With Permission, Mr Speaker, I would like to make a Statement on Afghanistan and also report back on last week’s European Council.
I visited Afghanistan on Armed Forces’ Day to pay tribute to the extraordinary men and women who risk their lives every day to serve our country.
We should remember in particular the 444 who have lost their lives in Afghanistan.
I hope the whole House will welcome the decision to use money from banking fines to build a permanent memorial at the National Memorial Arboretum in Staffordshire so that our generation - and every future generation - can remember and honour the sacrifice they have made for us.
Mr Speaker, we are in Afghanistan for one reason to protect our national security by stopping that country being used as a base from which to launch terrorist attacks against our people and against our allies around the world.
That requires a security response - resisting Taliban insurgent attacks, driving out Al Qaeda and training Afghan forces to take on this task for themselves.
It requires a political response - supporting the Afghans to build a more peaceful, democratic and prosperous future - including a peace process.
And it requires a diplomatic response - working in particular with Pakistan, which has a vital role in fighting terrorism in the region.
On security. Four years ago three quarters of the most serious terrorist plots against the UK had links to Afghanistan and Pakistan.
Today it is less than half.
British and International forces have stopped Afghanistan acting as a safe haven for Al Qaeda.
And Afghan forces are now taking the lead on security right across the country.
At the weekend I went to Camp Bastion, Lashkar Gah and the Forward Operating Base at Durai.
British forces are absolutely clear about the capability, confidence and leadership of the Afghan forces.
They are already delivering 90% of their own training.
And all of the 1,000 police patrols in Central Helmand each week are now conducted alone, without ISAF support.
It is this growing capability which enables us to draw down our troops.
Our numbers in Afghanistan have already reduced from 9,500 to 7,900.
By the end of this year it will be around 5,200.
Until recently we were in 137 different bases. We are now in 13.
By the end of the year it will be 4 or 5.
And by the end of next year, when Afghan forces take on full security responsibility, there will be no British troops in any kind of combat role at all.
Beyond 2014, small numbers of British troops will remain to help the Afghans deliver their National Army Officer Academy.
And we will also contribute £70 million a year as part of international financial support for Afghan security beyond 2014.
A strong security response, must be also be accompanied by a strong political response.
In Helmand we have been working for many years to help support the development of better governance, local justice, public services and the chance for Afghans to build sustainable livelihoods that don’t involve drugs.
130,000 children are now in school, including 30,000 girls - something that would have been impossible under the Taliban.
And 80% of the population can now get healthcare within 10 km of their home.
At the national level, the political process is moving forward too.
At the weekend, President Karzai assured me of his commitment to the first peaceful democratic succession of power in living memory, following next year’s elections at the end of his 2nd and final term.
Over 50,000 new voters have already registered, including over 10,000 women - and Britain is supporting this with £4.5 million of aid specifically targeted to increase women’s participation.
The progress in Afghanistan is a challenge to the Taliban.
The combination of the successful build-up of the Afghan National Security Forces and progress on the ground demonstrates that the way to a role in Afghanistan’s future is not through terror and violence but only by engaging in a political process.
So I welcome plans to begin direct talks with the Taliban.
The peace process must be Afghan led. But we must do all we can to support it.
It doesn’t signal any weakening of our security response, but if we can persuade people that there is a legitimate political path for them to follow, we should do so.
Third, Mr Speaker, we also know that the problems in Afghanistan will not be solved in Afghanistan alone.
The support of neighbouring countries like Pakistan will be vital.
On my visit to Pakistan I was greatly encouraged by the commitment of the new Prime Minister Nawaz Sharif.
His election was the first ever democratic transition in that country from one elected government to another. It represents a precious sign of progress in Pakistan.
We discussed our trade, economic and cultural ties.
We also agreed to work together in countering extremism and radicalisation, investing in education, tackling poverty and dealing with all the issues that can fuel terrorism.
And building on the tri-lateral process that I have been leading between the UK, Afghanistan and Pakistan I welcomed the Prime Minister’s commitment to working with Afghanistan in defeating terrorism across the region.
Mr Speaker, let me turn to last week’s European Council.
This was rightly focused on sorting out Europe’s economy by doing what we are doing in Britain, getting a grip of spending and supporting private enterprise to create jobs and growth.
On spending, the Council finalised with the European Parliament the seven year budget deal we had successfully negotiated in February.
This agreed new flexibilities between different years and between different budget headings, but crucially the deal delivers, for the 1st time, a real terms cut on the credit card limit for EU spending for the next 7 years.
There was no change to the total permitted level of spending across the 7 years of 908.4 billion euros.
That compares with 943 billion euros in the last 7 years.
However, in this process there was a further attempt to unpick the British rebate.
In February, after repeated attempts to water down the rebate, we reached a clear deal that it would remain unchanged.
This was reflected in the Council Conclusions that I reported back to this House.
So this discussion was not necessary and it is frustrating and frankly unacceptable that we had to go through it.
The proposal to remove our rebate on agricultural spending in new member states would have cost the British taxpayer over £1.5 billion.
It has now been categorically rejected.
We will continue to get the rebate in the years ahead on the same basis that we do now.
It is fair. It is right. And unlike the last government, this government will not agree to weaken it or give any part of it away.
At the Council there was a particular focus on tackling youth unemployment by supporting the private sector to create jobs and tackling the burdens that hold back our businesses competing in the global race.
We agreed that the European Investment Bank should increase its lending by 40%, with more finance for small and medium-sized businesses.
We agreed to do more to help young people not working to acquire the skills the private sector needs through proper educational training - very much along the lines of Britain’s £1 billion Youth Contract.
And we agreed to scrap unnecessary EU regulation that ties up our businesses in red tape when they should be growing and creating new jobs.
To give additional detail and urgency to the Commission’s work we will establish a new Business Task Force with 6 of our best business leaders to take a fresh and ambitious look at the impact of EU regulation on our companies.
It is vital we expand our trade and increase overseas investment into the UK.
That was one of the reasons I was the first serving British Prime Minister to visit Kazakhstan on Sunday and Monday.
Since 2000, this country has seen growth at an annual rate of between 8 and 9%, per capita income has doubled and it has the potential to be the 6th largest oil and gas producer in the world.
My business delegation signed deals worth over £700 million - all of which will help create and sustain jobs here in the UK.
Finally, Mr Speaker, the Council welcomed Croatia which became the newest member of the EU at the weekend.
We also agreed to start negotiations on accession with Serbia, and on a stability and association agreement with Kosovo.
Mr Speaker, when we remember what happened in the Balkans within our political lifetimes, it is a remarkable achievement that these countries are now joining or preparing to join the EU, with a sense of peace and stability.
And Britain is proud to support them.
Mr Speaker, each of these steps at the Council was about doing what is right for Britain and right for Europe.
It’s in our national interest to get spending under control, to make Europe more competitive and to expand EU membership to the Balkan States.
Openness, competitiveness, and flexibility are vital elements of the fresh settlement that I believe is needed for the European Union.
We want more of a say for national parliaments and powers to flow back to Member States not just away from them.
This is a new settlement that I intend to put to the country in a referendum within the 1st half of the next Parliament
A referendum which will give the British people the in-out choice they want and which my party will offer at the next General Election.
It is a referendum which my party will be voting for in this Chamber on Friday – and I commend this Statement to the House.