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Mr. Wayne David (Caerphilly) (Lab): As we all know, this week's European Council comes at the end of the six-month British presidency. I think it is fair to say that
 
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disappointment has been expressed in some quarters about the presidency, but we should bear in mind that just a few months ago there was talk of Europe being in crisis. The constitutional treaty had been rejected by the French electorate and by the electorate of the Netherlands, and in many quarters there was great doom and concern about the future for Europe. Would it implode? Would the crisis lead to an unravelling of the whole nature of the European Union? It is to the credit of the British presidency that the Government have taken the lead in getting to grips with the situation, and in introducing what they have called a period of reflection.

That period of reflection was required. We have now begun to engage in a sensible, down to earth, pragmatic debate on what the European Union is all about. We have also refocused on the issues that really concern people from day to day throughout the member states. Let me give an example. An issue that has loomed large in the British presidency, which I do not think has been mentioned so far today, is the collective emphasis placed on the fight against terrorism. That is tremendously important, and, although it was not anticipated, the presidency has risen to the task of tackling it effectively. For instance, we have seen agreement on the storage of telephone and internet data for use in terrorism investigations, which is of almost inestimable practical importance in the fight that we all face daily.

Mr. Hendrick: My hon. Friend speaks of the progress that has been made on terrorism. One practical example of the way in which European co-operation works in that regard is the use of the European arrest warrant to apprehend an alleged participant in the 21 July bombing attempt. Use of the warrant has often been opposed by many Conservative Members.

Mr. David: That is a very good example. It precedes the British presidency, but it has been put to good effect. As my hon. Friend says, when Europe focuses on issues that are of real concern to people it can be extremely effective, and can command support on that basis.

Angus Robertson: Another issue that is high on the EU agenda is people trafficking. In recent days and weeks, a number of member states have announced that they have launched inquiries into alleged people trafficking by one of our coalition allies in the fight against terrorism. Does the hon. Gentleman believe that the UK Government should work with our EU partners to stamp out all alleged people-trafficking?

Mr. David: Without being drawn into specifics in any oblique way, as a matter of principle, yes, there should be dialogue and discussion, and where practical co-operation is mutually beneficial, it should of course take place.

The other issue of central importance to the British presidency has been the enlargement of the European Union. According to the treaty that was agreed and ratified by this House, at least, Romania and Bulgaria should join the EU in January 2007. It is true that both countries have a great deal of work to do in the next few months to ensure that the European Commission can propose to the Council next April that they are indeed ready to join, but there is good evidence to show that they are making a big effort and that they will be ready.
 
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I draw attention in passing to the case of Michael Shields, the football supporter from England who was arrested in Bulgaria, to whom reference was made earlier. The European Scrutiny Committee raised this issue as part of our discussions when we went to Bulgaria the other day; indeed, I raised it with the Bulgarian President. The Bulgarians are acutely aware of that case and I know full well that our Foreign Office has been working hard on it.

Mr. Llwyd: In that context, is the hon. Gentleman also going to refer to Turkey and the Ocalan case?

Mr. David: If the hon. Gentleman will contain his enthusiasm for a moment, I shall logically work my way toward Turkey.

It is noteworthy that in the past six months the European Commission has proposed that Macedonia become a candidate country. That is important, given the recent history of warfare in the Balkans. If the EU can be used to bring more stability to, and cohesion in, the western Balkans, that is to be warmly welcomed.

I turn to Turkey, to which the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) referred. As we know and as Members in all parts of the House will welcome, Turkey—along with Croatia—has begun negotiations on joining the EU. The momentum that has built up in the past few months is likely to continue. Genuine reform has taken place and there is the real prospect of Turkey's future EU membership stimulating further reform. Of course, many things are still wrong in Turkey. When the ESC visited Ankara last week, we discussed with the Turkish authorities some of the current misdemeanours and incidents of human rights abuse in that country. No one would condone such behaviour for one moment, but it is important to recognise that our being able to have that dialogue and to put pressure on the Turkish Government is worth while in itself and is already producing positive results.

Of course, the issue that will loom large in the next few days is the financial perspective: the EU budget for 2007–13. In that regard there are two closely linked issues of central importance: the common agricultural policy and the British rebate. The case for reform of the CAP has been well made time and again in this House and elsewhere. As we all know, it needs fundamental reform in the interests of the British consumer and taxpayer, and of poorer people throughout the world. Our Government are absolutely right to say firmly—to the French Government in particular—that we want nothing less than full-blooded reform and that we will fight on until it is achieved.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): Does my hon. Friend therefore agree that there should be no deal on the budget unless all concerned, including France, agree to re-examine the CAP, and that such re-examination and reform should take place before 2013?

Mr. David: It would be wonderful and easy for us to conduct negotiations among ourselves about what the financial perspective should look like, but it is important
 
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to emphasise that, however long it takes, we must continue to argue the case for reform. Ultimately, that case is unanswerable: sooner or later, the French Government will have to accept it. More information should be provided better to inform the debate.

It is important to recognise that the British Government have moved on the rebate to some extent and for justifiable reasons. We do not want to penalise countries that have just joined the EU in respect of their contributions. We do not want them subsidising the British rebate. Furthermore, many of the new countries are making use of and looking forward to future structural funds from the EU.

One of the biggest problems faced by the east European countries is absorption. Indeed, we had to confront a similar problem in south Wales under the last Conservative Government, when industrial south Wales was classified as an area of support called objective 2. We had real difficulty drawing the money down from Brussels because of the match funding stipulations. There were problems at that time with public expenditure, but the point that I am making is that it is not as easy as simply allocating tranches of money in one direction. The money must be used effectively and the match funding and infrastructure must be in place so that the full amount can be put to the best use.

Many of the Governments of central and eastern Europe now recognise that, under the Luxembourg presidency's proposal, those large sums of money could not be used effectively. We are seeing a greater realisation among those countries that it is important to have the money quickly and up front and to make the most effective use of the structural funds that are allocated. This is not a theoretical debate about large sums of money, but a practical debate about how to invest specific amounts of money as quickly and effectively as possible.

Angus Robertson: Does the hon. Gentleman agree that structural funds have played a significant role in the economy of Wales and Scotland? Does he share my concern that part of the UK Government's position might result in a step-change reduction in structural support, although the need for such support in Scotland and Wales remains? What would be his advice to Ministers about the stage at which such reductions become unacceptable?

Mr. David: Of course I want to see as much money coming into my constituency and nation as the hon. Gentleman does into his constituency and nation, but it is important to recognise what the Chancellor has said on many occasions: whatever the final agreement reached under the British presidency or later, the regions and nations of the UK that are presently in receipt of structural funds will not lose out. We have a cast-iron commitment, whatever the hypothetical scenarios of the future, that that support will continue.

If agreement is reached in Brussels over the next few days—I certainly hope that it will be reached—it will not be the end of the story as far as the financial perspective and the budget are concerned. If agreement is reached, negotiations on the fine detail of the budget will continue next year under the Austrian presidency and discussions will carry on under the inter-institutional
 
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agreement. The European Parliament will be intimately involved and it would be wrong for us to think that those discussions do not matter. They matter a great deal to the fine detail of the final budget arrangement.

We must also recognise that the European Parliament has real powers these days. The co-decision procedure gives it real influence on EU legislation, so it is all the more remarkable for the Leader of the Opposition to suggest that his 27 MEPs should neuter themselves, in effect, by leaving the European People's party, and so consign themselves to political oblivion in the European Parliament.

I am sure that the House is fully aware that the right hon. and learned Member for Rushcliffe (Mr. Clarke) has, in his usual way, made some very trenchant remarks. However, hon. Members may not be so well aware of what some Conservative MEPs have said recently. I refer in particular to an article in this morning's edition of The Times by Caroline Jackson, who has been Conservative MEP for South West England for many years. She is a very distinguished European parliamentarian, and has chaired that Parliament's Environment, Consumer Protection and Public Health Committee with some distinction. In the article, she considers where Conservative MEPs might go on leaving the EPP, and with whom they might associate. She states that

That says a great deal about the options facing Conservatives in the European Parliament.

If I may, I shall give the House one other quote. It is from Mr. Edward MacMillan-Scott, a Conservative MEP who is treasurer of the Conservative group in the European Parliament. At one time, he was its leader, and he was quoted in the Daily Mail as saying:

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