PM and Foreign Secretary press conference at the EU Council

20 June 2008

Transcript of a press conference given by the Prime Minister and Foreign Secretary David Miliband following the EU Council in Brussels.

Read the transcript

Prime Minister: Last night our main discussion was the outcome of the referendum. The main business of this Council and our focus of much of yesterday and today is tackling the issues that matter most to the citizens of Europe:  their jobs, prosperity, climate change, what is happening to oil prices and what is happening to food prices, and I am pleased that the focus of the communiqué which will be issued in a few minutes is exactly on these issues.

Let me say first on the Irish referendum and its implications.  We had a good discussion last night.  There was consensus that Ireland must be given time to consider how best to respond.  We agreed that other countries would continue their own process of ratification.  We will soon complete the procedures regarding ratifications and we look forward to hearing more from Brian Cowen, the Irish Taoiseach, at the next Council in October.

The rising oil price is the major economic issue we face.  The long term increase in demand, particularly from China and other emerging economies, has not been matched by an increase in supply and that has resulted in rising fuel bills - as we have heard from every country around the table - for families across Europe.  We recognise that governments can only tackle these problems together.  Global problems require global solutions so we agreed to do more to balance energy supply and demand now and in the longer term.  We need to make a reality of our commitment to improve energy efficiency, we need to reduce our dependency on oil.  This is strongly in Britain's interests and it is in Europe's interests.  It will help us cut energy and fuel bills, tackle climate change and increase energy security and in his role as Environment Secretary and Foreign Secretary, David Miliband has been pursuing this agenda across the world.

We agreed at the meeting that we need a more transparent dialogue between oil producers and oil consumers so we have welcomed the decision by Saudi Arabia to host a high level meeting this weekend, and I will be going to Jedda to attend this meeting.  The Jedda dialogue is not about announcements about immediate targets for production.  It is about how the medium and long-term mismatch between supply and demand can be bridged.  So we will propose at Jedda that oil producers should be recycling oil revenues into the United Kingdom, European and other countries.  Three trillions in revenue have been transferred from oil consumers to oil producers and there should now be credible commitments from the oil producers to invest more widely to alternatives to oil in nuclear, in renewables, in wind and wave turbine and in solar power, so that we can create a more balanced energy market with the prospect of the long term price of oil falling as a result. 

We also discussed how Europe can address the problem of rising food prices.  These are higher in real terms than any time since 1945.  These are devastating in their effects in poorer countries.  In an independent group the Council agreed will make policy recommendations by the end of the year and we will also be [indistinct] the evidence surrounding biofuel production including the [indistinct] and deliver real savings on greenhouse gas emissions within European Union targets. 

I can say we have also discussed the deteriorating situation in Zimbabwe.  Mugabe's increasingly desperate and isolated regime has unleashed still more violence, indeed a new wave of violence, in the last few days.  This is a blatant attempt to intimidate and to steal the election.  Our latest information is that there have been 69 confirmed murders, 35,000 people displaced, 2,700 men and women beaten and tortured, state TV has stopped any pretence of balance in this campaign.  The opposition has been intimidated, it has been unable to campaign, its secretary-general is under arrest, the Government has even used food as a political weapon and this is a brazen, and it is an unseemly use of power by a criminal cabal.  The statement of the European Union on Zimbabwe includes our commitment to identify and take further measures against those responsible for the violence.  We know that the coming days will be critical.  If Zimbabwe is to have any chance that the world will see the election as free and fair the violence must stop now, international and local monitors must be allowed to work unimpeded, the Human Rights envoy of the United Nations must be given full access.

We have also agreed a strong package today on the Millennium Development Goals: ?8 million to be invested in health in the poorest countries, followed by ?3 billions in education.  We will train 6 million teachers as a result, provide 75 million more bed nets to tackle malaria and we will substantially increase the number of health workers and we strongly reaffirmed our commitment in timetables from all countries to scale up [indistinct] by 2010.  The European Union will use this package to press at the G8 and the Millennium Development World Summit on 25 September to agree global plans involving all continents to get back on track to achieve the Millennium Development goals. 

We also agreed - and the communiqué will reflect this - that a world trade deal is now within our reach.  But we also know that time is running out to secure the world trade deal, which is a development round to benefit the poorest countries.  In the current climate, where protectionist sentiments have been rising, a deal on world trade has never been more important.  We want to see a ministerial meeting on trade in the next few days and we believe that that meeting could take place.  It is possible to secure a trade deal within the next few weeks and we support Peter Mandelson, the European Commissioner, in the excellent job he is doing in pursuing the mandate that has been agreed by the whole of the European Union.

Ladies and gentlemen, both David and I will be happy to answer any questions.

Question: Prime Minister, you have just praised Mr Mandelson.  You had a very amicable lunch with President Sarkozy yesterday, can I ask you therefore, do you agree with President Sarkozy that Mr Mandelson may have been partly to blame for the Irish "No" vote in their referendum?

Prime Minister: Mr Mandelson is pursuing the mandate agreed by all 27 countries in the European Union.  It is the desire of the European Union to secure a world trade deal not just over the next year, but over the next few days and weeks, and he is pushing forward the European agenda to reach an agreement with America, with Brazil, with India and with South Africa, with all the main countries who also have to sign up as representatives of their constituencies for the deal.  He is pushing for it.  We support him in the excellent work that he is doing and we believe that there is a chance of all the countries coming together to make that trade [indistinct] happen and that is why it is even more important to remind people that the mandate that Peter Mandelson is pursuing is the collective mandate of the European Union. 

Question: Prime Minister, on the Irish question is October a deadline or merely a staging post, and when do you expect there to be a [indistinct].

Prime Minister: Mr Cowen came to the meeting and gave a very full report of what had happened in Ireland.  We regret, of course, the decision that Ireland has made, but we respect the decision of the Irish people.  He said to us that he would come back to us with a fuller report in October, after he looked at all the conditions surrounding the referendum, and that is for him to do.  It is an offer that he made, it is the Irish Government that has taken this initiative and I believe they should be supported, not only in analysing what has happened and listening to the people of Ireland but also in making the report that they want to make to the European Council at the time that they suggested it should be made.

Question: I was going to ask you about the debate on whether the European Union should be cutting fuel duties, cutting VAT on fuel, to help consumers.  I know that you have frozen the 2p rise in fuel duty but I just wonder what your view was in general about the idea of cutting taxation on fuel at a time I think at the last Summit when I think you were discussing cutting VAT on energy-saving products?

Prime Minister: I think you will find when the communiqué is published that there is an agreement that countries will have to look at short-term social policy measures to help, particularly, lowest income groups who are facing the brunt of both fuel and food rises.  And as you know we in Britain have extended the winter allowance for pensioners, we have just negotiated a deal with the utility companies that will help low income households with their fuel bills.  We have frozen, as you rightly say, petrol duty for the few months, indeed we have frozen it for most of the years since the turn of the century and we recognise the problems that motorists face in all parts of the country when they are filling up their tanks at petrol stations and the increased costs as the result of it. 

But I think you will find that the communiqué invites the Presidency, working with the Commission, to look at all the different proposals that have come from different parts of Europe so that we can help those most affected by what has happened to the oil price.  But the communiqué also says that the only solution to these problems is going to be dealing with what is a medium and long-term problem as well, that we have got to look at the mismatch between what people expect the demand for oil is going to be, particularly with increasing demands from China, India and Asia, and of course the pressures on supplies that exist in the oil-producing countries and we want to look at first of all how we can have alternatives to oil and that is nuclear and renewables and I repeat that in Europe, 16 of the 27 countries have either decided to go nuclear or have nuclear power stations.  We expect on present estimates that 1,000 nuclear power stations will have to be built across the world over the next 30 years.  Renewables is a commitment that we have made for 20 per cent of our energy to come from that over the next few years and these are our determination to show that there are alternatives to oil and that we can meet the demand for energy in different ways.

There was a vigorous discussion also at the Council about the electric car, about alternatives for the vehicle production that made them less dependent on oil and given that that is one of the major sources of the usage of oil the investment that we are making in new technologies and other countries want to make in new technologies is also a powerful message that we are going to lessen our dependence on oil in the years to come.

We also want the oil-producing countries to invest their revenues in energy outside oil in the oil-consuming countries, and one of the powerful messages I can take to Jedda which we expressed round the table at the European Council is that there is a market for investment outside oil that can recycle some of the $3 trillion of revenues that the oil countries have made.  I think this will grow in strength as an argument over the next few months.  There are massive revenues being made from oil, it is a switch of money from oil-consumers to oil-producers.  Some of that should be recycled in investing to secure a more balanced energy market for the future.

Perhaps, David, you want to add something about the climate change agenda there.

Foreign Secretary: I think that the energy security and the climate change aspects go together, and the key point is that throughout the whole discussion, both the facts of supply and demand, and the argument about speculation, what is absolutely evident is that you have to have a strong, medium-term plan for reducing demand, whether that be in the housing sector, in the energy-generating sector or in the transport sector, and I think that the breadth of the argument that you have seen shows a real commitment on the part of the European countries to achieve that.

Question: Prime Minister, you have spoken about the problems that hard-pressed families are facing back at home in terms of rising oil prices, food prices and the rest of it.  Would you agree with Tom Harris that people should try and look on the bright side?

And can I also ask you, I understand that you had a chance to have a quick chat with Carla Bruni yesterday over the phone.  Could you let us know what you had to say to her?

Prime Minister: Well, I was renewing the conversation that I had with Carla Bruni when she was in London and wishing her well as she was promoting her new music, and I look forward to meeting her again soon. 

Tom Harris was talking about the increase over the last 10 years in the wealth of the average citizen of the United Kingdom.  But as he said this morning on GMTV, people are facing very difficult problems in terms of food prices, petrol prices and mortgage prices and he said that he recognised the problems that people faced at the moment, and I too recognise these problems and that is why our major contribution to this Summit has not just been the discussion on the future of the Treaty as a result of what has happened in Ireland, but how we as the European Union can deal with the problems that millions of people are facing across Europe as a result of the rise in oil prices, the rise in food prices and of course the rising cost of money as well, and so as a result of that the European Union must be seen, as every national government must be seen, to act in both the short term with the winter fuel allowance and the freezing of fuel duty on behalf of ordinary citizens, but also try to solve what is this big problem which is the mismatch between the demand for oil and the supply of it, which will continue into the years to come unless we take the sort of action that we are proposing: an increase in nuclear, increase in renewables, more energy efficiency in the use of oil and other sources of energy, and of course switching to renewables and other sources for the future.

Question: You were talking about oil-producing countries recycling revenue into consuming countries, just to clarify, would you be open to seeing them doing that in industries beyond alternative energy industries into more general investment by sovereign wealth funds, and on that the UK has been remarkably open to sovereign wealth funds and other countries have been less so.  Are you confident you can persuade other European countries, other G8 countries, to be more open to that degree of investment from oil-producing countries?

Prime Minister: Yes, I think two things are going to happen now if we are going to have a more balanced energy market and greater stability for the longer term.  First of all we must allow the oil countries and the producers therefore with the sovereign wealth funds to invest in our industries and in our services and that is already happening in the financial services, it is happening in many other areas, but I want to draw attention to the opportunities to create a more balanced energy market with sovereign wealth funds and other funds from oil-producing countries investing in the alternatives to oil.  And if the oil producers have an interest in other parts of the energy market, then undoubtedly we will create a more stable market for energy in the future. 

But I would also emphasise that we should have the right, and we should have the opportunity, to invest in some of the oil-producing countries and we cannot continue with the situation where certain markets and certain oil regimes are closed to investment for the long-term future and that creates a more inefficient market in the production of oil. Refining is not as efficient as it should be and that means that supplies of oil are less than they should be as well.  So I want reciprocal investment between the oil-producing countries and the oil-consuming countries, but let us not forget that the biggest financial figure that is in the minds of people looking at these markets is the $3 trillion revenues that the oil-producing countries have gained from the rise in oil and that is money that should be invested for the benefit of the whole world economy.  We need a global deal on these things and that is part of my discussions in Jedda. 

Question: Do you agree with the judgement of the European Commission that GM crops could play an important role in mitigating the effects of the food crisis and also that the current obstacles to trade in GMOs will mean higher food prices in Europe?

Prime Minister: Well what the European Union have done is set up a review into these issues.  That review started only a few days ago.  I think it is very important that we see the results of that review before we draw firm conclusions.  In the end the attitude to GM crops and GM foods taken by consumers in our country and in any country is going to depend on the scientific and the medical advice and that is what we are looking to, and for, from the work of this review group.  It has started, it will take some time.  Let us look at its conclusions but scientific advice is going to be the key to the future.

Question: Prime Minister, would you like to see all the oil-producing countries investing in nuclear plants in Britain?

Prime Minister: Well our nuclear market is open.  Of course we have got to bear in mind all the security considerations and all the regulatory requirements, but it is open for people to invest in our country, and indeed we have been looking at what happen to British energy for the future.

Question: Could I ask, on Zimbabwe, is there any sense that either Britain or the EU thinks that Robert Mugabe might have to be tried for war crimes?

Prime Minister: I think we have reserved the right to look at the actions of the Zimbabwean regime and it is certainly the case at the moment that we are dealing with murders that have taken place and deaths that have happened during this election campaign.  And I have said before that I regard this as a criminal cabal surrounding President Mugabe and a criminal regime because of the violence that has been practised and the intimidation against the citizens.  At the moment our basic concern is this: that elections should be free and fair and that action must be taken to stop the violence now, action must be taken to respond to what African leaders have said only a few days ago that there should be international monitors in the country, and those people who are the national observers, given that there are thousands of polling stations around Zimbabwe, should be given the chance to monitor these elections so that fraud cannot take place either locally or at the centre and we have made an appeal that the UN Human Rights envoy who visited Zimbabwe should return so that we are in a position to see how human rights are, or are not, being upheld.  The matters you raise are matters for the longer term.  At the moment the violence must cease, international monitors must be allowed.  And if that does not happen, the whole world will conclude that these elections are not free and fair.

Question: Was there agreement around the table on your position on sovereign wealth funds and investment in renewable energies, and does this mean that you are going to Jedda with a common European position?

Prime Minister: I think you will find when the communiqué is published that there is agreement that this dialogue must be taking place, that it must include all the issues that I am talking about - the future of renewables, the diversification of energy, greater energy efficiency, what the future, for example, of the car is and how it is fuelled in the future, the electric car, the plug-in vehicles and so on and so forth.  So there is general agreement about that agenda.  So far as sovereign wealth funds are concerned, I made my position clear months ago.  I said I would welcome not only sovereign wealth funds investing in the United Kingdom, I would actually welcome them setting up offices in the United Kingdom from which to conduct their international operations and I believe that there is some interest on the part of sovereign wealth funds in doing so. 

I continue to talk to those countries which have substantial oil revenues about how they see the future and I have got no doubt that they want to see a far wider portfolio of investment than simply oil and I have got no doubt, looking at the market for the years to come, if we are going to get the oil price into a better position, we have got to have this diversification of the energy market.  That will create more stability but I believe that most people sitting around the table will want to see sovereign wealth funds using their resources to benefit the populations of Europe and the rest of the world.

Question: On Zimbabwe, is this communiqué imposing new and immediate sanctions on Zimbabwe and if not, why not? And on enlargement, is President Sarkozy right to say that Europe cannot enlarge unless the Lisbon Treaty is ratified by everybody?

Prime Minister: Well those are two quite different questions, covering quite different continents.  I think you will find that the communiqué will say very clearly that we will consider further sanctions against the members of the Zimbabwean regime if the evidence that is now coming forward is proven to be true and we will consider whatever action has to be taken internationally.  But our first priority, given the loss of life at the moment, given the intimidation that is taking place, given the forced movement of people from their own communities into other areas and given the famine that exists in many parts of Zimbabwe, is to make sure that there is an end to violence, to make sure that the elections can be held without intimidation and that requires there to be international as well as national monitors on the ground in Zimbabwe.  If that doesn't happen people will conclude these elections cannot be free and fair, and I think we have got to remind President Mugabe and the Zimbabwean regime that the eyes of the world are now upon Zimbabwe.  People are looking at what is happening day to day in this country, people are shocked and horrified by the violence that is taking place during an election campaign against those people who are opposition candidates, and unless there is an improvement in the conditions and the international monitors are raised in number, and there is an end to violence, people will conclude that the regime has no intention of holding free and fair elections.

Question: Prime Minister, Lord Justice Richards who is hearing Stuart Wheeler's challenge to the Lisbon Treaty has said he is very surprised by the proposal to ratify.  He says that the government should have waited for the court to hear its case and he has asked you to stay your hand until the court case is finished.  How do you respond to both his surprise and his request?

Prime Minister: We actually wrote to the court saying that we were proceeding to ratify so that they had the knowledge that we were taking the steps which of course take days, and in some cases weeks, between the Royal Assent and the ratification.  The Judge has now replied that he expects to give his judgement next week, and of course that fits in with our timetable, where having had the Royal Assent we have got to go through all the different procedures before ratification and so ratification will not take place of course until after we have had the judgement from the Judge. 

Question: Prime Minister can you tell me, in Zimbabwe there has already been what seemed to the international community free and fair elections.  Robert Mugabe lost that it seems.  Why would the Zimbabwean people feel that anything different would happen this time, when the eyes of the world were on them then?

Prime Minister: Well first of all the Zimbabwean Parliament has been elected and there is no re-election of the Zimbabwean Parliament.  Zanu PF has no majority in that Parliament.  What we are debating now is a Presidential election and it was always part of the Zimbabwean constitution that if one candidate did not receive more than 50 per cent of the vote that there would have to be a run-off.  There were additional candidates to the two that are now already standing in the first round.  There was a disagreement that some people came to the conclusion that 50 per cent had not been achieved by Morgan Tsvangirai and that is why the run-off has taken place.  Look, we want a free and fair election.  If the conditions are not there fore a free and fair election we will say to the world, as will other countries, that this is not a free and fair election.  For the election to actually take place in a way that could command any credibility from the world, the violence must stop, the intimidation must come to an end, the international monitors must be allowed in and you can see from the Tanzanian response only yesterday, that they are concerned about the conditions in which they are monitoring the election as part of the SADC Group and I believe that they will make their views very clearly known if they believe that the election cannot take place fairly.

Question: Prime Minister you are going to attend the G8 Summit in Japan, what are hoping to achieve there?  What are your priorities there?

Prime Minister: I met Prime Minister Fukuda only a few weeks ago when he came to London.  We had a very constructive meeting about the G8 Summit.  We are of course debating climate change and we look forward to the Japanese initiatives that I believe are very important on the issue of both climate change and the environment generally. But of course will also be debating the Millennium Development Goals, and how we can make progress on that, and I believe that for many people around the world, the discussion of oil prices and food prices and what is happening to them will be a central part of what they expect us to and I believe that that discussion will be a very full one as well.

I am going to Jedda on Sunday.  As I have said, this is not a meeting to look at production targets for the short term and was never intended to be that.  It is a meeting about whether a dialogue between the producers and consumers about the demand that is created by the consumers and the supply available from the producers, how we can match that in the years to come.  At the moment, everybody accepts that demand will be higher than supply.  It is hardly surprising, therefore, that the price is higher.  But if we can show that there are alternatives in supply such as nuclear renewables that are credible, if we can show we can be more energy efficient in the use of our oil, and if we could show that this recycling of revenues is likely to take place so that we have a more balanced energy market, then that will also form part of the discussion that will be held in Japan.

Question: Obviously sovereign wealth funds and oil-producing countries are quite within their rights to decide what they do with their money.  How can you be confident that Europe's offer will be taken up?

Prime Minister: I believe that there is a huge interest by the sovereign wealth funds.  Some people say that the resources of the sovereign wealth funds are already in the region of about $3 trillion but it is expected that their wealth would be in the order of about $12-13 trillion by the next few years.  So we are talking about huge amounts of revenues in their possession.  I believe there is a huge interest already in investing in the United Kingdom and in other countries that are oil consumers and I believe that the right thing for the next stage, given that we have got very high oil prices, given we have got a need to diversify our energy supply, it is for the oil producers themselves to look at investing in alternatives to oil to create that balanced energy market. So it is both logical, it is being discussed at the moment, and I believe that the recycling of these revenues and the benefits that can then flow to the United Kingdom, the European Union and other countries, will become apparent in the next few months. 

Question: Prime Minister, even if the violence stopped in Zimbabwe tomorrow, do you believe that there could now be free and fair elections.  Hasn't it gone too far for that possibility to remain?  And after all your strong words, I am still not quite clear, what further sanctions could be imposed on the Zimbabwe regime if your words and those of other EU leaders are not heeded.  What actual things will you do?

Prime Minister: I don't actually have the text of the communiqué here because it is still in the process of being finally agreed but I think you will find that it is pretty tough in the language about financial sanctions against those people surrounding President Mugabe and it is tough about the general criminality of the regime that will have to be addressed after the elections.  But I do stress that the first thing that is important in these next few days, because we are only a few day away from the election, is that the intimidation and violence is stopped, that Zimbabwe knows that the eyes of the world are upon it, the regime knows that there are international and national monitors at a level to cover the 8000 or so polling stations, then nobody will be able to reach the conclusion that the elections are fair.  How do we judge this?  Well, SADC, the South African group that has been monitoring the election, have very clear rules that are set down.  I read them only yesterday because they are quite specific in the requirement for the openness and the fairness of the election campaign, they are very specific about what has got to happen at polling stations and during the count and how the result has got to be tested against these principles and I believe it is here for SADC to tell us what their view is, both of the conduct of the campaign so far and whether if the election takes place in the way that the regime might want, whether that has met the tests of being free and fair.  So we look forward to the report by the monitors from SADC on this matter, but the whole world is now looking at what is happening.

Now a final point about the Treaty itself.  The Treaty is of course about the extension of the European Union.  The Nice Treaty makes provision for the European Union, the Lisbon Treaty makes provision for the enlargement of the Union and all the arrangements surrounding it.  I am still confident that enlargement and discussions, I met the Croatian Prime Minister on Thursday.  Enlargement can proceed.  But clearly we have got to get agreement on the Lisbon Treaty itself.  That is the next step.  I believe that most countries, 26 out of 27, will go on to ratify the Treaty and Ireland will come back to us and talk over their proposals.  There has been in the past a way forward to dealing with the European challenges that come up when there have been problems in the past.  I believe that Ireland should be given the chance, and it is an offer being made by Brian Cowen, not something that has been imposed on Ireland, it is an offer made by the Taoiseach of Ireland that he will come forward in October, report to the Council about what he and the Irish Government believe are the lessons they have learned from the Referendum and what they then want to do.  And that is really the next stage of the process. 

We also discussed football and I think probably that was some of the most heated discussion during the two days.

So thank you all very much.