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Mr. Simon Thomas (Ceredigion): Will the Prime Minister take this opportunity to repudiate his official spokesman, who said last Friday that firefighters were not living in the real world? Does he accept that their world is a damn sight more real than that of most politicians? Will he tell the House what the extra costs to date have been in police overtime, local authority extra expenditure and Army expenditure? Will he try to address this question once again: is pump-priming available for a long-term settlement based on modernisation, or not?

The Prime Minister: Whatever the costs of fighting the dispute, they are less in our judgment than the costs of yielding to a claim that would trigger other claims right across the public sector, which there is no way the Government could afford. After all, as a result partly of the way that the economy has been managed, we are making the largest public spending investment in our public services that this country has seen since the second world war. We cannot go outside and breach those limits. Frankly, it is all a question of realising that, in the end, there is a reasonable way to approach this. We have tried to be reasonable, and if people do not want the reasonable way, we have, I am afraid, to stand firm and say that the interests of the country as a whole come first.

John McDonnell (Hayes and Harlington): The Prime Minister has said that any settlement has to be fully costed and linked to modernisation. Is he aware that the leader of the employers' side negotiators said at the weekend that the deal last Thursday was costed and that the information was available—[Interruption.] I am sorry; I am quoting directly from Mr. Ransford. The agreement said that any additional payment above 4 per cent. would be linked to modernisation and verified by a panel including the Audit Commission. May I appeal to the Prime Minister to go back to No. 10 and invite the union and the employers to meet him?

The Prime Minister: The difficulty is this: I have obviously studied the agreement—I have read it—that was entered into or may have been reached early on Friday morning, and if my hon. Friend looks at

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paragraph 6 of that document, he will see that it makes it quite clear that there are, I think it says, significant costs over and above those that can be paid for by modernisation. What is more, there were no costings attached to that at all. Even more than that, we were then told, in effect, that we had to agree to that document and that the strike action would go ahead in any event.

I urge my hon. Friend, if he has any influence with the FBU, to go back to it and simply say that if it produces an agreement with costs attached, it is not really reasonable to say to the Government, XYou have to sign the cheque for it, but we can't actually tell you what the

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costs will be and, what's more, if you do not do it in the next couple of hours, we are all on strike for eight days." The Government cannot operate like that, so if my hon. Friend is saying to me on behalf of those in the FBU that they are prepared to talk about modernisation reasonably and to work out the costing involved in that, he should get them to sit back down with the employers and work it out, and we will help in any way we can, but we cannot fund it outside of the modernisation.

Several hon. Members rose—

Mr. Speaker: Order. There will be another statement tomorrow.

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NATO Summit (Prague)

4.4 pm

The Prime Minister (Mr. Tony Blair): With permission, Mr. Speaker, I shall make a statement on the NATO summit in Prague on 20 to 22 November. With my right hon. Friends the Foreign Secretary and the Defence Secretary, I represented the United Kingdom at the North Atlantic Council, at the special meeting of the North Atlantic Council, with the seven new countries invited to become new members, and at the Euro Atlantic Partnership Council. At the outset, I pay tribute to President Havel and our Czech hosts, and to the skilful chairmanship of the NATO Secretary-General, George Robertson, who has been widely and rightly praised for his leadership in that role.

The summit reflected the extraordinary changes in the global security environment in which all nations now operate. NATO itself has changed. We decided on seven new members: I congratulate Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia on their invitations; they are well deserved, and they reflect the progress in reform that all seven countries have made since the end of the cold war. All are on course to be in the alliance by the next summit in 18 months' time, and to be contributors to European security. That enlargement will strengthen NATO and make the whole continent of Europe more secure. Those invitations will not be the last. The United Kingdom will help those who want to join, and who meet the criteria, to succeed in future.

Secondly, NATO continues to build new relationships outside its formal membership. Most importantly, the relationship with Russia has been transformed in the last year. We now work with Russia as an equal partner, co-operating in a whole range of areas. A good example is the Balkans, where NATO and Russia are together making an immense contribution towards our goal of a peaceful and stable Balkans playing a full part in the European family.

One of NATO's greatest benefits has been the forum it has provided for its European and transatlantic members to deal with security challenges together. My great hope is that we are now beginning to include the new Russia as a real partner in meeting the new threats we face. There was a useful meeting in Prague of the NATO-Russia council at Foreign Minister level. NATO is also pursuing its practical co-operation with Ukraine and strengthening its wider partnerships with the Mediterranean, central Asia and the Caucasus.

NATO is also building a close and effective relationship with the European Union on crisis management, for example, in the Balkans. At Prague, we decided to maintain a NATO presence in Macedonia for a further limited period. Once the EU-NATO links are in place, I am keen to see a European security and defence policy operation in Macedonia, to show that Europe can play its part in bringing security and stability to that part of our continent.

Thirdly, NATO needs to develop new capabilities. The cold war is over, and there are new missions and new threats. The key is flexibility of response, adaptability of military forces, and modernisation of defence capabilities. The Prague summit agreed on these new instruments to help to meet those new challenges: a

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new NATO response force will provide NATO with effective forces available at short notice; all allies have committed to improve their capabilities in specific ways to support and equip forces that are flexible and deployable; and we agreed on a revised, reduced and refocused command structure.

Above all, the summit was a profound demonstration of unity in the face of the new threats that confront us. Every nation spoke of the menace of international terrorism and weapons of mass destruction. We all recognised that there is no place to hide from them. The terrorists do not distinguish between the Xsoft" or Xhard" nations on terrorism. Every European country knows that it is under threat, whether it is known as a strong supporter of US policy or not. Every nation talked of cells of the al-Qaeda terrorist network or related groups ready to strike at innocent people.

This is not a war that we can avoid. There is no appeasing the fanatics. They will not go more lightly on us if we are less outspoken in our condemnation of them. Their enemy is anyone who is not them, and they feel as strongly—sometimes more so—against the moderate Moslem as they do against the Christian or Jew or Hindu.

The NATO summit affirmed that simple truth. It was a remarkable statement of defiance. It linked very clearly—and, I believe, rightly—terrorism and weapons of mass destruction. The threat from weapons of mass destruction in the hands of rogue unstable states is not part of some different danger. It, like terrorism, represents savage indifference to human life. It, too, crosses national boundaries without discrimination. It, too, cannot be negotiated with or appeased—simply defeated utterly.

The strength of the NATO summit statement on Iraq was testimony to that belief. There was complete unanimity around the table that the choice for war or peace lies with Saddam, and that if he breaches the will of the United Nations, the United Nations will have to act. There was strong support for multilateralism and for the decision of President Bush to go through the UN, but equally strong insistence that multilateralism and the UN be seen to work.

Some of the most powerful expressions of these sentiments on terrorism and weapons of mass destruction came not from the old but from the new members of the NATO alliance.

President Havel was a prisoner of the old communist regime; he was witness to the dissolution of the Warsaw pact; he has now presided over NATO's largest gathering. The President of Lithuania, who has seen his country raped and destroyed by war and totalitarian oppression and who lived for 50 years in Chicago as an exile from his homeland, is now back as its President. The President of Latvia, for years a Professor in Montreal, spoke in the most moving terms of her country's long dark years of struggle for freedom and of its pride in becoming part of NATO.

Each representative had a story to tell and all with the same theme: they know the value of the fight for freedom, for democracy, for the rule of law, the struggle to break free of totalitarian intolerance and fanaticism. They know the meaning of terrorism and of weapons of mass destruction in the hands of brutal and repressive states. They know that extremism has just taken a new

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form for the 21st century, and they were complete in their determination that these new threats had to be faced, conquered and consigned to history just like the old threats and struggles from the 20th century. They had a lot to tell us about the values we believe in. Sometimes we can be complacent about them, but they were not. They know their worth, and the ultimate message from the NATO summit was far more powerful than discussion of capabilities or formal structures. It was that, if we care about these values of freedom, the rule of law and democracy, we should not flinch from the fight in defending them. I know that this country, Britain, will defend them with courage and certainty.

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