European Council

HC Deb 28 October 2002 vol 391 cc541-58 3.30 pm

The Prime Minister (Mr. Tony Blair)

With permission, Mr. Speaker, I would like to make a statement about the European Council in Brussels on 24 and 25 October.

This European Council set the framework for the final stage of the enlargement negotiations. We are on course to finish those negotiations in December, sign an accession treaty with the candidate countries next spring and welcome them into the European Union at the beginning of 2004.

Enlargement has been a goal of successive British Governments. It was an historic obligation to offer membership to those nations that won their freedom after the collapse of the Soviet Union. Their membership will establish a single market of some 500 million people. We hope that those 10 countries will be joined by Bulgaria and Romania no later than 2007.

The European Council also welcomed the reforms undertaken by the Turkish Government. The Council agreed that Turkish progress had brought forward the opening of accession negotiations. At the Copenhagen European Council in December, we will decide on the next stage of Turkey's candidature. For our part, the British Government look forward to Turkey's membership of the European Union in accordance with the conditions that all candidates have to meet.

The last stage of any negotiation is always the most difficult, and the last stage of the negotiation between the existing members of the European Union and the candidate countries is of course about money: what they pay into and receive from the EU budget, including structural funds and the common agricultural policy.

The European Union will be generous to the new member states. It is right that we should he, given our own interest in their stability and prosperity. But at the same time, we do not want to jeopardise the progress that has been made in reducing agriculture's share of the EU budget from more than 60 per cent. 20 years ago to 45 per cent. now. The reforms agreed in Berlin in 1999 are worth €7.5 billion to EU consumers and taxpayers. We want to extend that reform in two ways. First, the Commission has brought forward proposals for the mid-term review of agriculture under paragraph 22 of the Berlin conclusions of 1999 which, if agreed would de-link agricultural subsidies from production for the first time in the history of the European Union. Secondly, we want to limit the growth of direct payments to farmers once the candidate countries become full members.

Before the summit, the main argument was whether enlargement could be blocked by the disagreement between France and Germany over limiting agricultural spending. Fortunately, before the summit, they reached agreement that future agricultural spending should be capped up to 2013 at the levels of 2006 envisaged by the Commission. In effect, because of allowances made for an inflation rate of only 1 per cent., that will mean a real-terms reduction over and above the original Commission proposals. That aspect of the agreement was welcomed by all. However, there then arose the question of whether in return for that, reform of the CAP, prior to 2006 when the current financial perspective runs out, would be postponed. That then dominated the latter stages of the summit.

In our view, such a blanket opposition to reform would have been wholly unacceptable. It would mean effectively destroying the current reform proposals of the European Commission. It would seriously inhibit the offer the EU can make in the World Trade Organisation Doha trade talks. Those talks are vital both for free trade and for the developing countries of the world. Those poor countries need agricultural reform in Europe and they need it badly.

Eventually, we agreed specifically that the limit on agricultural spending would be without prejudice either to the European Commission's mid-term review of agriculture based on paragraph 22 of the Berlin conclusions or to the Doha trade round. Those issues can now be taken forward by the Agriculture Council, which, of course, operates by qualified majority voting. Despite the difficulty in negotiating that, it would have been quite wrong for the possibility of CAP reform to have been hindered in that way. As a result of the summit outcome, enlargement remains on track and fundamental CAP reform remains on the agenda.

During the European Council, I also discussed with colleagues the issue of Iraq. We are all agreed on the need to ensure that Saddam has no chemical, biological or nuclear weapons programmes. We are working hard for agreement on the terms of a tough new Security Council resolution. The key point has to be that the weapons inspectors should return, free to do their jobs properly, without any of the restraints wrongly imposed before. Should there then be a further breach by Iraq, I have no doubt that action must follow.

We also discussed the development of European defence. We agreed that Macedonia would be a good place to start and that we should therefore work urgently to complete the agreement between the EU and NATO.

In addition, we had a presentation from President Giscard d'Estaing on the convention on the future of Europe. In his speech today, I am pleased that the president makes it clear that Europe should co-operate as a union of European states, not a federal super-state, and I believe that his proposals on subsidiarity, the role of national Parliaments and Council reform will be welcomed, at least here. We are well placed in this vital debate.

Before concluding, I would like to update the House on the hostage crisis in Moscow that ended tragically with the loss of so many lives. At 9 pm local time on Wednesday, around 50 armed Chechens took several hundred hostages in a theatre in south-east Moscow. Among the hostages were three British nationals: Peter and Sidica Low and their son Richard. Peter Low and a few others were released on Thursday morning. I spoke to President Putin from Brussels on Friday. Britain sent a team of counter-terrorist experts to help. President Putin told me that he had no doubt that the terrorists were prepared to kill all the hostages; that they were heavily armed with explosives; and that whatever decision he took would be immensely difficult. After the siege had ended at 5.30 am local time on Saturday, I rang him again to welcome the ending of the siege. I asked him and he was able to tell me that the safe release of Sidica and Richard Low had been ensured.

It is too early yet to know the full facts of what happened, but I ask people to understand that when it was clear that the terrorists were starting to execute the hostages, the Russian authorities had to act. I know how hard it will have been to make the right decisions. But there are no easy, no risk-free, no safe solutions to such a situation. And I hope that people will understand the enormity of the dilemma facing President Putin as he weighed what to do, in trying to end the siege with minimum loss of life and recognising the dangers of doing anything that conceded to this latest outrage of terrorism from Chechnya.

Although it is clear that hundreds survived, many did not, and the loss of each innocent life will be mourned not just in Russia but throughout the world, and we in Britain send our deepest condolences to the Russian people at this time.

The attacks in Bali, the occupation of the Moscow theatre, the other terrorist attacks around the world, the murder of the American diplomat in Jordan this morning are all brutal and horrifying reminders of this new form of terrorist extremism. A deadly mixture of religious and political fanaticism is being pursued by those who have no compunction about taking human lives, no matter how innocent, and little about losing their own. The only answer is to defeat them by security, intelligence and policing but also to tackle head on, especially within the Muslim world, their perversion of Islam in the cause of extremism. I remain of the view that it is not only the methods of extremism but the extremists' ideas that must be countered.

Thanks to the outcome of the summit, the way is clear to finish the enlargement negotiations by December. In the worst days of the cold war it would have seemed incredible that countries that were under Soviet rule for nearly half a century could find their freedom. But they did. This opportunity and the challenge of enlargement have helped them catch up half a century in the last decade. I hope the House will welcome this important step towards a Europe united, democratic and free.

Mr. Iain Duncan Smith (Chingford and Woodford Green)

I start by thanking the Prime Minister for his statement and I join him in offering the Opposition's condolences to the Russian people for the terrible tragedy that they faced during the past few days. I also join the right hon. Gentleman in expressing our horror at the actions of terrorists in Moscow and in extending our sympathies to all the victims and their families.

As the Prime Minister said, hostage taking and terrorism are utterly unacceptable whenever and wherever they occur. I also agree that a huge and terrible dilemma faced the Russian President. No matter what we discover during the next few days and weeks, it was no less than one of the most difficult decisions that could have been made, although in due course we shall need to understand more fully exactly what weapons were used. Our condolences go also to the family of the US diplomat. As the Prime Minister rightly said, those events bring home to us the fact that the war on terror must continue and that those who say that we can take a break from it, or that we do not need to pursue it with so much vigour, are fundamentally wrong. They must remain on the sidelines of the argument.

On Europe, I congratulate the Danish presidency on keeping EU enlargement on track. The Prime Minister is right to say that enlargement is a great prize that is worth fighting for. The 10 new countries seeking membership of the EU will bring 70 million customers for British goods and services in a single market extending from the Atlantic to the Baltic. The prospect before us is of a new Europe built on co-operation between stable democratic nations and the prosperity of open markets—[Interruption.] I know open markets make Labour Members very uncomfortable but they will have to live with them.

The choice will be between an old Europe that is always seeking to centralise power or a new Europe that is apparently about open markets and less regulation. In that context, it is a pity that the Prime Minister allowed the forces of old Europe to sideline him so convincingly at Brussels. Only four months ago, he told the House of the EU's commitment to breaking down the trade barriers, including those in agriculture. Yet he comes back from the summit saying that it was fortunate that France and Germany reached agreement. Well, if ever there was spin to cover failure, that was it. The Prime Minister welcomes a reduction from a position that should never have existed in the first place.

If the deal after Friday is so welcome, why was the Prime Minister storming around on the sidelines of the meeting saying that he was furious and angry. Apparently he even insulted President Chirac—[Interruption.] Terrible!—[Interruption.]—Oh yes, be careful; he will be joining us.

If the deal was so welcome, why were British officials unable to comment on the details of the deal between France and Germany for about 24 hours from the moment they arrived? Was that not because neither the Prime Minister nor his officials knew anything at all about the deal because they were not present in the first place? How does that square with the fact that, six months ago, the Prime Minister told the House: Britain is in there, shaping Europe's future … We will continue to get the best for Britain out of Europe. Under this Government, the days of weakness and isolation will not return"?—[Official Report, 18 March 2002; Vol. 382, c. 23.] The Prime Minister said that reform of the common agricultural policy remains on the agenda. I assume that he means that reform is on the agenda in the same way as his colleague in No. 11 Downing street believes that leadership of the Labour party remains on the agenda for him.

Will the Prime Minister tell us what the total cost of the CAP will be after enlargement and how he will pay for it? [Interruption.] Labour Members hate the idea that the nonsense they have been pushing that they are at the heart of Europe has been exposed—they are not.

Will the Prime Minister tell us about the total cost of the CAP after enlargement and how it will be paid for? Will the money be found by cutting existing EU budgets? If so, why has so little been done to reform the EU structural funds and why did the Prime Minister not raise the fact that about £3 billion of the EU budget is still wasted in fraud and mismanagement?

The Prime Minister has made much of the fact that the British rebate did not make it into the presidency conclusions, yet President Chirac even today continues to state publicly that it is part of the deal. So will the Prime Minister confirm what we believe his Foreign Secretary said last week? [Interruption.] Oh yes. He said that the rebate won by Mrs. Thatcher is not up for negotiation and never will be up for negotiation. If the Prime Minister agrees with that, when did he first tell President Chirac that he should drop the whole issue of the rebate; or did he ever tell him at any point during the conference?

Only two years ago, the Prime Minister assured the British people that the charter of fundamental rights would not impact on national law, yet his former Minister for Europe said that Britain would be prepared to compromise on allowing the CFR to be legally binding. So in the light of the report that was tabled at the meeting on the convention and given at the Brussels council, will the Prime Minister make it absolutely clear that Britain will veto any proposal to compromise and make the CFR in any way legally binding?

I have lost track—[Interruption]—of the number of times that the Prime Minister has come to the House. [Interruption.] Oh no. Again and again, we hear that this country is leading for Britain in Europe, but seldom has his failure to practise what he preaches been so transparent: a deal to extend the life of the common agricultural policy has been struck behind Britain's back; proposals to give away yet more powers from national Governments to the Commission have been tabled over British objections; and fundamental reforms that would secure the financial future of an enlarged European Union have been passed over despite the warnings.

The Prime Minister normally gets up at this point and lectures everybody about how he has been ahead of everybody else in leading for the Government. Instead of getting up and blaming the last Government or the Opposition, will he now tell British taxpayers how much more they will have to pay to foot the bill for his failure?

The Prime Minister

First, on Russia, we are in agreement. May I echo—I should have referred to it in my statement—the right hon. Gentleman's praise of the Danish presidency? It handled a difficult meeting extremely well and prepared the Council very well indeed, and the Danish Prime Minister's handling of the summit was excellent.

In relation to the agreement between France and Germany, I have to point out to the right hon. Gentleman that there are two quite separate aspects of the agreement—one was an agreement about limiting expenditure in the European Union. That is actually an advance on what was there before. Before the summit, there was no agreement that, after 2006, spending on agriculture should be limited at all. That was one aspect of the French-German deal, which was struck as a result of the disagreements between them.

There was then a second aspect: what France wanted in return for that deal was the abolition of any possibility of common agriculture reform prior to 2006. That is precisely what was resisted at the summit. That is why it was important to make sure that, after the summit, the mid-term review of the Agriculture Council continued. The purpose of the French proposals was to ensure that that review was effectively dead in the water. That review now carries on, and, as the EU Commissioner said in his statement today, it is important that the mid-term review is there, and it should be completed at the earliest possible opportunity. [Interruption.] With great respect, whatever is shouted at me from the Opposition Front Bench, we are fully supportive of the first point of the agreement—an additional limit on expenditure. We are not in support of the price for it—no CAP reform—and that was defeated at the summit.

Secondly, of course, it is extremely important to ensure that the European Union can make a proper commitment in the Doha WTO round. If we had ended up saying effectively that there would be no CAP reform prior to 2006, it would have been very difficult to make a constructive EU offer next year. I want to make it clear that I believe that it is in the interests not just of Britain but of Europe that we are able to make an offer in that WTO trade round that is of benefit not just to the developed world but to those poor and developing countries that desperately need access to our markets.

That is the importance of CAP reform. The reason why it is important that CAP reform is still on track is that the decisions on it will not be taken in the Prime Ministers' Council but in the Agriculture Council. That is important because the Agriculture Council will take its decisions by qualified majority voting.

In relation to the abatement, it is not up for grabs, for a very simple reason: the abatement compensates Britain for what would otherwise be a wholly unfair distribution of contributions. Even with the abatement, our contribution is three times that of France, for example, and without it our net contribution would be 13 times that of France. Only after enlargement, even with the abatement, will our contributions for the first time—as a result of the deal struck in 1999 at Berlin—come into line with those of France and Italy. It is therefore extremely important that we maintain it. As for French designs on it, that is a classic example of how Britain must take a sensible view. Of course, the French will want to take action against the British abatement, just as we want to take action on the common agricultural policy. They will make their position clear, and we will make ours clear; that, I am afraid, is the way that things happen. What is absurd, however, is to take the view that, just because there is an attack on the British abatement, we must give it up. We held firm at Berlin, when the Conservative party was telling us that we were going to give it up, and we will hold firm again.

In relation to the right hon. Gentleman's points about the charter of fundamental rights, we have made it absolutely clear that it should not extend the legal competence or jurisdiction of Europe in any way at all.

In relation to the issues that he raises about leadership in Europe, it is, of course, important that the Conservative party—which, effectively, has an anti-European position—says that Britain loses all the time in Europe. It must say that Europe is essentially something done to Britain against our interests and our designs. The shadow Leader of the House is nodding, unsurprisingly. [HON. MEMBERS: "Again!"] The shadow Deputy Prime Minister is nodding, too, as well as one or two others with an eye to the main chance. On economic reform, European defence and the future of Europe, I believe that, with other countries, we play a key leadership role. The right hon. Gentleman's problem is that, in order to make the case against Europe, he must always say that we are losing in Europe. In fact, Britain is not losing in Europe; Britain is gaining through a constructive attitude in Europe. I say unhesitatingly something that he did not say: our membership of the European Union is in Britain's interests, and we will carry on playing our full part in Europe because it is the right thing to do.

As for the right hon. Gentleman's comments about the leadership of political parties, if he wants a piece of free advice, he should not raise that topic again.

Mr. Charles Kennedy (Ross, Skye and Inverness, West)

I associate my right hon. and hon. Friends entirely with the expressions of condolence and sympathy for all the Russian people who have lost their lives in the terrible events in Moscow at the weekend, and I express our relief that at least the Low family from our country have escaped with their lives. I thank our ambassador and all the diplomatic staff, who, as we know from media reports, have worked so hard on our behalf and on behalf of the British citizens immediately involved in that terrible situation.

Does the Prime Minister acknowledge that the grotesque events in Moscow again underline the fact that, even in this day and age, some within the wider perimeter of Europe are still prepared to wage conflict on an indiscriminate basis? Although we rightly talk about the detail of these summits, it is surely always worth bearing in mind the fact that the whole European ideal was built out of the ashes of the second world war—out of two grotesque conflicts in the last century—and that the goal of growing stability, security and maintenance of peace and prosperity is something of which we should never lose sight.

In the context of this weekend's summit, we welcome the further progress made on enlargement, although perhaps the Prime Minister, like me, reflected just a few minutes ago on the fact that, if enlargement is to be made a reality, those who pay lip service to the practicality of enlarging the European Union also have to go through the motions and the Division Lobby of the House to give effect to treaties such as the Nice treaty, rather than opposing them at every juncture. So me of the comments that we heard a few minutes ago need to be viewed in that context.

Will the Prime Minister also acknowledge that aspirant states wish to come into the Europe Union? Although it is marvellous that they are at last being liberated from old-style central command-and-control economies, they are none the less finding that existing member states and the Commission are still putting too much red tape and bureaucracy in their paths. Further emphasis needs to be given on ensuring that the enlarged Europe that evolves is more liberal and more free-trading than it is at the moment.

On the specific issue of common agricultural policy reform, which has to be the big disappointment of the weekend, too little progress—if, indeed, much progress at all—was achieved. Will the Prime Minister acknowledge that the agreement reached simply to cap subsidies is not a long-term solution? Does he agree that Commissioner Chris Patten was correct yesterday when he said that far-reaching reform remains inevitable? In that context, we have to get away from the wastage of EU resources and the unfair discrimination against emerging economies elsewhere, in the third world in particular. We also have to recognise the unfair penalties that the existing CAP imposes on our hard-pressed agricultural community in Britain.

How does the Prime Minister reconcile the outcome of the summit with the commitment to the phased withdrawal of EU subsidies in favour of the wider Doha commitments, to which we are already a signatory? Does he see any potential in coming times for assembling a coalition of interests within existing EU member states towards that end? Will the Prime Minister also reaffirm that the British budget rebate still requires unanimity for reform, and that some of the scaremongering in the media and elsewhere in politics is simply trying to mislead people on that fundamental issue?

Will the Prime Minister acknowledge that our country would have greater leverage, not least on agricultural reform, if we were seen to be more of an active participant at the top table in Europe, especially as we are the fourth largest economy in the world? Are we not in danger of missing the boat at the formative stage of the single currency in the same way as we did at the outset of the establishment of the CAP? Did the Prime Minister have bilateral discussions on the single currency with other Heads of Government over the weekend? In that context, when will the next bilateral summit between France and Britain take place, and what items does the right hon. Gentleman propose to discuss with the President of France?

The Prime Minister

I am sure it will be a wide-ranging discussion as always.

The position on the single currency is the same. We are in favour of it in principle, and in practice the tests have to be passed. The right hon. Gentleman is absolutely right about the abatement. Unanimity is required. It is important to explain, however, that abatement is merely a form of compensation. Sometimes it is treated as if it were a marvellous and unusual device that allows us to get an unfair advantage. That is not the case. In fact, it is the minimum necessary to compensate us for what would otherwise be a highly unfair situation. That will change over time because of the deal struck in Berlin in 1999. In the ensuing years after enlargement, Britain's net contributions to the EU will come into line with those of France and Italy for the first time since we joined the Common Market. At the moment, however, even with the abatement, our net contributions are three times those of France. It is hardly surprising if we are vigorously defending our position.

Again, it is important to understand the two completely different aspects of CAP reform. The summit was originally not about CAP reform, but about enlargement. Germany took the same view as Britain, which is that we need some cap on overall agriculture spending. This summit delivered such a cap, and we can do more on that if we do more on agriculture reform. That is why it was so important to resist the notion that, as the trade for the spending cap, reform should be taken off the table. It was never the case that the nature of reform would be decided at the Council, but it had to remain on the agenda, otherwise the continuing work of the Agriculture Council would have been suspended. Reform is on the agenda.

The right hon. Gentleman remarked on the Doha treaty, which is vital. He is right about the Nice treaty. I had forgotten that the Conservatives voted against the Nice treaty. [HON. MEMBERS: "They did."] In that case, it is a little difficult for them to say that they are in favour of enlargement, but we shall leave them to sort that out.

Finally, to emphasise a point made by the right hon. Gentleman, it is important that the next few months are remembered as those in which enlargement takes place. If anyone had said two or three years ago that we would have 10 new countries in the EU, they would have been thought very bold. Those 10 countries will join the EU, and they have made enormous strides to do so. When all is said and done, and leaving aside all the differences that emerge at any summit, what should be remembered is the enlargement of the EU, which is an historic and massive step forward for Europe.

Donald Anderson (Swansea, East)

Will my right hon. Friend confirm that so far as the Government are concerned, enlargement is not a means of slowing down or hampering the development of the EU but an investment in democracy in the new member countries and, positively, a means of enhancing the potential of our new Europe? Does my right hon. Friend expect the new European force to be in Macedonia by 1 January? Is it the Government's view that Turkey should be given a start date for negotiations at the Copenhagen summit? What are the prospects of that happening?

The Prime Minister

I am sure that, over the next few weeks, there will be discussion of timetables for Turkey, and I do not want to prejudge the results of the Copenhagen summit, but I hope that we can give further significant welcome to the steps that Turkey is taking. On the possibility of European defence taking over the Macedonian operation, I think that that is an excellent idea, and it underlines why European defence is a good, sound project, because these are circumstances in which NATO does not want to be engaged. Obviously, it is important that European defence is used only in light of an agreement between Europe and NATO because it is important that European defence is seen as wholly complementary to the existence of NATO.

Mr. David Curry (Skipton and Ripon)

The Prime Minister is right to welcome enlargement and to talk about the importance of the world trade round, but on agriculture reform, he has clearly taken his eye off the ball. Does he not recall that on 23 September the Financial Times carried a letter from six EU farm Ministers entitled "The CAP is something we can be proud of", and that as France, Italy and Spain were all signatories, there is a clear blocking minority?

Is the Prime Minister further aware that on 3 October the Financial Times had on its front page a story headed "Berlin and Paris close to deal on farm reform"? What have the Government been doing in the meantime? Why did the Prime Minister's great friend Herr Schröder, whom the right hon. Gentleman is supposed to have rescued from election defeat, team up with the French and apparently defeat his own interests? Faced with that coalition, how can the Prime Minister believe that the mid-term review of agriculture reform is still on track?

The Prime Minister

I shall tell the right hon. Gentleman precisely why—for the very reasons that the European Commissioner Franz Fischler gave today, when he said: the fundamental issues and the aims that we addressed in the MTR remain unchanged … The underlying question is: Is there an urgency to arrive at a decision on the future common agricultural policy …?' My answer to this is clear. We must seize the opportunity to build a strong and sustainable CAP before it is too late. That is what he said today.

The point that I am trying to make to the right hon. Gentleman and his colleagues is that one part of the French-German agreement, the limit on CAP expenditure after 2006, is an advance on what existed before the summit. Before the summit, there was no such agreement. If we had simply had the European Commission proposals, there would have been no limit on agriculture spending after 2006; now there is.

What was unacceptable was the idea that in return for that, we should abandon CAP reform in the Agriculture Council and the mid-term review. As Franz Fischler has just stipulated and as was agreed at the summit, that mid-term review continues, so the way is open for agricultural reform. Of course there will be attempts by countries to get together a blocking minority; that is the same as it was before the summit—but the important thing is that, as a result of the decision of the Council summit, there is no way that the matter can now be taken off the agenda.

Mr. Tam Dalyell (Linlithgow)

We welcome the progress that has been made on Turkey. But have we misunderstood the Prime Minister? Did he undertake that there would have to be a breach by Iraq of the freedom of weapons inspectors before military action was taken? How does that lie with the statements over the weekend by Colin Powell that there would be no difficulty in getting a coalition, and that this was the key week in relation to Iraq? If there is no difficulty about getting a coalition, who is to form that coalition, other than the British and Ariel Sharon?

The Prime Minister

I think that there is a large measure of agreement. We are obviously working on a UN resolution now. Most people accept that the weapons inspectors should go back in, without any restraint or hindrance, unlike what happened before, but that if Iraq again plays the same game as before, action should follow. Most people can agree to that. It is a reasonable position which gives Saddam the chance to come back into compliance with the UN, but makes it clear that compliance will be enforced.

Sir Peter Tapsell (Louth and Horncastle)

What is the point of the policy of step-by-step sacrifice of aspects of British national sovereignty as the price of being, as the Prime Minister likes to put it, at the heart of Europe, if, when a crucial negotiation about the future of the common agricultural policy is held, the matter is settled at meetings between the French and German leaders behind his back, and all he gets is an unprecedented insult from the President of France?

The Prime Minister

The hon. Gentleman should make up his mind who is insulting whom. He is wrong about the summit. The part of the deal that was unacceptable was the part of the deal that was resisted, with the greatest respect—a point that, no matter how many times one makes it, does not seem to have penetrated the Opposition. The reason for that is exactly the point that he makes in the first part of his question. He and his fellow Conservative Eurosceptics must say the whole time that Europe is something terrible. They therefore have a view of British national sovereignty that really means in the end that Britain being in Europe is a giving up of British national sovereignty. The fact is that Britain gains as a result of co-operating with other European countries. We gain through the single market, we gain through co-operation on issues such as defence, we are gaining on issues such as economic reform, and it is important for Britain to be in Europe and at the centre of Europe—[Interruption]—yes, I believe that, because I believe it to be in the British national interest.

Mr. Dennis Skinner (Bolsover)

Does the Prime Minister agree that there is an air of unreality about the arguments on the common agricultural policy? I listen to the Tories every time the matter is raised. They give the impression that they do not like it. The truth is that if it were ever proposed in the House, every Tory MP would vote to put the money in the pockets of the farmers and the Countryside Alliance. As for the dustup with President Chirac, if there is to be another row, let us have it about the euro. I will give my right hon. Friend a bit more advice: he should take the Deputy Prime Minister with him. He would put President Chirac in his place.

The Prime Minister

I always get immensely constructive and occasionally idiosyncratic advice from my hon. Friend, and I will reflect upon it.

Mr. Michael Portillo (Kensington and Chelsea)

I welcome the Prime Minister's reference to Turkey in his statement. Does he agree that Turkey is a particularly valued ally because it is an Islamic state, but it is also pluralist and pro-western? Does he also agree that it occupies one of the most important squares on the strategic chessboard? Have not the EU leaders sometimes been unwise in the past to appear to shun Turkey? Given that Britain understands our strategic interests, will the Prime Minister become a positive advocate of Turkish membership of the EU in the future?

The Prime Minister

I agree exactly with what the right hon. Gentleman is saying. It is important for Britain to be an advocate for Turkey, on the basis that Turkey abides by the rules of the European Union. I hope that there is a growing recognition within Europe and within Turkey that Turkish membership of the EU is in the end a good thing for Turkey, for Europe and for the wider world. We have tried consistently to support the case for Turkey while making it clear that it must abide by the same rules as everybody else in Europe.

Joyce Quin (Gateshead, East and Washington, West)

I welcome the progress that has been made towards enlargement. However, is not one of the strongest cards in the hands of those who want CAP reform the fact that an excellent alternative to the CAP already exists through the rural development regulation, which is a much more flexible way of helping rural areas and avoids distortions and the effect on the world economy that the present CAP has? Therefore, will it not be vital during the review of the CAP to build as wide a coalition of support as possible in favour of the rural development approach?

The Prime Minister

My right hon. Friend is absolutely right. The rural development regulation is important. Our ability to move forward on that was untouched by any deal at the summit.

Mr. Alex Salmond (Banff and Buchan)

My hon. Friends welcome enlargement. Indeed, we would rather see Europe even larger.

Did the Prime Minister have the opportunity to discuss the fishing industry at the European Council? The industry will be affected by enlargement and it faces an immediate crisis with the proposed closure of the white fishery around Scotland, which will cost thousands of jobs and economically dismantle entire communities. Can the Prime Minister offer two commitments? The first is that the fishing interest will not be traded away in pursuit of wider British interests in Europe, as has happened so often in the past; and the second is that, over the coming weeks he will fight as hard for our fishermen as the French do for their farmers.

The Prime Minister

On the common fisheries policy, hugely difficult decisions will have to be taken because of the depletion of fishing stocks. Of course we shall fight very hard for the interests of our fishermen; we do so on every occasion. As any Government will find at present, the situation is difficult. There is no doubt, as the scientific report shows, that there is significant depletion of stocks. I am well aware of the effects of that on fishing communities not only in Scotland, but throughout the United Kingdom. We will do our utmost to ensure that any deal that is secured protects, in so far as it is possible, the interests of British fishermen.

Mr. Gerald Kaufman (Manchester, Gorton)

I welcome my right hon. Friend's careful and precise words on Iraq, which should have wide support on the Government Benches, and I share his pleasure that the year after next we are to be joined in the European Union by two Commonwealth countries—Malta and Cyprus. Does he agree that it is out of the question for Turkey to become a member of the European Union as long as its armed forces are occupying a third of Cyprus? Does he also agree that the best way to get Turkey into the EU, as we would wish, is for its Government to facilitate and use their influence to obtain a settlement in Cyprus?

The Prime Minister

I am sure that my right hon. Friend will understand if I say simply that we are working very hard to try to secure an agreement in respect of Cyprus, and I hope that that can be done. That is in the interests of everyone within the EU and it is in the interests of Turkey. We are supporting strongly the United Nations efforts in that regard. It is probably better if I do not comment on the matter further as the negotiations are at a delicate stage.

Dr. Julian Lewis (New Forest, East)

As the Prime Minister raised the question of hostage taking in Moscow, will he tell us whether he can think of one good reason why President Putin is refusing to divulge to his own doctors the nature of the poisonous gas that has made so many of the hostages so ill? Will he use his good offices to make representations to President Putin to enable his own doctors to know what antidotes they need to apply? Otherwise, much of the sympathy which President Putin deservedly had for his dilemma will promptly evaporate.

The Prime Minister

I understand the concern behind the hon. Gentleman's question. I am sure that, consistent with Russian security, further answers will be given to such questions. I hope that people understand that the Russian President, as I could tell when I spoke to him on Friday, was faced with an agonising and painful decision. These people will stop at absolutely nothing and have no hesitation in killing large numbers of innocent people. We know that those taking hostages had explosives strapped to their bodies and were willing to give their lives in a massive terrorist attempt to destroy as many lives as possible. These are difficult decisions, but I am sure that, in due course, we will get some answers on those points and others.

Mr. Peter Pike (Burnley)

My right hon. Friend will know that throughout the countries in eastern and central Europe whose joining the European Union has been agreed to, the part played by him and the Government in seeking and supporting enlargement has been very much welcomed. Does he recognise that his statement with regard to Romania and Bulgaria and the target date that he envisages for them is seen as very important? Once the other 10 countries have joined, it is vital that those two countries can also do so at the earliest possible opportunity, in line with the indications that he gave.

The Prime Minister

I very much hope that we will see the inclusion of Romania and Bulgaria not later than 2007. I know that both countries are making enormous efforts to ensure that that happens. When we reflect on Europe and the balance of advantages and disadvantages, there is no doubt that it is the prospect of membership of the European Union that has had a transforming effect on the countries that used to be under the control of the old Soviet Union. Indeed, even in parts of the Balkans that have troubled this nation and other European nations for 100 years or more, there are signs of change and improvement as a result of their hope that in due course, obviously over a long period, they will secure European Union membership.

Mr. Roger Gale (North Thanet)

Further to the Prime Minister's equivocal answer to the right hon. Member for Manchester, Gorton (Mr. Kaufman), will he give the House an absolute assurance that at Copenhagen he will not agree a rendezvous date for Turkish entry into the European Union unless a settlement on the Cyprus problem has also been reached by that time?

The Prime Minister

I will not give such an undertaking. Very difficult issues need to be resolved. We both want Turkey to be inside the European Union if we can possibly achieve that and we want a resolution of the Cyprus issue but, frankly, I do not think that that will be encouraged by my laying down ultimatums or adopting fixed positions at this point in time, in the light of a set of circumstances that is obviously changing.

Keith Vaz (Leicester, East)

I congratulate my right hon. Friend on his continuing to play a pivotal role in the enlargement process. He will know of the case of Catherine Meyer, which has been raised with him before. He will also know that last week at the Foreign Office an undertaking was given to Lady Meyer that he would raise her case with Chancellor Shröder. Was he able to do so and what action does he think Chancellor Shröder will take to improve the operation of the German courts?

The Prime Minister

As my hon. Friend knows, the issue to which he refers has been raised many times in the past few years. I should tell him that I have today written a letter to Chancellor Shröder about the subject. I am well aware of the concerns that he expresses and he will know that they are shared by many people.

Mr. Michael Jack (Fylde)

Commissioner Fischler is entirely correct to say that the CAP should be reformed, but in my reading of the written presidency conclusions, there was nothing in terms to say that all parties would be committed to the process of reform of the CAP. The statements from the French and Germans indicated a postponement in that process until 2006. Where can I find a clear written statement that France, Germany and others will actively support and participate in all the discussions about CAP reform?

The Prime Minister

The short answer is that, certainly in relation to France, some countries may well not agree with common agricultural policy reform. It is their right not to do so. However, the fact is that, with regard to the attempt to ensure that that reform would not take place—or, in other words, that the discussion would end—their position on such reform was the same before the summit as it is afterwards. They are entitled to take whatever position they choose. What they were not entitled to do, in my view, was to say that the issue of CAP reform should be taken off the agenda. That is what was prevented at the summit and what is important.

Although I understand that it is sometimes difficult to follow such issues all the way through, I emphasise again that the basic part of the French-German agreement on limiting CAP expenditure was a step forward on what existed before the summit. [Interruption.] With the greatest respect, it was. Prior to the summit, there was no agreement that there should be any limit on CAP expenditure. There is now a limit on CAP expenditure, and—[Interruption.] The shadow Foreign has not understood, which is hardly surprising or, indeed, unusual.

As a matter of fact, there is already a financial perspective up to 2006, so we have already got a financial deal up to 2006. The question was what would happen after that. Before the summit, there was no agreement to limit CAP expenditure, but the demand of Germany—supported by Britain, Sweden, the Netherlands and other countries—was that there had to be a limit. What was unacceptable was that, in return for that limit, CAP reform bit the dust. That is not now going to happen. Of course, France will carry on arguing its position, but we are able to argue our position in the Agriculture Council where, unlike the Council of Ministers, the decision is taken by qualified majority voting.

Mr. Derek Foster (Bishop Auckland)

I warmly welcome my right hon. Friend's report on progress towards enlargement. This must be a historic moment for European peace and democracy. He also holds out the prospect of further progress on reform of the CAP. Does he agree that if, by the end of the negotiations in the Agriculture Council, the European Union is not able to grasp this unique opportunity radically to reform the CAP, that would be greatly to the EU's shame?

The Prime Minister

It would be. The other thing that means that CAP reform must happen in the end is the world trade round. Nothing is more important than making sure that the trade round succeeds. Europe will have to make an offer in the trade round and that offer will have to be about reform and about the reform of agricultural subsidies. That is why it is so important that we carry on the fight for that.

Mr. John Wilkinson (Ruislip-Northwood)

The Prime Minister will be aware that the office of the United Nations High Commissioner for Refugees has said that, for the first six months of this year, the United Kingdom had the highest number of asylum seekers in the world, with the Federal Republic of Germany coming second. Is there any prospect of the Dublin convention being made to work by our EU partners? Following enlargement, will it not be even more difficult to control immigration in the wider EU, particularly if there is visa-free access to and from the Kaliningrad enclave, as the Russians propose?

The Prime Minister

It is correct to say that Britain and Germany have the highest number of asylum seekers in Europe, though countries of a similar size, such as France and Italy, use different ways to calculate the figures. However, the hon. Gentleman is right to raise this subject and the Dublin convention as a serious issue. I had lunch today with the Prime Minister of Greece, which takes over the presidency of the EU in the first six months of next year. We discussed the issue at length and we agreed that there had to be fundamental reform of the asylum system in Europe. Otherwise, in exactly the way that the hon. Gentleman indicates, the problems will intensify on enlargement. That is why it is important that we get the reform in place, and we will certainly support it. However, the position has changed in that there is now a common will across Europe that recognises that we all face the problem and that we must return integrity to the asylum system in Europe.

Mr. Chris Bryant (Rhondda)

Notwithstanding the significant constitutional changes that there have been in Turkey over the past couple of years, notwithstanding Turkey's strategic importance to the EU, and notwithstanding most people's hope that Turkey will eventually join the EU, does it not have some way to go in terms of respecting human rights before its admission into the EU can be hastened along?

The Prime Minister

As my hon. Friend knows, certain criteria have to be met by any country that joins the EU. It is worth pointing out that Turkey has made progress, and the summit specifically welcomed that progress. Of course, Turkey has to abide by the same rules as any other member of the EU.

Mr. John Maples (Stratford-on-Avon)

Did the Council have any time to discuss the stability and growth pact? Presumably, the Prime Minister agrees that fiscal discipline is an important ingredient of currency stability, but that agreement is now being deliberately flouted by major members of the eurozone, in particular France and Germany, where, he tells us, he has good contacts. If that agreement is to be so flouted, does it make him more or less inclined to take Britain into the euro?

The Prime Minister

There are two issues. The first, which Britain has raised on many occasions, is the flexibility of the stability and growth pact, in particular the differences between borrowing for different reasons—for example, for investment or for consumption. That is why we have an attachment, born out of experience, to the rules set out by my right hon. Friend the Chancellor. On the other hand, it is important that any changes in the stability and growth pact reinforce discipline within the eurozone and do not undermine it. It is for that very reason that the current discussions about the best way forward are taking place.

Mike Gapes (Ilford, South)

Mr. Putin would have been damned if he did not act and damned if he did. Is it not clear that extremist terrorist actions involving suicide bombers will be with us for the foreseeable future? Will the Prime Minister hold urgent discussions not only with our EU partners, but with other members of the Security Council and NATO, to co-ordinate best practice, advice and techniques for dealing with the more extreme forms of hostage taking?

The Prime Minister

We will continue to discuss that important issue at every level. One thing is clear: those groups are operating anywhere and everywhere in the world and they will stop at nothing. I entirely agree with my hon. Friend.

Sir Teddy Taylor (Rochford and Southend, East)

As a major part of the CAP is spent on dumping surplus food production, and as the EU is still increasing its food production and as east Europe has fantastic potential for increasing food production, how on earth can the Germans and the French propose that spending increases be restricted to 1 per cent.? Does that not remind the Prime Minister of the accountancy principles used by Enron? Seriously, is he not beginning to find, like all his predecessors did, that the policy of cooperation and reform in Europe simply does not work?

The Prime Minister

Actually. for once, the hon. Gentleman has rather effectively made the point that I was trying to make to his colleagues. He is absolutely right to say that by, for the first time, limiting spending after 2006—in other words, limiting overall spending, including for the accession countries—a squeeze will be put on agriculture spending. That has now been agreed—

Sir Teddy Taylor

It will not happen.

The Prime Minister

The hon. Gentleman says it will not happen, but instead of trying to predict the future, let us both agree—unlike his party's Front Benchers—that it would be a very good thing if we did manage to achieve that limit. That is the very point that I am making, and I am glad that he has come to my assistance in educating his party's Front Benchers.

The part of the French-German agreement that is right and should be supported is the limit on common agricultural spending. The hon. Gentleman is saying that we have to ensure that that is achieved, and I agree. However, one of the things that people wanted to do in return for that is to abandon any idea of delinking subsidy from production—delinking the two being part of the Fischler proposals from the European Commission. It is for precisely that reason that we rejected the idea that we should abandon reform and abandon those proposals, and that is what was secured at the summit. For once, in a European debate, I thank the hon. Gentleman.

Several hon. Members

rose—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. We must move on.