Clegg quizzes Brown on the European Council

• [Mar 29] Nicholas Clegg (Sheffield, Hallam, Liberal Democrat): ' . . THE Prime Minister is frowning, but can he tell me what will be the exact role of the IMF in this deal? How will the burden be broken up between the other eurozone countries? What is the maximum level of support likely to be given to Greece in the event that it asks for help and, crucially, what conditions will be put on Greece in return for this support?'

I wish to add my own expressions of sympathy and condolence to the family and friends of Rifleman Daniel Holkham, from 3rd Battalion the Rifles, and Lance Corporal of Horse, Jonathan Woodgate, from the Household Cavalry Regiment, both of whom tragically lost their lives in Afghanistan this week.

I also wish to join the Prime Minister in expressing our condolences to the families and friends of the dozens of victims injured and killed in Moscow. Londoners especially, given the horrors of 7/7, will feel a strong bond of sympathy for the families of commuters affected in Moscow.

I thank the Prime Minister for his report from the European Council. It will most probably be his last European Union summit. I imagine that he will be feeling some relief about that, given that in a few short years he has gone from lecturing his colleagues in Europe on how not to run an economy to teaching them how not to run an economy by example. At last week's summit, the Prime Minister called in some of the few favours he has left from his colleagues in Europe to delay a decision on the alternative investment fund managers directive. Instead of defensively trying to stave off damage to the City, why did he not take the chance to show real leadership on the reform of our banking system? Real leadership is breaking up the banks. Real leadership is imposing an additional levy on their profits until that is done. Real leadership is getting banks lending to small, viable companies that are going to the wall.

Will the Prime Minister report on any conversations that he had with President Barroso, the President of the European Commission, as this summit was after all their first meeting since the Commission issued its damning verdict on the Prime Minister's handling of Britain's huge budget deficit? No doubt the European Commission will today be equally dismayed by the shiny promises of tax cuts from the shadow Chancellor, who is not in his place-he must be preparing for the mauling that he will get on television tonight. He has no idea how he will pay for those tax cuts. Labour and the Conservatives seem to be competing to come up with the most ludicrous fantasy announcement paid for with bags of gold found through efficiency savings. I am not sure who is winning, but I am certain that no one is falling for it.

On the bail-out for the Greek Government, as the Prime Minister knows, instability in the eurozone can and will rapidly turn to instability across the European Union, which will affect us too. Given that, I found the lack of details about the potential Greek bail-out a little concerning. Yes, Greece has not yet formally asked for help, but we have a deal on the table that is meant to calm the markets' nerves but gives us very little in the way of detail. The Prime Minister is frowning, but can he tell me what will be the exact role of the IMF in this deal? How will the burden be broken up between the other eurozone countries? What is the maximum level of support likely to be given to Greece in the event that it asks for help and, crucially, what conditions will be put on Greece in return for this support?

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Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour): I will tell the right hon. Gentleman the facts. There is a limit on the amount of support that the IMF can give. It is limited by its constitution and how it has always done things. That is a matter that we will discuss with both the IMF and the eurozone at the right time. It is limited by the regulations that it has.

On the right hon. Gentleman's other points, in the Budget last week we reached agreement with the banks about £92 billion of additional lending in the next year. We also reached an agreement-and said in the Budget-that proper supervision of that would be needed, so that the public and small businesses could be assured that the money was being paid to them. So we are setting up a small business mediator who will act on behalf of small businesses to try to resolve the issues that have left them without the funds that they need- [ Interruption. ] An Opposition Member says that that is ridiculous, but we have to protect small businesses to ensure that they can grow. As far as the banks are concerned, we are taking the necessary action.

As far as directives are concerned, we did not accept the compromise proposed by the European Finance Ministers. We will therefore renegotiate that over the next period of time, because we are determined both to have proper regulation of those industries and, at the same, to allow companies to have access to the full range of countries in the internal market, and that is what we are doing.

As for ludicrous policies, the right hon. Gentleman would win the race any day.

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