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Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Prime Minister rightly said that this is a case of reaching agreement not just among the politicians of Europe but among the people of Europe. Would that process not be helped by accepting the votes in the Netherlands and France and saying that the constitution was no longer on the table? That would allow him to focus on the important message: making Europe's economies fit for the 21st century and delivering jobs and economic prosperity. Then people will grow closer to the concept of the European Union.

The Prime Minister: I understand entirely what my hon. Friend is saying. Most people are now concentrating on the debate in the European Union. It is difficult when 10 countries have ratified the constitution, as they are naturally sensitive about being in a position where the rest of the Europe says that the constitution is over and done with. As I keep saying, one could have a theological argument about the state of the European constitution, but the fact is that the French and Dutch voted no. Those votes are there—unless they are got round, that is it.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): In light of the Prime Minister's call for a fundamental review of the European Union, its purpose and fitness for that purpose, can he explain why he continues adamantly to rule out the possibility of any return of    powers and competences from the European institutions to the member states?

The Prime Minister: Because if we started a debate now about renegotiating our own treaty obligations to the rest of Europe, at a stroke we would lose any possibility of influencing the argument in the rest of Europe. I am sorry, but that is simply true. I will not bother reading out quotations from Conservatives when they were in government, as there is not any point in doing so. [Interruption.] Perhaps the right hon. Gentleman never made such statements, but I can assure him, without embarrassing too much the people who were in government at the time, that even the speech by Mrs. Thatcher at Bruges, if it were given today by a Conservative aspiring to the party leadership, would be considered rampantly pro-European. That is the truth. If we want to conduct the debate in a such a way as to suggest that the real point is how we get rid of the existing powers of the European Union, we would lose it before we started it, and that would not be sensible.

Martin Linton (Battersea) (Lab): Does my right hon. Friend agree that the most important aspect of our commitment to Africa is not the pressure, albeit that that is important, to increase aid, but our target of ending agricultural export subsidies by 2010? How can we end export subsidies by 2010 without fundamental reform of the common agricultural policy?

The Prime Minister: My hon. Friend is right, and that is exactly what we should do. As I said, it is perfectly reasonable to say that, as part of the refinancing of the European Union, the budget, everything in it, the CAP and the rebate, should all be looked at.
 
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Mr. James Paice (South-East Cambridgeshire) (Con): The Prime Minister knows that there is little support in this country for using our taxpayers' money to support French farmers or to support subsidised exports of foodstuffs to the developing world, but he is aware that British farmers are already grappling with the biggest change in agriculture policy since 1947. Is he aware that his remarks in the past few days have caused considerable uncertainty and confusion at home among our farmers? In the light of his comments a few minutes ago, is he telling the House that if the CAP were to result in further reductions to farmers' payments above and beyond those already in train, the British Government would make them up to the level already planned?

The Prime Minister: Any budget decisions must be taken at a later time, but I understand the concerns of British farmers, as well as of European farmers. I am not standing here in order to have a go at French farmers and the support. What I am saying is that, unless we put in place a reform process that allows us over time to adjust the budget of the European Union, in the end we will find that we have an unsustainable position. That is the problem. If we do not have such a reform process in place, it will be 2014 before we can agree changes to the CAP. I am not advocating—this is important—changes tomorrow in the payments made to UK or other farmers. I am saying that, by the time we get to midway through the next financial perspective, we should have a clear plan as to how we are to make changes to the CAP. At the same time, we can work on other ways of supporting farmers in a more rational way.

Joan Walley (Stoke-on-Trent, North) (Lab): May I press the Prime Minister on the issues of globalisation and the environment raised by my hon. Friend the Member for Islington, North (Jeremy Corbyn)? Now that we must have a complete rethink, how can my right hon. Friend use his presidency to make sure that we put environmental issues and sustainable development at the heart of the budget that will have to be reformed?

The Prime Minister: What my hon. Friend says is right, in the sense that the environment is one area where Europe must act together. There is no point in Europe taking measures to deal with the challenge of global warming unless other countries are part of that. That is why we are trying to use the G8 to restart the process of binding in other countries—America, and obviously China and India as well. This is an area in which Europe can develop measures such as the emissions trading system, and where we can take common action to protect our environment. People talk about what is wrong with Europe, but as a result of the changes made in the regulation of the water industry, we have enormously improved the quality of our rivers, our drinking water and so on within the European Union. There is much that we can do. My hon. Friend is right—that is one area where it is important that Europe acts together.

Mr. Andrew Mackay (Bracknell) (Con): How long does the Prime Minister define a pause to be?

The Prime Minister: As long as it takes.
 
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Hugh Bayley (City of York) (Lab): The need for CAP reform will clearly bounce back at the G8, because development and trade justice for Africa will be impossible without a substantial reduction in subsidy. At €10 billion, le chèque franc"ais is considerably greater than le chèque britannique. Did the Prime Minister ask President Chirac why French farmers need almost twice as much aid from the common agricultural policy as France gives to poor people in Africa, Asia and Latin America?

The Prime Minister: I did not quite approach the matter in that way. It is important to say, not just for the audience in the Chamber, but for the audience outside as well, that it is unreasonable to expect the whole system to change overnight. It is reasonable to expect that we have a process in place to change it. That is what we are asking for. In certain parts of the rest of the EU, it has been said that we were demanding an immediate, overnight change of all the priorities and trying to renegotiate the whole CAP on Friday night. That would be absurd and no one ever suggested it. What we are saying, however, is that we cannot wait until 2014 before we confront those issues.

Mr. John Maples (Stratford-on-Avon) (Con): I understand why the Prime Minister has closely linked the possibility of the reform of the rebate to the reform of the CAP, but it looks like that linkage might be rather difficult to achieve. Issues such as the elimination of external tariffs, the genuine completion of the single market, the services directive and the completion of the Lisbon agenda, which he promoted, are tremendously important to us and would be hugely beneficial to the British economy. Would it not be worth negotiating the rebate in the context of some or all of those issues?

The Prime Minister: I agree that those questions are important, but the financing deal must be fair to this country as well as to everyone else in Europe. We currently face a blockage on all fronts, which is a situation that must change. However, the hon. Gentleman is right that some other issues are every bit as important for the British economy, in the longer term at least.

Ms Dari Taylor (Stockton, South) (Lab): Does my right hon. Friend accept that many of the British electorate believe that EU funding is not only unfair and chaotic, but, frankly, corrupt? Will he use the presidency to ensure that the funding system is open, accountable and fair? Does he believe that the great European project could be fatally damaged if we do not achieve such a system?

The Prime Minister: I understand the points raised by my hon. Friend, and I will do my best.

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