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Spring European Council

Before asking the Prime Minister about his statement today, may I ask him about reporting back to the House on the outcome of next week's G20? Given that it is taking place on the day when the House rises, will he consider a statement that evening? Before turning to the economy, I welcome what the Prime Minister says in the communiqué about the climate change agreement in Copenhagen. I also agree with what he says about the importance of not walking away from developing countries at this time. On the economy, I want to ask about trade, financial reform and the recession in Europe. First, on trade, this communiqué talks about the importance of the Doha round, but frankly, so did the last one and the one before that. Since then we have seen "Buy America" programmes from the US Congress, higher agricultural tariffs in India, French Ministers boasting of repatriating jobs from Slovenia back to France and the Prime Minister talking about "British jobs for British workers". The task of the London summit should be urgently to agree the key issues of the Doha round. That should be the key aim. Will the Prime Minister confirm that the existing trade rules in fact allow countries to double their revenues from tariffs? Is freezing existing tariffs not a pretty minimum acceptable outcome for the London summit? Secondly, on financial rules and financial reform, we need rules that force banks to hold more capital when the economy is strong. We have been pressing for such counter-cyclical capital requirements for more than a year now. Will this communiqué mean that that actually happens, and do we not need the same sense of urgency when it comes to the supervisory colleges of regulators? The Prime Minister's office announced that they would be established by the summer, but the communiqué is now talking about it happening by the end of 2009. Can the Prime Minister tell us whether the deadline has slipped? I agree with the Prime Minister that it is better to have co-ordination than a single European regulator that overrides national regulation, but would it not be easier to resist such a European regulator if he would accept that the tripartite system that he put in place in 1997 simply has not worked and needs reform? Does he not need to admit that clearly and frankly today? Next, on recession in Europe, the Prime Minister repeatedly lectures everyone in this House and beyond that he is uniquely forging a consensus in Europe on how to deal with recession. Does not that claim now look completely ridiculous? Are there not three examples of that? The first is whether we in Britain can afford a fiscal stimulus, the second what that stimulus should consist of, and the third whether he is any good at actually implementing the measures that he has announced. Let me take each in turn. ...There will be a question if you are patient. Is it not remarkable—that is a question—that today the CBI, which is the organisation responsible for representing businesses large and small, said—[Interruption.] Labour Members should perhaps spend a bit less time filling out their expenses and listen to the CBI. The CBI said that""a further significant fiscal stimulus is unaffordable and would lead to businesses and households retrenching"." Instead, the CBI says, the Chancellor needs to""deliver a clear and credible"—[Interruption.]" ...Thank you, Mr. Speaker. I thought the hon. Gentleman was getting better, too, but I am an optimist. The CBI says that the Chancellor""needs to… deliver a clear and credible plan for restoring the public finances to health"." Is not the CBI right and the Prime Minister wrong? Last week, we had the worst set of public finance figures in our peacetime history. We are forecast to have the largest budget deficit of any G20 economy next year—almost twice as large as for the G20 as a whole. Is the view in Europe not clear? As the German Chancellor says:""We should not be competing for the most unrealistic fiscal stimulus"." Is she not right? Let me put it another way. This week, the Prime Minister goes to south America. Will he confirm that only one country in the whole of south America entered recession with a higher deficit than Britain—not Argentina, not Paraguay, not Uruguay and not Ecuador, which all managed to balance the books better than the Prime Minister? Is it not something when the British Prime Minister has to go to a conference in Latin America to get a lecture on fiscal responsibility and prudence? The Prime Minister is criticised in Europe for not only affordability, but the make-up of his stimulus. No one else is copying his policy of cutting VAT. Indeed, the consensus in Europe is that it made things worse. The French President said:""We won't be repeating Gordon Brown's mistakes"" and that the VAT cut had "absolutely not worked". The German Finance Minister said that the debt will take a generation to pay off. The Prime Minister is not only wrong about affordability and VAT; everyone thinks that he is getting implementation wrong, too. Can he not see that, when his various schemes exist only in a press release, they do not help build confidence and instead destroy it? The home owners mortgage support scheme and the recruitment subsidies for the unemployed were announced months ago, but are still not available. Should he not listen to the German Chancellor, who said that""if we want to make a real impact, you really must implement the package first before you talk about the next step"?" Instead of listening to his lectures, we should all be clear about what the Prime Minister is delivering—a longer recession than the United States or the eurozone, the fastest rise in unemployment since records began and the worst public sector deficit in British peacetime history. When will the Prime Minister understand the need for change? Should that change not start with his acknowledging properly and apologising for the mistakes that have led this country to that position? Is it not time to start now, with "Sorry"?