Transcript of press conference given by the Prime Minister David Cameron at the EU Summit in Brussels on 17 December 2010.
Good afternoon and welcome. We came into this European Council with a victory for commonsense on the 2011 EU budget. The European Parliament’s request for a 6% budget increase was decisively rejected and agreement on a much more limited increase of 2.91% was secured. This saves the British taxpayer several hundred million pounds compared with what could have happened if the normal processes were followed and the difference was just split between the Council and the Parliament, and I believe it was our intervention that stopped that from happening.
That left Britain with two priorities for this meeting. First, because it’s in Britain’s interest that we have a strong and stable eurozone, it was important to establish a permanent mechanism for bailing out eurozone countries who find themselves in financial difficulties; and that has been achieved with the very limited treaty change that has now been agreed. Now, this change does not affect the UK and it does not transfer any powers from Britain to the European Union.
Second, I said yesterday that we needed to make sure that Britain was not liable for bailing out the eurozone when the new permanent arrangements come into effect in 2013, and we have achieved that too. It is clear in the Council Conclusions and in the draft legal Act annexed to them that this will be, and I quote, ‘a stability mechanism for member states whose currency is the Euro’. That is a mechanism established by eurozone countries for eurozone countries, so Britain will not be part of the new mechanism.
Crucially, we’ve also ensured that the current emergency arrangements are closed off when the new mechanism comes into effect in 2013. On this point, the Conclusions are clear that the new mechanism will replace the emergency arrangements. I wanted to be absolutely clear that Article 122, which was the basis on which the emergency arrangements were established, would not be used in this way once the new arrangements came in. On this, both the Conclusions and the legal Act are crystal clear that, and I quote, ‘Article 122 will no longer be needed for such purposes’ and that, quote, ‘heads of state and government therefore agreed that it should not be used for such purposes’. I think that is pretty clear and it’s not just in the Council Conclusions; it’s in the Article that introduces the treaty change.
So what Britain has secured in black and white is a clear and unanimous agreement that from 2013 Britain will not be dragged into bailing out the eurozone. That couldn’t be clearer. It is, of course, frustrating that we will still be part of the emergency mechanism until 2013, but that is a commitment the previous British government entered into against our advice and we have to live with it. But I’ve taken the very first opportunity I’ve had as Prime Minister to put this right and to protect Britain’s interests, and this much improved package will now be put before the British parliament.
I also wanted to take the opportunity of this Council to keep up the momentum on the question of the future of the EU budget. This is an issue I’ve discussed in the margins of this meeting with a number of other European leaders. Tomorrow, Angela Merkel, Nicolas Sarkozy and I, together with a number of other partners, will publish a text setting out our goals. This will cover both the budgets for 2012 and 2013, where we want to do even better than we did in 2011, and the longer term financial perspectives covering the rest of this decade. What I’m doing together with our key partners in Europe is putting down a firm marker for these negotiations. All around Europe countries are tightening their belts to deal with their deficits. Europe cannot be immune from that. We want to see real budgetary restraint from 2014 to 2020, the time of the next financial perspectives, and that’s why the text we will publish talks about at least a real terms freeze in the budget for that period.
My job is to advance British interests in Europe and I will always be totally committed to that. It is in our interests that the eurozone achieves stability and that treaty change is a key part of that. I’ve been able to save British taxpayers millions by the change we’ve made to the 2011 EU budget. I’ve been able to protect Britain from having to bail out the eurozone from 2013. These are always, and I will do so again in the long term, EU budget negotiations. This will not be easy; the odds in these budget negotiations are always stacked against us. It will be a long and hard campaign, but it’s one in which I am determined to stand up for Britain’s interests.
Prime Minister, is it only the French and German leaders who are signing this letter and, if so, why have you not been able to persuade more leaders to come on board with you?
And also, if I may, the Deputy Prime Minister has said Britain can’t stand idly by on bankers’ bonuses, so what do you propose to do?
Well, first of all, on the text, the letter or statement, this will be signed by France and Germany and Britain and also by other leaders as well, but let’s be clear about the point about France, Germany and Britain standing together and saying we must have at least a real-terms freeze in the budget between 2014-2020 I think is incredibly significant. I know there have been British prime ministers who’ve stood here before and been asked, ‘Well, why haven’t you got any allies, why haven’t you got any partners in this, why haven’t you got some colleagues to sign up with you?’ This is Britain, France and Germany, the three biggest countries in the EU, standing together united on the need to stop this budget from getting out of control and saying a real terms freeze for 2014 - 2020. I think that is a huge achievement to have all those three together and I think that makes it a very, very powerful thing, and I know there are other countries that will want to back that.
On the issue of banks, of course we want to see restraint. Bankers have to realise that the British public helped to bail out the banks and it is very galling when they see bankers pay themselves unjustified bonuses. So there’s a call for restraint, there is better regulation in place and we, unlike the previous government, have introduced a bank levy unilaterally. And alongside that bank levy, which will actually raise more than the last government’s one off bonus tax, we also have the stronger rules and regulations about the tax that banks must pay, the so called ‘code’. Now, at the time of the last election I think only three banks had signed up to that. Now all of the banks in the UK have signed up to that, which will mean a much better tax yield from the banks and that, I think, has got to be the focus: how much tax revenue can we sustainably raise from our banking sector, an important sector that we should focus on. But of course with bonuses, the banks have got to think about their social responsibilities and their wider responsibilities when they make these decisions.
Thank you, Prime Minister. Is Mr Berlusconi one of the other leaders who might be signing the letter when you publish it tomorrow? And can you give us an indication for the 2012 budget, which is the next one to be decided, what would you like the figure to be?
Well, first of all, on who else is going to sign the letter, it’s very important that the European leaders will speak for themselves. As I say, the key thing I’m announcing today is that the three largest countries in the European Union at a British initiative have come together - Britain/France/Germany, with a very strong position on what ought to happen to the budget. It’s very simple it should not be more over the 2014 - 2020 period than a real-terms freeze. And I think, as I say, that is progress and I want others to come in behind that, and I’m sure that they will.
I’ve forgotten the second question; what was it?
2012, what sort of number?
2012. Well, the point is this: in 2011 we managed to do something we haven’t done in previous years, which is, instead of splitting the difference between the Council and the Parliament, we actually just dismissed the Parliament’s 6% and held firm to the 2.91%. Would I have preferred we did even better than 2.91%? Of course. Even 2.91% means a lot of extra money going from Britain to Brussels, so I want us to do better in 2012. What I’m finding in this process is the best way you can do this is by forming strong alliances with like minded partners, so you go into these negotiations playing the toughest possible hand that you can. And I think what’s happened over this issue since the election is that because the British have been taking a very strong line on this and have been very active on this, that it’s actually galvanised others to say, ‘Yes, this is right, while we’re making cuts in our country it is unacceptable to go on spending more and more and more through the European Union’. And I think the action that we’ve taken is not only galvanising other European leaders, but it’s also actually making sure that other European publics ask their leaders, ‘Hold on a second, if you’re making reductions in the pensions budget and the welfare budget and the pay budget, shouldn’t it be right that we control the spending at the European level?’ So this is a change that’s taking place. In previous years there’s just been a creep upwards and upwards. The Council says one thing, the Parliament asks for a bit more, a little bit more is paid out and up and up the ratchet goes. And what you’ve seen for the first time this year is linking it back to what the Council insisted on and now you’ve got France, Germany and Britain saying we’ve got to do better than that in 2012 and 2013, and then we want a real-terms freeze in the 2014 to 2020 period. I think this is, and I think any expert Brussels-watcher here would agree, this is real progress.
You had originally hoped to get a freeze in the 2011 budget. What makes you confident that you will be able to achieve one from 2014 to 2020 when you didn’t in 2011?
Well, the point about 2011 is that, yes, Britain was pressing for a freeze, but in the end, because this is decided on qualified majority voting, we were outvoted on a freeze. And so what has happened since then is we’ve put together this alliance and it had an effect in 2011, because instead of the normal split the difference between 2.9 and 6.0, we pared it back to 2.9, and that just simply would not have happened if we hadn’t put the effort in, got the alliance together, got that original letter together and taken steps.
If you do not believe me, go and talk to people in the European Parliament and they will say that this had a real impact. I think the point is that you have a new British government that has taken the initiative on this issue of spending, and is galvanising other European leaders to do the same, and it is having an impact. Do I want us to do better? Yes, I always want to do better - 2012, 2013 and then through the next financial period. I think what you are seeing is a different approach that is yielding results.
In your discussions with President Sarkozy on the budget, have you reached some kind of understanding where you, the British, retain most or all of the British rebates, and the French keep hold of most of the Common Agricultural Policy (CAP) or is it still your policy that the CAP should fall as a percentage of the EU budget?
There are no back-room or secret deals. I will defend very strongly the British rebate. We are big net contributors to the EU, that rebate is justified and obviously we have always taken a very forward position on CAP reform and I think it is entirely right, and we will go on doing so.
I would like to ask a domestic question. The Institute of Fiscal Studies is saying that child poverty will rise by 200,000 over the next three years as a result of your government’s policies. Are you still committed to the 2020 pledge to eradicate child poverty, and are you willing to look again at your welfare and benefit changes if child poverty continues to rise?
Yes, we are committed to that pledge, and if you look at what we did in both the budget and the spending round, you will see that because we put such increases into the child tax credit, we actually made sure that neither the budget, nor the spending round - and these involved difficult decisions - would result in any increase in child poverty. Child poverty has actually increased since 2004 by 100,000 and this government, despite the difficult decisions we have had to take because we put more money into less well off families by helping through the child tax credit, has actually made that change.
I will make one other point on the welfare reforms: you do not tackle poverty long-term by keeping people trapped on welfare. The best way out of poverty is to get people working, off welfare and to rebuild their lives. That is exactly what the work programme and what the universal credit is all about. Under the universal credit system - and remember that is putting £2 billion into a new system, not cutting it - that will mean that it is always worthwhile for someone to be working rather than not working. That can be a great engine for getting people out of poverty and into greater prosperity.
There is a great deal of concern at home about this asylum seeker who killed a young girl in a hit-and-run accident and is being allowed to stay because of the Human Rights Act. How do you personally respond when you see a case like that? Do you think the Home Office should appeal the case? Is there anything you can do about it, and how quickly can you move to change the situation?
Well, my personal response is one of great anger that this can be allowed to happen. Here we have an Iraqi asylum seeker who is convicted of an offence that has led to the death of a child, and yet we are being told that there is no way that this person can be deported to Iraq. Now I think that is wrong and I very much hope that the UK Borders Agency will be able to appeal. It is a decision for them and there are legal questions, but I hope they will.
I think there is another way to look at it which is this. Britain has spent billions of pounds, and also lost many very good people - some killed, some wounded - to make Iraq a safer, more stable country. We, having done all those things, should not be in a position where we are told that it is not possible to return Iraqis there. I do not think that is acceptable, and so I hope that the UK Borders Agency will appeal and as ever, I would love us to see more common sense in this area. If you read the European Convention on Human Rights it says nothing about deportation. It has been extended and expanded by judge after judge, lawyer after lawyer, and sometimes it is flying in the face of common sense. The articles being used are nothing about deportation and I think it should be the case that if someone commits a crime like this and they could be deported back to a country where you have expended a lot of blood and treasure to make it a safer country, that should be allowed to happen.
Just to return to bankers’ bonuses, Prime Minister. Are you prepared, if the bankers do not heed your warnings in the bonus round, to increase the bankers levy as a means of punishment almost, but also certainly as a warning for future years? Secondly, on a more domestic issue, are you going to save the taxpayer some money by sharing a car with Nick Clegg up to Oldham East?
On Oldham East and Saddleworth, the by-elections are underway and I look forward to going there. I went to the last - delayed - election in North Yorkshire; I think I went on my own on that case. I tend to have quite a lot of people come with me in this day and age, so I am not sure. I will be going, we have a strong candidate and it is important that people have a proper choice. I look forward to campaigning.
On to the second point of banks, bonuses and the rest of it. The banks have got to understand that there is a political debate and a political context to all of this which is that we have had to bail out the banks, use taxpayers’ money in a difficult economic situation and I do believe in social responsibility. People have to think of their responsibilities when they make these decisions, and of course every decision like that, that the banks make, make it more difficult to keep a tax regime that they might favour. I think we have to start thinking more about the revenue we raise from banks, and what we want is strong and sustainable revenues so that actually we can put those to good use. The banks have got to understand, and I think the more sensible of them do understand, that there is a context to these decisions, and there is a political context to them as well.
On the summit you talk about galvanising other leaders and making strong alliances. You do not mention say, Poland, or other Eastern European countries, who do not seem to be quite as pleased about your move to the budgets. I was wondering what you would say to people at this summit who say that you have thrown your lot in with old Europe and in so doing, have harmed Britain’s relations with some new, more recent allies in the East? Also, just one little question on Oldham and Saddleworth: I was just wondering if you would like to make it slightly more explicit as to why people voting there should vote Conservative, and not Liberal Democrat?
Okay. First of all, in terms of European alliances, I would reject that. I have a very good relationship with Donald Tusk, the Polish Prime Minister. I had a meeting yesterday with Petr Nečas, the Czech Prime Minister. I spend a lot of time being criticised for having too many alliances with some of the new parties and leaders of Eastern Europe, so I do not accept that at all. One of the things I find quite refreshing about the way these European councils work is that actually you have got, whether it is Viktor Orban from Hungary or Petr Nečas from the Czech Republic, actually arguing for the sort of Europe that we want - more free trade, more internal markets, more reform of our economies, greater emphasis on competitiveness. Those alliances are extremely strong and many of the new countries of the former Eastern bloc take that line very strongly, and we work with them very closely.
On the issue of the budget, I mean it is not surprising that the biggest net contributors get together. I think what is different to perhaps in the past is that quite early on in this process, the French, the Germans and the British have come together and said, ‘Look, we have really got to get control of this budget and we cannot see it going up and up and up, and things need to change.’ I do not think that is an old alliance, I think that is a new point being made by some old friends who are coming together in a very new and positive way. That is probably enough old and new metaphors.
On Oldham and Saddleworth, the fact is we have a very strong candidate who fought at the general election. I had a meeting with him a few weeks ago and he did an extremely good job in the general election. He is local; he can stand up for local people, and he knows the area well. Obviously, in coalition, you always wish your coalition partners well. I think the coalition has worked extremely well between the Liberal Democrats and the Conservatives.
All I would say is that obviously the context of this by-election is that the Member of Parliament that the people of Oldham and Saddleworth elected, and the party that he represents, have been found in court to have told complete untruths about their opponent. I think that is an extremely important context to the election, and in that context, we wish our partners well because they had an extremely tough time in that general election locally and that has all been uncovered now as well as all the unfairness and untruths that were told about their candidate. He has now been exonerated really, so of course I wish them well. I will have a friendly contest; it will be a contest and we will be fighting for all of the votes, but just as I hope in local elections, there will be many cases of Liberal Democrats and Conservatives patrolling the same streets and fighting for the same votes, but I hope that it will be done in a slightly more friendly manner than it has been in the past. With that, thank you very much indeed for coming.