way to treat people. It is time the Government said sorry and accepted the ombudsman’s report. I suspect that the Chancellor will not do so today, but I am sure that he will be forced to in due course.

Instead, we must focus our attention on the deepening recession into which the Government have led us, and what better place to start than by reminding the House what the Chancellor told us in the debate on the Queen’s Speech a year ago? That debate was held many months after the August seizure of the credit markets. It took place long after the Chancellor had discovered from reading his Financial Times that a credit crunch was happening. It was after the Northern Rock run and after warnings had come thick and fast about the downturn that lay ahead; in other words, when the Chancellor rose to speak in this debate a year ago there was absolutely no excuse for his not facing up to the economic realities, preparing the country for a forthcoming recession and readying the House for the difficult decisions that lay ahead. However, instead he told us that Britain

“will grow the fastest of all the developed countries. Inflation is around target…The foundation for all those things is a strong and stable economy…That is why, as I have said time and again, we shall take no risks with stability.”

Britain was to grow faster than any other country and inflation was to be on target—it just shows what a complete fantasy world the Treasury was living in.

To be fair to the Chancellor, he gave us the following warning, which turned out to be nothing short of prescient:

“What risks stability is getting into a position of making promises that cannot be afforded. That will result either in increased taxes elsewhere or, more likely, increased borrowing, which puts pressure on interest rates. That is the last thing we need, especially at this time of international uncertainty.”—[Official Report, 14 November 2007; Vol. 467, c. 701.]

A year ago, he said that increased borrowing was the “last thing we need”, but it is the very first thing he proposed in the face of the recession.

How did the Government move from the position a year ago, when the Chancellor boasted that he would take no risks with stability, and predicted that Britain’s economy would grow the fastest of all developed economies, to today’s position? Now, the prediction from almost every international body is that Britain’s economy will contract the furthest of all developed countries in the world, and the Chancellor is taking enormous risks with stability—risks that mean increased taxes, increased borrowing, and pressure on long-term interest rates, as he warned us a year ago.

The Government’s answer is that it is all America’s fault. That has become a kind of mantra for the Government, like something in a panto; I know that the Chancellor has been spending time with panto characters. The Government blame sub-prime, Lehman Brothers, AIG and all that. Of course, all those things help to explain why all countries are facing tough economic circumstances; the Chancellor says that that is right. However, they do not explain why the slow-down is forecast to be worse in Britain than in any other major economy. They do not explain why the European Commission, the International Monetary Fund and the Organisation for Economic Co-operation and Development predict that Britain will have one of the steepest recessions and one of the sharpest rises in unemployment. For a decade, when the Prime Minister was Chancellor, he took personal credit for the fact that, as he modestly put it, Britain was doing better than anyone else. Now, he refuses to accept any personal responsibility for the fact that, as the world sees it, Britain is set to do worse than anyone else. That will not do.

Eleven years ago, the Prime Minister inherited a strong economy from the predecessor Government. Now, once again, Britain is on the path to being the sick man of Europe. Labour has done it again. The blame for that lies fairly and squarely with him. The truth about the Prime Minister’s record is that during all his years at the Treasury, he became so convinced of his own propaganda about abolishing boom and bust that he mistook a finance and housing boom for stability, and never prepared Britain for the bust.

The Prime Minister talked of prudence endlessly from the Dispatch Box, but ran up a huge structural budget deficit. He pledged that he would be the iron Chancellor, but let spending rip. He went on and on about the long term while wrecking our pension system. He preached a kind of Presbyterian morality, yet presided over an age of excess and irresponsibility. He created a regulatory system that allowed the biggest financial crisis of our lifetime to develop entirely unnoticed. Indeed, last week he pleaded to a newspaper that he did not know what was actually happening behind the scenes.

When the credit markets froze last year, the Prime Minister froze, too. The Government were paralysed by indecision, because, as ever, he did not want to do anything that might lead him to admit that he could, in some way, be held to blame. The Budget came and went without anyone noticing, except the poor motorists, who were to be hit by higher taxes. Just days before his own party decapitated him, the drama of the collapse of Lehman Brothers and Washington Mutual threw the Prime Minister a lifeline and enabled him briefly to seize the international limelight with the recapitalisation plan that the Bank of England had drawn up.

Ever since then, the Prime Minister has been scrabbling around for other things to announce—on housing, on VAT, on almost anything—regardless of whether the measures would work, regardless of the absence of any detailed policy, regardless of the cost or the impact on national debt, regardless of the burden placed on future generations, and regardless of the damage done to Britain’s international credibility or creditworthiness. The attitude is, “It doesn’t matter whether it is the right or wrong thing to do, just so long as it can be spun as something rather than nothing.” That is what the last few weeks have been all about—the short-term political plans of the Prime Minister, not the long-term economic interests of this country.

That is why Britain is where it is today—badly prepared for the recession, and badly led now that the recession is upon us. It is not just that the Prime Minister failed to fix the roof when the sun was shining. [Interruption.] I will say it again: it is not just that the Prime Minister failed to fix the roof when the sun was shining—his plan for the recession is now failing. Britain has been in recession since July—almost half a year—and at some point the country will ask whether all the promise of action has actually delivered. There is no evidence that the bank recapitalisation has got credit flowing again to businesses; no evidence that the stamp duty holiday has persuaded a single person to buy a house; no evidence that the £12 billion temporary VAT cut has made the slightest difference to the confidence of a single consumer.

I am following the hon. Gentleman’s argument carefully. He has noted the importance of getting credit out to businesses, so that they can open again after Christmas. One obvious way of doing so is to use the two nationalised banks, and perhaps the moneys that we are putting up, to cut VAT. On Wednesday, we have a chance to vote on the VAT reduction—will the hon. Gentleman seek ways to vote against it, so that Government Members who would like the money to be spent in other ways will similarly be able to vote?

If I needed persuading before that intervention, I am totally persuaded now. We plan to vote against the VAT reduction, which has already come into effect. Because of the procedures of the House, the Government did not allow us to have a vote before it did so. Our argument, made over many weeks and against quite a lot of criticism, not just from Ministers but from various economic commentators and so on, was that we were standing in the way of a fiscal boost that would deliver a transformative effect on the British economy. There is an independent survey—the first, I suspect, of quite a few—out today that shows that there is absolutely no evidence that that measure has had any impact whatsoever on consumer confidence.

May I push the hon. Gentleman further on that? Members on both sides of the House will be desperately worried about how the unemployment figures out on Wednesday or Thursday will begin to affect their constituencies, and what the level of unemployment will be after Christmas. The one thing that we could do to mitigate those redundancies would be to ensure that firms, which will prosper only if the banks deliver credit to them, received credit. The banks are clearly not going to do that, so we should use the moneys from VAT to go through the two nationalised banks so that firms can get credit and open again after Christmas.

The right hon. Gentleman makes a compelling case, with which I agree, about the need to get credit flowing from the banks to businesses. That is essential if we are to keep small and medium-sized businesses in particular, but also larger businesses, afloat. That is the single most pressing problem facing the Government. I disagree with him about the method: I think that a different approach is needed, and I shall discuss it in detail—[Interruption.] The hon. Member for Bishop Auckland (Helen Goodman) giggles, but I think that the Chancellor is about to copy something akin to what the right hon. Gentleman or I have announced about a loan guarantee scheme, so perhaps she will have to swallow her giggles. However, I certainly agree that we need to do something about the problem. I would introduce a loan guarantee scheme similar to the inter-bank scheme that is now in place, with the Government underwriting lending, and I shall come on to discuss that in more detail.

Supporting businesses is an aim shared by Members in all parts of the House. The Government have borrowed £37 billion of taxpayers’ money and given it to the banks, but they have set an interest rate to the banks of 12 per cent. They then expect the banks to lend to small businesses at a rate of about 3 per cent. The banks cannot be pulled both ways: that is why money is getting stuck, and it is why small and medium-sized businesses are not receiving the support that they need from the Government.

My hon. Friend makes an excellent point. Again, I shall come on to discuss recapitalisation. I certainly think that the Chancellor needs to revisit the terms of recapitalisation, as the 12 per cent. charge is too high, if one considers the coupon bond charged in the United States, Germany, France and other countries. That is one reason why our banking system has the problems that it does.

I am grateful to the hon. Gentleman. He is always gracious to me. I understand that he and his party are concerned about fiscal stimulus. As their amendment states, they want

“a low debt and low tax economy”.

To me and many of my constituents, that suggests that there would be considerable cuts in public expenditure. That is a coherent political position, but my constituents deserve to know what cuts the hon. Gentleman and his party propose to make to public expenditure.

Let me say two things to the hon. Gentleman. First, according to the Institute for Fiscal Studies, if we use the same methodology as the Labour party used against us at the last election—as, indeed, the Chancellor used—the thing that Labour Members all cheered a couple of weeks ago amounted to a £37 billion cut in public expenditure, so no one will ever believe anything they say again about spending cuts. Secondly, when it comes to specific Departments—[Interruption.] Treasury Ministers say, “Answer the question.” They probably do not know the answer to this question, so I have some sympathy with them.

As I understand it, the Chancellor has announced that he would take £5 billion in efficiency savings from Government Departments from 2010 onwards. There is absolutely no indication from the Government which Departments that will come from. They cannot tell us what the total spending will be on health, defence, schools or anything else, so it is a little unreasonable of the hon. Member for Wolverhampton, South-West (Rob Marris) to ask me what my health spending would be as opposed to the Labour party’s, when we do not even know what the Labour party’s plans are because they came up with the £5 billion figure and have not filled in the details yet. Once again, further evidence that everything they say on spending is total nonsense.

Before the shadow Chancellor moves on from VAT, may I point to him that it is £12.5 billion of real money in the real economy—about 1 per cent. of GDP? Would he have been more satisfied if the Government had been straight and said that business would keep that to see themselves through the recession, rather than pretending that it would be passed on to consumers?

I know one business that kept some of the VAT for itself—the Labour party, whose own shop did not pass on all the VAT cuts. Some businesses made use of the potential secret fiscal stimulus.

I shall make a little more progress and perhaps give way to the hon. Gentleman later.

I was speaking about the lack of evidence that the stamp duty holiday, the VAT cut and so on had made the slightest difference. There is plenty of evidence that the prospect of a trillion pound national debt and the tax bombshell to pay for it is undermining national confidence in the future, and that makes the recession worse today. We will begin to see proof of whether the Prime Minister’s tax and borrow recession plan is working when we see the unemployment figures later this week, and particularly when we see the unemployment figures in January and February, by which time the Government will have been dealing with the recession for more than half a year.

The Prime Minister has staked his claim to office on the performance of the economy. Let him, then, be judged by it, just as we are prepared to be judged by the positive action that we now urge on the Chancellor—action that really would help reduce the length of the recession and instil the confidence that we need for a future recovery. That action begins, as my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) said, by addressing the problems in our credit markets, for this is a credit crunch, and until we address the lack of credit, the Government are only scratching at the surface of the deep problems that we face.

The problem for the Government, and particularly for the Prime Minister, is that it requires an admission that he does not want to make. That admission is that the bank recapitalisation may have rescued the banks back in September and October, but it has not rescued the wider economy. There remains an acute shortage of credit. An over-leveraged economy is de-leveraging—[Interruption.] The Chief Secretary to the Treasury, who survived the fire that was taking place behind her on the Andrew Marr programme yesterday, is obviously very excited by the incident and is gabbling away. If she wants to make an intervention, she is more than welcome to do so—

Perhaps the hon. Gentleman will tell the House whether he supports the £60 for every pensioner, to be paid in the new year; that will be paid for through £900 million of borrowing.

I notice that, again, there was not a word on Equitable Life; perhaps the Chancellor will deal with that issue. In a recession, of course we want to be getting money to the front line. I think that the money for things such as the pensioner bonus could have come from within Government.

By the Chief Secretary’s own admission, there are billions of pounds of efficiency savings to be made. We have said that the £12 billion VAT cut was a waste of money. If, when he responds, the Chancellor of the Exchequer can provide any evidence that that cut is having a significant impact on consumer confidence, or changing the spending patterns of British people in the run-up to Christmas, I will be delighted to hear it. So far, we have seen absolutely none.

What would the hon. Gentleman say to the right hon. and learned Member for Rushcliffe (Mr. Clarke), who spoke in support of the VAT cut on Sky News yesterday? He said that the best fiscal stimulus was a VAT cut, and that such a cut gives a little boost to consumer demand and stops us hitting the bottom too hard. Is this another split in the Tory party?

With the greatest respect to the hon. Lady, I should say that I think that she is reading the planted Whips’ note from three weeks ago. It has not been updated to take account of the fact that my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) has made it very clear that, given the scale of Government borrowing, this could not be afforded. He said that in the House and on many occasions. I apologise, but if that was a Whips’ note issued yesterday, the Labour party needs a new set of Whips as well as a new set of notes.

On the hon. Gentleman’s plans for recapitalisation and repairing the banks, why has the Conservative party set its mind and not made any positive comments about the use of what might be described as the “bad bank” solution—that is, taking bad debts off the banks’ balance sheets so that they feel more confident about lending to each other? Has that been a consideration in policy making within the hon. Gentleman’s party?

We are looking at all the options. The idea of a bad bank is at least worth considering, although the problems that the troubled assets relief programme, or TARP, encountered in the United States make it clear that that route is not easy. However, as I am sure the hon. Gentleman is aware, because of his knowledge in this area, there is plenty of speculation that this may not be the end of the story of bank recapitalisation when it comes to rescuing the banks. We may need some further form of recapitalisation. That might take the form of injections of share equity, as we have seen, or something else, such as a TARP scheme for the United Kingdom. It is not sensible to rule any of those options out, but if we look at the problems with the Paulson plan—or the Paulson-Geithner plan; we will see what Mr. Geithner does in office—we see that there may be other, better routes to pursue.

Another aspect of bank recapitalisation was raised by my hon. Friend the Member for Bournemouth, East. As I said, there remains an acute shortage of credit. An over-leveraged economy is de-leveraging at an alarming rate, and money is being withdrawn from our economy—withdrawn because those who used to fund loans from the wholesale markets cannot get that wholesale funding; withdrawn as US money market funds and other international investors pull back from the UK because they can see the truth about our economic prospects; and withdrawn as recapitalised banks use what resources they have to pay the Government’s coupon or buy out the Government’s stake as quickly as possible, instead of using the resources to lend out to business.

The fact is that the 12 per cent. rate that we are charging the banks is too high; it is more than twice the rate that the American Government are charging and half as high again as the rate that the Germans and French are demanding. Instead of summoning the bank chiefs to endless summits and briefing the press in advance about the ticking-off that they are going to get, the Chancellor would surely spend his time better looking at exactly what he is asking the banks to do. He wants them to pay the Government coupon, repay the preference shares, rebuild their balance sheets, lend more money in a deteriorating economy and pass on rate cuts to borrowers while protecting rates for savers—no wonder that last week the Council of Mortgage Lenders took what for it was the pretty extraordinary step of issuing a press statement:

“Current policy objectives are conflicting and incoherent…The tug of war with lenders being pulled in every direction at once needs to end.”

The Treasury and the Prime Minister need to go back and negotiate a different deal with the banks, cut preference share rates, and cut the costs of the inter-bank guarantees, as the Dutch have done. If that requires them to swallow some pride, they should swallow a bit more and introduce, alongside the recapitalisation deal, the Conservatives’ national loan guarantee scheme, for which we have been calling for over a month.

Earlier, in his statement on the European Council, the Prime Minister said that the Chancellor is about to announce a lending scheme of some sort. We will wait to hear what he has to say about that. I hope that he follows our lead and the model that we have set out, which has been discussed with and approved by many business organisations and individual businesses. We need the Government to underwrite, for a fee, lending from the banks to businesses in the same way as they are underwriting lending from one bank to another. That is the only way to ensure that sound firms get their overdrafts extended and their loan facilities renewed. It will not be enough merely again to back up securitisation in the international markets.

I would argue that directly guaranteeing lending is the only way to restart the credit insurance that, for example, underpins the supply chain, the absence of which contributed to the sad demise of Woolworths. Everyone knows that that is required. The CBI, the Federation of Small Businesses and the British Chambers of Commerce all support a version of the Conservatives’ national loan guarantee scheme, and it needs to be introduced now. The Chancellor of the Exchequer, who has a long and distinguished history of copying the ideas that we propose from this Dispatch Box, is more than welcome to copy this one. If he does, it is of course an admission that the Government are looking to the Conservative party for solutions to the Labour party’s recession.

To substantiate what my hon. Friend is saying about our proposals for a loan guarantee scheme, is he aware of further evidence—if that is required—from a new survey by Essex chamber of commerce showing that a quarter of all businesses have found that their banking terms and conditions have deteriorated markedly in recent weeks courtesy of the banks’ tightening of conditions? There is clear evidence that credit flows are not working and small businesses are suffering, and the Bank needs to stop talking, get on its bike and start acting to get some fresh proposals.

I agree with my hon. Friend, and I would be delighted to read the survey from Essex chamber of commerce. He makes a good point. There are all sorts of ways in which credit is being withdrawn from businesses. In some cases it is simply refused, in others a very high interest rate is being charged, and in others a very high arrangement fee is being charged. This credit famine is manifesting itself in several different ways. There are other ways in which the Government can help businesses that are struggling to stay afloat and to keep people in work, which I entirely agree with the right hon. Member for Birkenhead (Mr. Field) is the key priority for the Government. They could allow businesses to defer their VAT and tax bills, cut national insurance costs for the smallest employers, or provide a chapter 11-style breathing space so that problems can be worked out before the liquidators are sent in.

I will certainly give way to my hon. Friend, who has excellent connections with the German Christian Democrats.

I thank my hon. Friend for giving way, although this is not a question about Germany. One of the sectors that have been particularly badly affected by the credit crunch is that of housing associations building social housing, which are being offered terms by banks whereby they will get new loans only if they renegotiate the terms of their existing loans to give them higher interest rates. Does he agree that one of the worst effects of the inability to get banks lending falls on people in our society who desperately need new houses and proper Government financing to be delivered for those homes now?

I absolutely agree with my hon. Friend that that is another example of how the credit problems in the economy are affecting all sorts of different sectors. One of the Prime Minister’s great boasts was that he was going to build 3 million homes, but house building has virtually ground to a halt. That is due not only to the lack of a market for homes to be sold to the private sector but to the lack of credit for social landlords and the like. That is further evidence of why we need to address the credit problems.

I have given way to both hon. Members, and as many Members wish to speak in this debate I shall make a little more progress.

The Government can do other things to help businesses, all of which would keep people in work over the coming months, which must be the priority. With a freeze on council tax, which I am delighted to say many Conservative-controlled councils are trying to bring about anyway, and which a Conservative Government would help them to bring about, we can bring rising household bills down and give greater confidence in the future.

That greater confidence has to be the priority. We have to rebuild confidence in Britain’s ability to pay its way in the world. People need to know that we can bring public spending under control and get government to live within its means. Our independent office for budget responsibility will tell the country the truth about this country’s liabilities, including the liabilities for the 10 years of dodgy PFI deals that they all signed up to.

On the point of control of Government expenditure, the hon. Gentleman is making a thoughtful speech—he is more thoughtful today than he is often, and I salute him for that—and I understand that in the medium term he cannot tell what will happen to the economy, as none of us can. However, perhaps he could tell us, without contrasting it with the spending of the Labour Government, what the position of his party is in the medium term on the percentage of gross domestic product that a Conservative Government would spend each year?