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Mrs. Alice Mahon (Halifax): Did any discussions take place on the increase in killings and kidnappings and the continued ethnic cleansing of minorities in Kosovo that was almost certainly carried out by the Kosovo Liberation Army, now called the Kosovo Protection Corps? Did any discussions take place on the discovery of the huge cache of arms approximately half an hour from Agim Ceku's headquarters? Will the KLA be allowed to ethnically cleanse Kosovo?
The Prime Minister: There was an extensive discussion on Kosovo in the summer. There are significant problems with some of the extremists on the Kosovan side who attempt to drive Serbs from their homes. However, we should not ignore the fact that enormous progress has been made in Kosovo, despite its difficulties. We should never forget that if we had not taken action in Kosovo, 1 million more refugees--genuine asylum seekers--would be touring Europe.
We have much more to do; the United Nations force is working hard with the civil authorities, which are in a position to help to run the country. We are doing everything we can to prevent the sort of extremism to which my hon. Friend referred. However, it would be wrong for people to think that the whole of Kosovo was marked by such outrageous and wrong disturbances, and by elements of ethnic cleansing. On the whole, the new administration is settling down; elections will be held and there is every possibility of a stable future for Kosovo. It is obvious that the UN force will have to stay there for some time. However, I emphasise that if we had not taken action, the position would have been much worse.
Mr. William Cash (Stone): Does the Prime Minister accept how deeply the Turkish Government were
offended by events in Feira at the weekend? Does he know that one of the greatest problems that faces European defence and security policy is the issue of secrets between us and the United States of America within NATO? How will he deal with that question? Has he discussed it with President Clinton? Has he reached a solution? In the light of increasing movement towards a common foreign, security and defence policy, how will he find the resources that should be made available for the sort of policy that he is pursuing? Average defence spending is 2.5 per cent. of gross domestic product, and to achieve the objectives, not only would that figure have to be increased to between 5 per cent. and 7 per cent., but the whole of Europe would have to be taxed on a massive scale.
The Prime Minister: The trouble is that one knows that the hon. Gentleman is simply opposed to anything that comes out of Europe. The defence proposals are for peacekeeping and humanitarian missions in circumstances in which NATO does not want to be engaged.
Mr. Cash: The Prime Minister knows that that is not true.
The Prime Minister: It is true. It is sensible for the European Union to have that facility. It is extraordinary if we are always in a position whereby even if the United States of America does not want to be involved, Europe has no capability for peacekeeping and humanitarian missions. The matter will be decided by unanimity. We take the lead in that debate and we are shaping it in the right way. There are issues that relate to intelligence; I have no doubt that they can be resolved. As I said earlier, both NATO and the United States support the initiative.
If we did not support the initiative but turned our back on it, what would happen? There would still be a common defence policy and a common security policy in Europe, but this country, which probably has as much to contribute to such a policy as any other European country, would not be part of the debate and the discussions. I emphasise to Conservative Members a point that would be immediately recognisable to any Conservative Prime Minister of the past 30 or 40 years: if we do not co-operate positively and constructively in Europe, this country suffers. We gain nothing by isolation or by being at the margins. If we engage in such a policy, we undermine the very national interest that we want to advance.
Mr. Tam Dalyell (Linlithgow): Was Wim Duisenberg right or wrong to suggest that there was a window of opportunity for entering the euro, and might a decision not to join now be an historic mistake of Messina-like proportions? Will my right hon. Friend look at the case study of the Inveresk Paper Corporation, which has plants in the Chancellor's constituency and in mine? The company is very efficient and used to export to Europe, but finds that the strong pound makes that impossible. Not only that, but its home markets are now invaded by Europe, driving people to extraordinary lengths to maintain a traditionally important industry.
The Prime Minister: I do not believe that any issue concerning the exchange rate on a day-to-day basis can be a reason for joining or not joining the euro. We have
to take a longer-term perspective and ensure that the economic tests and conditions that have been set out are met. The principal criterion is sustainable economic convergence. When one studies Wim Duisenberg's comments carefully, one sees that he believes, of course, that there is an opportunity for the United Kingdom to join the euro, but that it is important for the economic conditions to be right, and they are not right at the present time.We have taken the sensible position, which is to prepare for the euro, to agree in principle that Britain should be part of a successful single currency, but to ensure that, as I said yesterday, we do not repeat the mistakes with the exchange rate mechanism and join in circumstances in which the economic conditions are not right. That is why our position is in the long-term interests of British industry.
Mr. Crispin Blunt (Reigate): When the Prime Minister tells us that he will agree to a charter of fundamental rights that is political in nature, but not to one that is legally binding, is he not being a little naive, as experience tells us that such politically aspirational documents are used by the European Court of Justice as a guide for the judgments that it makes?
The Prime Minister: I think that at one point I was told that I was being naive over the withholding tax. The important thing about the charter of rights is that it is not legally binding. We will have pretty broad support on it from most other countries in the European Union Fifteen, and I think that people can exaggerate the dangers hugely. We have to deal with the question of whether the European Court of Justice could, by some side wind, end up extending our national legislation, or whether we can ensure that that avenue is closed off, which I believe we can.
Mr. Paul Marsden (Shrewsbury and Atcham): I welcome my right hon. Friend's statement and I congratulate him, the Chancellor and the Foreign Secretary on their achievements at the European Council. What progress has been made to bring to justice the killers of the British military attache in Greece, and to prevent another such atrocity from being committed in the future?
The Prime Minister: First, let me repeat what I said yesterday--that we extend every sympathy to the family of Brigadier Saunders following this appalling terrorist act. I had a long discussion with the Greek Prime Minister about the measures that Greece is taking to find those responsible. For our part, we have said that we will co-operate with the Greek Government in any way, including giving them help--as we, unfortunately, have our own experience of dealing with terrorists. We will give any help that we possibly can to bring those people to justice. Brigadier Saunders committed himself to his country and did very valuable work for it, and it is an absolute tragedy that his life was cut short in that way.
Mr. William Ross (East Londonderry): Will the Prime Minister consider using the term "murder" instead of "killing" for such terrorist acts, because the word "killing" tends to sanitise them in a way that the people of this country will not understand?
Will the Prime Minister also reflect on the fact that, although our continental companion countries had a problem that led them to come up with the idea of a withholding tax, that is not the only means of cross-border tax evasion in the European Union? Is he aware of the huge sums that are being laundered following the cross-border smuggling of fuel between Northern Ireland and the Irish Republic, which is spreading, I believe, throughout the United Kingdom?
The problem of the differing rates of duty on tobacco and alcohol of late has led to similar problems in the south of England, at tremendous cost to the Exchequer. Has the Prime Minister discussed those matters with the Government of the Irish Republic over the past few days, and what action do the Government intend to take to end such smuggling operations?
The Prime Minister: As the hon. Gentleman will know, the Treasury has published proposals to address the smuggling issue. Of course I understand the concern about petrol price rises--although it is not unique to the United Kingdom. It is fair to say that in the past year, the biggest rises have really had more to do with the price of oil than with fuel duties. None the less, there is a price differential between Northern Ireland and the Republic of Ireland. However, we have other benefits in our country. It is important to recognise that although it was painful to raise duties in that way, it was necessary to do so because of the very large deficit that we inherited. I do not believe that interest rates would be at 6 per cent. today if the public finances were not in such sound order.
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