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The Prime Minister: Well, it is not.

Kate Hoey (Vauxhall): Following on from the question of the hon. Member for Rochford and Southend, East (Sir Teddy Taylor), did my right hon. Friend speak to the Spanish Prime Minister during the private chit-chats that happen at Council meetings? If so, did he convey the feeling of the House and the country against any dilution of Gibraltarians' rights to be British? Did he also tell him that Gibraltarians, who are marching in their thousands today, will not be bought off?

The Prime Minister: The Government's position and the constitutional guarantees remain, as we have said constantly. I stress to my hon. Friend and those on the Conservative Benches who want to disown the Brussels process, which the previous Government began, that it is manifestly in the interests of the people of Britain, Spain and Gibraltar to find a proper modus vivendi for the future. It is in everybody's interest, and the constitutional guarantees remain. Maintaining the stand-off that has occurred between people in Gibraltar and people in Spain when they live side by side cannot be in anyone's interests. The conspiracy theorists can have their theories, which abound, but what we are trying to achieve is in the interests not only of this country and our relationship with Spain but of the people of Gibraltar. That is why the Brussels process was started.

Mr. Ian Taylor (Esher and Walton): The Prime Minister was right to say that at least the summit was moving in the right direction. However, for those of us who are committed to Britain's playing a full role in the European Union, it was rather disappointing.

Away from the public discussions, did the Prime Minister sense that the leaders of France and Germany were genuinely prepared to make progress and thus make a success of the single market, which Baroness Thatcher helped to create when she was at her peak as Prime Minister? Were they prepared to put in an effort to increase research and development by Governments and to deliver the broadband objectives for telecommunications by 2005?

Will the Prime Minister confirm that, under qualified majority voting—another great achievement by Margaret Thatcher—the energy market will genuinely open up after 2004?

Was there any discussion on the Galileo satellite network for global positioning, which seems vital if we are to make a full impact on world politics?

The Prime Minister: On telecoms, I believe that we will achieve the goal. I also believe, as I said to the right hon. and learned Member for Rushcliffe (Mr. Clarke), that we can be confident about achieving the goal for energy because we are able to open up the domestic market through qualified majority voting.

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It is not for me to speak for the leaders of France or Germany, but I believe that the overwhelming desire of those who attended the summit was to push forward opening up the market. The Commission supports that position strongly, as do almost all the member states, whether centre right or centre left. I believe that there is an unstoppable momentum towards it. The pace of change will be governed by many matters, including political considerations. However, the atmosphere of the discussion of economic reform was qualitatively wholly different from four or five years ago.

We have agreed in principle to take Galileo forward. We insist on its civil application and proper systems of sound financial management. If they are in place, we believe that it could play a big part in the technology and technological opportunities for Europe in future.

Ms Debra Shipley (Stourbridge): What does my right hon. Friend consider to be the environmental impact of the European energy market that he described?

The Prime Minister: We have made it clear that at the same time as opening up the energy market, we must push forward on energy efficiency and fulfilling the Kyoto targets. We are well aware that opening up the market may benefit consumers on price but that it is important to take other measures on energy efficiency that are necessary for the environment. All the evidence that I read week after week suggests that climate change has become a more serious rather than a less serious issue. It is essential that the Governments of the world face up to its seriousness.

Mrs. Angela Browning (Tiverton and Honiton): To be generous to the Prime Minister, I believe that he misunderstood or misheard the comments of my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) in response to the statement. My right hon. Friend challenged what the Prime Minister signed up to on British military deployment in the Balkans because it was specifically against the advice of the Ministry of Defence. Why did he disregard that advice?

The Prime Minister: Of course we do not disregard the advice that we receive. The point that I was making to the Leader of the Opposition—I am glad that the hon. Lady agrees that he requires translation nowadays—was that, if we are to play our proper role in the Balkans, it is important that we are part of the system of peacekeeping there. We learned from Bosnia, where we did not go in in the early 1990s when we probably should have done and where tens of thousands of people died, and in relation—[Interruption.] If the Leader of the Opposition will forgive me. In respect of any European role on defence, it has been made clear that it, too, must be consistent with the Berlin-plus arrangements for NATO. I say to the hon. Lady—as I keep trying to tell Opposition Members—that it must be right that Europe upgrades its defence capability so that, in circumstances where NATO does not want to be engaged, Europe has the ability to act. That, de facto, is what is happening in Macedonia. It is important that we take forward European defence and it would be a very, very great shame if we turned our back on it.

Mr. Ian Davidson (Glasgow, Pollok): Does the Prime Minister accept that there is great concern both in this

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place and elsewhere that a British Prime Minister—a Labour Prime Minister—appears to have as his closest ally a Spanish Conservative and an Italian neo-fascist? Do not we spend our time trying to marginalise the right here, and is it not therefore contradictory to seek to ally ourselves with the right in Europe?

The Prime Minister: We spend a lot of time trying to marginalise the right and on the basis of the last two elections I think we have been reasonably successful. The reason for that is that we have been prepared to do things that sometimes, traditionally, people would not have done.

I am happy in the alliance that we had before the summit with Italy and with Spain. We also had one with Germany and with Sweden—both of which have centre-left Governments. It is important that when this country works with other Governments we are prepared to work across traditional lines. I see no problem whatever in that; in fact, it is one of this country's strengths. It is in part because we have been able to do that that we are making a difference in Europe, whereas previously we were entirely isolated. We should leave that type of ideological prejudice to the Conservative party and not adopt it ourselves.

Mr. David Heathcoat-Amory (Wells): Does the Prime Minister recall, two years ago, after the Lisbon summit, promising to lift the regulatory burden on small and medium-sized businesses, since when there has been a steady stream of new EU measures adding to business costs? Specifically, does he remember the pledge on page 17 of the Lisbon conclusions promising to set up an action plan to deal with that regulatory problem by 2001? Why was that action plan never brought forward, as the Barcelona conclusions recognise? Would it not be simpler if the Prime Minister and his colleagues agreed to keep the promises that they made in the past rather than waffling on, as they did at the latest Council, about what they hope to do in the future.

The Prime Minister: First, when the Leader of the Opposition was speaking, I should have said that the numbers given by the Conservatives for new regulations on business are actually the numbers of statutory instruments. Vast numbers of those have nothing whatever to do with regulation on business; indeed, some of them are deregulating measures. In respect of the action plan on Europe, that is precisely why we brought forward the Mandelkern report—to ensure that there is less regulation on small businesses—

Mr. Duncan Smith: What happened to it?

The Prime Minister: I am just about to explain what happened to it.

Secondly, we put in place a new mechanism for deciding regulation in Europe. The principles of that plan were agreed at Barcelona, so we did not fail to take it forward—we actually agreed to take it forward.

Mrs. Louise Ellman (Liverpool, Riverside): Will my right hon. Friend tell us whether there were any discussions about how to tackle the international terrorism

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supported by Iraq, Iran and Syria? When his European partners were discussing a solution to the middle eastern conflict did they agree that those who support the suicide bombers and the suicide gunmen who kill young people on the streets of Tel Aviv, Jerusalem and Natanya do not want a just solution to the conflict but the annihilation of Israel?

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