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European Council: 11-12 December 2008 and Prime Minister’s Visit to Afghanistan, India and Pakistan

My Lords, with permission, I shall repeat a Statement made by my right honourable friend the Prime Minister entitled EU Council and Prime Minister’s Visit to Afghanistan, India and Pakistan. ““First, Mr Speaker, I am sure the whole House will join with me in sending our profound condolences to the family and friends of Corporal Lee Churcher, of the Royal Engineers, who died while serving in Iraq, and Corporal Marc Birch, Marine Damian Davies, Lance-Corporal Jamie Fellows and Sergeant John Manuel, of the Royal Marines, who lost their lives in Afghanistan. This is a tragic loss. We owe them and all those who have lost their lives in the service of their country our gratitude for their service and sacrifice. As a House, and as a nation, we will never forget them. As I saw in Afghanistan on Saturday, our troops are serving with great skill, courage and dedication. It can truly be said that Britain's Armed Forces are the best in the world and we are immensely proud of all who serve in them. With permission, Mr Speaker, I should like to make a Statement on the European Council held last Thursday and Friday and on my visits to Afghanistan, India and Pakistan this weekend. The European summit focused on two global challenges—economic recovery and climate change. I can report first of all that the Council agreed measures worth around 1.5 per cent of GDP—that is, around €200 billion—that will provide a fiscal stimulus for the European economy. This 1.5 per cent fiscal boost is in addition to the work of the automatic fiscal stabilisers. The measures agreed included support for, "““increased public spending, judicious reductions in tax burdens and direct aid to households, especially those which are most vulnerable””," exactly the measures Britain has taken. France has announced a package of measures worth €26 billion, Spain a package of measures worth €11 billion and Germany a fiscal package worth €32 billion. Just as Europe came together in October and November to lead the recapitalisation of the banks, so too Europe has agreed unanimously on co-ordinated action which will support employment and growth. The Council agreed to act in a ““united, strong, rapid and decisive manner”” and, while committing to medium-term sustainable public finances, to ““mobilise all the instruments available to it””. By acting in a concerted and co-ordinated way, the impact on jobs and growth in each country is much greater than if we acted on our own. The action across Europe will be of help to Britain with nearly 60 per cent of our trade being with the rest of Europe. The co-ordinated European action includes speeding up public procurement, a ““continued, general and significant reduction in administrative burdens on business”” and an additional €30 billion from the European Investment Bank to be invested in Britain and throughout Europe in the coming year. So the debate about the use of fiscal policy to stimulate our economy and give direct support for families and businesses in Europe is resolved. Europe favours substantial fiscal stimulus alongside cuts in interest rates, and I am confident that the new US Administration of President-elect Obama will also introduce a fiscal stimulus. This European set of announcements from the Council in advance of the G20 is the answer to those who have said that nothing could be done; that the recession must just take its course; that fiscal policy has no role to play; and indeed that even at this time of difficulty public spending should now be cut. To back up the loan guarantee scheme, the export credits and the deferral of tax, today the Chancellor will announce new measures to speed up the resumption of lending to business and homeowners. The Minister for housing will announce a £400 million package of measures that, building on our help with mortgages to avoid repossessions, will help up to 18,000 first-time buyers draw on the popular home-buy shared equity scheme to get onto the first rung of the housing ladder—real help to families and businesses now. In advance of Copenhagen next year, the summit agreed a new energy and climate change policy supported by all member states. When approved by the European Parliament—as I believe it will be—the programme will put into European law four far-reaching commitments: a 20 per cent cut in greenhouse gas emissions by 2020, which as part of the right international agreement we will raise to 30 per cent; a target that 20 per cent of the EU's energy will come from renewables by 2020; a strengthened EU emissions trading scheme with 100 per cent auctioning of permits in the power sector, the introduction of auctioning for other sectors of the economy and help to ensure that businesses in international markets can adjust; and a financing mechanism to make potentially around €9 billion available for the commercial demonstration of carbon capture and storage. This is a transformative technology and every major economy will need to ensure that it can continue to use coal, oil and gas without contributing to climate change. These historic commitments make Europe the first continent to make legally binding the detailed policies required to set itself on a path to a low-carbon economy. They provide a clear signal to the rest of the world that an international agreement on climate change can be achieved in Copenhagen next year. This was matched by agreement at the United Nations talks in Poznan on a framework for countering deforestation, with Britain making a contribution of £100 million from our environmental transformation fund for sustainable forestry activities in developing countries. At the European Council, agreement was also reached on measures to answer concerns expressed to us by Ireland. All countries were agreed that there could be no change or amendment to the Lisbon treaty and that we should proceed to ratification with the Irish agreeing to hold a referendum within the next year. At the same time, it was agreed that, in order to meet Irish concerns, the Lisbon treaty, as we have always made clear, in no way affects the rights of member states to make taxation decisions; that the treaty in no way affects the individual defence policies of member states, including our obligations to NATO and Ireland’s traditional neutrality; and that because, as we have been clear, the charter of fundamental rights creates no new rights at EU level, the Irish constitution provisions on the right to life, education and family are not affected by its incorporation into the treaty. Nor are they affected by the justice and home affairs provisions of the treaty from which Ireland has an opt out. The Lisbon treaty allows for the Council, by a unanimous decision, to agree to ensure that each member state retains a commissioner and this, we stated, we would be prepared to do. The Council made an important statement on the Middle East peace process. The Council welcomed efforts to give renewed momentum to the Arab peace initiative and affirmed that the EU will do all it can, practically and politically, to support the peace process and to urge the new US Administration to make it a major priority in the new year. Let me turn to Afghanistan, India and Pakistan. I reiterate the tribute I have already paid to the service and sacrifice of our Armed Forces. Today I can inform the House that increased compensation payments come into force—a doubling for the most serious injuries to a new maximum lump sum of £570,000 for Armed Forces personnel wounded in action or otherwise; an increase which means around £10 million will be paid to 2,700 troops who have been awarded lump-sum payments. While in Afghanistan I met President Karzai and took stock of our strategy with commanders and senior officials and saw at first hand the hard and dangerous work our Armed Forces are doing in arduous conditions far from home. Our goals in Afghanistan are clear: to support democracy and confront terror at its source; to build the Afghans’ capability by training the army and police to spread the rule of law into empty spaces on the map which shelter terrorism, narcotics, and other problems; in all this, to respect local ways of life and strengthen traditional Afghan structures; and to give Afghan people an economic stake in the future. Free and fair elections are an essential part of Afghans taking control of their own security and destiny so as we approach the Afghan elections planned for next year, on top of the work we are doing with NATO and the Afghan army to ensure security for those elections, we are pledging to contribute $10 million to help with voter registration. In return for this renewed commitment from Britain, I asked for quicker progress of the decisions at the NATO summit on burden-sharing in Afghanistan and I asked President Karzai for leadership in tackling corruption, with our co-operation in the shape of a multi-agency task force which we are ready to send immediately. Five years on from the first free and fair elections Afghanistan has seen in decades, we should reflect on the scale of what has been achieved. Governor Mangal of Helmand, who I met on Saturday, said last week: "““It has been a hard year for our brave police and soldiers, but it has been a much harder year for our enemies who have found through experience that they cannot defeat us””." Today, with 5 million refugees returning, 4 million more children in school, great improvements in healthcare including massive reductions in child mortality, and GDP up 70 per cent, our task is to ensure that violence and insecurity do not threaten this progress. Security depends on proper burden-sharing. In recent weeks we have had to respond to the threat from insurgents in the district of Nad e Ali near the provincial capital of Helmand. The operation involves 1,800 troops, not just from Britain but from Denmark, the US and Estonia, It is a model of burden-sharing that we need to see replicated across Afghanistan. Forty-one countries are involved but the burden is not always shared equally. As the international community and the American President-elect contemplate strengthening our commitment to Afghanistan, it is vital that all members of the coalition contribute fairly. The second pillar of security is Afghanisation, enabling the Afghan people to take greater control of their own affairs. We have trained thousands of Afghan soldiers and police. With our help, Governor Mangal is starting to work with tribal leaders who I met in Musa Qaleh, only last year in Taliban hands, and to build basic services such as roads, power and water that are having a tangible impact on the lives of Afghans. This is starting to bring to Helmand the wider progress we have seen across Afghanistan since 2001. To reinforce this progress, and having been briefed on the decision by the British commander, as is his right, to call forward reserves to work with our allies and deploy them on a temporary basis, the Defence Secretary and I have decided, on the advice of the defence chiefs, to approve until August, including the period of preparation for the elections, an increase in the number of British troops deployed to Afghanistan from just over 8,000 to around 8,300. We, the Americans, and the international community as a whole increasingly recognise that we cannot deal with Afghanistan in isolation from Pakistan. There is a chain of terror that links the mountains of Afghanistan and Pakistan to the streets of the UK and other countries around the world, and it must be broken. On 27 November the whole world learnt that terrorists based in Pakistan can strike anywhere, when in a murderous assault condemned by the whole world 12 terrorists killed 175 people in Mumbai, including British citizens. This weekend I met Prime Minister Singh in Delhi and President Zardari in Islamabad to discuss action to be taken. I expressed my condolences to Dr Singh and through him to the Indian people, and assured him that Britain stands fully alongside India in its determination to see those responsible brought to justice. I pay tribute to the efforts of Pakistan to deny the federally administered tribal areas as a training ground for terrorism, and for the insurgency in Afghanistan and for terrorism. More than 100 Pakistani troops have died in the Bajaur agency since July this year. Plots hatched in the FATA have a direct impact on the UK. Of the security services’ top priority terrorist investigations, three-quarters have links into Pakistan. Our commitment to countering terrorism and the empty spaces that shelter it, and to build local capacity to do so, must be just as just as strong in Pakistan as in Afghanistan. The time has come for more action not more words. We will offer our support for the democratic Government of Pakistan but that Government must act rapidly and decisively against the terror networks based on its soil. Pakistan’s own future depends on action against those within its borders who are bent on the destruction of its elected Government and Pakistan’s relations with its neighbours. To make this effective, Britain will work with both India and Pakistan to continue building counterterrorism capacity with help that I announced yesterday on bomb disposal, scanning devices, airport security and help with new laws. Our assistance programme to Pakistan is the most comprehensive we have with any country and now includes a programme, initially worth £6 million, to tackle the causes of radicalisation. No matter how serious the other tasks we face, security is the first duty of government. We will always maintain our vigilance against the evil of terrorism. I commend this Statement to the House””. My Lords, that concludes the Statement.