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Mr. Tony Blair (Sedgefield): First, I should like to state our unequivocal support for the measures that were agreed on co-operation to fight terrorism, organised crime, drugs and crimes against children. I also place on record our continuing support for the process of enlargement. On the IGC, we restate our agreement to justice and home affairs remaining outside Community competence, as in other essential areas such as taxation and defence. I agree with the Prime Minister on the issues of subsidiarity and the common foreign and security policy.

On the issue of flexibility--certain states moving ahead without others--does the Prime Minister agree that if that meant some states forming an inner core in the European

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Union and moving ahead in certain areas without the consent of others, that would be potentially dangerous to Britain's interests?

I shall come straight to the two principal issues that arise--BSE and the single currency. We were told prior to Dublin that the Government were about to pull off a deal lifting the beef ban. Where is that deal?

Sir Jim Spicer (West Dorset): That is unreasonable.

Mr. Blair: That is supposed to be unreasonable, is it? Is it not now six months since the Florence summit, when we were told that a deal had been reached and that, as I recall, the ban would be lifted by November? After six months, is it not a fact that not a single piece of progress on lifting the ban has been made? Six months on, we are apparently back to the Florence agreement. Meanwhile, our farmers are suffering and it seems that the cost to the Exchequer is likely to rise to more than £3 billion.

Has not this whole affair been handled with serial incompetence? It is not unreasonable to ask: what is the timetable now? November has passed--what is the new date? In his statement, the Prime Minister said that decisions are now to be taken on the cull and elsewhere on scientific evidence. Apparently the Minister of Agriculture, Fisheries and Food said at lunchtime, "If one was to try to justify the cull in terms of the science, one would be in some difficulty." If Ministers of the same Government cannot get the same line right on the same day, is it any wonder that we are in the mess that we are on this issue?

On a single currency, the Prime Minister made much of the parliamentary reserve. Can he confirm, as the communique makes plain, that the vital decisions--some of them the most important that Europe has faced, as he rightly says--have been made? Will he confirm in terms of the stability pact that he and the Chancellor have agreed not only the deficit limits, but a system of penalties, rules for exceptional circumstances and a means of enforcement? Have they not also agreed that convergence programmes for those out of the single currency will be made obligatory? Plans will have to be submitted every year, with provisions for default. On exchange rate co-operation, have they not also agreed a system of assessment and monitoring, even for those outside any new exchange rate mechanism arrangement?

Therefore, on the parliamentary reserve, which is the Prime Minister's fallback position, may I put this to him? When will those issues be voted on in the House? When will we get the chance to explore those matters? Will he at least give us an undertaking that we shall have that vote before the general election? I think from that smile that the answer is no. I think that it is fair enough to say, however, that the only reason why we are not getting the chance is that the right hon. Gentleman is afraid to face the House of Commons' verdict on those issues. The whole point about the parliamentary reserve is that, if we were to change the position in any way, he could go back to our European partners and renegotiate. Is he seriously saying that, as a result of the reserve, he could credibly renegotiate decisions that had been taken?

How does the Prime Minister's position of keeping open the options on a single currency square with the extraordinary unilateral declaration of independence in today's The Daily Telegraph, from 147 Conservative

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candidates, who said, effectively, that they would now stand on a different manifesto from the Government's at the next election? After all, it was the Prime Minister who said that it was self-evident that Tory divisions on Europe were damaging Britain's interests. I simply ask him, and again I think that this is not unreasonable: what could be more damaging than almost 150 candidates openly disagreeing with the Government's position and over half of them saying that they would never, ever join a single currency--and some of them want to come out of the European Union altogether? How does that make for credibility in negotiation? It is only fair to ask the Prime Minister to deal precisely with those 150 candidates, with their different manifesto.

Is not the real test in Europe success or failure, strength or weakness, and "Can we get a good deal for Britain?", and, as a result of those divisions, exemplified by 150 candidates effectively forming a party within a party, are we not in a weaker position than Britain has been in for 25 years?

The Prime Minister: Let me first welcome what the right hon. Gentleman said about his support for the terrorism measures, for enlargement and for subsidiarity. I also welcome the other points of agreement at the outset of his remarks.

On flexibility, I have made the point on a number of occasions that, if some of our colleagues moot the prospect of flexibility, which means an inner core going ahead on its own, that would be utterly unacceptable, unless there were areas in which they went ahead by unanimity, so that every other member of the European Union agreed. However, in relation to any form of flexibility, if people propose to use the institutions of the European Union, those institutions belong to all EU members, not just some of them, and I have made the point to our partners that there can no prospect of an inner core going ahead on its own, other than by unanimity. The prospect of their going ahead on a wide front would fundamentally change the whole nature of the EU and is not the sort of flexibility that would be in the interests either of this country or of the EU as a whole.

On the right hon. Gentleman's remarks about BSE, the point that he frequently overlooks whenever he raises that matter in the House is the changed scientific evidence, which appeared after the Florence agreement was reached, about maternal transmission and other matters. That is what has changed the timetable for us. My right hon. and learned Friend the Minister of Agriculture, Fisheries and Food will make a detailed statement about the way forward in a few moments.

On a single currency, the parliamentary reserve applies to all the matters in the stability pact, not of course to the matters agreed in the Maastricht criteria some time ago, some of which the right hon. Gentleman listed as if they had most recently appeared in the stability pact and had never been seen on a previous occasion. On the exchange rate mechanism, that remains entirely voluntary, as my right hon. and learned Friend the Chancellor of the Exchequer has made clear on a number of occasions.

On convergence for countries outside the new euro zone, if it is created, the reports to which the right hon. Gentleman refers--I assume that he is referring to the

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routine surveillance reports that have been made by the House for some time--have no binding obligations at all and the circumstance does not change in any way.

On the manifestos of some of my colleagues, I have to tell the right hon. Gentleman that we did not discuss those at all at the summit, but, of all hon. Members, the right hon. Gentleman is on rather thin ice in raising the question of manifestos, because I recall what his 1983 manifesto said. He said that he would like to come out of Europe. He wanted to scrap Trident. He also wanted to end nuclear weapons. It is self-evident that, sometimes, what is put in a manifesto is not necessarily maintained by individual Members thereafter. The right hon. Gentleman is not in a position to make the points that he made.

On the question of a good deal for the United Kingdom, I have to tell the right hon. Gentleman that if he were to negotiate while still following the policies that he has advocated so far, the Amsterdam summit would be a Dutch auction of British sovereignty. He told his party conference that he would never allow himself to be isolated. He cannot negotiate if he is not isolated. He would surrender the veto in social policy, surrender the veto in industrial policy--

Mr. Donald Dewar (Glasgow, Garscadden): Ridiculous.

The Prime Minister: I tell the Opposition Chief Whip that it is ridiculous to surrender it, but that is the policy that the right hon. Gentleman is pressing upon his party. He would also surrender the veto on regional policy and on environmental policy. He would sign up to the social chapter and to the working time directive. He would back a new treaty on employment. Were he to go to Amsterdam, by the time he came back, there would be a great dent in British sovereignty.

Mr. Hugh Dykes (Harrow, East): I thank my right hon. Friend for the major contribution made by the United Kingdom to the successful Dublin summit. Is not it a statement of fact that our strong opt-out on joining a single currency and our policy of wait and see, which are strongly supported in this country as the only rational stance, do not in any way gainsay the need for further discussion on the merits of a single currency?

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