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Mr. Hendrick: That is the case, but the hon. Gentleman is not comparing like with like when he compares countries such as Liechtenstein and Norway with countries such as Italy, France, Germany and the
 
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UK. Even though they are not members of the EU, the countries that he mentions benefit from the European free trade zone, which operates alongside the EU. However, they have none of the advantages of being able to influence the rules of the single market, which we operate as members.

I look forward to welcoming Bulgaria and Romania into the EU in 2007 and, further down the track, Croatia and Turkey. Previous speakers have mentioned the importance of Turkey. Like other parts of central and eastern Europe, it will benefit from economic and political security through membership of the EU. Also, as has been mentioned, it is a Muslim country and its accession will get rid of the myth that the EU is some kind of Christian club. That in itself will be a huge achievement and send a signal to the rest of the Islamic world that the west is not anti-Islamic and that it is pro-people, irrespective of their religious backgrounds. I congratulate my right hon. Friend the Foreign Secretary on brokering the historic deal on 3 October.

On the budget and EU perspectives for the period 2007 to 2013, it is important that some agreement is achieved, even if it is less ambitious than our original aims. Hon. Members have mentioned the possibility that France may scupper an agreement because of disagreements over the common agricultural policy. Having witnessed the Make Poverty History campaign over the past 12 months, none of us in our own minds can justify the $2 a day spent on European agriculture, as against the $1 a day spent on people in the poorest countries of the world.

Whatever agreed position is adopted at the Council—I assume there will be agreement—I hope that at the trade summit and the Doha round in Hong Kong, any agreement reached on agricultural subsidies is brought back to the EU, and the EU perspectives in the budget for 2007 onwards adjusted accordingly. Although this week is important for determining a budget for 2007 onwards, it is not the end of the story. We will then be involved in multilateral trade talks in Hong Kong and their implications.

It is not right, as hon. Members have said, that 40 per cent. of our budget is spent on farm subsidies. There is €8 billion on offer for enlargement, for expenditure such as structural fund payments. Let us be honest—those countries must restructure their economies if they are to become valuable trading partners in the European single market, which will benefit them and us. As the European Union becomes bigger, more trade will take place, which will make the EU more prosperous. The €8 billion is not wasted money, because it helps those countries to develop, which, as I have said, benefits them and us.

Despite remarks by Conservative Members, the rebate remains intact. The rebate was negotiated before enlargement, and none of the money that relates to the EU 15 is being given up. The money that is being given up is to help the enlargement countries and, as someone who still describes himself as a socialist, I have no problem with that. The UK will still receive more money that it has in the past through the rebate, and that money will be spent on development in different parts of the UK, so I think it a win-win situation, providing that agreement is obtained on the budget in the European Council.
 
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It would be ludicrous if did not make some movement on the rebate. As has been said, when it was agreed in 1984 France and Germany were far more prosperous than the UK. If things were left as they are, the UK would be the second lowest contributor as a proportion of national income, which cannot be right when so many poor countries have joined the EU.

The failure of the referendums in Holland and France has cast doubt on the future of Europe, and it has perhaps led to a more cautious approach on what Europe is and what it is about. There is nothing wrong with change in itself, and hon. Members have discussed a period of reflection. The Hampton Court summit, which the Prime Minister organised, concerned such reflection, and I shall discuss that matter in greater detail.

This afternoon, Conservative Members have discussed the constitution for a long time. Some of them are not satisfied with dancing on its grave and want to dig up the body and swing it around, which is ridiculous. Given the failure of those referendums, we must ask ourselves what Europe is about in the 21st century. What are the relevant structures for Europe and what are the imperatives for financing Europe in the 21st century? The CAP and the structural funds must play a huge role in the answers to those questions.

As other Labour Members have said, the rebate will not disappear as a whole, and it will not be on the table as a whole until we achieve significant CAP reform. We have already seen some progress, which is why I am unhappy about the degree of negativity in the House. Tremendous progress has been made on sugar reforms, which will save €3.5 billion to €4 billion and which were secured by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.

On the Lisbon agenda, the shadow Foreign Secretary said that there had been little progress in this Parliament. As hon. Members will know, the Lisbon agenda goes back to the Portuguese presidency of six or seven years ago. It is down to national member states to implement it. The European Union can make decisions but it cannot implement them without the co-operation of individual national Governments. It is disingenuous to pretend that the issue is just for the EU institutions, and it presents it in an unrealistic and a bad light.

Everybody wants a more dynamic and competitive knowledge-based economy in Europe, but it will take time. The six months of a British presidency is not sufficient, nor was the six years since the Portuguese presidency. Changes in culture will be required. We cannot restructure other countries' economies—that must be done by their national Governments. The CAP is important in relation to budget reform. However, if we could spend money on research and development to develop knowledge-based technologies and economies instead of spending it on agriculture, we would get more bang for our euro in terms of expenditure from the central pot of the European Union. We need value for money.

I was a little dismayed to hear the shadow Foreign Secretary speak in the same way that he did when he was Leader of Her Majesty's Opposition, with continual doom and gloom and negativity about Europe. Many Conservative Members shed crocodile tears over money spent on the CAP, but when they were in government
 
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they were happy to give those heavy subsidies to farmers in their own constituencies. The double standards of the Conservatives' attitude towards Europe will lead to their losing considerable credibility. Withdrawal from the European People's Party would be a huge mistake that the new Leader of the Opposition will come to regret. When I served in the European Parliament, I met the headbangers to whom the right hon. and learned Member for Rushcliffe (Mr. Clarke) has alluded. In my experience, what the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) said about certain Members of the European Parliament is completely accurate. It is ironic that he should mention Sir Robert Atkins, who replaced me as a Lancashire MEP in 1999. That is why I am speaking in this House today.

We are seeing more of the same old Europhobia—in favour of enlargement but asking for a referendum on Nice so that people could say no, and in favour of a referendum on the constitution, again so that people could say no. The constitution would have given new powers to national Parliaments, which would have made enlargement work better and allowed for a repatriation of powers that is now not possible given the existing treaties. What we have seen today is vintage Conservative Euroscepticism. Europe-bashing will not substitute for responsible foreign policy.

The British presidency has been successful because it has been positive. I mentioned the sugar reform, which has improved the quantity and quality of development aid. Sixty per cent. of the €4 billion has gone into the global fund to tackle AIDS, TB and malaria. The EU has been able to move mountains in terms of tackling climate change, as we saw from the historic deal in Montreal.

The successful European security and defence policy was mentioned. Work on the Rafah border between Gaza and Egypt has enabled the peace process to go forward. We expect progress in Hong Kong in the EU and World Trade Organisation negotiations. There has been progress on financial services action plans and directives on services, which account for approximately two thirds of Europe's GDP. Progress has been made on chemicals, for example, through the Registration, Evaluation and Authorisation of Chemicals—REACH—programme, which balances health and environmental concerns with industrial competitiveness.

The work on counter-terrorism measures has been mentioned. The EU has been in action in Bosnia to promote peace and stability. The meeting at Hampton Court was an initiative of the Prime Minister's, which led to debate on the future of Europe and the changes that are needed to meet the challenges of globalisation. There were new initiatives for research and development and universities. Demographic changes in Europe, energy supply security and immigration were also discussed.

It has been a good presidency and I congratulate the Prime Minister, the Foreign Secretary and other Ministers on their success, for which they deserve credit. Europe in the 21st century is a new Europe. It has 25 members and will possibly soon have 27 and then 30 members. Peace, prosperity and political stability have been the key to Europe and we still need the
 
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original ingredients that were used to achieve those aims. However, the threats that the new Europe faces are different from those that confronted the old Europe.

The two big issues for the new Europe are not communism and fascism but globalisation and terrorism. The changes that we want and have tried to promote through our presidency are part and parcel of dealing with globalisation. The recent arrest with regard to the 21 July attempted bombings has shown the value of European co-operation, with the introduction of the European arrest warrant before our presidency.

The constitutional referendums in France and Holland were a setback, as is slow progress on the Lisbon agenda. However, the history of Europe shows that it must go forward, even if that means two steps forward and one step back. That approach will take Europe into the 21st century and make for a prosperous and harmonious Union in the future. The Hampton Court meeting was about that. We need more Hampton Courts. The European institutions need to adapt to the blue-skies thinking that happened there.

Our future and destiny continue to lie with the European Union. I believe that the constitution contains much good for the betterment of Europe. I believe that, one day, this country will join the European currency. Perhaps that will not happen this decade, but it makes sense for the future and for a Europe that works in the 21st century.

5.2 pm

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