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The Prime Minister: First, in relation to how we proceed from now, the issue of a White Paper is being discussed by the usual channels, and that is one possible alternative.

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It is important to emphasise that, in a Europe of 25, it must be in our interests—except in vital sets of circumstances such as foreign policy, defence or tax—to extend QMV, without which we cannot make Europe work effectively. I agree with the right hon. Gentleman entirely about that, although it is important that we do not unravel what was seen—not always here, but certainly abroad—as essentially a good deal for Britain.

It is important to retain unanimity on the common foreign and security policy. We want Europe to develop a better and more effective common foreign and security policy, which is why, for example, we are backing France in the Congo through the EU mission, which is very important. We expect reports on the pilot projects in June 2004.

On the whole, most aspects of the Convention have been seen, elsewhere but not here, as a substantial retention of the concept—indeed, perhaps for the first time, a proper elaboration of the concept—that as Europe co-operates more it should be on the basis of nation states and not on the basis of a federal superstate.

Dr. Jack Cunningham (Copeland): May I commend the important progress made at the European summit and congratulate my right hon. Friend on safeguarding so effectively Britain's important national interests? Is it not clear from the Leader of the Opposition's suggestion that agriculture reform should be taken at the summit that he is abysmally ignorant of the processes of the European Union? Will my right hon. Friend redouble his efforts to end the serious dislocation between the European Union and the United States of America? If we do not do so, summits will come and go, but in the middle east and Africa, famine, war, pestilence and death will gallop ahead unchecked.

The Prime Minister: First, I thank my right hon. Friend for what he says about the Agriculture Council, which is very important. Clearly, if we had to take matters related to agriculture in the full European Council, it would prevent any prospect of reform or change.

In respect of the dislocation, as he describes it, between Europe and the United States of America, some signs exist that, whatever the differences over Iraq, people are coming together, which is welcome. I hope very much that at the European Union-American summit this week we will be able to take significant steps forward again for the re-establishment of good relations. The truth is that on issues related to terrorism, weapons of mass destruction, the middle east peace process and global poverty, the EU and the US are on the same side and share the same values. Working together, we can achieve a great deal. The general mood of the Council was to make sure that we repair the transatlantic alliance and make it function effectively.

Mr. David Heathcoat-Amory (Wells): The Prime Minister was rather coy about the list of red line issues that he wants removed from the draft constitution. Will he agree, however, that it is rather a long list now, including majority voting on criminal laws and procedures and on aspects of tax and foreign policy, all of which are in the present draft, as well as the compulsory co-ordination of national economic and employment policies, which he did not mention, plans

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for a European public prosecutor, harmonisation of social security measures, and late plans for a wholesale transfer from national veto to majority voting, without any reference back to national parliaments or people? As he is now diverging from his absurd claim that this is just a tidying-up exercise, will he put in a public document where and what his red lines are? If he is so confident that he can overturn all of them, why does he not have the confidence to put the result to the British people in a referendum?

The Prime Minister: I have explained on many occasions why I do not believe that this is a proper subject for a referendum. I repeat once again that neither the Single European Act nor the Maastricht treaty was put to a referendum by the then Conservative Government.

In respect of the right hon. Gentleman's other points, issues remain, of course, in relation to tax administration. Let us not forget, however, that, for example, on tax, we have effectively won that battle in Europe. In respect of common foreign and security policy, we have effectively won that battle. Surely there will still be issues that we need to get right, but let us be quite clear about the situation.

There are, of course, issues that we must debate here, but the right hon. Gentleman will accept that his ideas on the Convention, which I think have been effectively agreed by his party today, would mean that Britain would become a different type of member of the European Union. That is exactly what he wants; it is a perfectly honourable position but a position of which people should be aware. We could end up effectively in a situation in which, for example, as he says, a national Parliament could effectively veto the application of any issues in its country. People might agree with that but there is no way that single market measures could be driven though in those circumstances. If we ended up with associate membership of the European Union, which he is advocating, it would effectively result in a complete change in our relationship with Europe. I think that he has the intellectual honesty to admit that and, if it is the case, it represents a fundamental dividing line between the two political parties.

Mr. Harry Barnes (North-East Derbyshire): Will my right hon. Friend tell me the gains and losses, in democratic terms, of the draft treaty proposals both for United Kingdom citizens and the totality of citizens of the European Union? If his answer requires a couple of volumes by way of response, perhaps it could be placed in the Library, but a brief, taut and penetrating reply would be welcome.

The Prime Minister: I do not think that my answer will require a couple of volumes. The principal gains for our own involvement and that of national Parliaments, for example, will be involvement in legislation for the first time. Powers of co-decision will also be extended for the European Parliament. The basic issue is that there were those in Europe who argued that we should effectively move to some sort of federal superstate. That argument has been decisively rejected, which is why it is so important that, apart from the British Conservative party—which is, let us say, eccentric on the issue—every other country in Europe has accepted that this is indeed

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a strike against federalism and in favour of a Europe of nations. The Conservative party might explode with indignation about that but it represents literally the only part of Europe in which that is being said.

Mr. Crispin Blunt (Reigate): The Prime Minister has made it clear that the draft constitution is unacceptable in its current form, so why has he so undermined his negotiating position at the intergovernmental conference by pre-emptively ruling out a referendum?

The Prime Minister: Because I do not believe that that undermines our negotiating position at all. Indeed, the very reason why we have got as far as we have is that we have negotiated sensibly, built alliances and shown—as Britain does when it puts its mind to it—that in Britain we can win.

Denzil Davies (Llanelli): On the common agricultural policy, my right hon. Friend reminded the House that decisions taken at the European Council require unanimity, but decisions taken at the Agriculture Ministers Council use qualified majority voting. In view of that, can he give us some hope that before long proposals for substantial reform will come from the Agriculture Ministers Council and that that will happen in good time before world trade negotiations in the autumn?

The Prime Minister: I think that I can give at least qualified hope on that. The Agriculture Council meets again on Wednesday. I think that it secured significant advances last week. There is every hope that we will get agreement there and, of course, it is the only place where we will get agreement precisely because QMV applies.

Mrs. Angela Browning (Tiverton and Honiton): When the Prime Minister brought this Mary-Anne back through the nothing-to-declare channel at the weekend, had he spent any time discussing the British interest in terms of European fraud, accounting systems, the way in which European accounts are audited and Neil Kinnock?

The Prime Minister: I do not agree with some of the hon. Lady's remarks. She talks about discussing the British national interest, which is precisely what we have represented throughout. Our disagreement with her and her colleagues is that we believe that the British national interest is best served by being in Europe and inside the European Union, not by moving towards associate membership that would leave us without any influence on issues relating to fraud or anything else.

Mr. David Borrow (South Ribble): Can I refer my right hon. Friend to the reconstruction of Iraq? When I visited Iraq about a week ago, I was impressed by the work of our forces to reconstruct Basra. Water and electricity supplies are better now than they were before the war, 15 schools have been refurbished, medical centres have been re-equipped, police stations are being painted and decorated, and new Iraqi police officers are being trained and are out on the streets. However, I raise with my right hon. Friend UN Security Council resolution 1483 and the EU's reaction to it. It is clear to me that if we are to make a success of reconstruction in

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Iraq, it is no use leaving it simply to our troops and the UK taxpayer. Successful reconstruction needs a much bigger input from both the EU and aid agencies across the world.

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