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EU Council

Volume 569: debated on Monday 28 October 2013

In the past 24 hours the country has been hit by one of the worst storms for many years. I know the thoughts of the whole House will be with the families and friends of the four people we know have lost their lives. I am sure the whole House will join me in paying tribute to our emergency services and to all those who have been working to clear up the debris and get our transport system moving again. All the agencies involved are working as fast as possible to get things back to normal.

Let me turn to last week’s European Council. The key subjects under discussion were business regulation, competitiveness and monetary union. We also discussed migration policy following the Lampedusa tragedy and the importance of the EU’s eastern partnership, specifically with respect to Ukraine, so the background to this Council was the state of the European economy. There is no doubt that the outlook is better than it has been, particularly here in Britain, where Friday’s figures showed the fastest growth for three years. My aim at this Council was to do everything possible to enhance the prospects of a sustained and balanced recovery here in the UK. We made good progress in three areas in particular: cutting red tape; promoting trade and the completion of the single market in digital and services; and protecting British interests as the eurozone integrates further. Let me briefly say a word about each.

First, on cutting red tape, Britain’s business taskforce produced an excellent report, which was endorsed by 100 European businesses. I chaired a meeting bringing members of the business taskforce together with President Barroso and the leaders of Germany, Sweden, Italy, Poland, Finland, Estonia and the Netherlands. Those countries, which represent all parts of Europe and all political traditions, agreed on the need to make more progress in cutting regulation and helping businesses across Europe to create jobs. The strong language adopted in the communiqué by all EU member states reflects that ambition. It calls for rapid implementation of REFIT, the Commission’s own bureaucracy-cutting initiative, and a proper scoreboard to measure exactly how much regulation is being cut. Deregulation is now part of the EU agenda in a way that it simply has not been before.

Secondly, on trade, we welcomed the conclusion of the new EU-Canada trade deal, which could be worth £1.3 billion to the British economy, with estimates suggesting that British exports to Canada could go up by as much as a fifth. Last week’s agreement also means that we can now move on to focus on the EU-US talks that we began at the G8 at Lough Erne. There were some attempts to link that potential US trade deal with the concerns about US intelligence, but the Council rejected the idea.

On the digital single market, once again a commitment was made to complete that by 2015, potentially boosting growth by as much as 4% of the EU’s total GDP. As Britain is a world leader in e-commerce, that is very much in our interests. We made good progress at the Council on issues such as portability of data, e-identification, e-invoicing and payment services, and an EU-wide copyright regime for the digital age. But we also agreed not to rush ahead with the data protection directive on an artificial timetable, because the current draft has disproportionate burdens on small business that need to be removed. With regard to the services directive, we also agreed that it was time to look at a new sector-by-sector approach, rather than just trying to remove all the outstanding barriers to free trade in services in one go, a process that has stalled in recent years.

Thirdly, on defending Britain’s interests, as I have argued repeatedly in this House, the European Union is changing and the eurozone needs more integration and co-ordination, but Britain is not in the single currency and is not going to be, so we should not have to take part in those additional pieces of co-ordination, whether they cover economic or social policy. Therefore, while eurozone members agreed to even more intrusive policy co-ordination, including on social policy, I was clear that Britain will not take part. That is reflected in the communiqué, which states that all changes are voluntary for those countries not in the single currency.

On the tragedy at Lampedusa, we agreed the next stages of the work of Frontex, which is responsible for trying to stop people coming into the EU in the first place, but we rejected the idea that there should be additional burden sharing for so-called “front-line states”, not least because the figures show that Britain, France, Germany, Belgium and Sweden received almost 70% of asylum applications recorded in the EU in the last 12 months. What is most important of all is to help stop the problems at their source. The UK will continue to play a leading role in that, for example through support for border security in Libya and the focus of our development assistance on helping countries at risk of instability.

On the eastern partnership, we agreed that countries that look to Europe for support, such as Ukraine, should be free to enter into agreement with us, while of course continuing to insist on proper standards of governance and justice that such a relationship should entail.

Finally, because of the recent controversies there was much discussion of the role of intelligence agencies. We agreed a statement, which we signed as Heads of Government—because there is no EU competence in this area, and nor should there be—saying that European countries and America should have a relationship based on trust and referring to the damage that had been done by recent revelations. The UK has a very strong, long-standing, trust-based relationship with the US, not least as part of the “Five Eyes” partnership, together with Canada, Australia and New Zealand.

With regard to our own intelligence services, it has been a long-standing stance that we do not comment on their activities, but it is worth saying this: we have parliamentary scrutiny of our intelligence agencies through the Intelligence and Security Committee, and we have strengthened that oversight. Our agencies operate under the law and their work is overseen by intelligence commissioners. Of course, as technology develops and the threats we face evolve, we need to ensure that the scrutiny and frameworks in place remain strong and effective, but we have every reason to be proud of our intelligence services and the way they are properly constituted in our country.

Since 2000, we have seen serious attempts at major acts of terrorism in Britain, typically once or even twice a year. Since 9/11—this is a significant figure— 330 people have been convicted in our courts, here in the UK, of terrorism-related offences. This year alone, there were major trials related to plots including plans for a 7/7-style attack with rucksack bombs, two plots to kill soldiers, and a failed attempt to attack an English Defence League march using an array of lethal weapons. There were guilty pleas in each case. Twenty-four terrorists were convicted and sentenced to more than 260 years in jail. I quote these figures just to demonstrate the scale of the ongoing threat that we face in our country. Our intelligence has also allowed us to warn our EU allies about terrorist plots aimed at their people, about cyber attacks on their businesses and infrastructure, and about attempts in their own states to traffic drugs, people, arms and money illegally.

Our intelligence officers serve our country without any public recognition. Some have given their lives in this service, and yet their names are not known and their loved ones must mourn in secret. We owe them, and every intelligence officer in our country, an enormous debt of gratitude. They are silent heroes and heroines keeping our country safe, and they deserve our support. I commend this statement to the House.

I thank the Prime Minister for his statement. May I start by joining him in sending my deepest condolences to the families of the four people who have died during the storm conditions of the last 24 hours? Let me also join him in thanking the emergency services for the work they have done overnight to protect people and the work they are now doing to clear the debris. Will he take this opportunity to update the House on the hundreds of thousands of homes without power in south-west England, East Anglia and the midlands, and on how long it is expected to take for it to be restored?

On the European statement, I join the Prime Minister in his support for the work of our intelligence services. It is vital, it keeps us safe, and, as he said, by its very nature it goes unrecognised. I join him in applauding the men and women who work for our intelligence services. I also support the summit’s statement on this issue. We can all understand the deep concerns that recent reports have caused in some European countries, especially Germany, so as well as providing that support for intelligence services, it is right that every country ensures proper oversight of those activities.

Turning to the formal agenda of the summit, first, on trade, we welcome and support the conclusion of the Canada-EU trade deal and agree with the focus on the US-EU trade agreement. At the start of this year, a timetable for December 2014 was set to complete negotiations. Will the Prime Minister set out any further developments on that challenging timetable and its feasibility? Does he agree that the possibility of this agreement is an important reminder, including perhaps to his Cabinet, that a prosperous future for Britain lies inside, not outside, the European Union?

Secondly, completion of the digital single market could have a significant impact on our prosperity. On numerous occasions, the Prime Minister has come to this House stating his commitment to expand the single market in digital services. What has been achieved at this summit that was not achieved at previous summits? Can he reassure us that the delay to the data protection directive is a delay and not simply a pushing of this into the long grass for it never to be completed?

On regulation, we will look at the proposals of the Prime Minister’s taskforce. We agree with the need to restrain unnecessary regulation and welcome any progress on this, but we do need to distinguish between good and bad regulation. That takes me to a couple of questions about his taskforce’s report. In the light of the horsemeat scandal earlier this year, does it really make sense, as the taskforce seems to be suggesting, to scrap new rules providing transparency about where slaughtered meat has come from? What about rules on agency work? Those rules play an important role in deterring employers from using low-wage migrant labour to undercut local workers, but his taskforce says they should be watered down. What reassurance can he provide that this will not simply mean cuts in wages and conditions, and a race to the bottom?

On broader economic policy, I note that the Prime Minister said at the end of his European summit press conference that his priority was now to

“make is a recovery for all”.

Does this represent an acknowledgement that despite the welcome news on growth, millions of people still feel worse off because of the cost of living crisis? Talking of that crisis, did he share with other European countries the fact that the UK has the highest inflation in Europe and in the last quarter we saw the lowest wage growth in Britain on record?

The Prime Minister also said after the summit that he wanted to help people “excluded from our economy”. This includes youth unemployment, which is mentioned in the communiqué. [Interruption.] I know that Government Members do not want to hear about youth unemployment, but it is a very important issue. The shameful truth is that nearly one in five unemployed young people in Europe lives in Britain, and the Prime Minister’s youth contract has recently been branded a failure by his own advisers, so what did he say at the summit about the changes needed here in Britain when it comes to youth unemployment?

For people who are struggling with their energy bills and whose wages are falling, and for young people looking for work, is it not the truth that nothing is different after this summit from what it was before? To be fair, in his heart of hearts, I think even the Prime Minister realises that, because he began his press conference after the summit with the stirring words: “Another European Council concluded.” Is not that the best that can be said for this summit?

I make no apology for coming to this House and repeating the policy prescriptions we need to achieve in Europe. We have a very consistent record of going after completing energy, completing digital and completing services. That is what will make a difference. It is hard work in Europe—it is hard going —but we are making progress.

The Leader of the Opposition asked a number of questions; let me answer all of them. On electricity disconnections, more than 200,000 people are currently disconnected and work is under way to reconnect them. Obviously, circumstances will differ in each case, so it may take longer for some than others.

I very much welcome the fact that there is cross-party agreement on the intelligence services. Over recent years, we have put in place—under Governments of both parties—very good arrangements for governing our intelligence services and we should be proud of the work they do.

On the EU-Canada trade deal, the right hon. Gentleman is right that there is still more to do. I think that the most difficult decisions in principle have been made, particularly on key areas such as beef and dairy, so I do not expect this to take a long time. The pressure is on, because everybody knows that the EU now wants to turn to the bigger deal with America, so the Canada deal needs to be wrapped up.

On digital and the single market, there is quite a lot of detail in paragraphs 5 to 9 of the communiqué about the specific progress on individual items. Whether they are telecoms, data or rules for e-commerce, a huge number of detailed changes have to be made.

I reassure the right hon. Gentleman that we have looked very closely at the data protection directive. The effect of the current draft would be to add more than £300 million to the costs of UK business. It would mean that quite small businesses that do market research, for example, would have to employ one extra person simply to comply with the directive. We need a directive in order to make the digital single market work properly, but the current draft is wrong and we should hold it up so that we get it right.

On deregulation more generally, I hope the right hon. Gentleman will read the report, which is excellent because it comes up with good principles that should be adopted in Europe, such as the one-in, one-out principle that we have adopted in the UK. It also makes 30 recommendations for directives to be scrapped, amended or in some cases completed. It is a good report.

On unemployment, let me answer the right hon. Gentleman specifically. The UK youth unemployment rate is below that of France, Italy and the EU average. It is down over the quarter. The youth claimant count is down 79,000 since the last election. There is much more to do, but the fact is that just this morning we announced 100,000 extra training opportunities for young people and there are record numbers of apprenticeships—they are now running at twice the rate they were under the previous Labour Government.

The right hon. Gentleman made a number of economic predictions that rather reminded me of other predictions he has made over the years. He told us in 2010 that our policies would lead to a loss of 1 million jobs. That was completely wrong: we have added 1.4 million private sector jobs. In 2012 he was still saying, amazingly, that the loss of public sector jobs would not be made up for by the growth of private sector jobs. Again, he was wrong: we got 1 million more people in work.

As late as June this year, the shadow Chancellor, who is not in his place—presumably he is sorting out Labour’s HS2 policy—said that we would choke off growth, and yet the truth is that this year we are forecast to grow more than twice as fast as Germany. Those are the results we are getting both here and in Europe.

During the summit, did the Prime Minister manage to raise the issue of energy prices? EU regulations mean that we have much dearer energy than America or Asia, and I seem to remember the previous Government willingly signing up to those proposals. They are clearly a competitive impediment to us.

There was no specific discussion about energy prices, but one of the proposals of the business taskforce report is to ensure that we do not add to the cost of, for instance, shale gas extraction. That was very much welcomed by other member states. We need to consider how regulations add to the costs for energy consumers.

I welcome the Prime Minister’s efforts in respect of deregulation. May I ask him to pay particular attention to the REACH—registration, evaluation, authorisation and restriction of chemicals—regulation? As I have explained to the Secretary of State for Environment, Food and Rural Affairs, that regulation is likely to have a deleterious effect on one company in my constituency, which does not wish to be named for obvious reasons. We all support health and safety measures in respect of chemicals, but will he look at the over-elaborate enforcement of the regulation, which is unnecessary and could do gratuitous damage to companies in this country?

The right hon. Gentleman makes a good point. That issue is covered in the excellent document by the business taskforce.

May I take this opportunity to say how much the right hon. Gentleman will be missed in Parliament by Members on both sides of the House? I worry that if he retires to his house in my constituency, he might be a rather frequent correspondent when he has so much time on his hands. However, his contributions are always welcome.

May I join the Prime Minister in offering my condolences to those who are suffering from bereavements as a result of today’s weather, and my thanks to the emergency services? I also echo his warm words about working with our eastern European neighbours, including Ukraine, at the European Council.

Following last week’s very good economic news for Britain, does the Prime Minister agree that we can best show that the EU provides more jobs and trade in this country not only by making good trade deals, but by developing a digital common market in which Britain can lead, because English is our language, and which can open the telecoms market and end the nonsense of roaming charges, which are onerous and expensive?

Ending roaming charges would be a good step that would demonstrate that EU directives can sometimes make people’s lives easier, rather than more difficult. The challenge is that, all too often, we find that a directive will add to business costs, rather than reduce them. That is why it is vital to hardwire into the EU’s systems a greater belief in deregulation and cost-cutting.

If we are giving impetus to association agreements with Ukraine, Moldova and Georgia, where does that leave Turkey? What assessment has the Prime Minister made of the reports that Germany and France may be revising their attitude to Turkish membership of or association with the European Union? Surely Turkey should be a greater priority, given its crucial role as a gateway between Europe and Asia and between the Christian and Muslim worlds.

We should take the two cases separately. We are in accession negotiations with Turkey and another chapter has just opened in relation to its membership of the EU, which I support. Ukraine and the other Eastern Partnership countries are a different matter. They are obviously under an enormous amount of pressure to join a trade area dominated by Russia. We want to say to those countries that if they want to have a relationship with Europe and to trade with it, they can. This is an opportunity to say to countries such as Ukraine that they must continue to make progress with governance and justice if they want to have that relationship. That is an important part of the EU’s relationship with those eastern countries. I therefore think that the two cases are slightly different.

The Prime Minister is determined to achieve proper reform of the EU. Does he agree that it is ridiculous that the EU spends only 2% of its annual budget on trade and more than two thirds of its annual budget on structural funds and agricultural policy? Does he think that that needs to change?

That does need to change. We made some progress at the recent budget negotiations, because the deal for the seven-year period involves a cut. The EU will, to coin a phrase, have to do more with less. Hopefully it will do less with less—that would be even better. It should focus on things that will improve living standards in European Union countries. Obviously, trade deals are chief among those things.

Did the Prime Minister discuss with Chancellor Merkel the targeting of her phone by the American intelligence services? Will he tell the House whether his phone has been targeted and, if not, why not?

There was a good moment at the dinner when one EU Prime Minister said how disappointed he was that clearly no one was interested in his conversations. I will not reveal who that was. We do not comment on these issues. The White House has made the situation perfectly clear and I do not need to add to what it has said.

Thank you, Mr Speaker, and I thank colleagues very much.

I welcome what the Prime Minister had to say on migration and avoiding the tragedies in the Mediterranean, but will he reaffirm the long-term nature of support to Arab countries in transition? There is a sense that just two years after the events of 2011, countries should be settling down and sorted out, but the impact on politics, economics and security has been significant. If we are to avoid the tragedy of deaths in the Mediterranean, and greater migration, an assurance from the United Kingdom and the EU that there will be long-term support for transition would be helpful.

My hon. Friend did a huge amount in the Foreign Office to ensure proper relationships between the EU and those north African countries, and that we put in resources to try to help stabilise them. Clearly there is much more work to be done, and we must keep on with that initiative because the best way to stop those migratory flows is to help heal those countries at source.

May I push the Prime Minister a little further on that point? He said in his statement that the next stages of work for Frontex were agreed at the Council? Will he say what that amounted to and what part the UK will play, both by itself and as part of necessary EU co-operation? Nobody in this country wants any more of the terrible incidents that we have seen in the Mediterranean.

As the hon. Lady said, the tragedies that have happened were appalling, and we must therefore improve all the ways we deal with this issue. Frontex is, as its name suggests, absolutely on the front line, and it needs the resources necessary to carry out its work. There will be a bigger and broader debate in the EU about the whole issue of migration, and we should try to avoid the sense that there are somehow front-line states such as Italy or Malta that are under particular pressure. When we look at the figures and see how many asylum seekers per 1,000 people there are coming to Britain or countries such as Hungary, we see that there is a fair burden share. All those issues will be discussed at European Council, probably after the next European elections.

Were there any discussions at the European Council about the role that the EU might play in the forthcoming election in Bangladesh, in observing and ensuring free and fair elections?

That issue was not discussed, because we were focused on trade and the single market, and additional issues of migration and the eastern partnership. Observers can play a role, however, and I am sure my friends in the Foreign Office who are sitting next to me will respond to my hon. Friend on how Britain and the EU can help with those elections.

Given the orchestrated campaign and witch hunt against The Guardian, is this an appropriate time to congratulate it on publishing details of how the mobile phone of the German Chancellor has been monitored? Does the Prime Minister consider that that sort of information should be in the public domain?

I certainly would not congratulate The Guardian newspaper, because I can see what has been done. Information has been published about the work of our security and intelligence services that will, quite frankly, make this country less safe. We live in a free country, so newspapers are free to publish what they want. We have not been heavy-handed and come in with injunctions and all the rest, but we appeal to newspapers to use judgment, common sense and responsibility when they make such decisions.

I congratulate my right hon. Friend on his emphasis on deregulation for British business. To get such deregulation, what kind of treaty change does he think we will need in the end?

We must ensure that the way Europe works is not always by reaching for regulatory changes and costs when it examines a problem. Sometimes that will just be about Europe behaving in a different way—as I hope it will on shale gas, for example—but on other occasions it will require institutional changes, such as the red card system that my right hon. Friend the Foreign Secretary has suggested, or further treaty changes to try to reduce the burden of regulation, or indeed take this country out of areas of regulation. All those things should be on the table.

I thank the Prime Minister for an advance copy of the statement. It is unclear whether the UK will be allowed to rejoin some measures following the block opt-out of EU criminal law because, of course, rejoining will be subject to veto by other members. What discussions on that did the Prime Minister have with his counterparts? Would it not be better to address any concerns he has by trying to reform the system rather than by leaving it, as was so clearly said in the recent Cambridge university law faculty paper on the subject?

I did not have discussions about that at this European Council—it was not on the agenda—but it is absolutely right to exercise the UK opt-out. That means coming out of all the areas and having the opportunity, if we so wish, to negotiate our way back in to those that matter most. That is the right approach. Europe should be focused on prosperity, growth and trade, and not on other issues.

Did the Prime Minister have any conversations with our EU friends about his welcome commitment to an in/out referendum on British membership? Will he make it a condition of any future coalition that any future coalition partner must agree not to stand in the way of such a referendum?

My hon. Friend is always keen to get such conditions in black and white, but I can satisfy him on this occasion. I have said clearly that I would not be Prime Minister of a Government unless they put in place that EU referendum by the end of 2017. I could not be more clear. I did not have any specific conversations about the referendum pledge. It is well known by EU members. Interestingly, while holding the referendum, Britain is perfectly capable of leading the way and bringing countries together on issues such as deregulation to pressurise the rest of the EU to take up an agenda that would be good for all of us.

Will the Prime Minister tell the House what discussions took place on relations with Iran, on the future of a sanctions policy against Iran and, importantly, on Iran’s participation and that of every other partner in the region in a Geneva II peace process to try to end the ghastly war in Syria?

There was not a Council-wide discussion, but I took the opportunity to speak with Cathy Ashton, who is doing an excellent job on behalf of this country and the EU. It has rightly taken a tough line in negotiations with Iran, because steps by Iran on the nuclear front need to be seen. On Syria, the first thing that has to happen is that Iran needs to sign up to Geneva I and those principles before being able to move forward to Geneva II.

Turning back to the issue of the refugees coming across the Mediterranean and the tragedy at Lampedusa, did the Italian Government or Italian leaders ask my right hon. Friend whether there was any assistance by Royal Navy patrols? On Libyan border security, was my right hon. Friend referring to Libya’s African land border or to the maritime border?

The Italians have been doing very good work to up their naval patrols in a particular operation to try to assist with the problem. They have not asked us for any assistance, but relations between Britain and Italy are extremely good. On Libya, Britain’s focus is more on helping on the land borders that have been particularly porous and dangerous in recent years. Obviously, we are also working with Libya to try to increase its level of domestic security, because one key to preventing such migratory flows is ensuring that countries have Governments who work.

Further to the question from the hon. and learned Member for Harborough (Sir Edward Garnier), the Italians have been doing a good job but, even last weekend, 800 migrants were prevented from going to Lampedusa by the Italian authorities. Although support for Frontex and agreements on an EU basis with origin countries are useful, it might be necessary for Britain to have bilateral arrangements with some origin countries. Does the Prime Minister support that?

I always listen carefully to the right hon. Gentleman on such issues—his Home Affairs Committee does such good work on them. My point is that Britain already does over and above our share of taking people who are fleeing torture and persecution, or people who are fleeing for a better life but who claim asylum. We share a very big part of the burden and I do not want to do things that add to it.

I welcome the Prime Minister’s robust defence of our security services. Following this morning’s revelations in The Sun on the impact of the Snowden leaks, is it not time for any newspaper that may have crossed the line on national security to come forward and voluntarily work with the Government to mitigate further risks to our citizens?

I thank my hon. Friend for his consistent championing of the intelligence services, who do such important work to keep our country safe. As I said, we have a free press and it is very important that the press feels it is not pre-censored in what it writes. The approach we have taken is to try to talk to the press and explain how damaging some of these things can be. That is why The Guardian destroyed some of the information on disks it had, although it has now printed further damaging material. I do not want to have to use injunctions, D notices or other, tougher measures; it is much better to appeal to newspapers’ sense of social responsibility. However, if they do not demonstrate some social responsibility, it will be very difficult for the Government to stand back and not to act.

What is the Prime Minister going to do about the fact that even people with as many as three jobs are unable to make ends meet? Prices in the UK are rising faster than anywhere else in the EU.

The first thing to do is to keep inflation down. The Bank of England has that responsibility and we have seen better figures in recent weeks. Even more important is to help people with their living standards by making sure that we continue to grow the number of people in work—up by 1 million since the election—and, crucially, that we cut taxes. We are now seeing people earn £10,000 before they pay any income tax. That means someone on a minimum wage working a full-time week is seeing their tax bill cut by two thirds —that is good news for them.

Will my right hon. Friend say whether at the EU Council there was any attempt by our EU partners to raid our rebate further? They were quite successful at it when the Labour party was in power. What would his response be to such a raid?

It was one of the few EU Councils that I have been to where there was not a specific attempt to raid our rebate. However, because the corset, as it were, that we put around the EU budget between 2014 and 2020—the seven-year deal—is so tight, the European Parliament is trying to spend as much money as possible before 2014. I think that what we will see, depressingly, is amending budgets to the 2013 budget, on which, of course, we can be outvoted, but from 2014 onwards we are going to see the EU budget cut. That is good news, because it means less contribution from us, and our rebate is safe.

Talking of the Prime Minister’s constituents, Mr Phil Ball is one of the Greenpeace activists in prison in Murmansk, along with five other Britons, including Kieran Bryan, who is a journalist. There are no German nationals in Murmansk, but Angela Merkel rang President Putin to say that this is a sledgehammer to crack a nut. Has the Prime Minister already rang President Putin? If not, will he do so as a matter of urgency?

This is a serious issue, which I have spoken about in the House previously, not least because one of my constituents is involved. The Minister for Europe has been on this case day after day. I will look at every single intervention I could possibly make to help. If contact directly with President Putin would be helpful, I am certainly prepared to consider it.

I note that the EU Council agenda now includes the social dimensions of economic and monetary union. Will the Prime Minister confirm that welfare systems continue to be a national competence and that he will fight any attempt by the Commission to interfere with the UK’s important welfare reforms?

I thank my hon. Friend for her question. There are two points here. What the eurozone countries want is a sort of social score card to go with deeper integration. I said that we did not want to be involved in that and insisted on a voluntary system. We not only need to see that welfare issues remain for national Governments; we need to look at the habitual residence test and some of the problems with the welfare system. This is not now a uniquely British complaint about European systems. We hear it from German and Dutch Ministers and others, so we need to build an alliance to try to ensure that we have a better system in Europe.

What progress—or lack of it—was made on banking union and did the Prime Minister find any support among fellow EU leaders for the idea that it would benefit Britain’s very important financial services industries to pull out of the EU and erect barriers between us and our most important market?

There was some progress on banking union, but this is an issue predominantly for members of the eurozone. A single currency necessitates some form of single bank regulation and resolution system, and that is what its members are putting in place. They are doing so quite tentatively, however, because they are beginning to realise what an enormous transfer of sovereignty it could amount to—theoretically, of course, it would see German citizens standing behind Greek banks and vice versa. Some progress was made. Britain is not taking part in this banking union, of course, but we have achieved some excellent safeguards to ensure that we have a real say over those parts of financial services regulation to which we are still subject. I suspect that progress towards full banking union will be fairly slow, but in any case Britain will not be involved.

I join my right hon. Friend in paying tribute to our security services, whose members not only risk their lives to keep us safe, but have to sit in silence while ludicrous conspiracy theories are often thrown at them. If the first rule of intelligence is the “need to know” principle, the second is do not throw stones in glass houses. At the European Council, did he have a chance to speak to his French counterpart, the French President, about his intelligence services’ record on industrial espionage, and will he seek assurances that the French will not use the Snowden affair as a political football for another agenda and therefore undermine the EU’s and Britain’s intelligence capabilities?

First, I insisted that we were clear that intelligence services were a national competence, not an EU competence, which was why the statement, of which my hon. Friend can see a copy, was issued by EU Heads of State and Governments, not the European Council or the European Commission. That is very important. Certainly, there was a lot of discussion at the dinner of the point my hon. Friend raises. Different Prime Ministers and Presidents made different points and I listened carefully to their contributions.

The Prime Minister has rightly paid tribute to the work of the intelligence services, and I am sure he will agree that hundreds of lives have been saved in Northern Ireland over many decades as a result of the excellent work of many intelligence officers. Does he agree that it is important to put on the record the excellent life-saving work of people in the security forces and intelligence services, at a time when it has become ever so fashionable to degrade and denigrate that work and to revise the roles of various groups during the troubles in Northern Ireland?

The right hon. Gentleman makes an important point. It is not always possible—in fact, it is hardly ever possible—to identify even the specific pieces of work done by the security services in foiling various crimes or bomb plots, but the fact is that they have done extremely good work on that basis. That is why I quoted the figure of 330 people going through our courts and being convicted since 2001. If we asked people what number they would expect that to be, I think they would come up with something much, much lower. The figure points to the scale of the threat and therefore to the need to maintain a very strong security presence.

Further to the question from my right hon. Friend the Member for Wokingham (Mr Redwood), will the Prime Minister tell us how much the EU’s renewable energy target has added to UK consumers’ energy bills already and how much it is likely to continue to add in the future? Will the EU get rid of this ridiculous target and does my right hon. Friend agree that the Energy Secretary who signed up to that directive, the current Leader of the Opposition, has a brass neck to claim to be the champion of low energy prices?

I will not be able entirely to satisfy my hon. Friend, which is always a difficult job. There is no doubt that green levies and charges add to consumer bills—the figure is over £100 and rising. I would argue that it is necessary to help some renewable technologies to get going, but the moment we can remove those levies is the moment that we should remove them. One of this Government’s first acts was to remove the £179 levy placed on every single bill by the renewable heat initiative, which was put in place by none other than the Leader of the Opposition.

The Scottish people are of course pleased and delighted that the Prime Minister has found time to engage in debate with European leaders, but we are still wondering why he has been such a big fearty in refusing to debate with Alex Salmond, the First Minister of Scotland.

This is such an old chestnut that I could almost put the answer to music. The fact is that the debate about Scotland’s future in the United Kingdom is not a debate between the leader of the Scottish National party and the leader of the Conservative party. It is not even a debate between the Scottish First Minister and the British Prime Minister. It is a debate between two groups of people in Scotland: people such as the hon. Gentleman, who want to break up the successful partnership of the United Kingdom and put all that at risk, and people in Scotland who very sensibly want to stay part of the United Kingdom. Because the SNP is not winning the argument, it is looking for some distraction therapy; well, I am not going to fall for it.

We are a nation of garden-loving, nature-loving people. Will my right hon. Friend consider carefully the real concerns expressed by the Royal Horticultural Society about the unnecessary and costly proposed EU regulations on seeds and plants that would do so much harm to businesses and gardeners the length and breadth of our country?

I try to keep up with all EU legislation, but I am afraid that that one has passed me by, which I am particularly sad about because I am very proud of my vegetable patch and of the investment that I make in seeds every year, even though it does not always pay off in the form of good results. I will look carefully at the issue that my hon. Friend has raised.

Having gone some way towards reforming parliamentary scrutiny of the intelligence services through the Intelligence and Security Committee, does the Prime Minister think that it is now time for some parliamentary scrutiny of the intelligence commissioners?

We have just done a major piece of work to see how best we can strengthen the ISC, and put those proposals in front of the House. I think we should let those settle down before we consider other changes.

I welcome the Prime Minister’s statement and, particularly, the recommendations of his business taskforce. It is good to hear that those recommendations were endorsed by more than 100 businesses in the EU. Will he tell the House what further steps will be taken to engage yet more businesses across the EU to ensure that we make even faster progress on this vital agenda?

My hon. Friend raises an important point. There is a good dialogue in this country between business and the Government on the cost of regulation and the things that need to change. I am not sure that that debate takes place in the other European countries, so I have asked the authors of the excellent report—who include a number of very senior business leaders in Britain—and Ministers to do a tour of European capitals to try to get European business leaders and European alternatives to the CBI together and to encourage them to lobby their Governments, so that we can really get the issues of deregulation and cost reduction hard-wired throughout the European system.

Does the Prime Minister agree with the assessment that a successful transatlantic trade and investment partnership would increase our exports to the United States by as much as three fifths, and be worth as much as £10 billion a year to our economy? Does he also acknowledge that the only way to achieve those benefits is to make the case for being part of the European Union, instead of appeasing those who want us out of it?

I agree with the hon. Gentleman in that I think an EU-US trade deal can add to the economies of the EU and the US. Britain is particularly well placed to benefit because these complex trade deals now help quite a lot with trade in services, where we have real expertise and a real comparative advantage. I do not agree with him, however, in that I do not think that we will secure Britain’s place in a reformed European Union if we just stick our head in the sand and pretend that there is not a real question mark hanging over our membership. The fact is that consent for our membership is wafer thin, and we need to change Europe and then have a referendum so that we can rebuild it.

The Prime Minister is leading Europe in the efforts to end modern-day slavery. However, there are two countries in Europe that are in denial that it even exists. Did he have a chance to talk to the German Chancellor and the French President about this? If not, could he call them on their mobile phones, so that the Americans can find out about it too?

As I mentioned in the statement, the issues of trafficking and slavery were mentioned briefly at the Council. Britain is doing a good job in leading the way not only in applying the relevant European rules but in going above and beyond them to wipe out modern-day slavery here in the UK. That will put us in a stronger position to be able to turn round to other countries and say, “Look, this can be done in a way that does not add massively to costs but that is absolutely right for our countries.” I am very happy to have those conversations.

US protectionism has long been detrimental to some poorer countries that are trying to sell certain products. What pressure can the Prime Minister bring to bear on the US-EU trade treaty negotiations to ensure a better deal for some of the poorest countries in the world?

The hon. Lady raises an important point. As part of these negotiations, we should push for what we have here in the EU—basically, duty-free and quota-free access for the poorest countries in the world. That has worked well, has not cost European jobs, and has created wealth in other parts of the world. We should encourage other countries to do the same thing.

Between the end of 2011 and the middle of 2013, exports from the west midlands grew by 30%—almost twice the rate of the next strongest regional performer. Does my right hon. Friend agree that the EU-Canada trade deal and the progress he has made in cutting EU red tape from the digital economy will provide a further boost to exporters in the west midlands and across the entire country?

I would certainly commend exporters in the west midlands. This morning, I met apprentices from across the country, and a number of them were from Jaguar Land Rover, which has seen staggering growth in its business. We need that to happen across the board—not just in manufacturing, but in the digital economy. That is what these changes are all about.

I refer to the answer given to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) on banking union. The Prime Minister said in his statement that he would be defending Britain’s interests if he ensured greater integration and co-ordination in the eurozone. The stability of the eurozone is in our interest, but is he not worried by the lack of progress and about the signals coming out of the eurozone that progress will be much more difficult and much slower. Is it not in our interests to be concerned about that and to do whatever we can to ensure that it is carried through at the earliest opportunity?

The hon. Gentleman is absolutely right: it is in our interest to have a working and stable single currency on our doorstep, and that will require a banking union, just as we effectively have a banking union and single currency in the United Kingdom. Some progress has been made. In terms of our efforts, the most important thing for us is to make sure that, as that goes ahead in the eurozone, we are not left out in respect of the regulations that affect the single market. Financial services is, of course, a vital business not just for the City of London, but for the cities of Belfast, Glasgow, Birmingham and the like. It is there that we should focus our negotiating effort to make sure that we have real safeguards in how those regulations are written.

The north-east of England has a positive balance of payments. Did the Prime Minister have the chance to point out in respect of trade and employment that general unemployment in the north-east has fallen by 18% and youth unemployment by 24% over the last 18 months—due, I suggest, to the policies of this Government?

I thank my hon. Friend for standing up for the north-east. I had a good meeting in Brussels with Martin Callanan, the leader of Britain’s MEPs, who strongly represents the north-east in the European Parliament. We are seeing better employment figures and falls in unemployment in parts of the country, but we have more work to do to make sure that the recovery is spread right around the country.

Which approach to EU relations does my right hon. Friend think will deliver the best outcome for Britain —more regulations, surrendering our rebate, increasing the EU Budget and signing up to the EU bail-out mechanism, or reducing regulation, defending our rebate, cutting regulation and getting out of the bail-out?

I absolutely agree with my hon. Friend. Taking a tough approach on issues such as deregulation, the bail-out and the EU budget can be done at the same time as winning friends and allies in these important negotiations. What was interesting about this European Council was that, on the traditionally British issue of deregulation, we had the support of the French, the Finns, the Swedes and the Italians. We thus had people on the centre, the centre-right and—in the case of the Italian Prime Minister—the centre-left of politics, agreeing with us.

I welcome the statement, and, indeed, a report on cutting red tape published by the business taskforce, which estimated that if we opened EU markets in the digital economy alone, we could add 4% to Europe’s GDP. Did the other European leaders around the Council table agree with the Prime Minister about the level of excess regulation, are the effects of such regulation being felt throughout Europe, and does the Prime Minister agree that the Commission should spend less time consolidating EU legislation and more time repealing it?

I do agree with my hon. Friend about that. However, to be fair to the Commission, I must tell the House that it has changed its stance in recent years, and is leading some of the efforts to cut the number and costs of regulations in Europe. That is extremely important, but we need to keep up the pressure at national level as well.

Did my right hon. Friend have a chance to discuss Europe’s competitiveness vis-à-vis the rest of the world, particularly in view of the sensible measures taken by the Irish Republic to ensure that it will be out of the bail-out mechanisms in December?

One of the reasons for pushing the deregulation agenda is the need to keep pointing out that Europe will be in danger if we go on adding to our regulatory costs while other parts of the world are becoming more competitive. This is not, as the Leader of the Opposition says, a race to the bottom. It is a recognition that we want highly skilled, high-end, high-network jobs to enable us to compete with the Chinese, the Indians and the Malaysians. We in Europe must play to our strengths in areas such as the digital single market. We have a market of 400 million people, but unless that market works properly, we shall not benefit.

As a key trading partner and long-standing ally of our Commonwealth partners in Canada, the United Kingdom is particularly well placed to benefit from the £1.3 billion free trade agreement. May I urge the Prime Minister not just to press on with the broader transatlantic free trade agreement, but to ensure that other Commonwealth countries appear high on the list of the EU’s free-trade partners?

I can certainly give that assurance. We have pushed for all the EU free trade agreements that have taken place in recent years, such as the agreements with Singapore and Korea, but I think that we have many more opportunities to move further and faster. We must recognise that we are operating in a competitive world. As the New Zealand Prime Minister said to me recently, there is only a certain amount of capacity in that Government to do free trade deals. We must ensure that what we are offering is attractive.

I congratulate my right hon. Friend on the excellent work that he is doing in cutting red tape. It is clear from what has been said by businesses in my constituency that they were inundated with, and stifled by, more EU regulations and red tape under the past Government than they had ever been before. Does my right hon. Friend agree that not only is the Labour party responsible for more red tape than ever before, but it clearly loves red tape more than it loves the red flag?

I do not think that enough attention was paid to the problems of regulation and red tape, but I think that proper attention is being paid to them now. We are showing that it is possible to win allies in Europe, including the European Commission, and to ensure that red tape is cut.

I strongly welcome the Prime Minister’s leadership in regard to the small business deregulation and the business taskforce, and particularly welcome the delaying of the badly drafted EU data protection directive relating to e-commerce. The UK is plainly leading the way in the use of data transparency to drive the empowerment of citizens, taxpayers and consumers, and the creation of new markets. May I encourage my right hon. Friend to continue his strong resistance to the EU’s attempts to do for our data pioneers what it would have done for our currency?

My hon. Friend has made a good point. A single e-commerce market requires proper rules on data protection, but if those rules are much more onerous than what we have today, they will add to costs, destroy jobs and send those jobs elsewhere. That is why, although we are the biggest enthusiasts for the completion of the digital single market, we must get the directive right rather than just signing it through, as the Labour party would have done, without caring about the consequences.

We have 4.9 million small and medium-sized businesses in our country. The number has risen by 400,000 since 2010. Did the Prime Minister have a chance to talk about those businesses and the regulatory burden that has been imposed on them?

My hon. Friend has made an important point. Given that 400,000 net new small businesses have been created since the Government came to power, we should be trying—at both European and UK level—to exclude micro-businesses altogether from some of these classes of regulation.

Businesses throughout the country will welcome the Prime Minister’s drive to cut barriers to growth. Does he agree that one simple and effective way of doing just that would be to change the current public procurement thresholds in the EU, thus releasing more opportunities? Did he discuss such action, and will he continue to press for it?

We did not discuss public procurement on this occasion but it is worth looking at. One of the things that the Government are looking at domestically is whether we can get rid of a lot of these pre-qualification questionnaires to make it far easier for businesses to compete for Government contracts.

I welcome the Prime Minister’s emphasis on deregulation and trade, but does he agree that more competition, more connectivity and more investment in technology, such as one can find in my constituency, would exert downward pressure on energy prices, not the state intervention proposed by the Opposition?

There is no doubt that a more competitive energy market both in the UK and in the EU would put downward pressure on prices. It is the same in every industry. If one sees a tendency towards monopolies and oligopolies, one tends to see higher prices, less competition and less choice for consumers. That is why we see eight new companies coming into the energy market. Is it not good that the Leader of the Opposition has followed my advice and switched to one of the small upstart businesses for his energy supply? The only problem he has is that the new business that is accepting his custom does not support his policy and thinks that it will be a disaster.

The reformed UK Trade & Investment is making a significant difference in helping British businesses to export at record levels, contributing to last week’s excellent growth figures. Does the Prime Minister agree that UKTI can now focus on a major new opportunity following the EU-Canada agreement?

My hon. Friend is right. UKTI now has more areas to look at around the world. It has excellent leadership from Stephen Green, the Trade Minister whom we hired from HSBC, and I am pleased that Ian Livingston, who until recently ran BT, will bring even more impetus to the vital work that UKTI and our trade bodies do around the world.

I welcome my right hon. Friend’s strong defence of our intelligence services. Does he agree that it is a great shame that the very modest measure that we enacted last year to protect them from wholly spurious civil actions did not receive full bi-partisan support?

My hon. Friend makes an important point. As I said, I think that we scrutinise our intelligence services in the correct way in this House. I am always happy to look at other suggestions but I do not at the moment think that there is anything else we need to do.

Did my right hon. Friend have the chance to ask the Prime Ministers of Romania and Bulgaria for their estimates of how many of their citizens are likely to head our way from 1 January? Given that the level of youth unemployment in this country remains stubbornly high, despite the tremendous progress in the economy, even at this late hour, will the Prime Minister consider enacting the emergency provisions buried deep in EU treaties to prevent the end of transitional controls on Romania and Bulgaria, which will send a firm signal to our EU partners that we are serious about renegotiation?

We have kept the transitional arrangements for as long as we possibly can. I do not believe that there are powers in the EU arrangements to extend them any further. As I said to 600 apprentices I spoke with this morning, the key to the issue is that, as well as having tough controls on immigration from outside the EU, we need to improve our education system so that young British people are capable of doing the jobs that our economy is clearly creating, and reform our welfare system so that it is not an option to live on benefits when one can work. Education and welfare are two things that can make the biggest difference to immigration and controls on immigration, which I know that everyone on this side of the House wants to see.

On Friday, I met a number of small business people from across the west midlands. What message of support and reassurance can my right hon. Friend give those people in relation to regulation and red tape, following his excellent contribution to the EU summit?

First, I thank my hon. Friend’s constituents for the work that they do. Running a small business means taking a huge amount of risk and working extremely hard. They are the wealth creators of this country. They are likely to be the ones who create the most jobs in this country. Our job is to try to work out how we can make it easier for them to operate, to hire people and to grow. That is the challenge for the Government and it is one that we take on with relish.