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European Council

Volume 541: debated on Monday 5 March 2012

With permission, Mr Speaker, I would like to make a statement on last week’s European Council. The Council focused on the measures needed to address the growth crisis in Europe and complete the single market. It also reached important conclusions on Somalia, Serbia and Syria. I will take each in turn.

First, on growth and jobs, this was the first European Council for some months that was not completely overshadowed by an air of crisis surrounding the eurozone. The problems in the eurozone are far from resolved and we need continued and determined action to deal with them, but the biggest challenge for Europe’s long-term future is to secure sustainable growth and jobs. Ahead of the Council, Britain, along with 11 other EU member states, set out in a letter our action plan for growth and jobs in Europe. This was an unprecedented alliance involving countries from all across Europe and representing over half the EU population and a quarter of a billion people. It included our traditional partners on this agenda in northern Europe, but it also included countries such as Poland, one of the largest in the EU, and countries such as Spain and Italy in the south of Europe which previously had not prioritised this agenda.

Over the past year we have frequently succeeded in inserting references to the single market and competitiveness into Council conclusions, and the Commission’s proposals have begun to reflect that, but what was encouraging about this Council was that an EU growth agenda, based around free trade, deregulation and completion of the single market, received stronger and broader political support from Heads of State and Government than ever before. A whole series of concrete commitments to actions and dates by which those actions need to be taken was inserted into the final communiqué. Now it is vital that these commitments are fulfilled.

The reason Britain so strongly insists on the completion of the single market is its huge potential for growth and jobs at home. The single market is the biggest marketplace in the world, with 500 million consumers. Removing barriers to trade in products has clearly had a huge impact and, with one of the largest manufacturing sectors in Europe, Britain has clearly benefited from that, but the benefit can be even greater if the single market is completed in other areas where Britain also has great strengths. The first of these is services. Full implementation of the services directive could add 2.8% to the gross domestic product of the EU within 10 years, and Britain would stand to be one of the prime beneficiaries because, from financial services to legal services to accountancy, Britain has some of the leading companies in the world.

The Council also agreed to complete the digital single market by 2015, which could boost EU GDP by as much as €110 billion every year. Again, that could particularly help Britain, with our strength in digital technology and all forms of creative content, including film, television and online media.

The Council agreed a specific deadline to complete the single market in energy by 2014. That could add 0.8% to EU GDP and create 5 million jobs. Again, many of those of jobs could be in Britain, because we are a major producer and exporter of energy, with the most liberalised market in Europe.

The Council agreed that there will be a special focus on trade—including trade deals with fast-growing parts of the world—at the next Council in June. Completing all open bilateral trade deals could add €90 billion to the EU economy, and a deal with the US would be bigger than all the others put together. Britain is one of the most open trading nations in Europe, and that is why trade deals have a particular importance for us.

On deregulation, for the first time we got a specific commitment for an analysis of the costs of regulation sector by sector, and we got a repetition of our call for a moratorium on new regulations for those businesses with fewer than 10 employees. Taken together, those measures represent a clear and specific plan for growth and jobs at EU level, and we must now ensure that Europe sticks to it.

I turn to wider international issues. On Somalia, the Council welcomed the conference held in London last month and the important conclusions that we reached, cracking down on piracy and terrorism and supporting a Somali-led process for a new representative and accountable government.

On Serbia, Britain has always been a strong supporter of European Union enlargement, from eastern Europe to the countries of the western Balkans. That policy has clearly demonstrated success in embedding support for democracy and human rights across the continent, so I was particularly pleased that the Council granted Serbia candidate status. I have no doubt that this decision would not have been possible without the courageous leadership of President Tadic. It was he who secured the arrest of Ratko Mladic, closing one of the darkest chapters in Serbian history, and it was he who took the brave decision to engage in a dialogue with the Kosovans.

It is also right to mention the leadership of the Kosovan Prime Minster, Hashim Thaci. He too has been prepared to enter into constructive dialogue with Serbia. That decision has rightly been rewarded by the European Commission, starting the process that can lead to a new contract between the European Union and Kosovo. That is the first important milestone on the long road for Kosovo itself to join the European Union.

Let me turn to the grave situation in Syria. I know that the whole House will join me in welcoming the safe return of British photographer Paul Conroy, who escaped from Baba Amr last week. I spoke to him this morning and he described vividly the barbarity that he had witnessed in the city. The history of Homs is being written in the blood of its citizens.

Britain is playing a leading role in helping to forge an international coalition to try to do three things: first, to make sure that there is humanitarian assistance for those who are suffering; secondly, to hold those responsible for that appalling slaughter to account; and, thirdly, to bring about the political transition that will put a stop to the killing. We must pursue all three at the same time.

First, on humanitarian assistance, Britain has already provided an extra £2 million to agencies operating on the ground in order to help deliver emergency medical supplies and basic food rations for more than 20,000 people. But the real problem is getting that aid into the affected areas. Now that the Syrian Government have occupied Baba Amr, they have a duty to allow humanitarian access to alleviate the suffering that they have caused. Britain will be working this week to secure a United Nations Security Council resolution that demands an end to violence and immediate humanitarian access. The longer access is denied, the more the world will believe that the Syrian regime is determined to cover up the extent of the horror that it has brought to bear on Baba Amr.

Secondly, we are working to make sure that those responsible for crimes are held to account. The European Council agreed that there must be “a day of reckoning” for those who are responsible. Britain and its European partners are working together to help to document the evidence of those atrocities so that evidence can be used at a later date. International justice has a long reach and a long memory.

Thirdly, we are working for a political transition to bring the violence to an end. The European Council was clear that President Assad should step aside for the sake of the Syrian people, and it supported the efforts of Kofi Annan to work for a peaceful process of political transition.

Syria’s tragedy is that those who are clinging to Assad for the sake of stability are in fact helping to ensure the complete opposite. Far from being a force for stability, Assad’s continued presence makes a future of all-out civil war ever more likely. What can still save Syria is for those who are still supporting and accommodating Assad's criminal clique to come to their senses and to turn their back on the regime. It is still possible that Syria’s national institutions can be saved and play their part in opening a path to an inclusive, peaceful and decent transition. We will deploy every tool we can—sanctions, aid, the pressure of diplomacy, reaching out to the opposition in Syria and beyond. We will work with anyone who is ready to build a stable, inclusive, non-sectarian, open and democratic Syria for all Syrians. That is the choice that is still open to those in authority in Syria. Now is the time for them to make that choice, before it is too late.

Finally, on Friday morning, 25 member states signed the intergovernmental agreement on the fiscal compact. This binds countries in the eurozone to a budget deficit of no more than 0.5%, and it involves countries giving up the power to write their own budgets if they go beyond it. Britain is not signing this agreement. Britain is not in the euro, Britain is not going to join the euro, so it is right that we are not involved. But it is important that we continue to ensure that vital issues such as the single market are discussed by all 27 members. That is exactly what happened at this European Council. Far from not being included in the vital discussion that affects our national interests, Britain helped to set the agenda at this Council and Britain helped to ensure its success. I commend this statement to the House.

May I thank the Prime Minister for his statement and associate myself with his words on Somalia and Serbia?

Let me turn first to the pressing issue of the continuing violence in Syria. The pictures and testimony coming out of Homs in the past few days, and again today, are truly horrific, with women and fathers telling of their children being murdered in front of their eyes. Responsibility for the brutal repression and murder of innocent people lies firmly at the door of President Assad and his regime. It is appalling—I agree with the Prime Minister on this—that the Syrian Government have so far even refused requests for humanitarian access. In this context, it is even more important that Britain puts pressure on the international community to back a United Nations resolution and address this desperate situation.

May I ask the Prime Minister a few questions? First, will he update the House specifically on what he believes the UK and the EU are able to do to support the Arab League and the joint special envoy in his efforts somehow to broker an end to the bloodshed? Secondly, what steps are now in train to strengthen sanctions against the Assad regime, including through the proper enforcement of the Arab League sanctions? Thirdly, given that the Russian Government are responsible for vetoing the last UN resolution on Syria, does the Prime Minister agree that they will be judged by their actions rather than their words on Syria? No doubt he will be speaking to President-elect Putin in the coming days. What will he be telling him in those conversations? I hope—I am sure that I speak for the whole House and the country in saying this—that he will make it clear to President-elect Putin that action is necessary and that the Russian position is frankly unacceptable.

Let me turn to other matters discussed at the European Council, particularly jobs and growth. At his press conference on Friday, the Prime Minister was uncharacteristically shy—indeed, totally silent—about the main event of the summit: the signing of the fiscal compact. He did at least mention it today at the end of his statement, although I am very struck by the fact that in the written copy that was kindly distributed to me before he delivered it, the word “treaty” was used, but he could not bring himself to use that word. Of course, the reason he was uncharacteristically coy in his press conference is that his veto was not a veto; the treaty has gone ahead. Can he confirm that for all his claims, both the European Court of Justice and the Commission will be fully involved in implementing the treaty? Can he tell us how he will find out about the result of the meetings, in which a whole variety of economic questions that will affect the UK will be discussed? Apparently, his spokesman was asked about this last Wednesday, and the best that he could manage was to say, “The Prime Minister may not be in the room, but he will be in the building.”

Yes, he is Elvis. I do not think that the spokesman’s comment is very reassuring.

It is a matter of record that the Prime Minister spent Thursday complaining that he felt frustrated because he did not feel that the other 25 leaders were taking enough notice of him as they prepared to sign the new treaty. However, on Friday, he claimed that in less than 24 hours, his powers of persuasion had once again triumphed:

“The communiqué has been fundamentally rewritten in line with our demands.”

After the experience of the veto, I am sure that he will forgive us all for being a little sceptical about his claims.

Let us examine the Prime Minister’s claims. He said that big strides forward were clear from the communiqué on energy, micro-enterprises, the single market and reducing trade barriers. However, will he confirm that the commitment on the energy market was in the conclusions of last February’s Council, that the commitments on the single market and trade simply echo those following the October 2011 Council, and that the supposed progress on micro-enterprises was in the conclusions of last December’s Council?

Listening to the Prime Minister, I had a sense of groundhog day. I then realised why. He sent the same letter to the European Council a year ago. Believe it or not—of course, we do believe it—he claimed the same triumph then:

“I organised a letter…making the case for action on growth, on deregulation, on completing the single market, on extending it to services… I think this has had a real impact”.

The people behind him are not looking amused. If last year’s letter had such an impact, why did he have to send it again? For the avoidance of doubt, I will place last year’s letter in the Library of the House, because it will probably be next year’s letter as well. For all the Prime Minister’s slapping himself on the back, the reality is that not one job has been created, not one family helped and not one business boosted. Why does he not learn the lesson that empty claims of a European triumph lose him credibility at home and influence abroad?

Why did the Prime Minister not press those countries with fiscal headroom at the summit to stimulate growth in Europe? Why does he not lead by example and sort out the jobs crisis here at home? He said on Friday and repeated today that there was not an air of crisis about the euro. Will he tell the House whether he thinks that a sustainable solution has been put in place for the euro area, because that is one of the most important long-term issues that we face and that the European economy faces?

The reality is that we have a Prime Minister who is isolated and without influence. He is unable to argue for jobs and growth because of his own failure at home. He achieved nothing for Britain at this summit. For all the good it has done us, he could have given the summit a miss and gone horse riding instead.

First, let me thank the right hon. Gentleman for what he said about Syria and answer his questions specifically. On the special envoy, we are helping Kofi Annan. Indeed, we are funding part of his mission. The right hon. Gentleman asked about sanctions. We are on round 12 of the EU sanctions against the Syrian regime. We will continue to ratchet up the pressure in every way that we can, with sanctions, asset freezes, travel bans and the like.

The right hon. Gentleman raised the issue of Russia and China. We will make it very clear, as we have already, that their veto was completely wrong. Their reputations are suffering as a result in the Arab world. I will be speaking to President Putin later today and will say that it is important that we have a unified UN Security Council resolution about humanitarian aid and access that puts a stop to the appalling killing that is taking place. I know that there is all-party support for that.

Turning to the EU Council, the right hon. Gentleman said that the communiqué did not change between the arrival of the countries at the EU Council and its conclusion on Friday. If he had done his homework properly—he was working very closely on his gags, and they are getting better—he would have noticed that there was no mention of deepening the single market in services in the original communiqué, but that we now have a clear commitment to that; that there was no mention of tackling regulated professions and properly opening up the single market, but that that is now clearly in the communiqué; and that there was no reference to deregulation, but that we now we have, for the first time, sector-by-sector analysis so that we can see the cost of regulations. When Labour used to go along to EU summit after EU summit, it never got half of that sort of thing.

On the issue of the treaty, there is one big problem in the right hon. Gentleman’s position, which is that he has got to make up his mind—would he have signed it or not? Why does he not just nod for a yes or shake for a no? I think I know the cause of the confusion. It is that there is a slight division between the Leader of the Opposition and the shadow Chancellor about whether they want to join the euro. The shadow Chancellor has said that it will not happen in his lifetime, whereas the Leader of the Opposition, when asked whether he would join the euro, said that it depended on how long he was Prime Minister. I agree with the shadow Chancellor—clearly, the Leader of the Opposition should not be Prime Minister in our lifetime.

May I welcome the European Council’s decision to prepare further targeted sanctions against Syria? If Russia continues to refuse to accept its responsibilities, should not the Arab League and Turkey, on their own incentive but with full support from the United States and Europe, close their land borders and airspace to all exports destined for Syria? If that were combined with a United States-led naval brigade, would it not prevent further armed supplies from being delivered to the Assad regime, thereby possibly saving the lives of tens of thousands of Syrian people?

My right hon. and learned Friend, with all his experience, makes an intriguing suggestion for further steps that the Arab League could take. Indeed, it has shown great leadership in putting pressure on Syria. However, if we want to turn the pressure up on the regime, a United Nations Security Council resolution that could be unanimously agreed and that was tough about humanitarian access and the unacceptability of what is happening should be part of the picture.

May I welcome what the Prime Minister said about the developments in the western Balkans? However, I wonder whether he agrees that the most significant piece of economic news last week was the decision of the Spanish Government to amend their austerity programme in the face of stagnation and recession. The Prime Minister of Spain said he thought that when circumstances changed, policy should change. Is that not the kind of common sense that we need here?

I am not at all surprised by what the Spanish Prime Minister did. After all, he is stuck inside a fixed exchange rate system with no ability to have an independent monetary policy. If we had listened to the right hon. Gentleman all those years ago and joined the euro, we would be in the same boat.

Does my right hon. Friend agree that the responsibility for the appalling treatment being handed out to the people of Homs rests as much with those who authorise it as with those who carry it out? Is he aware that in the course of last week, Hillary Clinton said that there was a case for regarding President Assad as a war criminal? Does he agree?

I do agree with that. I believe that, as the Foreign Secretary has said, it is now a criminal regime. That is why it is so important that we gather the evidence of the war crimes, the human rights abuses and the dreadful things that are being done in Homs and elsewhere. As we collect that evidence, we need to be very careful to try to join all the dots, right up the chain of the command, to the people who run the regime. However long it takes, it is important that we are clear that there should be a day of reckoning when those who are responsible for crimes are made accountable for them.

I thank the Prime Minister for highlighting the role of Boris Tadic and of Hashim Thaci, the Prime Minister of Kosovo, in moving the western Balkans forward. I should declare an interest—I recently published a book on Kosovo, which I hope all hon. Members will read. Does the Prime Minister agree that the next step forward is for Serbia to recognise Kosovo, as 90 other UN member states have done? That decisive step would help to bring more stability, peace and co-operation and a European future to the western Balkans.

I know that the right hon. Gentleman has considerable expertise in this area, and I thank him for welcoming the news. We have to understand that Serbia has already taken some quite important steps forward that were difficult for it to take. I was concerned that the European Union should demonstrate its openness to the steps that President Tadic had taken, because slamming the door in his face after he had taken them could have encouraged the extremists in Serbia rather than people who want to have a peaceful European future.

In congratulating the Prime Minister on his veto—[Interruption.] It would have been an EU treaty had the Prime Minister not exercised the veto. In congratulating the Prime Minister on his veto and on his insistence on growth, does he recognise that we are at a crossroads, with two separate European treaties—one in line with the Lisbon treaty, and the other in breach of it? With the Chancellor of Germany now insisting on a further leap towards political union, will the Prime Minister take forward his current concerns about the legal position of the non-EU treaty to the European Court?

I am grateful for my hon. Friend’s support. He is absolutely right that that treaty places no obligations on us. It is worth making the point that it does not have the force of EU law: not for us, not for the EU institutions and not for the countries that sign it. As he knows, my view is that while we have reserved our legal position on the use of the institutions because there are real concerns, the path he outlines—of a legal challenge—is a less good one than using our leverage and influence to ensure that the agreement sticks to fiscal union rather than gets into the single market. That is the right approach and the one we are pursuing.

Everybody knows that without growth, it is virtually impossible for Greece’s problems to be reconciled. The Prime Minister talks about growth—he talks, for example, about a detailed account of regulatory reform—but nothing he has said and nothing that came out of the Heads of Government meeting gave a programme for growth. Where are the drivers for that?

I am afraid I do not agree with the hon. Gentleman. Britain has leading industries in services, energy and the digital economy. If we can complete the single market in those areas, there are real opportunities for British business. The additions to gross domestic product that we would have through completing the single market in those areas would partly mean jobs, investment and growth here in the UK. When there is no room for fiscal stimulus, as there is not in the UK because the budget deficit is so big, and when we already have a very accommodating monetary policy, the right way for growth is to look at structural reform and changes, just as we are doing through the EU.

Does my right hon. Friend agree that ambitious companies looking for growth in Mid Sussex will be extremely pleased with the steps the Government took towards seeking to resolve the crisis in Europe through growth? May I suggest that he looks further back—to European Councils of the past 10 years—to see how many good ideas signed up to came to naught, and could well, with a bit of effort, have come to something good?

My right hon. Friend is correct about this. Of course, Europe has on many previous occasions signed up to wonderful rhetoric about single markets, energy and all the rest of it. That is partly what the Lisbon agenda—not the treaty—was all about. What is different this time is that there was real pressure from the 11 countries that signed the letter with Britain to insist on actions and dates by which those actions would be taken. We must still ensure that those things are achieved. Many countries will want to hold up getting rid of regulations on services and many will want to keep some of those regulations on small businesses, but we now have a majority in the EU to try to fix those things in a way that is good for our country.

Does the Prime Minister believe that the European Council will ever publicly criticise China, not just for what it is doing—or not doing—in Syria, but for what it is doing to its own people, particularly in Tibet? That is being done behind closed doors, with no brave photographers and journalists able to get in. Will the European Council start taking on the might of China?

One advantage of having forums in which the EU meets the Chinese leadership is that the EU can speak on behalf of all members about the importance of human rights, the rule of law and some of the issues the hon. Lady raises. Sometimes that is a useful way for pressure to be brought to bear. The EU Council president and the Commission President should have no compunction in doing that.

Many UK citizens, especially in London, are world leaders in the provision of services such as legal and insurance services. What are the roadblocks to regulatory reform? I am sure that the Prime Minister will join me in echoing the words of the Mayor of London, who said that we are always happy to see more businesses come to London.

The roadblocks come in two forms. First, there is the fact that the services directive has not been fully implemented, and some countries have been blocking it. Those countries—Germany is among them, I think—are now undergoing infraction proceedings by the European Commission. The second part of the problem concerns the number of regulated professions in Europe that countries continue to regulate separately rather than open up to competition. Britain has a relatively good record on both the services directive and getting rid of regulated professions but we need to keep up the pressure.

Was there any discussion of the European arrest warrant? I ask because the Prime Minister will know that a lot of his Back Benchers want Britain to withdraw from it, whereas the Liberal Democrats want no change at all. If he insists on riding two horses at once, may I suggest that he campaign for reform rather than withdrawal?

This was a European Council devoted to discussion of the economy and foreign affairs, so there was no discussion of the European arrest warrant.

I welcome the consistency with which the Prime Minister has argued for the development of the single market. Does he agree that a successful single market does not require harmonised employment laws? Can anything be done at this late stage to mitigate some of the damaging effects of the agency workers directive in particular?

On the agency workers directive, it is difficult, because it has already effectively been implemented. However, as I and other countries said, it is no good pursuing a growth agenda in the EU if, at the same time, the Commission is still coming forward with directives that cost business and industry a huge amount of money. I mentioned the new ergonomics directive—believe it or not—which will cost business many hundreds of millions of pounds. As I said, however, with the new Prime Ministers in Italy and Spain, there is now southern support for the northern agenda of deregulation. We need to ride that horse as fast as we can.

Is not the great challenge facing the European democracies the need to marry deficit reduction with sustainable growth in the interests of their peoples? Will the Prime Minister confirm that the present restructuring of Greek debt is the largest of its kind in history and a testament to the eurozone’s capacity to bring stability to the euro? Building on the questions from my right hon. Friend the Leader of the Opposition and my hon. Friend the Member for Manchester Central (Tony Lloyd), is this sustainable growth not essential for our country as well as the eurozone?

I agree with the hon. Gentleman on this point: 40% of our exports go to eurozone countries and we want those countries to recover. We have to accept, however, that doing that while dealing with fiscal deficits is enormously challenging. On Greece, those of us who are sceptical about the euro and who do not want to join it must accept, whatever our views, that the Greeks have made their choice. That is the path that they want to pursue. Whatever our misgivings, we must allow them to make those decisions to make their economy more competitive within the eurozone.

Given that the evidence from last week’s summit is that full participation in the EU is the best news for jobs and growth in this country and for all our neighbours, will the Prime Minister tell us the best estimate of the number of extra jobs that completion of the digital services and energy single markets will achieve by the end of this Parliament? Will he also reassure the House that we will lead the way in dealing with tax fraud and tax evasion at the next European summit in June?

We believe in dealing with tax fraud and tax evasion. That is vital. On the jobs effect of completing the energy and digital services single markets, I have given the GDP figures for how much it would add to the EU, but if the right hon. Gentleman would like, I could perhaps look at how many jobs that could convert into. It is worth noting, however, that the Commission’s forecast for growth this year is that Britain will grow faster than France, the EU and the euro area. Furthermore, according to International Monetary Fund figures, we will grow faster than France, Germany, Italy, Spain, the EU and the euro area this year and next year.

The conclusions from the summit were clear:

“Innovation and research are at the heart of the Europe 2020 strategy.”

They are also vital for growth at home. The conclusions also referred to intellectual property, research and development, and patent protection. Can the Prime Minister give us an assurance that concrete progress was made towards a unitary patent protection scheme, as agreed by the Competitiveness Ministers last June, and also update us on the parallel process for the unified patent court?

There has been quite a breakthrough on the unified patent process, because the EU has been discussing this for, I think, around three decades. There is now an agreement among those countries that want to go ahead and have a unified patent process, so that is a success. There is not yet agreement about where the court should be. We strongly believe it ought to be in London, because London is the centre of international litigation and finance, but the French believe it should be in Paris and the Germans believe it should be in Munich, and there is what is known as a negotiation under way.

We are very lucky to have a British bulldog of a Prime Minister fighting for our interests in Europe, and of course, the Prime Minister is nearly always right on most things. [Hon. Members: “But…”] No, not “but”. Earlier he quite rightly said that Spain could not grow without devaluing its currency. I know that he cannot tell us what he says in private, but can we assume that the advice in private is significantly different from what he can say in public?

I did not quite say what my hon. Friend said. Spain is forecast to have a decline in its GDP this year. It has tough targets for its fiscal deficits, which it is trying to reduce, and at the same time its Government, like all others in Europe, want to get back to a position of growth. The point I would make is that I have always believed that it is better as a country to have both fiscal and monetary levers at our disposal, so that we have the most flexible way to respond to economic circumstances. In Britain, we are able to have tough measures to reduce our fiscal deficits, but at the same time, because we have an independent monetary policy, set by the Bank of England, we are not constrained by being members of a currency bloc. That is why I oppose Britain joining the euro—ever.

The Prime Minister takes great pride in having achieved a deeper and greater commitment to completing the single market and deregulation. Last Friday the hon. Member for Sevenoaks (Michael Fallon) said that some EU financial services proposals

“verge on the discriminatory, verge on protectionism”.

Has the Prime Minister made any progress on doing something about that?

We are making quite good progress on the financial services dossiers. We are having to deal with them one by one. There are some cases where we are actually arguing that countries ought to be able to regulate even further than the EU is allowing—for instance, in building up capital in our banks. However, there are some difficult financial services directives, which we have to deal with one by one, to make sure that they are proportionate and not threatening to our financial services industry, which, as I say, is not just an asset for Britain, but an asset for the whole of Europe.

Will my right hon. Friend elaborate on what he means by “reserving our position” in relation to the fiscal compact? Does it indicate that Her Majesty’s Government doubt the lawfulness of the compact under EU law and are considering a legal challenge at some future date?

Let me try to shed some more light on that. The position is this. I think there are some major legal question marks over what the 25 EU members have signed up to. However, the best thing for Britain to do, instead of going for an outright legal challenge—which might be partly successful—is to say, “We have our misgivings and concerns. We’ve reserved our position, but we won’t challenge, so long as you are sticking to the elements of fiscal union and not the single market.” I have given this considerable thought and I think that that is the right way forward, not least because there are some things being done in the agreement that the EU treaties give permission for, because they allow member states, as my hon. Friend will know—he is a great expert on this—to do things together under some circumstances. Therefore, the legality is not completely black and white. That is why I think it is in Britain’s interest to use our leverage to make sure that those involved stick to the fiscal union and do not get involved in the single market.

There are newspaper reports that the Prime Minister is one of a group of four Conservative EU leaders who are proposing to ostracise François Hollande, who is soon to be the socialist President of France. Given that Monsieur Hollande is more of a Euro-realist than President Sarkozy, would it not be sensible to work positively with him, instead of against him?

I can confirm that I am not part of any secret pact. I basically take a pretty straightforward approach, which is that it is not normal practice to see candidates in the middle of an election. I have made exceptions on occasion, but I am not going to make an exception in this case.

I congratulate my right hon. Friend on pursuing a growth and deregulation agenda at the EU Council. Did he have an opportunity over the weekend to see the reports in the newspapers here about proposed changes to the working time directive that would allow employees to add sick leave and paternity and maternity leave to their end-of-year holiday entitlement? Does he agree that such proposals run entirely counter to his agenda? Will he confirm that the Business Secretary would have his full support if he were to oppose them here in the United Kingdom?

My hon. Friend makes an important point. We have a blocking minority on extending the working time directive and we need to ensure that we keep that together. In my view, however, this is the sort of area that the European Union should not have got into in the first place.

We are not signatories to the agreement, so we will not be represented at the meetings. What was interesting about Friday was that, although they signed an agreement, there was only one meeting, which was a meeting of the 27 that discussed, funnily enough—[Interruption.] I was in the room at the time—[Hon. Members: “Ooh!”] We discussed not only the single market but single currency issues.

I warmly welcome my right hon. Friend’s statement. Among the dubious legal matters contained in the fiscal compact, which is not an EU treaty, are the provisions relating to what is described as “reverse qualified majority voting”, which sounds bad and is even worse than it sounds. Will he be extremely vigilant and ensure that this coercive and profoundly undemocratic practice is not extended into the EU proper?

My hon. Friend makes an important point. This treaty does not have the force of EU law, either on us, on the institutions or on those that have signed it. I am sure that he could give us a very straightforward explanation of reverse qualified majority voting, but I can tell the House that it is basically a way to impose the will of a group of countries on to others, and I do not think that it is the way forward. But we still have not heard from the Opposition whether they would sign this treaty or not—[Interruption.] Well, would you sign it? Nod for yes; shake for no. Yes or no? It is one way or the other. Even Wallace and Gromit could do this! What is so difficult? Why don’t we ask the Leader of the Opposition’s brother? Maybe he could tell us. This is farcical. This thing now exists, and everyone else has signed it, so would you sign it or not? Utterly, utterly feeble.

The Prime Minister’s officials were reported to have told the Press Association during the summit that he was frustrated at being ignored. Despite jockeying for position, why does he think that his European colleagues might want to ignore his advice on how to grow their economies?

I think that one might have been better if it had stayed in the stalls; it was never going to make it out on to the course. I was frustrated that the original draft of the communiqué did not have the actions and the dates that the 12 countries that signed the letter authored by Britain had asked for. I was frustrated because, if half the population of Europe, in countries as diverse as Spain, Italy, Poland and Britain, all ask for actions to be taken, they should be taken. But the good thing is that, at the end of this European Council, all the key issues that we asked for in the letter—which is in the Library of the House of Commons—are now in the Council conclusions. If the hon. Gentleman has plenty of time, he can slip on his nosebag and have a good look.

Will the Prime Minister confirm that, at this meeting and other European meetings, political leaders need to have a clear idea of what is in their national interests, that decisions often have to be taken in the middle of the night on whether to participate in treaties, and that we cannot dither for weeks afterwards about whether to sign them?

Fortunately, at this European Council, the dinner only went on until about 11 o’clock at night, so it was not the middle of the night. However, my hon. Friend is right. There is now nowhere for opposition parties anywhere in Europe to hide. This thing exists, and the Opposition need to work out whether they would sign it or not. They cannot tell us that. Even though they say that they want to be at the heart of Europe and complain that we have put ourselves on the sidelines, they cannot answer that question. Would they sign it: yes or no?

The Prime Minister has mentioned a special focus on trade deals with fast-growing parts of the world. Will that focus take account of human rights experiences in those parts of the world, and how will he ensure that this push does not compound the frustration of poor developing countries that are waiting for trade justice?

On trade justice with the poorest countries in the world, the EU has quite a good record on giving those countries duty-free access to our markets under the “Everything but Arms” agreements. Where we should make more progress is, for example, on the free trade agreement with Korea, which is worth up to £0.5 billion to the British economy. There are opportunities for many more free trade agreements, which include all sorts of different stipulations but could make us more prosperous here at home, too.

Does the Prime Minister agree that the lack of support shown by the Leader of the Opposition and Labour Members for the measures on growth taken at the EU Council show a real lack of respect and support for the manufacturing and small business sector both in my constituency and in those of all other Members?

My hon. Friend makes an important point. To be fair to the last Government, they spent quite a lot of time trying to push issues like the energy single market and the digital single market, so one would have thought that there would be some sort of welcome for the progress that has been made. Instead, we got absolutely nothing from the Opposition and a complete silence on whether they would have signed up to what they think was the important bit of the European Council—the signing of the treaty. If they think it is so important, they should be able to say whether they would have signed it.

While condemning totally and without reservation what has happened in Syria—the President should certainly be condemned as a war criminal and be brought to justice in due course—should there not be some hesitation about the sort of people we support, bearing in mind the wrecking of wartime graves over the weekend by armed militia in Libya, which was a despicable act, damaging the graves of those who fought and sacrificed their lives in the fight against Nazism?

I agree that what happened in Libya with the desecration of those graves is completely unacceptable. To be fair to the interim Libyan Government, they condemned it absolutely, clearly and frankly in terms when it happened several days ago. We now need to make sure that those graves are fully restored and that the Libyan Government properly help in doing that. The interim Libyan Prime Minister is going to be in Britain this week, and he will meet my right hon. Friend the Foreign Secretary. I hope that I will see him, too. We will make it clear in terms how important it is to put those graves right. On Syria, there are all sorts of questions about who is involved in the Syrian opposition. We have to ask careful questions, but we should be clear that the people of Syria would best be served by a transition away from this dreadful President.

The Commission estimates that concluding all trade deals currently on the table would add about €60 billion to European gross domestic product. Did the Council show appreciation of the urgency of getting on with this important task?

There is a sense of urgency, which is why the June Council will be dedicated to this issue. There are obviously some different views within the European Council and there are the familiar cries about not going ahead unless there is full reciprocity. I believe that Britain, as an open trading nation, should be in the vanguard of arguing for these deals, because we have a lot to gain from them.

It was obviously right for the Council to concentrate as a priority on the bloodshed and murderous actions of the Assad regime in Syria, but does not the example of what happened in Libya at the weekend emphasise why we should not lose focus on what is happening elsewhere in the middle east and north Africa? In view of some of the reverses that have taken place, will the Prime Minister give us an update on what the European Union is doing to support moves towards democracy and human rights in those countries?

What the European Union has been doing—I think it is right—is to rewrite its neighbourhood agreements and neighbourhood partnerships to make them more conditional on political reform and economic progress. I am still optimistic about what is happening across the middle east. For all the difficulties there are in Libya, at least that country has the prospect and the chance to make peaceful progress. We see that happening in Morocco, but what is happening in Egypt is clearly far more challenging. Europe has a real influence to bring to bear here, but we should be clear that our money and our help has some strings attached in terms of political and economic reform.

I thank the Prime Minister for his statement and warmly congratulate him on not signing the fiscal compact agreement. Article 16 of the agreement provides that within five years at most, a further attempt will be made to bring the agreement into the legal framework of the European Union. I am sure that my right hon. Friend will remain as Prime Minister throughout that period, so can he reassure me and the House that if such an attempt is made, he will exercise his veto once more?

I certainly agree with that, but let me make this point to the hon. Gentleman. Those who say that the veto did not achieve anything must ask themselves why other European countries are so keen to try to fold this agreement back into the treaty. That is important.

We made our position very clear. We made it clear that we would not allow a EU treaty to go ahead unless it contained proper safeguards for the single market, for financial services and in relation to other issues, and nothing has changed in that respect.

Last week it was revealed that youth unemployment in the EU had risen to 5.5 million—an increase of 269,000 in the last year. One in two young people in Spain and Greece does not have a job. Where is the plan that has arisen from this summit to deal with youth unemployment? Is it not the case that without such a plan, there will be no return to growth and no resolution of Europe’s debt crisis?

The hon. Gentleman is absolutely right. The levels of youth unemployment in many countries in Europe are completely unacceptable. There is a wide spread of practice—from countries such as Holland and Germany with very low rates to countries such as Spain and Greece with very high rates. Britain needs to do better, and that is why we are investing about £1 billion in measures such as the youth contract.

This morning I was at a meeting with employees of Tesco, which has announced the creation of an extra 20,000 jobs in the next two years, including 10,000 apprenticeships. It is absolutely committed to the work experience scheme. I must say this to Opposition Members: one of their number is chairing the Right to Work campaign, which is basically a bunch of Trots trying to destroy the scheme, and they have got to get serious about it.

Order. A good many Members are still seeking to catch my eye. I remind the House that today is also an Opposition day, and I have to factor that into my thinking as well. What is required is brevity—to be exemplified, I feel sure, by Mr Geoffrey Clifton-Brown.

The failure of the Assad regime to allow humanitarian assistance into Syria is utterly despicable. What does my right hon. Friend think are the chances of the Russians and Chinese abstaining on the relevant United Nations resolution?

I think that we must work not just to get them to abstain, but to try to get them to support a resolution that is about humanitarian access and is clear about the unacceptability of what is happening. I know that my right hon. Friend the Foreign Secretary has had a long telephone conversation with Foreign Minister Lavrov, and I hope to speak to President Putin later today. Although we are not going to agree with Russia on all that needs to happen in Syria, I hope that we can agree about the bottom-line things that absolutely do need to happen.

I welcome the Prime Minister’s emphasis on the importance of creating a digital single market. Does he agree that a vibrant digital single market is vital to the future competitiveness of the European Union?

My hon. Friend has made an important point. I believe that, for instance, not all the 27 members of the European Union have licensed iTunes in their countries. Given that Britain has a leading role in music, film, television and the creative industries, completing the digital market is as important to us as completing the single market in cars is to Germany. It is absolutely vital to us, and people should not think that it is a small issue, because it is a big one.

The Assad regime is committing crimes against humanity in Syria. Are there any further practical measures that Britain and the EU can take against both China and Russia to help to stop them colluding with this mass murder, or should individual consumers be making choices in boycotting goods from China until they do?

I think that there is evidence that both China and Russia feel the pressure that their previous veto has brought about. The Arab League is absolutely unified in the view that what is happening in Syria is completely unacceptable, and I think that Arab League countries saying that to China and Russia will have an influence, as well as our saying it. I think that there is a lot of diplomatic pressure to be brought to bear, and I hope that in the coming days we can really make that happen.

Did the European Council discuss the points made by the Saudi Foreign Minister, who said that Saudi Arabia would not take part in any action unless it led to

“the quick protection of… Syrians”,

and that focusing on humanitarian aid was “not enough” while the killings were going on?

Clearly humanitarian aid on its own is not enough: it is not good enough if all we do is feed and clothe people while the slaughter continues. That is why, as I have said, we must also focus on the other bits of pressure that we can bring to bear, such as the sanctions—that is the diplomatic pressure—and also gathering the evidence of what is happening. We should not underestimate that. Britain has, I think, sent some people to the Turkish border, and we are co-ordinating with others so that we can take the testimony and receive the evidence of the terrible things that have happened. It is all those things combined.

Of course it would be good if there were more that we could do. We have to recognise the difficulties of the situation, and some of the ways in which it differs from the Libyan situation. However, there is more that we can do than just provide humanitarian aid.

What practical steps can be taken to ensure that the humanitarian aid to Syria reaches the people who so desperately need it?

My hon. Friend is right: that is the key question. If the Syrian authorities will not allow that aid to get to areas such as the Baba Amr district of Homs, it will not reach the people who need it. While we are doing what we can to provide the resources and work with the expert agencies, we need the Syrian authorities to allow that aid to get through. That is why the United Nations Security Council is particularly important.

May I, too, congratulate the Prime Minister on his statement? I am especially pleased with the measures in paragraphs 15 and 19 of the Council conclusions on the completion of the digital single market, the energy market and the services directive. Can the Prime Minister tell us a little more about how he was able to move Europe in the direction of growth by getting the measures in the conclusions renegotiated?

I am grateful to my hon. Friend. Most of the measures in paragraph 15 were not in the original draft of the communiqué. What was decisive was that it was not just the usual suspects, such as the Swedes, the Danes, the Dutch and the British, coming forward with the agenda; we also had support from the Italian and Spanish Prime Ministers, who have not always championed this agenda, but who now see that it is vital for European growth.

Consistency delivers results, so whereas Opposition Members have been criticising the Prime Minister for being consistent in pushing for a digital single market, I congratulate him because, apart from silicon valley, the UK is uniquely placed to take advantage of that. More specifically, did he get a chance to discuss with his colleagues why it costs so much more to start a company in Europe than in America, Canada or India?

My hon. Friend makes a good point. The truth is that if we want to get anywhere in Europe, we have to be a bit of a bore about things and keep going back to them again and again and again. Countries across Europe need to look at all the steps we have put in the way of people starting up businesses. There is the venture capital issue, for instance: for every dollar raised in Europe for venture capital, $5 are raised in America. That is yet another area in which Europe needs to do better.

The Opposition have—entirely co-incidentally, I am sure—tabled a motion for debate in a few minutes’ time on the low carbon economy. Does the Prime Minister agree that the completion of the single energy market—which he has championed and which will create 5 million jobs across the continent—will go a long way towards addressing the concerns in that regard?

I think it will: I think completing the energy single market is good for jobs and good for growth. It is just disappointing that the Opposition have tabled motions on low carbon, and then they reduce carbon even further by sitting in their offices.

I welcome the announcement on micro-exemptions, but will this focus on the existing stock of rules and regulations or just the flow of new ones?

The moratorium does what it says on the tin: it is intended to stop the further flow of regulations. I hope the sector-by-sector analysis will start to look at the stock of regulations. Part of the problem with the way the EU works is that when the Environment Ministers all get together they think about the environment but not about the costs, and when the Social Affairs Ministers get to together they think about social affairs but not about the costs. We have to get all these groups of Ministers to focus on the cost to business of what they agree to, and this is an early start down that path.

The entire House will welcome the Government’s prompt action on humanitarian aid, but will my right hon. Friend the Prime Minister make sure that those perpetrating the atrocities in Syria will be held to account by the international community?

That is essential. Syria is not a signatory to the International Criminal Court, but that does not mean that we should not collect the evidence and hold these people to account for their crimes, and Britain and others are doing that work right now.

What measures were agreed by the Council to make progress towards the completion of the single market? I am thinking in particular about the digital services and energy sectors, as businesses in Yorkshire—my area—will be well placed to take advantage of opportunities that may arise in them.

The key point was that in paragraph 15 we are setting dates for the completion of these markets, which I hope gives my hon. Friend’s businesses and constituents confidence. But what we have to do now is make sure that individual steps are taken to make that happen and that where countries are holding things up, we support the Commission in making sure that infraction proceedings are taken against them.

The British Chambers of Commerce has calculated that the cost of EU regulations to British business is a whopping £7.5 billion each and every year, and the figure is growing. What measures were discussed to turn back that tide, especially for small and medium-sized enterprises?

The two elements of the moratorium are to try to stop things getting worse for the smallest businesses, and the sector-by-sector analysis, so that we can start to build a picture of exactly what is costing business and how much and then try to put the pressure on to have the regulations reduced.

I congratulate my right hon. Friend on the new coalition he has built for deregulation and growth in the single market. Is it not time that Mr Van Rompuy and the Commission remembered who they are meant to be working for?

I am grateful for my hon. Friend’s question. It was an interesting Council in that regard, because a number of countries, Britain included, were not happy with the original communiqué. So even before the opening session—when we hear from the President of the Parliament—was over, a number of countries had intervened to say that the letter we had written and the measures we wanted were not properly reflected in the communiqué. That had quite an impact on the Council and the Commission recognising that they needed to take these into account.

I welcome my right hon. Friend’s clear statement on deepening the single market in services, a cause he continuously champions. When does he think we will see UK companies bidding for continental rail franchises, as Dutch and German railways bid for franchises here?

Of course that should happen now under the procurement directives that have already been signed. We need to do two things, the first of which is to make sure that those are properly enforced by the European Commission. Domestically, we ought to learn the lessons of great businesses that actually work with their customers and their suppliers on a long-term basis so that they know what is coming up next.

I thank the Prime Minister and colleagues for their succinctness, which enabled 44 Back Benchers to question the Prime Minister in 41 minutes of exclusively Back-Bench time.