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The Prime Minister: I thank my right hon. Friend for his comments about those who are engaged in the training of the Palestinian Authority's security forces. Britain has undertaken this work over a significant period, as well as work on political reform and governance. Actually, a lot has been happening underneath the surface that is very important, although not much noticed. As I have said before, I will obviously do everything that I can to ensure that this peace process becomes reinvigorated; plainly, that will be a significant part of the discussions that I have later in the week.

Michael Fabricant (Lichfield) (Con): But further to that question, given the grave ill health of Yasser Arafat, was any consideration given to the possible succession in Palestine? Does the Prime Minister accept that in a way the whole peace process is on a cusp? If the Palestinian organisation falls into the wrong hands, there could be impasse between Israel and Palestine, whereas if the right people succeed Yasser Arafat, the peace process could have a very real future.

The Prime Minister: I agree, which is why it is important to proceed with measures that would allow elections in the Palestinian Authority to take place and the drafting of a new constitution. What is important is that we have empowered Ministers who can take decisions on security issues, but I agree with the hon. Gentleman that the situation is very much in the balance. It is important that we ensure that there is a Palestinian leadership that wants to make progress in the middle east. It is then for the international community to give that moderate Palestinian leadership support.

Mr. Harry Barnes (North-East Derbyshire) (Lab): Is the Prime Minister aware that I utterly condemn, and wish to see countered, terrorism in Iraq not only against the Black Watch but against Iraqi citizens? Four railway workers, all of whom were members of the Iraqi Federation of Trade Unions, were murdered on 27 October between Mosul and Baghdad. What measures have been put in place in Falluja to ensure that such people—innocent people who are held hostage, as the Prime Minister himself put it—are not attacked?
 
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The Prime Minister: My hon. Friend—he was an opponent of the war, but he has taken a very honourable position on these issues all the way through—is right in saying what the dilemma is. The terrorists are trying to cause maximum difficulty, which is why they are taking over places such as hospitals, schools and mosques. That is the reason why the situation in Falluja has not happened before now. I know from my discussions with Prime Minister Allawi and his Government that over the past few months, they have been making every effort to get a peaceful settlement in Falluja. That included making it clear that, provided that Iraqi Government forces came in and took control in Falluja, there would be no need for multinational forces to be in there, and it included ensuring that it was realised that there would be municipal elections in Falluja. The problem that we now have, however, is that unless we take back control of Falluja, ultimately it will be very difficult for ordinary people there to make progress, but we are doing everything that we can to limit civilian casualties in the course of the action that we take, which is why this is being proceeded with in a very careful way. I entirely agree that the important thing is to ensure that the Iraqi people understand that in the end this is not directed at them, but at the people who are preventing them from getting a democratic outcome.

Mr. Desmond Swayne (New Forest, West) (Con): I found myself in profound agreement with what the Prime Minister had to say about Iraq and the transatlantic alliance, but the gloss on the summit coming from the Elysée palace is very different, prompting the question whether the Prime Minister and the President of France attended the same European summit.

The Prime Minister: It is probably not the first time that that has been said. Of course there are people in Europe who take a different view of what our attitude should be to the transatlantic alliance, but my answer is that we should remain in there, fighting for the right view of how Europe should co-operate with America, not get out and leave the field to those we disagree with.

Hugh Bayley (City of York) (Lab): Does the Prime Minister agree that there would be security benefits as well as environmental advantages if the west, the European Union, the United States and other Organisation for Economic Co-operation and Development countries reduced their dependence on, and consumption of, oil? What will the EU do over the coming months to try to persuade the second-term US Government to take the problem of global warming more seriously and to reduce US consumption of oil?

The Prime Minister: The emissions trading agreement is obviously an important part of what Europe is trying to do to deal with the problem. Europe as a whole has signed up to the Kyoto protocol. I think that issues connected to security of supply are making people think again, even in the United States of America, albeit from a different perspective. I have made Africa and climate change the key priorities for the G8, so there will be an opportunity to take this agenda forward. It is possible to see how we can do that—probably, when it comes to discussion with the Americans, through the route of
 
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science and technology. Long-term issues to do with energy supply, as well as climate change, make that imperative.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Further to that answer, one of the explanations for why our constituents, especially the fuel-poor and large energy-using industries, are threatened with extremely high energy bills this winter is that we have managed to liberalise our energy market quite successfully in the UK, while mainland Europe has dragged its heels. Did the Prime Minister find anything in the summit to encourage any optimism that mainland Europe will eventually address that agenda, open up its own energy markets and decouple the price of gas from oil?

The Prime Minister: The hon. Gentleman is absolutely right. The Council did discuss the issue of energy liberalisation and why it is important to pursue it. A process of change is now under way, and it will reduce energy prices for our consumers. One of the problems is that we have a liberalised energy market, while other countries in Europe do not, but the movement is definitely towards liberalisation.

Hugh Robertson (Faversham and Mid-Kent) (Con): Did the Prime Minister have any discussions with other European Heads of State about the attitudes of countries bordering Iraq? Is there any evidence that any of those countries are providing men and equipment to the rebels in Falluja?

The Prime Minister: A conference taking place in Egypt in the next couple of weeks will discuss that very issue. It is true to say that there are varying reports, but when Dr. Allawi visited Syria recently, he found a willingness to co-operate. I think that it is immensely
 
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important for both Syria and Iran in particular to ensure that their borders are not being used as a route for people to cross over and engage in terrorist activity. We are certainly making it very clear to those countries that any such support of terrorism in Iraq is unacceptable. I believe that the conference will play some part in flushing out people's positions and will send out a strong signal that those who support terrorists and insurgents are in breach of their moral obligations to the international community.

Mr. Jonathan Djanogly (Huntingdon) (Con): The surrender of Britain's veto on asylum and immigration policy in favour of qualified majority voting forms part of the European constitution. That being the case, why is the Prime Minister taking the decision to give up the veto now? Can he not wait for the referendum, when the British people will be able to vote on the constitution?

The Prime Minister: The hon. Gentleman said, "That being the case", but it is not the case. We are not giving up the absolute right to decide whether to opt in to any asylum or immigration measure, and that is very sensible. There are certain issues—for example, as I said a moment ago, people trafficking and illegal immigration—on which we want to be part of European action. However, we can decide those issues one by one. As my right hon. Friend the Home Secretary rightly said, it is the best of both worlds.

The hon. Gentleman probably represents the mainstream view in the Conservative party today. It is not really about opting in or opting out, or this veto or that veto. What he and his colleagues want is a fundamental restructuring of Britain's existing relationship with the European Union—[Interruption.] Well, one or two Opposition Members shake their heads and many of them nod. Why do they not sort it out between themselves and come back with a proper position?
 
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