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Mr. John Greenway (Ryedale) (Con): Many British businesses are well placed to take advantage of the services directive, as and when we get it. Can the Prime Minister give an indication of the timetable that he envisages for the adoption of the directive? Does he really think that it will go through under QMV if the French are against it?

The Prime Minister: In exactly the same way, there was a lot of opposition to reform of the common
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agricultural policy. The reform has not been as great as we wanted, but the position is different from what it was a few years ago. Yes, I believe that the services directive will go through, but there will be a battle over it. My point to the Conservative party is not that there will not be a battle—there will—but that we must consider what is the best way to win it. My point is that the biggest change that has happened in Europe—I do not think people fully understand it yet—has been the accession of the new member states, which are our allies on both the transatlantic alliance and economic reform. That is why it would be so crazy to marginalise ourselves in Europe. With respect to the Leader of the Opposition, at the very moment when we are fighting those battles for the transatlantic alliance and economic reform, to start a    debate about the renegotiation of Britain's membership—I cannot think of a crazier or more misjudged policy.

Mr. Dennis Skinner (Bolsover) (Lab): Does the Prime Minister agree that one of the reasons why Chirac has turned a bit nasty lately is that the French will soon be having a poll on the constitution and it looks as though he might finish up with a headache? In the Prime Minister's quieter moments, does he think that it might not be a bad idea if that happened? It would save us a lot of embarrassment here.

Finally, after eight years of a Labour Government, may I congratulate them on running such a successful economy—unemployment down, employment up and everything else—without joining the euro?

The Prime Minister: I thank my hon. Friend for his congratulations on our economic management. He asks about my quieter moments. I have to say that I have not yet had any.

Tony Baldry (Banbury) (Con): On Darfur, the Prime Minister will be aware that the African Union forces in Sudan at present have only a limited monitoring role. Is the House to understand from his earlier comments that the UK and the Security Council will support both a peacekeeping and a peace-enforcing mandate for the African Union? If so, will there also be funds to assist that objective?

The Prime Minister: We have to try to negotiate that in the Security Council, which is what we are doing at present. I return to the point that I made earlier—because I have looked at the situation in Sudan very carefully—as I did, too, when I visited the country. The Security Council and the resolution we have managed to pass there will be extremely important, but the only thing that will stop what is happening in Sudan is the presence of a sufficient number of well-armed people able to keep the combatants apart and—[Interruption.] Of course their mandate is important. That is why we must secure the right mandate, and we are working to do that, but in the end the most important thing is to ensure that that force goes to Sudan, and we and other countries have already said that we are prepared to help with funding that.

Mr. Andrew Miller (Ellesmere Port and Neston) (Lab): Were there any discussions at the margins about collaborative education projects? My right hon. Friend
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will be interested to know that there is real excitement at the Whitby high school in my constituency, where we are putting together such a project to form links, through the highest available technology, with a school in Budapest. The teachers are buzzing with excitement. We can do extremely well in that field, because of the importance of the English language to the rest of Europe.

The Prime Minister: My hon. Friend is right. I know of many such joint partnerships and ventures. They work extremely well, and it is certainly our intention to encourage them.

Mr. Richard Allan (Sheffield, Hallam) (LD): The Prime Minister rightly referred to the importance of telecommunications market liberalisation in the Lisbon agenda on competitiveness. Does he agree that although the UK market has been opened up effectively with the Communications Act 2003 and the creation of Ofcom, much more progress remains to be made in other EU countries, to the potential disadvantage of British businesses that want to invest in the European market? Will he ensure that telecoms liberalisation is given significant priority in the UK agenda for the EU presidency?

The Prime Minister: We will certainly do that.

Mr. Wayne David (Caerphilly) (Lab): I congratulate the Prime Minister on his statement. Was there any reference at the Council, either formally or informally, to the idea that Britain should have an associate relationship with the European Union? Does he agree that if we were to have such a relationship it would be    extremely detrimental to the interests of this country?

The Prime Minister: It certainly would be, which is why under this Government it will not happen. The result would be that, on trade policy, the services directive and the whole reform agenda, Europe would be without the strong voice of Britain, and Britain would be marginalised in Europe.

Mr. John Randall (Uxbridge) (Con): Was there any discussion of what is to be done about Kosovo, and if not, why not?

The Prime Minister: It was discussed in the Foreign Ministers meeting, as I have just been quickly and reliably informed by my right hon. Friend the Foreign Secretary.

Mr. Kelvin Hopkins (Luton, North) (Lab): Does my right hon. Friend accept that there is deep and growing alarm at the march of neo-liberalism in the European Union? Working people and trade unionists are beginning to wake up to the threat to the welfare state and the worker protection they have enjoyed in the post-war world. That is the underlying cause of the Swedish no in their referendum on the euro, and the probable no vote in France on the constitutional treaty. What happens when the constitutional treaty is rejected? Will we have a fundamental rethink about the economic direction of Europe?
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The Prime Minister: I am afraid that I cannot agree with my hon. Friend. I am not sure that the European economy can be described as marching towards neo-liberalism. It is important to open up the economy. There used to be a view on the right, held by the previous Government—indeed the Leader of the Opposition pioneered the idea—that somehow one had to choose between good, decent terms and conditions for the work force and economic efficiency. That is why the Conservatives opposed the minimum wage and the social chapter. In this country, we have shown that we can combine a minimum wage, the social chapter, help for people to get off benefit and into work and the work-life balance—measures that help people to combine their family life with work—and still have a successful economy. In today's world, it is a deception on our work force and our people to believe that we can isolate ourselves from the emerging economies in Asia—the Chinese economy and the Indian economy—when in fact we have to compete with them. The way to compete is to go higher and higher up the value-added chain, which is why it is so important to invest in skills, technology and education, but to combine that with a flexible and open economy. That is what we have to do. When we consider the difference between this country's economic performance and that of some comparable countries in Europe, I think we are doing extremely well.

Mr. Robert Walter (North Dorset) (Con): The Prime Minister referred to the relaxation of the growth and stability pact. When he agreed to that at the European Council meeting, had he taken the advice of the Governor of the Bank of England? When the Governor appeared before the Treasury Committee this morning, he was critical of that decision and said that if you want monetary stability you have to have a set of rules and stick to them.

The Prime Minister: Of course you have to have a set of rules, but you also have to have the right set of rules. We want to see changes in the growth and stability pact as it is now—as it is amended. We made a series of propositions for something much more akin to the British system, which works well for us. Obviously, that has to be agreed among all the European countries, but the greater flexibility in the growth and stability pact that was agreed makes sense.

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