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The Prime Minister: It is in the nature of the position in which the right hon. Gentleman has put the Conservative party that Conservatives have to say that Britain fails in Europe the whole time. That is their position.

The big difference between now and five years ago is simply this: when we came to power five years ago and went to our first European summit, the agenda was set by somebody else. It is true that we could block certain things, but the general direction of Europe was set by others. The difference now is that the agenda at Seville and at the earlier summit that the Spanish held was set by us. Of course there will be countries that block certain parts of that agenda—that is bound to happen—but the idea that we would now be in a better position if we had pursued the policies of isolation that we had five years ago is absurd.

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The right hon. Gentleman has to say that we achieved none of our objectives at Seville. Let me take the two points that Seville was about. On asylum and immigration policy, the agenda conclusions say that

With respect, that is precisely what we asked for and what was achieved. It is correct to say that we would have gone further in respect of existing agreements, but it is also the case that, in respect of those agreements that we now conclude with any third country, this is at the heart of the agenda—and that, with respect, is a substantial step forward.

The right hon. Gentleman said nothing about Council reform, which, again, is hugely important. The fact that the agenda for the EU will now be set by the European Council at intergovernmental level is extremely important for the future of Europe.

The right hon. Gentleman's comments on the EU border police are, quite simply, wrong. A study has been going on for months in the EU—nothing new was decided on this at Seville—about whether it is right to have European border police, but what he forgets is that, as a result of the protocol negotiated by this Government at Amsterdam, none of that applies to Britain at all, so his point, which is that somehow our police will be supplanted at Dover by European police, is factually wrong. In any event, even those things—

Mr. Bernard Jenkin (North Essex): Are you against the European border police?

The Prime Minister: I will explain exactly what I believe. As a result of what we negotiated at Amsterdam, Britain has a complete veto on this. In any event, the proposal on the European border police can be agreed only by unanimity. I am not against such a study being conducted because, when we take new countries into the EU, I do not think it foolish to consider the idea of Europe giving help to countries on our eastern frontier, where a large number of people are coming in illegally as the result of the activities of organised criminal gangs. The only reason why the right hon. Gentleman is against even discussing the idea is that it has the word "European" in it.

Finally, the right hon. Gentleman fails, again, to understand that European defence can be undertaken only where we have agreement between the EU and NATO. That is clearly stated in the conclusions, and I believe that, if possible, it is sensible for Europe to try to improve its defence capabilities. Unlike the right hon. Gentleman, who believes that we should not even engage in European defence, I think the fact that Britain is able to make European defence compatible with NATO is essential for the future best interests of this country.

Whether it be on economic reform, the euro, asylum and immigration policy or defence, Labour Members believe in engaging constructively, whereas Conservative Members would opt out of the argument altogether. We remember where we were five years ago—opted out of every major debate in Europe, unable to set the agenda and completely isolated—and from what the right hon. Gentleman has just said, it seems that, if he ever got the

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chance, he would return us to precisely that position. As I have said on many occasions, that is not the satisfaction of the national interest; it is the betrayal of the national interest.

Mr. Charles Kennedy (Ross, Skye and Inverness, West): I think that the Prime Minister would wish to acknowledge that there is a bit of salutary sense in the process leading up to the summit and in its eventual outcome. Among the salutary messages and lessons that emerge are, first, that attempts that advance bilateral fixes between individual member states do not necessarily work, far less deliver; and, secondly, that imposing sanctions and punishments on the poorest nations is not a tenable way forward. In many respects, the language is modified when one compares the vocabulary used by the Government in this country in the run-up to the summit, as opposed to the agreed statement on the outcome of the summit, which pledged

That is a considerably more balanced and tolerant presentation of a serious and complicated issue, which can be adequately addressed, far less resolved, only at a European level. Liberal Democrats certainly subscribe to the view of the Secretary of State for International Development that the earlier approach that was outlined by the Government would be morally repugnant.

Is this not a good opportunity to make the positive case, in our domestic politics, for long-term, planned immigration? It is economically essential to Britain. We need look only at the demography of our country, for decades and generations ahead, to see that we can learn a lot from the past and that we must plan better for the future. We must not give in to some of the more strident voices on this issue. Over the course of this weekend, Europe has—to coin a phrase—been something of a candid friend to the British Government, and that should be welcomed.

On the issue of enlargement, which we strongly support, and the intended progress, which is also very much to be welcomed, can the Prime Minister explain how that can be squared when no meaningful decisions have yet been arrived at and, apparently, no substantial discussions have taken place on reform of the common agricultural policy. Surely one must predate the other.

Greater transparency in the international institutions that govern the European Union is, of course, welcome. On the central issue of the single European currency, however, does the Prime Minister agree that the debate needs to be led in this country? It can be led only by the Prime Minister and the Government, and the absence of a positive lead leaves us in the weakened position in which we saw ourselves as an EU member state last weekend in Spain.

The Prime Minister: On the latter point, I am afraid that I simply do not accept what the right hon. Gentleman says. It is absolutely correct that we would have gone somewhat further in Seville than other countries, but we were probably in the majority in wanting to do so.

The point that I was making earlier to Opposition Members was that the difference now is that we set the agenda on economic reform, defence or asylum and immigration—[Interruption.] No, we do not lose it.

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Of course, one never gets all that one wants, because unanimity applies at European Councils, but each new EU agreement must now contain a migration clause and a readmission clause. In respect of existing agreements, we have a proposal to assess whether those countries are co-operating. If they are not co-operating, we reserve entirely the right to act.

We made it clear from the very outset, if I may quote from what my right hon. Friend the Home Secretary said at the Justice and Home Affairs Council, that we should take measures

We never thought that it was sensible to penalise poor countries and make them poorer, because that would operate against the policy of encouraging them to take action against migration flows. We are saying, however, as we do now in relation to the Cotonou agreement with African and Caribbean countries, and as we have just done in relation to Balkan countries, that the totality of our relationship with those countries whom we are assisting must also include the issue of trafficking in illegal immigrants. That is entirely sensible—[Interruption.] I am sorry, but that is precisely the proposition that we put.

In the end, of course, that is not the only thing that we need to do. It is important that we co-operate at the external borders of Europe and also take our own measures here in respect of asylum, because we cannot make those measures count simply through the European Council. The fact is that that agenda now exists. We have made substantial progress on it, and the fact that we do not get everything that we desire does not mean that we get nothing. That is the truth, whether on that issue, on Council reform, or on the other issues.

People must ask themselves whether we are in a better position trying to set the agenda, as we have done on economic reform, Council reform and asylum and immigration, or whether we should be in the Conservative party's position, which is next door to the exit sign. The idea that we would be in a better position if we were sitting there resolutely hostile to absolutely everything that Europe proposes is absolutely ridiculous.

On the right hon. Gentleman's point about the euro, we have the right and sensible position. The economic tests have to be passed and, if they are passed, we will put the matter before the British people in a referendum. That is the right position and it distinguishes itself from those people who say that we should join irrespective of the economic conditions—I never know whether that is the right hon. Gentleman's position but, if it is, I disagree with it—and it certainly distinguishes itself from the position of the Conservative party, which is against joining the euro under any circumstances. Conservatives Members may nod their heads at that, but it is a foolish and futile position that is not in the best interests of the country.

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