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European Council

I agree that it is important that Europe focuses on those key questions. May I deal first with domestic policy issues? I am against binding annual targets because they are too inflexible. Changes in temperature and in the cost and price of fuel can make a dramatic difference to the economy’s ability to cope with such a binding annual target. We have to strike a balance the whole way through between what we do to give leadership here, and not putting our industry in a position where it becomes uncompetitive or our consumers in a position where they get clobbered. I am dubious about the right hon. Gentleman’s proposals to put VAT on air travel, or a new tax on airline fuel, because they might hit consumers and businesses in this country very hard, while having a small impact on CO2 emissions worldwide. It is important to get right the balance between what we do here and what we do by international agreement, because on it will depend whether we give the right leadership on this issue, as this country has in the past few years, but also whether at the same time we make our businesses uncompetitive and harm our consumers, which would be unfair to them. We will set out steps for introducing more measures on energy efficiency, as we have already done in respect of new buildings. For example, it would plainly be sensible to build into the building schools for the future programme, through which we will rebuild or refurbish many schools in the country, measures for the use of environmentally sustainable energy and for energy efficiency. That is very important and is right. Of course, we will also be improving and increasing the amount of money that we devote to research on renewables and to our use of renewable energy. I basically agree with the right hon. Gentleman’s points about the European emissions trading system, as that is precisely what we are trying to achieve in Europe. We are trying to get a progressive tightening of the cap, and to ensure that there are policies in place for post-2012 and that we extend the scheme. Bringing in aviation will play a major part in that. By way of conclusion, I say to the right hon. Gentleman that we will need alliances to build all this. It was interesting, when we got to the discussion about what would be in the Berlin declaration, that there was a general agreement that we should put in a measure on climate change and protecting the environment. I must say that the only Prime Minister who spoke against it was—[Interruption.] It was indeed the Czech Prime Minister. To be fair, however, I must add that he made a very strong statement in favour of nuclear power, so I warmed to him on that. The basic point, surely, is that if we want to get this done in Europe—I totally understand what the right hon. Gentleman says about what Europe focuses on; I make the same points myself a lot of the time—we have to recognise that this European relationship is the only way in which we can take critical action and make a critical difference to climate change. If we put at risk the European relationship in any shape or form, we diminish our capability to take that effective action on issues such as climate change. I really believe that this summit, particularly under the leadership of the German Chancellor, has indicated that over the years the agenda that we have been pressing for from this country—some of it, I agree, under previous Governments—has the chance now of really leading the agenda in Europe. We simply do not want to do anything that puts that at risk.