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Mr. David Curry (Skipton and Ripon): The Prime Minister was quite right to agree to the extension of qualified majority voting. That has long been the principal motive of the achievement of British objectives in the European Union. Does he agree that Britain and Germany have increasing common interests--devolved Administrations and, in our case at least, a semi-federal state--in seeking to define what is done by national Government; what is done locally; and what must, but no more than what must, be done internationally? People ask, "Where does it end?" The forthcoming intergovernmental conference gives them a chance to answer that. Will the right hon. Gentleman start work now to ensure that the answer is a convincing one?

The Prime Minister: I entirely agree with that. The important thing about this new debate is that it is about the issue of subsidiarity and the definition of the competencies as between the European Union and the nation state. There was a very broad acceptance around the table of the fact that there are areas in which Europe has to co-operate--indeed, co-operate more closely--but that there are also areas in which the European Union does not need to be present. There are indeed areas in which some of its powers could be returned to the nation state. Therefore, that argument is of crucial national importance for the future of this country and of Britain in Europe. As a result of what we have agreed, we should be able to participate in that process. The right hon. Gentleman was quite right to say that Britain and Germany in particular have many interests in common there.

Mr. Tam Dalyell (Linlithgow): What was said about the possible role of the rapid reaction force in dealing with the chaos and murder that is taking place on the Kosovo-Serbia border, the Kosovo-Macedonia border and the Kosovo-Albania border?

The Prime Minister: There was a discussion not specifically on that issue but, obviously, on the Balkans and the situation in Kosovo. It is very important for us to make sure that, having fought that war against ethnic cleansing, we do not see ethnic cleansing being visited on Serbs by the other side. We are acutely conscious of that. Of course, Kosovo is not such an example--it is important to say that. The rapid reaction force is not, I repeat, a standing army; it is merely a capability that we should have. It is limited to the so-called Petersberg tasks, which are peacekeeping and humanitarian missions. It would not be used to fight, for example, the Kosovo conflict or the Gulf war. However, it could, for example, be used for peacekeeping operations in circumstances in which NATO decided that it did not wish to be involved.

Mr. Tom King (Bridgwater): May I join the Prime Minister in expressing satisfaction at the opportunity that a number of former Warsaw pact countries have to join the EU, and thank him for the implicit tribute to the Governments of Baroness Thatcher and of my right hon. Friend the Member for Huntingdon (Mr. Major) for the considerable contribution that they made to bringing freedom to those countries?

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Was anyone surprised by President Chirac's statement that he looked for an independent force? There was nothing improper about that remark. It is consistent with French policy since President de Gaulle took France out of the military structure, since President Mitterrand failed to rejoin it and since President Mitterrand refused at the beginning of the Gulf war to allow French troops to come under American command. Is it any surprise, therefore, that the French have a different objective and that, whatever might have been in the communique, there remain very real difficulties ahead?

The Prime Minister: It is right--I choose my words carefully--that France comes from a different tradition in respect of such things, especially in respect of attitudes to NATO, but that is precisely why we have made sure that the matter is absolutely bolted down with the conditions that we have stated. Let me explain why it is important that we take part, because sometimes I read that it is simply a matter of politics in the EU. The truth is--this came home to me graphically during the Kosovo conflict--that European defence capability is not nearly as good as it needs to be. It has been a constant plea from the other side of the water--from the Americans themselves--that Europe has to develop better defence capability. I believe that it is important that we develop that in a way that is wholly consistent with NATO. If we had opted out of that debate altogether, that would still have happened. After all, a common defence policy was one of the matters agreed at Maastricht. That would still have happened, but not in a way that was consistent with our proper national interests. As a result of that, it is interesting--I say no more than that, and I am not suggesting that these policies are directly connected--that 11 out of 15 EU countries will this year increase their defence budgets for the first time in many years.

If the proposal is implemented sensibly, it will work in this country's interests. Of course, there are risks, but it is precisely for that reason that we have spent the past two and a half years making sure that those risks do not materialise.

Dr. Phyllis Starkey (Milton Keynes, South-West): Does the Prime Minister agree that the extension of QMV to trade is in the UK's interest? Does he also agree that the cultural exception won for the French film industry is a helpful and imaginative way of improving decision making overall while preserving cultural diversity for the benefit of everyone throughout Europe?

Mr. John Bercow (Buckingham): The people of Buckingham do not write to me about that.

The Prime Minister: If hon. Members think that this issue is not an important national interest for France, they are wrong. My hon. Friend is right. Qualified majority voting in trade and services is very important. Obviously, we would have liked that measure to have gone further. We would have preferred even greater qualified majority voting in trade and services, because that would be in our interests, but we have none the less made considerable progress.

Mr. Dafydd Wigley (Caernarfon): As the Nice summit confirmed that both taxation and social security were

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matters for member states, will the right hon. Gentleman confirm that operating aids, such as the variation of corporation tax or national insurance, within objective 1 areas are a matter for London and the Treasury and not for Brussels, and that he will consider positively the requests made by the Lib-Lab Government in Cardiff in this respect?

The Prime Minister: Yes, that is right, although we must always be careful that other countries do not try to use these measures as a means of unfair competitive practice. Subject to that, the right hon. Gentleman is absolutely right.

Mr. Dale Campbell-Savours (Workington): From listening to today's exchanges in the House of Commons, is it not clear that my right hon. Friend and his Foreign Secretary played a blinder in the negotiations? Indeed, they have secured everything for which the Tories asked before Nice. The Tories are now changing their agenda.

The Prime Minister: As we have noted before, the bandwagon is a flexible vehicle.

Sir Teddy Taylor (Rochford and Southend, East): Having had the pleasure of listening to several Prime Ministers over the years reporting great victories that sadly have proved to be disappointments, to say the least, I urge the Prime Minister to consider the danger of over-confidence. Is it not the case that we cannot have enlargement of the European Union without fundamental reform of the common agricultural policy, of which there is no prospect? Does he recall previous Prime Ministers and Ministers saying that there will be reductions in our contributions? To allow us to check up on that, will he tell us what he anticipates our gross net contribution will be in 2001 and what it was the year he came to power?

The Prime Minister: I do not have those precise figures at my fingertips.

Sir Teddy Taylor: Send them to me.

The Prime Minister: I will certainly send them to the hon. Gentleman. He says that we have made absolutely no progress on the common agricultural policy, but that is not true. As a result of what was agreed at Berlin, the saving is about £64 a year for the average British family. However, the hon. Gentleman is right that we would have preferred to go much further. He should have the honesty to admit--in a sense he does--that he does not believe that Britain should be in the European Union. He believes that Britain should come out. That is a perfectly honourable position--it is not one that I agree with, but it is an honourable position. I am afraid that it is now obvious that the hon. Gentleman's view is shared by increasing numbers of Conservative Members. That is the real argument that we shall be having over the next few months.

Mr. Denzil Davies (Llanelli): As my right hon. Friend has said, a number of national vetoes, many of which are not very important, have gone as a result of the Nice agreement, and a number of national vetoes, many of which are fundamental, have been retained. Does he agree that the time has now come to draw a line under any

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further erosion of national vetoes? Will he give an assurance that the national veto will not be on the agenda at the next constitutional conference?

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