With permission, Mr. Speaker, I shall make a statement on the European Council held in Brussels last Thursday and Friday, which I attended with the Chancellor and the Foreign Secretary, and which once again emphasised the importance of European and international co-operation to address this financial crisis.

In October and November, all European and then G20 countries agreed to recapitalise the banks. In November, both the European Union and the G20 agreed on co-ordinated fiscal action to support employment and growth. Just as in the previous summit in December, Europe led the way towards a global climate change deal, which we hope to secure in Copenhagen later this year. Europe has now made proposals in advance of the G20 meeting in London to reshape the global financial and trading system and to do what is necessary to build economic recovery across the world.

First, we agreed that the global challenges we face today cannot be met if nations turn inwards to a protectionism that—history tells us—in the end protects no one. Our agreement to

“avoid all forms of protectionist measures”

will require careful monitoring by the World Trade Organisation. The Council agreed to encourage international trade by facilitating more trade credits, and the Council called for a

“swift conclusion of bilateral trade negotiations and of the…Doha Development Agenda.”

Secondly, we agreed measures to put to the G20 for global agreements to reshape the regulation of banks and financial services. We agreed that all systemically important institutions should be subject to appropriate regulation and oversight, and that this would extend to include hedge funds and the shadow banking sector. We pledged to protect the world’s financial system from non-transparent, non-co-operative and loosely regulated jurisdictions, including offshore centres and tax havens. We welcome the progress that has already been made by Switzerland, Austria, Andorra, Lichtenstein and other countries, and look forward to seeing them implement the international standard—[Interruption.]

Order. The way we do things is that we hear the statement that the Prime Minister has to make, and then questions are asked of him.

We call on all countries yet to endorse the OECD standard to do so urgently.

The Council also agreed to improve supervisory co-operation by pushing forward with colleges of supervisors for all major cross-border financial institutions. We also agreed to adopt international principles on remuneration in the financial sector, based on an approach that rewards long-term success rather than excessive risk-taking. We called on the Council and the European Parliament

“to rapidly reach agreement on the legislative acts relating to credit rating agencies, the solvency of insurance companies, the capital requirements for banks, and cross-border payments and electronic money”.

At its next meeting in June, the Council will take its first decisions on regulation and supervision following the de Larosière report. Our policy is that regulatory rules should be set at an international level but that direct supervision is a matter for our national authorities.

The Council was clear that by acting together, the European Union can

“put its financial sector on a sound footing, get credit flowing to the real economy and protect its citizens from the worst impacts of the crisis”,

as well as helping to build a stronger economy for the future. The Council welcomed the Commission’s proposal to double, to €50 billion, balance of payments assistance so that those within the European Union have the support they need to deliver the fiscal stimulus required to ensure their recovery. But with global capital flows in 2008 down by more than 80 per cent. compared with 2007, and with the financing gap for emerging economies this year up to $800 billion, this is not just an issue for central European, eastern European and emerging economies. Because of the continuing risk of contagion, it is an issue for every country in the world. It is vital that we increase the resources available to the International Monetary Fund to ensure that it can intervene to stabilise economies, stop the crisis spreading, and return the global economy to growth.

The Council called for a very substantial increase in resources available to the IMF, and agreed that, for their contribution to this increase, EU member states should as a first step provide on a voluntary basis a fast temporary support of IMF lending capacity in the form of a loan of over $100 billion. The Council called for continued

“international coordination of fiscal stimulus measures.”

It agreed that:

“Good progress has been made in implementing the…Economic Recovery Plan”,

and that while we must ensure fiscal sustainability in the medium term,

“the size of the fiscal effort (around 3.3 per cent. of EU GDP or over €400 billion) will generate new investments, boost demand, create jobs and help the EU move to a low-carbon economy.”

We agreed a further €5 billion to be invested in stimulus projects in energy security, renewable energy and broadband. The agreement provides for at least €220 million of additional investment in UK carbon capture and storage and offshore wind projects.

We have seen an unprecedented fiscal injection in almost every major economy: in France, a package worth €26 billion with further recent measures worth €2.6 billion; in Spain, an infrastructure package worth €11 billion alongside other measures, with the IMF estimating a total stimulus of 2.3 per cent. of GDP; and in Germany, not one but two fiscal stimulus packages totalling €82 billion—1.5 per cent. of its GDP this year and 2 per cent. of GDP in 2010. As the Council concluded, Europe’s determination is

“to do what is necessary to restore jobs and growth.”

The Council also reached important conclusions on energy security and climate change, on the eastern partnership and the relationship with the United States. The Council remains committed to working for a worldwide and comprehensive climate change agreement in Copenhagen. Following the December council, Europe became the first continent in history to make legally binding the detailed policies required to set itself on a path to a low-carbon economy. There is a commitment to a 30 per cent. reduction in emissions, provided that other countries make comparable commitments according to their capabilities. But our success in Copenhagen will depend on unlocking negotiations with developing countries. The Council therefore agreed that within the framework of a future comprehensive climate agreement, the European Union will take on its fair share of financing for green technologies, reducing deforestation and protecting the poorest from the impacts of climate change.

The global economic downturn is no time to walk away from our commitments to the developing world. The Council agreed that Europe should continue to play a leading role in supporting developing countries in order to avoid jeopardising the progress achieved in recent years and undermining their economic and political stability. The Council agreed that commitments to increase development assistance and to deliver on the millennium development goals must be honoured. The Council also emphasised the importance of promoting stability, good governance and economic development in the eastern neighbourhood.

Finally, in looking ahead to the informal EU-US summit to be held in Prague next month, the Council welcomed the inauguration of President Obama and reaffirmed the strategic importance of transatlantic relations. At this moment of international economic crisis, we are showing that Europe and the world can work together to achieve co-ordinated interest rate cuts, substantial fiscal stimulus, banking reform, new rules for tax havens and new rules for remuneration. I commend this statement to the House.

Before asking the Prime Minister about his statement today, may I ask him about reporting back to the House on the outcome of next week’s G20? Given that it is taking place on the day when the House rises, will he consider making a statement that evening?

Before turning to the economy, I welcome what the Prime Minister says in the communiqué about the climate change agreement in Copenhagen. I also agree with what he says about the importance of not walking away from developing countries at this time.

On the economy, I want to ask about trade, financial reform and the recession in Europe. First, on trade, this communiqué talks about the importance of the Doha round, but frankly, so did the last one and the one before that. Since then we have seen “Buy America” programmes from the US Congress, higher agricultural tariffs in India, French Ministers boasting of repatriating jobs from Slovenia back to France and the Prime Minister talking about “British jobs for British workers”. The task of the London summit should be urgently to agree the key issues of the Doha round. That should be the key aim. Will the Prime Minister confirm that the existing trade rules in fact allow countries to double their revenues from tariffs? Is freezing existing tariffs not a pretty minimum acceptable outcome for the London summit?

Secondly, on financial rules and financial reform, we need rules that force banks to hold more capital when the economy is strong. We have been pressing for such counter-cyclical capital requirements for more than a year now. Will this communiqué mean that that actually happens, and do we not need the same sense of urgency when it comes to the supervisory colleges of regulators? The Prime Minister’s office announced that they would be established by the summer, but the communiqué is now talking about it happening by the end of 2009. Can the Prime Minister tell us whether the deadline has slipped?

I agree with the Prime Minister that it is better to have co-ordination than a single European regulator that overrides national regulation, but would it not be easier to resist such a European regulator if he would accept that the tripartite system that he put in place in 1997 simply has not worked and needs reform? Does he not need to admit that clearly and frankly today?

Next, on recession in Europe, the Prime Minister repeatedly lectures everyone in this House and beyond that he is uniquely forging a consensus in Europe on how to deal with recession. Does not that claim now look completely ridiculous? Are there not three examples of that? The first is whether we in Britain can afford a fiscal stimulus, the second what that stimulus should consist of, and the third whether he is any good at actually implementing the measures that he has announced. Let me take each in turn.

Is this a question or a statement?

There will be a question if you are patient.

Is it not remarkable—that is a question—that today the CBI, which is the organisation responsible for representing businesses large and small, said—[Interruption.] Labour Members should perhaps spend a bit less time filling out their expenses and listen to the CBI. The CBI said that

“a further significant fiscal stimulus is unaffordable and would lead to businesses and households retrenching”.

Instead, the CBI says, the Chancellor needs to

“deliver a clear and credible”—[Interruption.]

Order. Mr. Austin, for a few months you have been quiet, and now you have begun to shout again. You just cannot do that. I keep telling you that you cannot do it. By the way, Ms Thornberry, the right hon. Gentleman is in order. If he were out of order, I would be the first to tell him. It would not be you telling him, it would be me. How is that?

Thank you, Mr. Speaker. I thought the hon. Gentleman was getting better, too, but I am an optimist.

The CBI says that the Chancellor

“needs to… deliver a clear and credible plan for restoring the public finances to health”.

Is not the CBI right and the Prime Minister wrong?

Last week, we had the worst set of public finance figures in our peacetime history. We are forecast to have the largest budget deficit of any G20 economy next year—almost twice as large as for the G20 as a whole. Is the view in Europe not clear? As the German Chancellor says:

“We should not be competing for the most unrealistic fiscal stimulus”.

Is she not right?

Let me put it another way. This week, the Prime Minister goes to south America. Will he confirm that only one country in the whole of south America entered recession with a higher deficit than Britain—not Argentina, not Paraguay, not Uruguay and not Ecuador, which all managed to balance the books better than the Prime Minister? Is it not something when the British Prime Minister has to go to a conference in Latin America to get a lecture on fiscal responsibility and prudence?

The Prime Minister is criticised in Europe for not only affordability, but the make-up of his stimulus. No one else is copying his policy of cutting VAT. Indeed, the consensus in Europe is that it made things worse. The French President said:

“We won’t be repeating Gordon Brown’s mistakes”

and that the VAT cut had “absolutely not worked”. The German Finance Minister said that the debt will take a generation to pay off.

The Prime Minister is not only wrong about affordability and VAT; everyone thinks that he is getting implementation wrong, too. Can he not see that, when his various schemes exist only in a press release, they do not help build confidence and instead destroy it? The home owners mortgage support scheme and the recruitment subsidies for the unemployed were announced months ago, but are still not available. Should he not listen to the German Chancellor, who said that

“if we want to make a real impact, you really must implement the package first before you talk about the next step”?

Instead of listening to his lectures, we should all be clear about what the Prime Minister is delivering—a longer recession than the United States or the eurozone, the fastest rise in unemployment since records began and the worst public sector deficit in British peacetime history. When will the Prime Minister understand the need for change? Should that change not start with his acknowledging properly and apologising for the mistakes that have led this country to that position? Is it not time to start now, with “Sorry”?

I will deal with each point in turn, but is the central point not that, in the face of a global recession, unemployment and a loss of output, alone in Europe and alone in the rest of the world, isolated even from the Conservative party in Europe, the Conservatives’ only response to the recession is to cut public services and public spending, except for the £200,000 that 3,000 people will get in inheritance tax?

Our priorities are to raise the pension for everyone, which we are doing; to raise child benefit for everyone, which we have done; and to ensure a VAT cut for everyone. The Conservative party’s policy is a £2 billion tax cut for the smallest number of people in Britain—the 3,000 people who will benefit from an inheritance tax cut. Is it not time for the Conservatives to face up to the fact that their policy is a 6p a week cut in the licence fee for the many and a £200,000 cut in inheritance tax for the few? Usually in times of difficulty, the few who have money help the many; only the Conservative party says that, in times of difficulty, the many should come to the aid of the few. [Interruption.] What am I on about? I am on about the Conservative policy, which Conservative Members say is a priority. At a time of crisis, they say that there is nothing for pensions, nothing for child benefit, nothing for public services except cuts, but tell us today that they are going ahead with an inheritance tax cut, which will help 3,000 people and give them £200,000 each. At least the shadow shadow Chancellor spotted that that was a difficulty, but he is not here because he is so out of synch with the Conservative party. He disagrees on VAT, the married couple’s allowance, Europe, and now the inheritance tax cut. The Conservative party is out of touch with the rest of the country. [Interruption.] They will have to face up to that one day—their priority is an inheritance tax cut for the few, whereas ours is to help the many.

As to trade—[Hon. Members: “Hooray.”] I know that the Conservatives are grateful that we have moved off what I will be coming back to in a minute. As to trade, we are working with the developing countries to see whether we can get a trade deal, but I have to tell the right hon. Gentleman that the problem is not Britain or Europe. The problem on the trade deal—as he would see, if the Conservatives were serious about it and if they wanted to face up to it—is that we have to get an agreement between America and India on very difficult and sensitive negotiations, which we are trying to move forward.

As for the colleges of supervisors, which the right hon. Gentleman mentioned, I have to tell him that instead of none having been established, as he said, 25 colleges of supervisors have been established to cover the financial institutions right across the world.

As far as delivery of policies is concerned, the right hon. Gentleman might want to notice that 90,000 companies are already benefiting from the schemes that we have put in place. He might want to know also that large numbers of people are benefiting from the greater support that we are giving in income support to those who are unemployed and who need help with their mortgages. None of those policies is supported by the Conservative party.

As for the right hon. Gentleman’s quotations of Chancellor Merkel, President Sarkozy and other European leaders, is it not remarkable that he is trying to quote them in evidence the week after he walked away from the European People’s party and linked up with the Czech forum, which says that there is no problem with climate change, and the Polish party of law and order—[Interruption.] I have to say to the Conservatives that they are isolated from the German Christian Democrats, that they are isolated from the French Conservative party of President Sarkozy and that they are now isolated from the party of Mr. Berlusconi in Italy. The Conservatives are out of touch with the European mainstream—so much so that the President of the Commission has criticised them, as has the President of the Parliament, and the chambers of commerce have said that it is a matter of regret that they are moving to the fringes in this country.

As for the delivery of policies, let me be absolutely clear that in every area in which we are working, we are trying to move forward, but that requires money. The only party that is refusing to support a fiscal stimulus is the Conservative party. It is the Conservatives who are out of step with Europe; it is they who are out of touch with public opinion; and it is they who are out of their depth when it comes to dealing with the economy.

I thank the Prime Minister for his statement, in which there is much to welcome. The principle of a common European framework of regulation in financial services is a significant step forward, and one that we have been advocating for many years. There will continue to be differences in detail—he alluded to them himself—but the principle of cross-border regulation of cross-border finance will be welcomed by all but the most small-minded Eurosceptics. The eastern partnership with countries such as Georgia and Ukraine is also welcome, not least because of Russia’s sometimes belligerent attitude towards its neighbours.

I remember in years gone by that the whole of Europe would groan every time the Prime Minister made another tub-thumping speech about how superior his policies were to everybody else’s, so it is good that the idea finally appears to have dawned on him that he does not have all the answers and that he might even have a thing or two to learn from our European Union neighbours. Is the problem not now that, even with a touch of new-found humility, it is hard for him to lead at the G20 summit and in the European Union, because he does not practise at home what he preaches to them abroad? Would his rhetoric about stopping protectionism not pack more of a punch if he had not indulged in populist rhetoric about “British jobs for British workers”? Would his words about cracking down on tax havens not be more compelling if he had not presided for 12 years over industrial scale tax avoidance by British banks and big businesses here in Britain?

When the Prime Minister tries to act as President Obama’s agent in Europe and persuade his European counterparts to issue another fiscal stimulus, would those leaders not listen to him more if he had not blown £12.5 billion on his wasteful VAT cut? Would those leaders not be more likely to listen to his recommendation that economic recovery must be driven by green investment if he was actually making those investments at home, rather than talking—as he did the other week—about 400,000 fantasy green jobs, which he has no idea how to create? If he had used the VAT money, as we proposed, to invest in public transport and in a transformation of our housing stock, he could have created 100,000 new jobs starting right now.

It is becoming increasingly clear that it will be difficult for Britain to afford a sustained, major new fiscal stimulus to boost our economy. Is it not therefore clear that we must take drastic action to ensure that we stop wasting any more money on things that do not create jobs? Will the Prime Minister commit immediately to cancelling the VAT cut and investing what money there is left in green transport, in the insulation of our homes, schools and hospitals, and in jobs? Did he not wonder, as he looked round the table at the other EU leaders at the summit, why not one of them had copied his cut in sales tax? Will he admit that they were right to choose to invest money in jobs instead?

The right hon. Gentleman wants us to spend money on insulating homes, and we are doing that. He wants us to spend money on investing in schools, and we are investing more than in any previous year. He wants us to invest money in hospitals, and we are doing more than we have done. I thought that he would support the £44 billion of public investment that is being put into the economy, instead of failing to support it today.

As far as tax havens are concerned, in every Budget since 1997 we have tried to crack down on the use of tax havens. We have taken action that, since 2005, has secured £14 billion of funds that would otherwise have been lost in tax avoidance. We know that we have to get a global agreement, however, and that is why we are pressing other countries to sign up to the international standards that are necessary. That means that Switzerland, Liechtenstein, Hong Kong and Singapore—areas that have been regarded as tax havens in the past—have got to come within the net. [Interruption.] And, yes, other parts of the world have got to come in, and I hope that the Opposition will join us in demanding that.

As far as the low-carbon recovery is concerned, the right hon. Gentleman should know that we are investing, and ready to invest, as I announced today, in major projects of energy infrastructure—[Interruption.]

Order. Mr. Mackay, you are another regular who seems to want to shout across the Chamber, particularly at the Prime Minister. You are down to ask a question, but you cannot keep shouting and then expect to be called.

As I was saying, the right hon. Member for Sheffield, Hallam (Mr. Clegg) can be sure that we are investing in low-carbon projects, and that we want to continue to do so. On the fiscal stimulus, I am not surprised that he is opposing it now. The reason for that is that he is committed to £20 billion of public spending cuts.

Is it not appropriate that the Prime Minister should seek consensus within the European Union, within the group of 20 and with the United States of America at the meeting in Prague next month in relation to the first global recession, and that he should link it with climate change proposals and, not forgetting the less developed world, with the millennium development goals? Is it not a pity, or even a tragedy, that the whole House cannot support that consensus?

This is a global problem that requires global solutions. I do not think that anybody in our country is in any doubt about that. There are four problems that must be solved if the global economy and our global society are to work better in the future. The first is financial instability, and that is why we are proposing the measures that we are proposing. The second is climate change and the need for energy that must be met in the future, which is why we are looking forward to a Copenhagen agreement. The third is security for people in a world of greater mobility and yet greater terrorism, and we have to deal with that as a global problem as well. The fourth is the poverty and inequality that led us to propose the millennium development goals in the first place. Everybody knows that those problems cannot be solved by Britain, America or any other country alone; they can be solved only by the world working together.

I saw pictures at the weekend of the Prime Minister engaging in a lot of back-slapping and bonhomie with President Sarkozy of France. Does he think that, as a result of his conversations, President Sarkozy will implement a VAT cut, as we have here?

The right hon. Gentleman is the first to say that we should not all do everything in exactly the same way in Europe. It is important to get a fiscal stimulus, but it is also important that countries choose the way in which they want to do that, as he will always acknowledge. We have chosen to do certain things, as have the French and the Germans. What is common, however, is that they are in favour of a fiscal stimulus and not, like the Conservatives, in favour of public spending cuts.

Is it not time that the whole House, including the Opposition parties, recognised that the Government have been absolutely right to attach the highest priority to stabilising the banking system? Is it not the case that the more we learn about the Royal Bank of Scotland, the more we realise that its shareholders and customers are entitled to become angrier and angrier? In view of the reports in certain newspapers, it is really no excuse for independent directors to say that they might have lost their jobs if they had stood up to the senior officers; surely that is the purpose of having independent directors.

My right hon. Friend is absolutely right. Independent directors are there not to rubber stamp decisions made by management, but to question them and to hold management accountable. I think that the Walker review, which is looking at the role of directors and people who sit on the boards of financial institutions, will conclude that a change of behaviour in the boardrooms is necessary. I think the whole country is angry at the practices we have seen in the Royal Bank of Scotland, and we condemn them.

On Second Reading of the Bank of England Bill in November 1997, the Prime Minister may remember that I strongly opposed the triangular regulation of our banks, which has proved such a disaster. In today’s circumstances, facing as we are the danger of mass unemployment for years to come in this country and throughout Europe, may I repeat what I indicated before the pre-Budget report—that I am a strong believer in fiscal stimuli, well chosen in every advanced country in the world, together with quantitative easing to maintain consumer demand, if we are to avoid the terrible mistakes made in Germany 80 years ago by Chancellor Bruning, from whom the present German Chancellor has mercifully learned the right lessons?

I am grateful to the hon. Gentleman for his comments. When the private sector fails, and when banks fail and falter, it is the Government’s duty to step in. If we are to have the level of economic activity in the economy that we want, there needs to be monetary activism, as the hon. Gentleman proposed, and also fiscal activism. I cannot see how the Conservative party can continue to resist the idea that we should have, as we are having, a fiscal stimulus in the economy. The CBI supported our fiscal stimulus and wanted it to happen in November when we announced it. It has supported the measures we have taken.

I welcome the fact that the European Council has adopted many of the ideas that the Prime Minister has advocated consistently now for months—a co-ordinated response on regulation and, yes, on a huge fiscal stimulus. Is it not extraordinary to get the same vacuous and juvenile posturing from the Leader of the Opposition when unemployment is 7.6 per cent. across the European Union and expected to rise to more than 10 per cent., with about 5 million jobs still to be lost across the EU? What we need in that context is huge public investment: the Tories simply will not learn the lessons of the 1930s and, yes, their own failure in the 1980s to tackle these problems through the power of government, using a fiscal stimulus to do so.

My right hon. Friend is absolutely right. It is right at this time to use the Government’s powers to help people who are unemployed, to help mortgage holders with their mortgages and to help small businesses get the funds that they need. Of all the parties I know across Europe, only this Conservative party is saying that there should be public spending cuts: the German, the French and other conservative, right-wing Governments have supported fiscal stimuli. The Tories cannot walk away from the fact that they are the only party calling for public spending cuts.

During the course of the Council, was there any discussion of the impact of the present financial crisis on defence budgets? Was there any discussion of the extent to which the countries of Europe are not fulfilling their obligations to NATO? In that regard, was there any discussion of increased defence co-operation and, in particular, the need to embrace the principles of force specialisation, interoperability and common procurement?

These matters are more appropriate for the NATO summit on 2 and 3 April. I hope that the right hon. and learned Gentleman will understand that there will be a big discussion of all those issues at that summit. I think he will find that we are meeting our obligations; I think he will find that our defence budget has continued to rise; and I think he will find that other countries of Europe are aware of their responsibilities.

The Prime Minister is right that the restoration of confidence in the financial sector and reforms depends very much on increasing transparency, oversight and regulation. With that in mind, will he turn the minds of his colleagues to the least transparent and least regulated part: credit default swaps? In that area at least, will he attempt to get as much unity as possible for a clearing-house mechanism that can introduce transparency and regulation, rather than the current free-for-all with over-the-counter dealings?

I am grateful to my right hon. Friend, who has taken an interest in the matter and written to me about the issues. We have looked at credit default swaps, and will continue to look at the risks and dangers that they pose. Obviously, the best way of dealing with such a problem is international action. We will consult with our colleagues at the time of the G20.

Does the Prime Minister recognise that his financial stimuli and counter-cyclical investments have helped some parts of the UK, particularly the financial sector in the south-east of England, unfortunately without much benefit outside that area? When he next talks about public, taxpayers’ investment, will he consider the effects on the rest of the UK? Precious little is filtering through to other parts of the UK, as we saw in last week’s unemployment and job creation figures.

Every pensioner in the United Kingdom got the benefit of the pension rise, every family got the benefit of the child benefit rise that started from the beginning of January, and every family has got the benefit of the cut in VAT, which extends to the whole of the United Kingdom. Also, every community is getting the benefit of further public investment, which we have instructed to be advanced to help keep jobs in our economy. So I disagree with the hon. Gentleman: the benefits that we are trying to spread to the whole of the country to deal with the crisis include benefits to Wales.

In his statement, the Prime Minister rightly highlighted the need to have economic stability, good governance and economic development in the eastern neighbourhood. Were there any discussions on some countries, particularly Romania, which, although they are in the European Union, still have considerable internal problems with good governance, about how they can be helped with not only their economic problems but their internal governance problems?

As you know, Mr. Speaker, some changes have taken place in Romania, and it is important to remind it of its responsibilities. If it signs up, as it is doing, to the European Union, it must meet the test of democracy. The European Union has that explicit test to enable members to join, and Romania is not excluded from that test.

In discussing the financial crisis with his colleagues at the Council, did the Prime Minister draw to their attention the important report of the National Audit Office on the nationalisation of Northern Rock? Did he consider with them the lessons that can be learned from the report’s finding that in 2004 the Treasury over which he presided was specifically warned that we were ill-equipped to deal with a systemic banking crisis, but decided that the issue was not a high priority? Does he now regret his failure to take that warning seriously?

Long after 2004, we did a number of exercises with the American authorities about what we would do in situations in which individual banks collapsed and about whether there was a systemic crisis as a result. Far from not taking action, we did take action and looked at what the global repercussions of individual bank failures would be. We talked to the United States Treasury and Federal Reserve and the regulators. The right hon. and learned Gentleman must recognise that Northern Rock, among other companies in the United Kingdom, was buying assets, from the United States of America, which were at that time labelled triple A but which turned out to be absolutely worthless. So there is also a failure in international regulation, which must be dealt with. I hope that he will agree that the measures that we are taking at the G20 are the right ones to take.

Forty per cent. of the jobless in the United Kingdom are under 25, and we face the prospect of rapidly rising unemployment this year, especially as young people leave education. What did my Friend learn from his counterparts across the European Union about what can be done specifically to help young people into work?

I can tell my hon. Friend what we are doing. We are determined to ensure that school leavers who leave in the summer are given the best possible chance to obtain training or jobs, or to stay on in further education if that is what they wish to do. We will be introducing measures to ensure that as many young people as possible are given that benefit, and I am sure that the same will be happening in other parts of Europe.

Did the Prime Minister have a chance to discuss with his colleagues at the Council the five European Union directives that are in the pipeline, all of which could impose considerable costs on employers? I am sure he agrees that at a time of high and rising unemployment, the last thing that we ought to be doing is imposing additional costs on employers, whether they are in the public or the private sector. Would he consider giving a lead in Europe in calling for a moratorium on regulation that imposes costs on employers until the recession is over?

Environmental and other regulations have been put forward by the European Union. Part of our promise of a low-carbon recovery is that we will be able to make progress on the environment. I will of course look at what the hon. Gentleman called the five regulations—although he did not name them—and will write to him.

The European Council’s pledge to protect the world’s financial systems from opaque and unco-operative tax havens is naturally good news, but will the Prime Minister tell us how he intends to implement that in our own country? We have four major banking groups. Two are effectively under national ownership and might be expected to respond to leverage on co-operation, but the other two—HSBC and Barclays—have long promoted tax evasion and avoidance schemes using offshore tax havens. How will the Prime Minister secure their co-operation?

Tax evasion is illegal, and we are dealing with it in the ways in which we can. If anyone has evidence of tax evasion, they should supply it to the prosecuting authorities. As for tax avoidance schemes, every Budget attempts to deal with the problems that arise from tax avoidance. We introduced new rules in 2005, and, as I have said, about £14 billion in revenues has been saved as a result. However, anyone who has any evidence of tax evasion should tell us.

Whatever people’s degree of enthusiasm for the European Union, it is commonly accepted that the free movement of people, goods, services and capital is a huge achievement, and that anything that undermined it would be very destructive of prosperity. In the light of that, when we reach the G20 may we have not just another mantra about the evils of protectionism, but a promise of some action to promote free trade and combat protectionism? Will we see an agreement among our leaders that they will stop this competitive playing to the protectionist gallery, which simply encourages sentiments that will destroy jobs, and to which the Prime Minister himself is not immune?

The right hon. Gentleman is absolutely right. At the G20 we will receive a report from Mr. Lamy, the head of the World Trade Organisation, about any protectionist measures that have been taken by individual countries over the last few months. The WTO will continue to monitor that protection, and will report to us regularly. As for the promotion of trade, we are anxious to facilitate trade by making available what has been missing for many months: the level of export credits and trade support that is necessary for world trade to resume, and for us to secure the growth in world trade that is necessary for recovery.

Will my right hon. Friend help the House by answering this question? How many jobs would be secured by a cut in inheritance tax?

If we were looking for job creation measures, that would not be at the top of the agenda. I remind Members that while the Conservatives are proposing public spending cuts in every other area, they are proposing to spend £2 billion on the estates of a very small number of people. I believe that they should think again.

What reassurance and hope can be offered to those who, 20 years ago, were citizens of the Warsaw pact and placed their hope and their trust in responsible capitalism, but who now feel that their world is falling about them, and feel totally disillusioned?

The hon. Gentleman is right. We have a huge problem in parts of eastern and central Europe, because German banks, Austrian banks, Italian banks, Belgian banks and even British banks are having to withdraw, or are withdrawing, to their own home bases. What we therefore need is an international effort to help individual countries that do not have resources of their own with which to rebuild their banking systems. That is why the European Union has raised its balance of payments assistance to those countries, and that is why when we meet at the G20 we will want the International Monetary Fund to have the additional resources that are necessary to deal with crises. But we do not want just to deal with crises; we want to prevent crises, so we will have to look at better mechanisms by which we can help those countries of central and eastern Europe that are being let down by the current financial crisis.

I strongly welcome the Prime Minister’s belief in more transparency. In that spirit, can he now tell us how much taxpayers’ money is at risk in bank support and bank guarantees and in all the off-balance-sheet devices this Government have gone in for? The British public have a right to know how much of their money is at risk.

This is the man who told us:

“We see no need to continue to regulate the provision of mortgage finance”.

This is the man who kept pressing us to deregulate more and more. The problem we have to face is that we have to intervene to save both the banks and the financial institutions so that people’s savings are safe, and I hope the right hon. Gentleman will agree that one thing is that, despite all the difficulties we have seen, people’s savings have been safe.

The Prime Minister may know that today the hapless Lord Myners has signed off the European Commission’s endorsement of the de Larosière report for the creation of a Europe-wide banking and financial rules framework, which—contrary to the statement the Prime Minister has just made—involves in practice majority voting and European Court jurisdiction, thus eliminating national control and jurisdiction. The Government have welcomed this report; Lord Turner has welcomed this report. Will the Prime Minister come clean and ensure that Parliament, and not the European Union, controls our banking and financial services?

I have with me a copy of the letter that the Chancellor sent to the Czech Republic, which has the presidency of the EU at present. It says that, under our proposals,

“it would not have powers over national supervisors, for example to change supervisory decisions, and it would not prescribe detailed supervisory practices.”

That is our position.

The published conclusions of the Council differ hardly at all from the conclusions circulated prior to the meeting, which were available on the Danish Parliament website, before the Prime Minister ever got to the meeting, but there is one matter that did change: the size of the bail-out to other EU economies, which has now risen to €50 billion. What is the potential exposure of the British Treasury and taxpayer to this size of bail-out?

First of all, I have a copy of the conclusions of the European summit and they did change substantially from the original draft provided by the Czech presidency, and I think the right hon. Gentleman must recognise that, even on the de Larosière report, the conclusions are different from what was originally put into the text. The balance of payments facility is a European Union loan of €50 billion that is to be made available. As far as the IMF loan is concerned, we will make up our mind what our contribution will be once we analyse what other countries are doing and what Europe as a whole will do, and we will make that known before the G20.

But with such enormous debt chasing a finite capacity to lend, some commentators are now talking about what Steve Bundred of the Audit Commission has called the Armageddon scenario in which there is simply not enough money to provide for the borrowing that is being sought. Did the European Council consider this to be a serious possibility, and if so, what is Britain’s strategy to deal with it?

I have never heard an Opposition who want to talk the country down as much as this Opposition. During this whole exchange, we have had anti-European after anti-European speaking. Now, on this occasion, we have a pro-European who is now becoming anti-European as a result of things that are happening. When markets fail and banks are unable to do their job, Governments have got to step in. That is the philosophy under which we are working, and I wish it was the philosophy of the Conservative party, too.

The Prime Minister has congratulated Switzerland and others on moving towards OECD standards of transparency. Will he confirm that British Crown dependencies and overseas territories already meet those standards?

These dependent territories have got to meet these standards—that is our position.

We must all welcome the Prime Minister’s positive programme of action to tackle the global economic crisis, but will he do more to reduce the subsidy that Britain gives other EU countries through the net cost of our EU membership and the £40 billion trade deficit between this country and other EU countries, which costs this country many jobs?

It is in the interests of the whole world that these imbalances—they are imbalances not only within Europe, but around the world—are corrected. Originally, in the 1940s, when Keynes was involved in setting up the International Monetary Fund and the World Bank, he wanted a situation to develop where people were under an obligation to correct imbalances that arose in one continent or in one country. These are matters that I think he would agree have got to be looked at, not only at a European level, but internationally. We are trying, as the hon. Gentleman knows, to persuade China to take more exports from the United Kingdom, and that would be one way in which the imbalances could be reduced.

The European Council deserves our support in putting pressure on unco-operative tax havens. Why did the Prime Minister not mention Bermuda when naming the various countries that are tax havens? Has it anything to do with representations from Lord Myners?

All tax havens are now under pressure. People will not see their money as safe in these havens after the experience that people have had over these past few months. [Interruption.]

Order.

This is a matter on which the world can now come together for the first time; never before have we had the will to take action to bring unco-operative tax havens under proper jurisdiction. That is something that I believe should happen, and we should be crediting this Government with the decision to push that it should.

My right hon. Friend the Member for Witney (Mr. Cameron) asked right at the beginning about the forthcoming G20 summit; why has the Prime Minister arranged Parliament so that he cannot report back to it? Is it not a fact that he is running scared?

I think the timings of the parliamentary recess were agreed far before those of the G20. I worked very hard to get a date that was suitable to the American President and to other world leaders, and we finally agreed that the date was the date that we chose. I think I am fair in saying that the date for this summit has to be set with a view towards bringing together the whole of the world, and that is what we have done.

With permission, Mr. Speaker, I should like to make a statement on the Green Paper “Rights and Responsibilities: developing our constitutional framework”, which was laid before Parliament today. It is the next stage in what has been described as a quiet revolution in our constitutional arrangements, which, since 1997, has included: independence for the Bank of England; devolution for Scotland, Wales and Northern Ireland; independence for National Statistics; the Human Rights Act 1998; the Freedom of Information Act 2000 and the Data Protection Act 1998; and reforms to the House of Lords and of party funding.

This Green Paper deals with some of the most fundamental questions we face as individuals and as a society: how we live together; what rights and freedoms we enjoy, and from whom; and what duties and obligations we owe, and to whom. Those issues are not abstractions, removed from the practical politics of jobs and housing, health care, education, crime and disorder, because these constitutional arrangements determine how power is distributed, and therefore the conditions in which every other question in our public life will be answered.

It is because of the centrality of these issues that my right hon. Friend the Prime Minister chose to make his first major policy statement, within days of taking office, on exactly this matter of constitutional change. He told this House that it was right to involve the public

“in a sustained debate about whether there is a case for the United Kingdom developing a full British Bill of Rights and duties”.—[Official Report, 3 July 2007; Vol. 462, c. 819.]

This was to be as a step towards a written constitution. The Green Paper presents the arguments for such a Bill. It does not reach final conclusions—that is for the end of the process of national discussion—rather, it sets the framework for this debate. Indeed, if by the end of the process the Bill is perceived to provide protection to rights and freedoms, it will become effective in defining common values so that people in Britain of different backgrounds may feel ownership of it.

From the Magna Carta and the declaration of Arbroath, the 1689 Bill of Rights and the Scottish Claim of Rights, to the great Reform Acts of last two centuries, our history illustrates the proud traditions of liberty on which our nation is built. Though the profound changes that those great texts initiated were the subject of intense struggle at the time, the United Kingdom’s experience of constitutional development has been unlike that of almost any other democracy in the world.

The constitutional arrangements of most other nations have emerged from rebellion, revolution, civil war, occupation or oppression. The United States, France, India, South Africa and nations across Europe and the world, have had to set down their arrangements in a single text—a constitution, underpinned by declarations of rights. Whether legally enforceable or not, they have become abiding points of reference as to how their citizens should relate to each other and to the state, and help to define the kind of nation they wish to be. This Green Paper sets out the case for how a Bill could become a similar unifying force for the United Kingdom, not least because our own society is much more diverse, in race, religion and ethnicity than at any point in our history.

We are, self-evidently, launching this Green Paper at a time of great uncertainty and anxiety. Tackling the global recession must be our immediate priority. But acting, at the same time, to strengthen communities’ and individuals’ sense of a stake in society—by better articulating the responsibilities we owe and the rights we have—is not an alternative to decisive measures on the economic front but an essential complement to them.

One of the most significant constitutional changes in the past dozen years is the Human Rights Act 1998. I worked hard as sponsoring Minister to achieve a consensus behind it: and I commend the official Opposition for the support that they gave the Act in its final form. Prior to that Act, accessing convention rights via the Strasbourg court was a time-consuming, expensive and difficult process, and, as such, prohibitive for many. Now, those rights can be accessed in UK courts, with cases heard by UK judges.

The Act better protects the family. It has benefited all sections of society; from the elderly couple wanting to live in the same care home, to the loftiest of newspaper magnates. In providing a more practical mechanism to access rights, as well as a positive obligation on the state to protect them, countless thousands of people have benefited from the law, without necessarily having to resort to the law.

Despite that, the Act has its detractors, primarily because the atrocities of 11 September 2001 occurred less than a year after it came into force. Had those tragic events not occurred, I suggest that the HRA would have slipped comfortably into the fabric of our lives without controversy. As it was, those terrible events threw into acute relief the tensions between liberty and security. We recognise these tensions but the Government are proud of the Human Rights Act. We will neither resile from it, nor repeal it.

The principles and rights set down in the European convention—now in the HRA—are timeless. They are the mark and measure of any civilised society at any time, but in the intervening 60 years since the convention was drawn up, the rights in it have been added to by a great extension of social and economic rights—of health care, dignity in old age, education, housing and social security. But as our rights have become so much wider and stronger, one question is whether their claim is balanced properly by an equally strong sense of the responsibilities we each owe. We believe that there is a case for drawing out more clearly and explicitly the responsibilities that go with rights.

Duties and responsibilities are to be found in the convention, in statute, in common law and woven deeply into our social and moral fabric. We have a latent understanding and acceptance of our duties to one another and to the state. That said, responsibilities have been a poor cousin to rights. The Green Paper proposes that responsibilities are given greater prominence in our constitutional arrangements, better to articulate what we owe, as much as what we expect. That is how we can move away from a “rights culture” to a “rights and responsibilities culture”.

Some responsibilities are obvious, such as obeying the law, paying taxes and undertaking jury service. Others are less obviously recalled at the moment they should be exercised, such as a responsibility towards future generations to live within environmental limits, the duty we have to protect the well-being of children in our care, a civic duty to vote, responsibilities towards our neighbours, respect for those public sector workers who care for us and a responsibility towards the taxpayer—for example, not claiming benefits if one is able to work.

If we are to fulfil our responsibilities, we must have a clear understanding of what they are. As the Green Paper sets out, an accessible Bill of rights and responsibilities could be emblematic of the fair society in which we want to live, where awareness of our rights is matched with a greater understanding of our responsibilities to each other. Most of the social and economic rights to which I have referred are already embedded in law, but they are scattered across myriad legal texts. The Government believe that we should encapsulate those rights in a single document, bringing together the “new” post-war rights of social justice and the welfare state, victims’ rights, rights of equality and good administration.

A key question set out in the Green Paper is whether any Bill should have, directly or indirectly, the force of law. Bills of Rights from around the world are a combination of symbolism, aspiration and law across a spectrum of legal effect. There need not be a binary choice between the justiciable and the declaratory. As the Green Paper points out, the Government do not necessarily consider a model of directly legally enforceable rights or responsibilities to be the most appropriate.

But even without full legal enforcement, words can have great power. The universal declaration of human rights contained no legally enforceable rights, but was rather the global expression of a shared commitment and a recognition of humanity’s common dignity—what Eleanor Roosevelt described as the Magna Carta for all mankind. A Bill of rights and responsibilities for the United Kingdom could be such a declaration and could set down the values we cherish.

I have had the rare privilege of taking through this House many of the constitutional changes of the past 12 years. Throughout that time I have looked to secure the broadest political consensus behind those changes, as reform of such importance to our democracy requires nothing less.

Constitutional change should take place only on the basis of full and proper deliberation. The Green Paper has been through such a process within Government and now it is time to take the debate out to the people whom we all serve. The deliberation must not be rushed and so the Green Paper will not precede any legislation this side of a general election. We are dealing with the fundamental building blocks of our democracy, and as the Prime Minister made clear:

“Constitutional change will not be the work of just one Bill or one year or one Parliament”.—[Official Report, 3 July 2007; Vol. 462, c. 815.]

A Bill of rights and responsibilities could form the next natural and necessary step in a process that began 60 years ago with the universal declaration. It is an opportunity to bring together existing rights and responsibilities in one statute and better to define the relationship between citizen and state in a new and unifying constitutional document for this century. I commend the statement to the House.

I thank the Secretary of State for advance sight of his statement. It was not in fact needed, as it was all in The Sunday Times. Yet again, even on serious matters of constitutional reform, this Government demonstrate their disdain for this House by first announcing policy to the media. Am I correct in recalling that the Justice Secretary told the House last Tuesday:

“I might be old-fashioned, but I take the view that the place to make announcements is in the House of Commons”? —[Official Report, 17 March 2009; Vol. 489, c. 762.]

What has changed since then? Was this a decision taken by the Prime Minister?

We have had a decade of botched constitutional reform from this Government. The Justice Secretary was there from the start, and now he has been instructed by the Prime Minister to clear up the mess. In truth, there can be only two reasons for this Green Paper, which he says sets the framework of debate. Has he come to the House because he accepts that the Human Rights Act, which has been in force for less than nine years, has proved badly flawed, and that new thought is needed? Or is the statement just the latest exercise in pure spin, designed to make absolutely no difference in practice?

I have to correct the Justice Secretary: the Opposition voted against the Human Rights Act, and experience has proved that we were correct about many of the concerns that we expressed. The Act has singularly failed to protect our core freedoms. The heavy-handed abuse of the right to peaceful protest is documented in today’s report of the Joint Committee on Human Rights. As for intrusions into personal privacy, the Joseph Rowntree Reform Trust today referred to Britain as the

“most invasive surveillance state…of any Western democracy”,

and this evening, the House will again resist the Government’s latest attack on juries.

The Human Rights Act has fuelled a rights inflation; it requires UK judges to take a maximalist approach to the interpretation of convention rights that is not, in fact, required by membership of the European convention on human rights, and that has created confusion and uncertainty in practice. Does the Justice Secretary now accept that the Act has often left police and probation services unclear of where the legal boundaries are as they strive to discharge their duty to protect the public, as was shown in the tragic case of Naomi Bryant? Does he accept that the Act has saddled public service providers with heavy liabilities and has what the Audit Commission describes as

“a universal and costly impact on the way that public bodies operate”?

Will he take responsibility for the Act’s role in undermining social responsibility, as the Government oversell human rights as all things to all people? If so, how exactly will his proposals make a difference to all that?

On the contrary, the Green Paper is, it seems, destined to make each of those problems worse. Take legal confusion. Writing in The Sunday Times, the Minister of State, the right hon. Member for North Swindon (Mr. Wills), explains that

“There may well be a case for not creating new rights outside the scope of the courts”,

but he urges us none the less to

“celebrate…the rights we enjoy…through…constitutional expression”,

because

“Words have power in their own right.”

Can the Secretary of State, who is after all a lawyer, please explain what on earth his junior Minister is talking about? The question is pretty straightforward: does he favour the creation of new economic and social rights with legal force, or are we talking about an entirely cosmetic exercise? If he does want to create new economic and social rights, he needs to say so, and he needs to explain why we in this House should abdicate to unaccountable judges our responsibility, as democratic law-makers, to set the nation’s economic and social priorities, and decide how finite public resources should be allocated to meet them.

Take rights to health care. Does the Justice Secretary accept that the reality of any new human rights to health care is that they will feed the claims culture? Just this week, the NHS Litigation Authority lambasted the existing regime. Would not the new rights mean more money for lawyers and less for patients—the last thing that the taxpayer will welcome in a recession? If he does not intend to create justiciable rights, can he explain how the standing of law is not undermined by the process on which he has embarked? What are we to make of his Minister of State comparing the proposals to the Bill of Rights of 1689? Was that document merely “aspirational”? Given their track record, I begin to think that the Government might well wish that the Bill of Rights, too, was merely the pap that is being served up here.

The Justice Secretary could not put off coming to the House for ever. We have waited more than 14 months for this announcement, which has been put back time and again, scuppered each time, we are told, by his colleagues. In a vain effort to say something—anything—on how to reform the Human Rights Act, he has produced a Green Paper that can only make matters worse. May I suggest to him that on the evidence of the Green Paper, he really would be well advised to heed colleagues’ warnings? That would be better than trying to create more confusion, and undermining yet again the democratic prerogatives of this House and, above all, the clarity of the law. The Green Paper has just one saving grace: it will not result in any legislation this side of a general election—in other words, it is for the birds.

I think the hon. and learned Gentleman protests too much. He makes much of his discontent with the Human Rights Act and how that has fuelled a compensation culture.

Let me read the House a quotation:

“The Human Rights Act has many benefits which it has conferred. The Human Rights Act is dynamic. . . I don’t think the Human Rights Act has anything to do with fuelling a compensation culture at all.”

That was the shadow Attorney-General speaking to lawyers at the Stationers’ Hall, City of London, on 30 March 2005—the hon. and learned Member for Beaconsfield (Mr. Grieve), the same hon. and learned Gentleman who told the House when the Human Rights Bill was going through the House,

“As is probably well known to my colleagues and possibly to other hon. Members, I have long been a supporter of the incorporation of a human rights Bill into our law. . . I would be denying my own conscience and feelings in the matter if I did not say that I believe that incorporation is a sensible step forward.” —[Official Report, 16 February 1998; Vol. 306, c. 831-3.]

I remind the hon. and learned Gentleman that when the Bill was before the House, it was indeed the case that the Conservatives voted against it on Second Reading, but they did not vote against it on Third Reading, as the hon. and learned Gentleman has now had the grace to nod in agreement. Why? Because the Bill was much improved as a result of parliamentary scrutiny, not least from himself as an ardent supporter of the measure. When we came to Third Reading, the then shadow Attorney-General, now the noble and learned Lord Lyell, stood at the Opposition Dispatch Box and “wished the Bill well”. The Conservatives, or some tendency of the Conservative party, supports the Human Rights Act.

We were entertained at the weekend by the shadow Business Secretary, the right hon. and learned Member for Rushcliffe (Mr. Clarke), putting a torpedo through the Conservatives’ tax policy. He has also put a torpedo through the Conservatives’ failure to come up with any significant alternative to the Human Rights Act, describing his own leaders’ proposals as “xenophobic and legal nonsense”.

As I read his speeches, the hon. and learned Member for Beaconsfield must agree with most of that which is in the document, and is simply posturing to who knows whom on the Opposition Benches behind him. He is in favour of the Human Rights Act. When I read his speeches I see that he is in favour of almost everything that is in the document, as I am in favour of much that he has written, particularly recently.

To what is the hon. and learned Gentleman objecting? Is he objecting to us setting down in summary form the economic and social rights that we all enjoy? What is the problem about that? What is the problem with setting down, as we have done in slightly longer form, the rights to health care or to education? While we set down those rights, which we all enjoy and which not even the Conservative party proposes we take away—yet—is it not also sensible to set down the balancing responsibilities?

The hon. and learned Gentleman suggests that by setting in a single declaration those rights and responsibilities, we will somehow encourage the compensation culture. He has already answered that. It is nonsense. But if in the same text, along with the right to health care, we set down the responsibilities of patients, and if in the same text, along with the right to education, we set down the responsibilities of parents in respect of the education and upbringing of their children, does our society lose from that exercise or gain? I suggest that our society can only gain from such an exercise, and I invite the Opposition to join us in a serious exercise better to set out for the society that we have today the rights and responsibilities that we owe and we should enjoy.

I, too, thank the Secretary of State for early sight of the Green Paper and of his statement.

With all due respect to the hon. and learned Member for Beaconsfield (Mr. Grieve), I do not understand the position that the Conservatives are taking. They seem on some days to want the plaudits of populists for calling for the abolition of the Human Rights Act, but also to crave the respect of civil libertarians. They simply cannot have both. However, does the Secretary of State not recognise that he, too, seems to want it both ways, in how he attempts to link rights to responsibilities? He seems to want not only to satisfy those who rightly say that human rights set up a minimum standard of which no civilised Government—no matter whom they are dealing with—can fall short, but to please those who say that some people do not deserve human rights; that latter position is simply a watered down version of the position of those who want to get rid of the Human Rights Act altogether.

More fundamentally, does the Secretary of State recognise the fundamental distinction between human rights on the one hand, and the rights and responsibilities of citizenship on the other? They are not the same. Human rights set up obligations owed to all humans, and cannot be conditional. The rights of citizens, on the other hand, are not universal, and there are far fewer problems in saying that responsibilities are attached to citizenship.

Does the Secretary of State not also agree that there is a crisis of citizenship in the simple sense of people taking part in the government of their own communities? He is a great supporter of first past the post, but does he not at least accept that one of its effects is to narrow electoral politics to a few swing voters in a few marginal constituencies to the exclusion of everyone else? Is there not an irony in calling for greater commitment to citizenship just before a debate in which, as the hon. and learned Member for Beaconsfield said, the Government seek to restrict one of the best traditions of our citizenship—namely, the jury system?

The statement also seemed confused and vague on the relationship between constitutional texts and a sense of national unity. Does the Secretary of State not agree that it is not a text in itself but the experience of acting together to govern one’s own community that creates a sense of democratic identity? National identity itself very rarely creates democracies—in fact, things might be the other way round: too strong a sense of national identity might have been destructive of democratic ideals in the past century.

The Government are right to be cautious on economic and social rights. It would be a mistake, I believe, to constitutionalise too many essentially political decisions about taxing and spending. At the same time, it is already a human right not to be left in destitution and it is a plausible extension of the rights of citizens that they should have an entitlement to sufficient access to health, education and welfare services for them to be able to take part in a practical way in governing their own communities.

However, I agree with the hon. and learned Member for Beaconsfield that such rights as are included have to be properly enforceable in the courts. I am disturbed by what the Secretary of State has said about a range of rights—rights that are enforceable on the one hand, and rights that are purely declaratory or symbolic on the other. Does he agree that there is a grave danger that in creating rights that are not enforceable, he might end up diluting the whole idea of rights themselves? We have had enough of government by press release; the last thing that we need is a constitution by press release as well.

Let me deal with the hon. Gentleman’s last point. Essentially, he said that if we have a Bill, anything in it has to be justiciable; that, at least, is what I took him to say. I understand his point. I am sure that the hon. Gentleman has read the Green Paper, but I commend it to him some more. In chapter 4, we bring out the fact that if we look at equivalent documents and texts around the world, we see that not every part of a declaration, Bill of Rights or preamble to a constitution is enforceable in the same way as every other part. On page 54, we cite what is set out in article 45 of the Irish constitution. The article is declaratory, but by all accounts the Irish believe that setting out important economic and social rights in a declaratory form in their constitution meets important imperatives within their society. My view is that it is sensible for there to be rights and responsibilities across the piece in a single document. If those could be agreed between the parties in terms of education for citizenship, it would be enormously valuable, when we talk to our constituents, to be able to say, “This is what has been agreed. Whatever else the British political parties and the British people disagree about, these are the sets of basic values—rights and responsibilities—that we all agree about.” This is a good starting point. There are certain things that we agree about, but at the moment they are less articulated than they should be, particularly as regards responsibilities, and we should set them out. In its important report last summer, the Joint Committee on Human Rights said that it would be unwise to make economic and social rights directly justiciable because that would pre-empt the role of this Parliament. Of course, I accept that. However, there is greater value in having such a document than in not having it.

I am always ready to rise to the bait of discussing electoral reform, but I will not on this occasion, if the hon. Gentleman will excuse me. I will just say that there is greater concern in Norway and in the Czech Republic about the state of their democracy than there is here, notwithstanding their proportional representation systems. The whole House will have noted that I did not mention, among the major constitutional changes that this House has agreed in the past 12 years, the list system for European Parliament elections. [Interruption.] It was a manifesto commitment, your honour.

The hon. Gentleman is right to ask what the Conservatives want. I think that they want different things. In February this year, the shadow Home Secretary said that what we want is “fewer rights, more wrongs”. That was an extraordinary statement—so extraordinary that the hon. and learned Member for Beaconsfield (Mr. Grieve) had to say that he was not completely clear about what it meant. [Interruption.] As a matter of fact, I am completely clear about what “fewer rights, more wrongs” means: it means fewer rights and more wrongs. That produced complete chaos at the heart of the Tory party.

rose—

Order. Before I call the next hon. Member, I say to the House that there is enormous pressure on business today, so could I please ask for single, brief questions and, if possible, brief replies?

I welcome what my right hon. Friend said about the Human Rights Act, which stands in stark contrast to the intellectually incoherent position of the Opposition. His remarks about social and economic rights are particularly important. I agree that direct enforceability is not appropriate, but such rights need to be more than just aspirational or declamatory. Will he consider some of the options that we advanced in our report as to forms of justiciability—for example, interpretive powers for the courts, an annual report to Parliament on progress, and a bottom line that nobody should fall below in terms of their social and economic rights?

As Chairman of the Joint Committee on Human Rights, my hon. Friend has played a very important role in developing our thinking and that of the House. The answer to his question is yes. For example, we will take careful account of what is shown in recommendation 39 of his report of last July.

Given that one of the most important rights of all is freedom of religion and freedom to express one’s belief, what does this document offer in the way of hope to the British Airways stewardess who was suspended for wearing a cross, to the nurse who was suspended for saying prayers for one of her patients, to the school secretary who was suspended because her child talked about Jesus, and to the pantomime dame who believes that his rights are threatened by what we will do tonight?

I am as appalled as the hon. Gentleman by those cases. They have nothing whatever to do with the Human Rights Act, and they are absolutely shameful. I made that clear at the time, and I do so again. The right to freedom of religion is guaranteed by the European convention on human rights and the Human Rights Act. However, I hope that he will contribute to the debate that we are starting off today about whether one can better protect the rights of faith so that the kind of appalling nonsense that has taken place, to which he refers, is not repeated in future.

The Lord Chancellor quotes Britain’s constitutional history, but is not one of the prizes painfully won in that history that a British citizen’s human rights are enforceable by the courts and do not depend on a person behaving as the Government want them to behave, as long as they obey the law? If people cannot enforce their rights under the proposed Bill, and if the duties are unenforceable, is it not just a Bill of hopes and aspirations—or Straw’s sermon on the mount? I think that I prefer the original.

So do I.

I should have said to the hon. Member for Cambridge (David Howarth) that basic human rights do not depend on responsibilities. We all understand that. It is a mark of a civilised society that we are ready to give to the least worthy in our society—the people accused of the worst kinds of crimes—rights that they would never accord to us. There is no argument about that. None the less, the way in which people behave towards others is taken into account by the courts and is part of our overall moral code, and we need to articulate that better. If the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) considers what happens in other countries, he will see that Bills of Rights and declarations cover a range from aspiration to direct enforcement. I believe that our Bill of Rights could do the same.

Does the right hon. Gentleman understand that many of us who have listened to his statement will come to the following conclusion? Either the proposal means nothing at all, and is an attempt to give apparent substance to the empty mouthings of the Prime Minister, or alternatively the Justice Secretary intends to create enforceable rights—that is, enforceable at law—in which case, he will give to unelected judges huge influence over matters that are the proper responsibility of this place.

The right hon. and learned Gentleman has not, understandably, had a chance to read the document, but I ask him to do so. I hope and believe that when he has done so, he will see that it is neither of the things that he describes. It is a serious contribution to an important debate, which was initiated, among others, by the leader of the Conservative party. His party has also promised a paper on rights and responsibilities. The only difference is that it promised it three years ago, and so far it has not produced anything at all.

The Justice Secretary quite rightly made reference to our constitutional heritage, such as the Magna Carta. But the Bill of Rights of 1689 was composed and arrived at within simply months, but the gestation period that the present Government have embarked upon confuses one. All the inalienable rights that we have always assumed as a free and democratic people are available in the constitutional instruments at our disposal, including the Human Rights Act. They protect the relationship of the citizen to the state and they define it. What the Justice Secretary proposes—this confusion and mishmash—is clearly just a diversionary tactic. I agree with my right hon. and hon. Friends: the proposal is going nowhere, and the Justice Secretary knows it. We are wasting time.

I disagree with the hon. Gentleman. On the drafting of the Bill of Rights of 1689, I am not sure how long it took to transcribe, but it was certainly the subject of huge debate over many decades, including during our own civil war. It reflected a long period of gestation.

That is not right.

Well, we can have a separate debate about that; we could have it in Government time. I invite the hon. Gentleman to read the document.

As well as some dodgy history that seems to claim the Declaration of Arbroath as British history, this curious and extravagant document hints at further devolution. Will the right hon. Gentleman accept that Scotland, as a distinct legislature and community, should go its own way in terms of rights and responsibilities, and will he assure me that he will not be too prescriptive in how he applies measures across the nations of the United Kingdom?

The inclusion of the Declaration of Arbroath was a mark of respect to Scotland. As to the future, we are a Union. We are a United Kingdom of four nations in one, and there are clear competences for the sovereign Parliament of that Union, as there are for the devolved Administrations.

Does the Justice Secretary agree that when people avail themselves of their right to demonstrate, they should also be held responsible for any offences that they happen to commit in the execution of that right, and that the law should be applied consistently no matter who the demonstrators happen to be?

Of course I agree with that.

I welcome the fact that there seems to be an emphasis on social and economic responsibilities. Many people would say that those include saving for a pension, and nobody will take the emphasis seriously if the Equitable Life pensioners do not have their rights restored through the ombudsman and get the pension that is due to them.

The hon. Lady will excuse me if I do not get drawn into the issue of Equitable Life, except to say that the Human Rights Act, which the Conservatives supported and which the shadow Justice Secretary was supporting until, I think, 1 o’clock this afternoon, has given individuals, including those in a similar position to pensioners of Equitable Life, far greater rights than ever they had before.

I hope that we are going to be spared Gordon’s little red book on responsible citizens, but can we have our right to a referendum on big constitutional change at Lisbon properly observed?

The right hon. Gentleman will know that we set out in our manifesto provisions and proposals in respect of referendums, and they were also set out in the Political Parties, Elections and Referendums Act 2000.

The right hon. Gentleman might recognise this question from the sessions of the Joint Committee on Human Rights. His statement mentioned responsibilities including obeying the law, but may I ask him why paying taxes, jury service and not claiming benefits if able to work are not obeying the law? Are not all the responsibilities that he lists simply obeying the law, and therefore is it not just a gesture to the tabloids to call this a Bill of rights and responsibilities?