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European Council

I am grateful to the right hon. Gentleman. First, may I correct him on VAT? I first raised the issue months ago with our European colleagues; I have been following it up ever since. I am grateful that we now have an agreement to look in detail at whether VAT reductions on matters such as household materials and electrical goods can be beneficial both in encouraging people to use energy-efficient products and in stimulating a market where Europe can benefit in the future. So, he is wrong to say that this was raised only on the day of the Council. We have been pressing our European colleagues on the matter for some time. I agree with the right hon. Gentleman on the importance that we attach to environmental issues. Again, I have to correct him. Carbon capture and storage is something that we have been pushing right across the EU. There will be 12 demonstration plants, and one of them, we believe, will be in the UK, but we want the European Commission to make it possible for there to be greater incentives so that people will develop carbon capture and storage at a quicker rate. The right hon. Gentleman is right about energy liberalisation and the importance that we attach to it in the EU. That is one of the reasons why qualified majority voting in energy matters will benefit the opening up of markets and the creation of jobs, although it was opposed by the Conservative party. I disagree with the right hon. Gentleman about Britain's record in relation to other countries. I repeat that we are one of the few countries in the world that is meeting its Kyoto targets, and we will continue to do so. On the economy, I hope that the right hon. Gentleman will agree that Europe is leading the way on calling for a proper international response. We had a meeting with Chancellor Merkel, President Sarkozy, Mr. Prodi and the President of the European Commission a few weeks ago. We have now put forward proposals in detail. The Chancellor is writing to all members of the IMF, the G7 and the Financial Stability Forum to push these forward. Our proposals are in harmony with those that have just been put forward by the US Treasury Secretary. To ensure confidence in financial markets, we believe that it is important that those proposals are adopted. Finally, I agree with the right hon. Gentleman when he says that action to express our views on Tibet is important. People around the world are expressing concern. We have made our views known, and there will be an EU statement later today. There is a demand for restraint on the part of the Chinese authorities. These are the most important matters now. We will make other announcements and decisions in due course.