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Mr. Speaker: Order. Mr. Bellingham, you had better be quiet, otherwise I will put you out of the Chamber.

The Prime Minister: The opt-in protocol for Britain, negotiated in Amsterdam in 1997, remains. It is also enshrined in the new constitutional treaty. We have used it successfully over the past five years to opt in to new measures on asylum and combating illegal immigration, and to opt out of measures on legal migration, frontiers and visas. The protocol gives us the right to decide whether to participate in each item of the EU work programme and makes nonsense of claims that Britain has given up the right to control its own borders. If, of course, we opt in because we want a particular measure, it is in our interests that in a Europe of 25 and soon 27 or 28 countries the use of a veto by another country cannot block the measure.

Finally, the President-designate of the Commission, José Manuel Barroso, briefed us on his proposals for restructuring the new Commission. He has reacted decisively to resolve the dispute with the European Parliament, and I am confident that as a result the new Commission will be able to take office soon. In summary, the meeting once again underlined the importance to Britain of maintaining both a strong relationship with the United States of America and a strong place in the Councils of the European Union. Both partnerships are vital to the British national interest and it will remain the policy of this Government at least to nurture both.

Mr. Michael Howard (Folkestone and Hythe) (Con): I join the Prime Minister in expressing our deepest sympathy to the families of the soldiers of the Black Watch who have lost their lives and our good wishes for a speedy recovery to those who have been injured. I join, too, in the tribute that the Prime Minister paid to the outstanding dedication, professionalism and courage of the Black Watch.

I welcome both the European Council's discussions with Prime Minister Allawi and the financial contribution towards elections in Iraq. I support everything that the Prime Minister said about the
 
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importance of defeating terrorism in Iraq and elsewhere. Events in Samarra have shown that bringing an area under ostensible control does not, sadly, always mean an end to insurgency. Can the Prime Minister tell the House as much as he can about the coalition's plans to deal with the situation that is likely to arise in Iraq after the battle for Falluja?

I welcome the Council's agreement on the importance of a close transatlantic partnership and on the need to strengthen the alliance. What specific proposals does the   Prime Minister have to bring that about? The communiqué emphasises the middle east peace process, although his statement was silent on the subject. Is it not time to turn again to the road map? Should we not now seize the moment to make real progress on the ground towards a secure Israel within internationally recognised borders and a viable Palestinian state?

The European Council also discussed Iran's nuclear programme. Has preliminary agreement been reached on that issue with Iran? In the past, Iran has not complied with the undertakings that it has given, so what measures are proposed to make sure that it does so this time? The communiqué also expresses grave concern about Darfur. Has not the time come for immediate United Nations action, including automatic sanctions, to ensure that the Sudanese Government reign in the militias? Should not the African Union forces be given the mission to keep the peace, rather than just monitor the situation, to put an end to the dreadful attacks on civilians that still continue in that area?

The Prime Minister has boasted endlessly about progress on economic reform in Europe. In 1998, he said

In 2000, he said that there had been

But is not that all talk? Has not Romano Prodi admitted that economic reform in Europe has been a "big failure"? Has not the director general of the CBI said that Europe has got to change? Has not Wim Kok said that

The aim of the Lisbon agenda was to make Europe the most dynamic economy in the world by 2010. Is not that just a pipe dream? Will not we all pay the price in terms of lower productivity, lower living standards and fewer jobs?

Promises on economic reform are not the only areas where the Prime Minister has been all talk. Four years ago, he said that he did not want a

yet that is exactly what he signed a week ago. The director general of the CBI has said that the constitution will not help business. The Prime Minister's own former chief economic adviser has said that it will

[Interruption.] Well, this was someone to whom the Prime Minister listened for six and a half years, so I think that his views might be entitled to a modicum of
 
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respect. Is not it the case that the constitution will make Europe's economy even less flexible, even less competitive and even more sluggish than it is today?

Earlier this year, the Prime Minister promised that

But was not that promise all talk? At the summit, a "common European asylum system" was agreed. The communiqué that the Prime Minister signed says:

Does not that mean in plain English that more and more decisions on asylum and immigration will no longer be taken in this elected Parliament, but will in future be taken by the unelected judges of the European Court? It is no good the Prime Minister's talking about opt-outs when he has chosen to opt into all the major measures on asylum.

Is not all this a huge lost opportunity? Are not there practical policies that would turn some of the Prime Minister's rhetoric into action? If the Prime Minister means what he says about listening to people on Europe, why will not he match our pledge to set a date next year for the referendum on the constitution so that the people can have their say? If he means what he says about a modern Europe, why does not he put the case for greater flexibility, including the return of powers from Brussels to Britain so that we are no longer forced to accept so many new regulations that we do not support?

In 1997, the Prime Minister promised to

Seven and a half years later, in a diverse Union of 25, and in a fiercely competitive world, is not the need for a modern, flexible, reformed European Union more urgent than ever and under this Prime Minister, despite all his talk, are not we further away from it than we have ever been before?

The Prime Minister: First, let me deal with the questions on Iraq. In respect of Samarra, Najaf, Tal Afar and other places that have been taken back into the control of the Iraqi Government and Iraqi forces, it is of course true that terrorists will carry on actions in those places, as they did in Samarra just a few days ago.

There are a couple of interesting points, however. When those terrorists have been cleared out of these cities, it has become very obvious, contrary to what we were told beforehand, that they did not enjoy the support of local people; on the contrary, local people were all too glad to get rid of them so that they could get back to the lives that they wanted to lead.

Let us be clear that the purpose of the action in Falluja is to stop it being used as a base for terrorists and insurgents who are killing innocent people in Iraq and anybody who tries to make the country better. If and when we take back control of Falluja so that it is in the control of the Iraqi Government, a process of reconstruction will follow, as happened in Samarra and Najaf, where literally hundreds of millions of dollars are being spent on reconstruction projects. The people can then participate fully in the elections. I do not minimise the difficulties but it is essential for the holding of democratic, free and fair elections that the power and grip of the terrorists and insurgents in some parts of Iraq be broken. That is why Prime Minister Allawi has authorised the operations.
 
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It is extremely important that we make progress on the middle east now. Progress must be towards a two-state solution; an Israel confident about its security and a viable, independent Palestinian state. It is essential to take measures to make progress on that. I hope that we shall do that as soon as possible. As I said when I congratulated President Bush on his re-election, it is the single most pressing political challenge of the moment.

We are still at the point of negotiation on Iran. A series of issues has been agreed at political director level, but not yet at intergovernmental level between the European three—France, Germany and the United Kingdom—and the Iranian Government but we are hopeful that we will be able to make some progress in the next few days.

On Sudan, it is important to make it clear that not only the Sudanese Government should exercise restraint; some of the Sudanese rebel groups must do so. A series of measures has been laid down for the Sudanese Government and they must follow them. If they do not, there has to be reference to the Security Council and necessary measures must be taken.

I agree with the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) that the African Union should not only increase the number of troops available there but make it clear that, if possible, it can keep the peace as well as monitor what is happening there. However, it is a difficult and delicate situation for the troops that are going into it. We are watching the situation carefully. My right hon. Friends the Foreign Secretary and the Secretary of State for International Development are in constant touch with their opposite numbers in other capitals and with the Sudanese Government. However, the situation remains serious. If anything, it has got worse rather than better in the past few weeks. If we do not get obedience and compliance with the measures that the international community laid down, we will have to revert to the matter at Security Council level and take action.

It is worth pointing out that, since 1999, some 6   million jobs have been created in Europe and liberalisation has taken place in many sectors under the Lisbon strategy process. I agree that it is important that we do more but the right hon. and learned Gentleman's policy of being a semi-marginalised player in Europe will not help to get economic reform. As for the woeful things that he claims will happen if the EU constitution is passed, I merely point out that he used to make the same predictions when he was Secretary of State for Employment in the previous Government about the social chapter. I think I remember his saying that 500,000 jobs would desert Britain if we signed the social chapter. We signed it and 2 million extra jobs have been created since. His powers of prediction are not good.

I am surprised that the right hon. and learned Gentleman opposes our opt-in on asylum. A few months ago, he made a speech in which he said that a process whereby countries decided whether to opt in to specific measures was precisely the direction in which Europe wanted to go. We have delivered that, but the moment that we do so, he switches around 180°, in his usual opportunistic fashion, and says that it is a disaster for the country.
 
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The right hon. and learned Gentleman mentioned the charter of rights. Let me read part of our protocol to him. It states:

to do with asylum and immigration—

That destroys the effect of the right hon. and learned Gentleman's point. As for his view that we should have a bold strategy of renegotiating the existing membership of the European Union, it is, as some his hon. Friends have pointed out, simply not on the table. He would have to get the agreement of every one of the other members to renegotiate that. How many members have agreed? [Hon. Members: "Norway."] I think we are back to the Norway issue.

Following the right hon. and learned Gentleman's comments at the weekend, it is extraordinary that, in his first year as Conservative leader, he has managed to achieve a foreign policy position that would make us a marginalised member of the European Union and not welcome in the White House either. Only his leadership could have brought the Conservative conception of foreign policy to such a pass.


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