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G20 Summit

Volume 547: debated on Monday 25 June 2012

The G20 needed to address the five big threats to the global economy: first, the problems in the eurozone; secondly, the mountain of debt and persistence of imbalances in the world economy; thirdly, the lack of growth; fourthly, the rise of protectionism; and fifthly the failure to regulate our banks properly. I shall take each briefly in turn.

First, I turn to the eurozone. Britain is not in the eurozone, and we are not going to join it, but, given that 40% of our trade is with the eurozone, its future affects our future. It is in our national interest for it to resolve its difficulties. As a full member of the EU and a significant net contributor to its budget, it is not only vital but right that we speak plainly about what needs to happen.

In the short term, we need rapid action by the core of the eurozone, including the European Central Bank, to restore financial stability and confidence to the countries on the periphery of the eurozone as they undergo their vital structural reforms. That needs to be reinforced in the medium term by improvements to the governance of the eurozone that recognise the remorseless logic of being in a currency union.

This clearly was a G20 summit, not a eurozone summit, but none the less the eurozone countries made some steps towards both those goals. First, they agreed to take all necessary policy measures to safeguard the integrity and stability of the eurozone, including breaking the link between sovereign debt problems and bank instability, and secondly they committed to taking further steps towards fiscal and economic integration, including through a banking union.

Britain does not want to stand in the way of these measures towards closer integration of the eurozone, but we will not be part of them. We did not join the eurozone precisely because we did not want to give up the kind of sovereignty over our national economy that is essential to making a currency union work. And we have been clear that whatever long-term decisions are made about the governance of the eurozone, the rules that govern the single market must always protect the interests of all its 27 members. This is a red line for Britain and is vital to our national interests. The eurozone now needs to get on with implementing the agreements reached at the G20, and I will work at the European Council this week to ensure that the eurozone takes these steps in a way that protects the UK’s interests.

To deal with the wider risks of contagion to the global economy, the G20 also welcomed the commitments to increase the resources available to the IMF by more than $450 billion. It is a basic principle of the IMF that the help it offers is for countries not for currencies. Indeed, almost all the IMF’s 50 programmes are for countries outside the eurozone. No country has ever lost money lending to the IMF, and Britain’s contribution is a loan on which interest is payable, and will be used only if troubled economies meet strict conditions to get their economies back on track.

Secondly, I turn to debt and imbalances. As at the G8, there was absolute agreement that deficit reduction and growth were not alternatives—you need the first to secure the second. The G20 also reaffirmed its commitment to reduce global imbalances, with deficit countries strengthening their public finances and surplus countries taking further actions to increase demand and move towards greater exchange rate flexibility. In particular, we welcomed China’s commitment to allow market forces to play a larger role in determining movements in its exchange rate, and to continue reform and increase transparency in its exchange rate policy. This is an important advance for the G20 in dealing with global imbalances, which was of course one of the underlying causes of the crisis in 2008.

In a debt-driven crisis where many countries lack the fiscal space to stimulate their economies, the most powerful tools for growth that we have are monetary activism and structural reform. The G20 agreed that monetary policy should continue to support the economic recovery, and every G20 country has put on the table specific structural reform commitments to strengthen global demand, foster job creation and increase growth potential. The Los Cabos growth and jobs action plan includes mechanisms to hold G20 members accountable for delivering on the reform commitments made. Vitally for us, this includes completing the European single market.

The G20 did not just focus on growth in the largest economies, as it also reaffirmed its vital commitment to supporting private sector-led growth in the poorest countries as the best way of helping people to lift themselves out of poverty. Britain led a significant breakthrough on two of the biggest barriers to successful private sector development in developing countries. First, we drove forward the G20’s anti-corruption plan, including securing agreement on important new principles that will deny to all G20 countries entry by corrupt officials or those who corrupt them. Secondly, on the inability of farmers to access the technology that makes their farming viable, Britain made a substantial contribution to the AgResults initiative, which will harness the creativity of the private sector to help put new technology in the hands of the world’s poorest farmers. We will be building on this further at our special event on hunger, which will be held at the Olympics in London this August.

Fourthly, on trade, we expressed our deep concern about rising instances of protectionism around the world. The President of Argentina had a number of arguments during this summit—not just with me—and it was made very clear to her that recent behaviour by Argentina on both investment and trade protectionism was not acceptable. At this G20, free trade again won the day. We extended our commitment to avoid any new protectionist measures until the end of 2014, and agreed to roll back new protectionist measures that have arisen, including new export restrictions.

Most significant of all, the US and the EU reached a groundbreaking political agreement to move forward with a deep but credible trade agreement with a clear and agreed timetable. The EU-US high-level working group will now produce recommendations for taking this forward by the end of the year. The EU and US make up half of the world’s gross domestic produce, so completing a deal here could provide an enormous boost to growth across the world. That means, of course, jobs and growth in Britain.

Fifthly, on financial regulation, this G20 maintained the political impetus behind the reform of regulation across the global economy. We endorsed the strengthening of the Financial Stability Board in holding all G20 countries to account for delivering on their commitments, which was specifically recommended by the UK report on global governance at the Cannes summit last year. We also agreed to push forward with completing the implementation of Basel III.

In the margins of this summit, I had useful discussions on some of our key foreign policy priorities. On Syria, where the regime continues to pound civilian areas with mortars, attack helicopters and snipers, the EU is today, as a result of UK efforts, extending sanctions to ban any EU companies from insuring ships taking arms to Syria. We will continue work with our international partners, including through the UN to stop the appalling slaughter and help forge a political transition to a democratic future that protects the rights of all its communities.

Finally, on the Falkland Islands, I took the opportunity to emphasise the importance of the planned referendum to President Kirchner. The islanders have had to put up with endless attempts at endless summits to put a question mark over their future. They want to determine that future themselves. No one should be in any doubt that, as far as the British Government are concerned, it is the Falkland islanders who will determine the sovereignty of the islands. I believe that their view will be respected by this House, this country and, indeed, by the world. I commend the statement to the House.

I thank the Prime Minister for his statement. Let me start with the foreign policy issues that he raised. On the Falklands, there is support on the Opposition Benches for the absolute need to protect the principle of self-determination for the islanders, and we should always stand up for that.

On the issue of Syria, there is deep concern on all sides about the continued failure of the Annan plan to deliver a cessation of violence. Given the urgency of having an immediate end to the escalating hostilities, does the Prime Minister agree that it is now vital for the international community to unite around the need for the toughest sanctions against Syria? In his press conference after the summit, the Prime Minister said that President Putin has been explicit that he is not locked in to Assad remaining in charge in Syria, but Russia’s Foreign Minister Lavrov said that was not his Government’s position. Does the Prime Minister still believe this to be the case, and does he believe that there is a case for persuading Russia to take a tougher stance?

I shall now turn to the main business of the summit, the economy. The G20 last met in Cannes in November. Since then our country has gone into a double-dip recession, world growth has slowed, and the eurozone crisis has deepened. If ever there was a time for the international community to come together and act, this was it, but frankly—I think that the Prime Minister may himself really recognise this—all that we got from the summit was more of the same: drift and inaction in the face of a global crisis.

The Prime Minister claimed at his press conference afterwards that the summit had

“made important progress on the Eurozone, on the lack of global growth and on the rise of protectionism.”

That sounded familiar to me—and then I realised why. The Prime Minister had said exactly the same after the last failed summit, in Cannes in November. On global growth, the Cannes summit communiqué said

“should global economic conditions materially worsen”,


“agree to take discretionary measures to support domestic demand”.

The list of the countries concerned included Germany.

Well, global conditions have worsened, most evidently in Britain, which is only one of two countries in the G20 to have gone into a double-dip recession. If that communiqué meant anything, it meant that this G20 summit should have been a coming together of the world leaders with a real plan to boost global demand, but what did we get? The Mexico communiqué is a cut-and-paste job which effectively repeats the same words that we heard at Cannes, almost word for word. Perhaps the Prime Minister will be able to tell me whether the words or the commitments of the international community have changed. As far as I can see, it is more words and no action. People will be asking—and rightly so—how much worse the economy has to get.

The tragedy, of course, is that the international community are divided between those who want a decisive move towards growth and jobs, like President Obama and President Hollande, and those whose answer to the failure of the last two years is simply more of the same—the same austerity that is not working—like the German Chancellor and our Prime Minister. Maybe the Prime Minister will be able to tell us whether, with Britain now in a double-dip recession, he was arguing at this summit for anything different from what he argued for last November. From his statement, it certainly does not sound that way.

On the eurozone, the Prime Minister said:

“These are significant agreements; now the Eurozone countries need to get on and implement them.”

But is not the reality that there is no agreement on the main issues of substance—how to recapitalise European banks, how the European Central Bank can stand behind member countries, and how to prevent the escalation of problems in the bond markets? It is more of the same—more kicking the can down the road—and there is no plan for growth in Europe either.

Of course the Prime Minister cannot be part of the solution, but he is part of the problem. No wonder he was looking for something else to talk about during the summit, and of course he found it, although, strangely, it was omitted from his statement—the tax affairs of Jimmy Carr. On Wednesday he could not have been clearer: Jimmy Carr was “morally wrong”. On what he called the “Gary Barlow situation”, he said—I am not making this up, I promise, Mr Speaker—

“As soon as I get in front of a computer I will have a look at it.”

On Thursday, the now-familiar sound of screeching tyres could be heard. The U-turn was well and truly under way. The Prime Minister said:

“I am not going to give a running commentary on different people’s tax affairs. I don’t think that would be right.”

[Interruption.] Members ask about the G20. Tax avoidance is certainly an issue at the G20 summit.

Later, when the Prime Minister’s spokeswoman was asked whether he had had a chance to catch up with the “Gary Barlow situation”, she said:

“He has been very busy.”

By Sunday, even the Prime Minister was saying “I think I’ve said enough.” That is certainly true.

There is one important lesson to be learnt from the last week. In the midst of an economic hurricane, this global summit should have produced action, not words. The reality is that this is a Prime Minister who has come back from the summit with nothing for Britain: nothing to turn around a double-dip recession, nothing to help Britain’s families, nothing to ensure growth in the world economy. No wonder he wanted to spend the summit talking about Jimmy Carr.

Oh dearie me.

First, let me thank the right hon. Member for Doncaster North (Edward Miliband) for his support over Afghanistan. I welcome that. On Syria, I agree that we should continue to back tough sanctions. On Russia, I had useful conversations with President Putin. Clearly the stance that the Russians take is a matter for them, but we believe that there is a real case for getting together and working to implement, in particular, the parts of the Annan plan that are about political transition, and we will continue to make those arguments.

On the economy, I do not over-claim—

I will tell you about that in a minute. I am trying to remember the words that you are and are not allowed to use in the House, Mr Speaker.

I would not over-claim for this summit—clearly, it was a G20, not a eurozone, summit—but I would say to the right hon. Gentleman that there are some battles that we have to fight every year, and the battle to prevent the rise of protectionism is just such a battle. This year, we have moved forward the date before which no one can put in place protectionist measures by another year, to 2014. Frankly, I wish that had gone further, but the idea that we fight this battle once and the fight is over is quite wrong.

The right hon. Gentleman’s problem with the communiqué —of course, he did not say whether or not he would have signed it—is that what he wants is more spending, more borrowing and more debt. The fact is that, while there might be some countries that could afford to spend more, because of the mess he left, Britain is not one of them. I have to remind him that he left us with a deficit that was bigger than those of Greece, Portugal and Spain. He quoted President Hollande, but he might remember President Hollande’s statement in which he said that the national debt is the “enemy” of the left. What a pity it is not an enemy of the left politicians sitting across from us. The right hon. Gentleman says we are part of the problem: frankly, he created the problem.

As for the issue of Jimmy Carr and all the rest of it, we learned from what happened in respect of Ken Livingstone that it is Labour politicians who are involved in tax avoidance, and now we know a new rule: they will stand up for tax avoiders wherever they are.

On Syria: last week, in answer to a parliamentary question, the Foreign Secretary agreed that there was some resemblance between Syria and Bosnia. If that is so, will the Prime Minister do his utmost to make sure that the Damascus of 2012 does not become the Sarajevo of 1914?

As ever, the Father of the House makes a very important point. One of the crucial things we want to see for the future of Syria, whatever the outcome, is that there is proper protection of minorities, including Christian minorities, in that country. We do not want to see sectarian conflict. It has become increasingly clear that there will not be a prosperous and safe future for Syria with Assad still in charge. That is why the political transition that Annan’s plan involves is so important and why we should keep pushing it.

Can the Prime Minister explain how Britain will retain its influence in the G20 given that his Government are isolating themselves from the main power brokers in the European Union? As Russia and China follow America in becoming superpowers, and as Russia flexes its muscles and India rises too, surely we should be right at the centre of the EU so that we are listened to more, instead of being followers on the margins of the EU?

If by that the right hon. Gentleman means, “Should we join the euro and just go along with everything that is suggested?”— [Interruption.] Well, that is what would follow, and I do not accept that for a moment. Britain can play a strong role in the EU, but where there are things we do not want to join, such as the Schengen no-borders agreement and the single currency, Britain should stay outside them.

In terms of our relations with the rest of the world, the Government have done a huge amount to increase our relations with China and India, as trade flows in the last few years show: in the last two years, exports to China up 72%, exports to India up 93% and exports to Russia up 109%. We are making a difference where it counts.

The Prime Minister referred to the part of the G20 declaration headed

“Intensifying the fight against corruption”,

which endorsed the

“denial of entry to our countries of corrupt officials, and those who corrupt them”.

As these measures were inspired by the tragic case of Sergei Magnitsky, who died in a Russian prison having exposed massive corruption by Russian state officials, is it not ironic that the next chair of the G20 will be Russia, and that President Putin will be chairing the next conference, in St Petersburg? Will my right hon. Friend encourage President Putin, who presumably endorsed this declaration, to ensure that those responsible for the death of Magnitsky and this massive corruption are brought to justice before President Putin chairs that conference a year from now?

My right hon. and learned Friend makes an important point. The section of the communiqué about corruption is indeed important, and all the countries that have signed up to it should make sure that they put it in place. One of the strengths of the G20 is that, because it is not bringing together countries that necessarily share all the same democratic or human rights values, it is an opportunity to try to push some of those agendas with colleagues sitting round the table.

The Prime Minister jests about what words are allowed and not allowed in this Chamber; on the Opposition Benches, we would quite like to hear one word more often from his lips: “growth”.

Further to the question from the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), the problem of corruption in Russia is manifest. On 7 March, this House unanimously agreed a resolution, supported by the Government, calling on them to introduce legislative proposals to make sure that those involved in the murder of Sergei Magnitsky and the corruption that he unveiled were banned from this country. When will those legislative proposals be introduced?

I have to say to the hon. Gentleman that the word I am waiting for from him, because he introduced a point of order claiming that I had misled the House, is “sorry”. To be fair to him, he has said sorry to everybody else—you, Mr Speaker, I think, and to the House in general—but the person he accused of doing something wrong he has yet to say “sorry” to. So, until I get that apology, I think I will leave off the answers.

The communiqué was clear that, as a way of agreeing further growth, there should be investment in infrastructure, particularly in housing, which would bring both jobs in general and deal with youth unemployment in particular. Can the Prime Minister say anything about the priority our Government will give to those matters in this country, in order to get youngsters off the dole and houses built for them to live in?

My right hon. Friend raises an important point. Because we have credibility in financial markets and our interest rates are less than 2%, we are able to use the strength of our balance sheet to help make sure that houses get built, that infrastructure goes ahead and that we help our economy in that way. We are looking at the best way to make this happen.

Given the lack of any discernible progress on ending harmful fossil fuel subsidies since the first G20 pledge on that three years ago, and given the silence about it again today, what would the Prime Minister say to the 1 million people whose petition was handed to him last week asking for an immediate end to those subsidies? Does he really think they are the best use of $100 billion globally every single year?

The hon. Lady makes a very important point, and there is huge pressure on countries that have big fossil fuel subsidies to end them. A number of countries—such as Nigeria and, I believe, Pakistan—have taken some steps to end the subsidies. It is obviously a difficult and painful process for those Governments to go through as they change the structures of their economy, but we should be encouraging them.

May I welcome the Prime Minister’s attack on protectionism and support for free trade, particularly the US-EU trade agreement timetable? Does he agree that these are the two largest trading blocs in the world, and together will create an enormous bloc that will have a profound effect on growth and trade across the world?

My hon. Friend is entirely right to raise this issue—it is half the world’s GDP. There are a huge number of difficulties in getting these talks properly under way; there will be concerns about farm subsidies and about hidden protectionism on both sides. But the pressure from European member states on the European Commission—and, indeed, from the Commission itself—and, I believe, from business in the US on the American President, is to get a deal done, because in the end, it would be very good for all of us.

Now that the Prime Minister has had his Jimmy Carr moment, would it not be a good idea to publish a list of all those using tax avoidance schemes, including those closer to home and those who inhabit millionaires’ row?

Order. I feel sure that the hon. Gentleman was seeking to relate his question to the European summit.

I was hoping, for once, that the hon. Gentleman would stand up and applaud what I had said about tax avoidance and aggressive tax avoidance. I thought, for once, we might be on the same side.

And better still—I beg your pardon to the hon. Gentleman and to the House—to the G20 summit. That would be helpful.

I am very grateful for the Prime Minister’s statement, particularly after he made such an excellent speech on welfare reform earlier today. Could he confirm that the referendum for the Falkland Islands will be binding and solemn? As referendums are such a good idea for people, why can we not have one in this country about our relationship with the European Union?

That was an excellent link, if I may say so. What is so important about the Falkland Islands referendum, which is very much an initiative that has come from the Falkland islanders themselves, is that it will give the opportunity for the rest of the world to see what the people who live there actually want—lots of countries that are not particularly focused on this issue may, in the past, have gone along with proposals from Argentina without really considering that. When they see it in glorious technicolour, I hope that will make a difference.

The Prime Minister will be aware that last week the Rio+20 conference also took place. As the leader of what he calls the “greenest Government ever”, can he share with us what representations he made in Mexico about that other crucial conference?

Obviously it is difficult to be in two places at once, so I did the G20 and the Deputy Prime Minister was at the Rio+20 summit. We discussed it a great deal in advance, and I think it did make some useful progress in terms of sustainable goals. I am also going to be working, through this high-level panel to which Secretary-General Ban Ki-moon has appointed me, to make sure that we put in place the right replacements for the millennium development goals and that they take into account sustainable concerns as well.

Does my right hon. Friend agree that events in the eurozone have predictably proven that the creation of the single European currency was a disastrous mistake?

It would have been a mistake for us to join the single currency, because we did not want to give up the necessary sovereignty to make a single currency work. We have to respect the fact that there are countries in the eurozone that want to make it work, and we have to allow them that opportunity. It would clearly be in our interests if we had a working single currency on our doorstep, rather than a dysfunctional one, which, I am afraid, is slightly what we have at the moment. So we have to make our own choices, and other EU countries must make their own choices, but the key point—this is where I agree with my hon. Friend —is that a single currency will not work unless it has at least the underpinnings that other single currencies, such as our own, have: a central bank right behind it; a means of supporting the weaker parts of the union at various times; and some sort of joint debt issuance. Those are the sort of things that all single currencies, the world over, have. To that extent, I agree with him.

At the G20, how did it feel for the Prime Minister to be one of only two leaders to have their domestic economies in recession?

What it feels like at the G20 is that you are around a table with people from other countries that have large budget deficits but not as large as the ones that we were left. We were left with an 11% budget deficit and with the biggest banking bust that had taken place anywhere. So I would say that there is considerable sympathy for that around the table, and a lot of people around the table talk about the complete mess we were left in.

The German Foreign Minister recently wrote in The Times:

“Anyone who wants new flash-in-the-pan stimulus packages financed by yet more borrowing has learnt absolutely nothing from the crisis.”

Who was he talking about?

I cannot possibly think, but I can think of some people sitting opposite me who do believe that the way to get out of a debt crisis is to borrow more—that is their policy.

The OECD has predicted that economic demand in America will rise this year at 2.3%, but in Britain it will rise at only 0.2%. Can the Prime Minister explain why?

There some quite significant differences between the American economy and the British economy. One of the biggest differences is that it is a reserve currency and we are not a reserve currency. Another big difference is that we had an 11% budget deficit, which was bigger than the deficits of Greece, Spain and Portugal. That is the legacy that the hon. Gentleman’s party left, and until Labour Members apologise for that legacy, no one is going to take them seriously.

Order. I did not want to hurry the hon. Gentleman, but we can hear his question when he has calmed down and when he is ready.

Thank you very much, Mr Speaker. Does my right hon. Friend agree that the rather ridiculous posturing by the Argentines at the G20 summit tries to hide the fact that it is they who are the real colonialists, because they wish to ignore the democratic wishes of the Falkland Islands people themselves?

My hon. Friend is entirely right. At the heart of the UN charter is the concept of self-determination, which is why I think that the referendum is important. In many ways, we do not need it to happen in order to know the wishes of the Falkland islanders, which have always been clear, but none the less I think that it will underline that and people will be able to see that it is not Britain that is behaving in a colonialist way but that we are simply doing what the Falkland islanders want us to do.

On the basis of what authority is the Prime Minister lecturing the eurozone when two and half years of his Government’s policies have driven this country into a double-dip recession?

I think that as a net contributor to and full member of the European Union we have every right to say what we think is necessary to fix the crisis. The hon. Gentleman talks about what has happened over the past two years, but I would make the point that 400,000 more people are in work than at the last general election. Unemployment was down this quarter and employment was up, and there are 840,000 more private sector jobs. It is tough and difficult but a rebalancing of our economy is taking place that involves more manufacturing and more exports and that is leading to private sector job growth.

The Prime Minister referred in his statement to the changes of governance in the eurozone and the remorseless logic of being in a currency union. Those of us who have consistently called this right over the past 20 years have serious reservations about asking countries such as Greece, Spain and Portugal to make the democratic sacrifices that we ruled were unacceptable to the United Kingdom. Does he share our concern that when countries find they cannot change the policies of their Government through the ballot box, it could lead to profound instability in Europe?

My hon. Friend makes a very good point, but the point that I would make in response is that it is not for us to tell those countries what to do. If countries want to join a currency union, understand that to make that currency union work they have to give up all sorts of sovereignty and freely enter into that bargain, that is a matter for them and not a matter for us. It is for us to decide whether we want to do that, which we do not, and—and, frankly, it is all right to do this—to give advice about what would make a eurozone work better than it is working today.

The communiqué reads:

“We are committed to adopting all necessary policy measures to strengthen demand, support global growth and restore confidence”


“enhance job creation”.

I welcome monetary activism as one of the tools to help achieve that, but can the Prime Minister explain to the House how his Government’s austerity programme will do anything other than weaken demand, weaken growth and suppress demand for labour?

I make this simple point to the hon. Gentleman: if we did not have a credible plan for dealing with our debts and our deficit, our interest rates would not be below 2%. It is worth remembering that when this Government took office, Spanish and British interest rates were at the same level. Our rates are now below 2%, which is helpful for growth, for business and for home owners, and the Spanish have interest rates close to 7%. That is the point. The idea that if a country spent more, borrowed more and added to its debts, it would stimulate its economy is probably wrong.

Order. I gently say to the hon. Member for Rhondda (Chris Bryant) that if he wishes to conduct a running commentary on our proceedings, he is welcome to apply for a job at Wimbledon over the next fortnight, where his services might—or, alternatively, might not—be required.

I look carefully at what the French are both doing and saying and it seems to me that their plans to reduce their structural deficit are, if anything, more aggressive than our plans to reduce our structural deficit. I hear from the Opposition that we should learn lessons from France, and the fact is that the French have a deficit reduction programme, it is quite aggressive and they refer to the national debt as the enemy of France and the enemy of the left.

Did not the G20 communiqué argue that advanced economies should pursue fiscal consolidation at a pace appropriate to support recovery? Why, then, is the Prime Minister pursuing fiscal consolidation at a pace that has contributed to a double-dip recession?

We are pursuing fiscal consolidation at a pace that is right for the British economy, which is why our interest rates are as low as they are.

Was the Prime Minister surprised to hear quite a lot of questions about stand-up comedians but that neither Tony Blair nor the Leader of the Opposition have ruled out joining the euro?

To be fair to the Leader of the Opposition, he has said that whether or not they will join the euro depends on how long he is Prime Minister, whereas the shadow Chancellor has said that they will not join the euro “in his political lifetime”, which gives us an interesting conflict—[Interruption.] For once, the shadow Chancellor has said something from a sedentary position with which I agree. He said that his political lifetime could be quite short—here’s hoping.

Order. This outbreak of amity is very welcome, but I am sure that Members are united in wanting to hear Mr Mark Lazarowicz.

On a more serious note about the euro, Greece now has a new Government, which indicates that it will accept the bail-out but wants some flexibility in how it is implemented. What will the G20 and other institutions do to meet that request? Of course Greece must accept its responsibilities, restructure its economy and all the rest of it, but at the same time is it not important that we show flexibility, so that we do not run the risk of the new Greek Government collapsing along with the deal and, as a result, bringing down not only Greece, but many others in the world community?

The hon. Gentleman asks an important question. It will be a decision for the Greeks to make in collaboration with the members of the European Union that have extended that money to Greece, of which we are not one, and of course the International Monetary Fund. The problem is that any delay in the terms of the memorandum effectively means more money going from those predominantly eurozone members to Greece, so those discussions have to be had; but other countries that are on track with the programmes that have been put in place will, I think, feel very uneasy about one country getting special terms. In the end, it will be a matter for the eurozone members and Greece to hammer this out between them.

I congratulate my right hon. Friend on facing down the Argentine President and pointing out that we will not be bullied or have any silly stunts. Does that not contrast starkly with either giving away huge European rebates or cosying up to African dictators, and show once again that if we want someone to stand up for sovereignty and British interests, we need a Conservative Prime Minister?

I am grateful to my hon. Friend for his question. It seemed to me important to try to make that point, not just to Argentina but—almost more to the point—to other countries, which sometimes go along with motions proposed at various international gatherings that are against the interests of the Falkland islanders because they have not heard their voice. People are now going to hear that voice, and I hope the world will listen.

Is not the Prime Minister’s influence in and prescription for the world economy fatally undermined by the first double-dip recession in 37 years in this country?

The point about what we are saying about the world economy is that, in fact, we are part of the consensus on the need to stop the march to protectionism, to regulate the banks properly, to have credible fiscal plans so that interest rates are kept down, and to have proper monetary activism and structural reforms to deliver growth. That is what the world signed up to at the G20 and it is a consensus that the Labour party is completely out of.

Given that the Leader of the Opposition seems to have identified the President of France as his special friend, does my right hon. Friend agree that it is worth reminding the right hon. Gentleman of the words of President Hollande, who said that growth cannot be generated by means of further public spending, because that needs to be reined in?

My hon. Friend is entirely right—that is exactly what the President of France said. He knows that a credible plan to reduce the deficit is necessary to generate growth in any country, and that one is fatally undermined by the lack of that credibility. It is only the left in this country that thinks we can borrow our way out of debt.

May I register the deep disappointment that the Prime Minister did not make the extra journey to attend the Rio+20 Earth summit? Given his remarks about growth, may I ask how he is making the links between the need to go beyond GDP and the importance of natural capital in the arguments and the growth objectives on the G20 agenda?

That is a perfectly fair question. My judgment was that having done the G8 and NATO summits, then the G20 and an important bilateral visit to Mexico—we should be linking up with the fastest-growing economies in the world—it was better to ask the Deputy Prime Minister to attend the Rio summit, which I believe made some important progress. This Government believe that, as well as GDP, we should be thinking about other measures of sustainability and well-being, and we are measuring those things for the first time in this country, which is giving something of a lead to others.

I warmly welcome my right hon. Friend’s support for free trade at the G20, and like him I believe that the free movement of peoples is important to free trade, but does he agree that it was a great dereliction of responsibility by the previous Government not to introduce transition arrangements in relation to those states that joined the EU in 2004?

My hon. Friend makes an important point. It was the Conservative Opposition who warned that it was a bad decision to allow unencumbered access to British labour markets from countries such as Poland. We well remember being told, “You can’t talk about these things”, that it is somehow racist to discuss immigration, and all the rest of it. Year after year we had to put up with that nonsense, and to get a half-baked apology now is simply not good enough.

It was interesting to see that the Prime Minister treats correspondence from the President of Argentina in the same way as he treats correspondence from Members of the House. Will he make it clear beyond any equivocation that not only is the sovereignty of the Falkland Islands not open for negotiation, but it is not open for discussion in any forum whatever, and that the wishes of the people of the Falklands to remain British will prevail?

I can certainly give the right hon. Gentleman that assurance. The referendum of the Falkland islanders will help us to deliver that in practice as well as in theory. Let me say to the right hon. Gentleman that if he writes me a letter, I shall try to respond to it very speedily.

I share my right hon. Friend’s concerns about the sovereignties and powers that may be given over by some of the weaker countries. I am concerned that we are not having a debate about what sort of chimera will be created by those who will mop up those powers and sovereignties, and I urge my right hon. Friend to speak up strongly on the European Council this week. May we have a debate when he returns from the Council, to inform the House exactly how we are being protected against this newly created large superstate?

My hon. Friend makes an important point. Of course there will be consequences if the eurozone members go ahead and form a more integrated eurozone, and it is very important that we protect Britain’s interests, particularly our interest in having a fair and open single market. On the issue of how we debate these things in Parliament, the Backbench Business Committee took over all the days for Back-Bench debates including, as I understand it, the time that was previously allotted by the Government for European debates in advance of European summits. So if the Backbench Business Committee wants to put in such debates, I am sure Foreign Office Ministers would be only too happy to answer those debates, which would help inform me before I go off to European Councils.

Does my right hon. Friend agree that it is grossly hypocritical of the Argentine Government to demand talks on the Falklands, while at the same time refusing to accept a letter from the Falkland Island Government about talks?

My hon. Friend makes a good point. There are a number of things about which the Falkland islanders would like to have proper discussions with Argentina—about the links between the Falklands and countries in Latin America; ordinary conversations that the Falkland Islands should be having with neighbouring countries. What is absolutely clear is that for that to happen, countries need to respect the sovereignty of the Falkland Islands and the decision that people there make.

If we expanded trade between Britain and America as part of the EU expanding its trade with America, the benefits would be more goods and services and more jobs in the UK, and more opportunities to export. We might find particular advantages to Britain in some of the services fields, where we have very good companies that do not always get full access to US markets. In that way my hon. Friend’s constituents would benefit.

Despite the economic headwinds of the eurozone crisis, in the west midlands in the past year 4,000 jobs were lost in the public sector, but 81,000 jobs were created in the private sector. Does that not vindicate the Government’s strategy of reducing the deficit and keeping interest rates low?

My hon. Friend makes an important point. As I said, there are 400,000 more people in work than there were in May 2010. Of course we have seen some job reductions in the public sector, but they have been more than made up—several times made up—by the jobs that have increased in the private sector. That is the sort of rebalancing that our economy needs.

Will my right hon. Friend encourage business to look also beyond the EU to secure growth and future orders, and will he ensure that Government policies are designed to support business to do that and to break down often hidden protectionism in other markets?

My hon. Friend is entirely right. Part of the Government’s strategy is to link Britain with some of the fastest growing countries in the world, and that is why I have personally taken trade missions to almost all of the G20 countries now, apart from Brazil and Argentina, and I hope to go to Brazil later this year. One of the most effective ways to break down trade barriers is through the EU trade deals. We have done one with Korea; we now need to do one with Japan, and there are many others in the pipeline.

The Prime Minister has talked a lot about eradicating the debt. At the start of the Parliament he said he would eradicate it by the end of the Parliament. How is that timetable going?

The Argentine Government and the media often repeat the claim that Argentina wants the Falkland Islands back. Does my right hon. Friend agree that no one can have something back that has never been theirs? Argentina has never had legal possession of the Falkland Islands, and unless it is the wish of the Falkland islanders themselves, it never will do.

My hon. Friend puts it very well; I could not have put it better myself. The key point is self-determination, and that is what the referendum will prove.

Does the Prime Minister agree that the relative strength of the German economy is partly derived from the fact that it has a sensible approach to public finances, and that we should continue to promote that across Europe? Does he also agree that the importance of the European Central Bank needs to be further enhanced?

My hon. Friend makes an important point. Of course, there is an enormous amount of pressure on Germany to do more to back the eurozone, and I understand and support some of that pressure, but we should remember that the German economy is so strong because it went into the recession with a budget surplus, whereas we had a budget deficit, and it had spent the previous 10 years getting more competitive, building up its industry and making sure its economy was balanced. Sadly, under the last Government we spent too much time imitating Greece, and not enough time imitating Germany.

It seems that 655 Argentines lost their lives in the Falklands war. Does my right hon. Friend agree that if Argentina were to restore proper sea and air links to the Falkland Islands, the families and loved ones of those in the Argentine cemetery would be able to visit it properly, which is what should happen?

My hon. Friend makes an important point. There is the air link with Chile. Obviously, if there were better relations, there could be air links with Argentina, but that has to be on the basis that Argentina respects the sovereignty of the Falkland Islands and the decision that the people of the Falkland Islands are going to make. Another reason why the referendum is important is that it will put that beyond doubt, and perhaps that will allow better conversations to take place.

Is it not right that international problems such as tax avoidance should be dealt with internationally at meetings such as the G20 summit, particularly as in the UK tax avoidance by individuals and corporations increased massively during the past decade? Is it not wrong and morally repugnant for anyone to attack, belittle or undermine the Prime Minister in dealing with this, particularly as the Leader of the Opposition did in his remarks earlier?

I thank my hon. Friend for what he says and make the simple point that tax evasion is illegal and should be pursued properly. Of course there are things that people do to minimise their tax bill, whether it be investing in a pension or an ISA, but as the Chancellor has said, and I totally agree, there are some aggressive tax avoidance schemes that should be roundly condemned, and that is exactly what the Government are doing.

The Prime Minister has put support for British exports at the heart of Britain’s economic recovery. What comfort can industries in my constituency that export globally take from the Prime Minister’s work at the G20?

I very much enjoyed the visit that I made to my hon. Friend’s constituency and to BAE Systems where his constituents are doing excellent work in building the Typhoon aircraft, and we go on supporting the sales of that aircraft. There are a number of important contests at the moment, and the Government are absolutely behind BAE Systems in all of those.

Manufacturers in my constituency have told me of the important help that they have had from UK Trade and Investment recently—for example, the setting up of webinars in British high commissions and embassies to speak to customers overseas. What more can we do to help British business sell even more around the world?

I am grateful to my hon. Friend for his question. He heard the figures earlier; some massive increases during the last two years to different countries. UKTI is doing a good job. Members on both sides of the House can help link UKTI to small and medium-sized enterprises in their own constituencies. I think that the figure is that if one in five of our SMEs that currently export moved to one in four, that would probably eradicate our trade deficit. That is an important agenda and I urge all Members of Parliament to help businesses in their constituency in this way.

Given that no amount of moving the eurozone debt around the system, between bank and Government, can hide or conceal its scale, does the Prime Minister agree that the most important thing eurozone Governments can do to narrow the gap between what is spent and earned is introduce sweeping supply-side reforms and free up small businesses from the dead weight of regulation?

My hon. Friend is entirely right. Whether it is trying to make the eurozone work better, trying to increase growth in the European Union or trying to compete with the rest of the world more effectively, all those pathways lead back to supply-side reform, structural reform and deregulation initiatives to help make European countries more competitive. That is what Britain is standing up for in Europe. At the summit this Thursday and Friday I very much hope that in the growth plan there will be the very strong commitments we secured at the last two European Councils for these deep structural changes: completing the single market in services, in digital and in energy. All these can add to our GDP and mean jobs and livelihoods for people in our constituencies.

I am grateful to the Prime Minister and Members of the House for their succinctness, which enabled 41 Back Benchers to question the Prime Minister in 34 minutes of exclusively Back-Bench time.