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The Prime Minister: I thank the right hon. Gentleman for his general welcome for what we have done. One can only imagine what would have happened had we failed to reach a budget deal this December in terms of our relationships with the central and eastern European countries who are our allies, and of course with other new Governments, not least the German Government.

The right hon. Gentleman is absolutely right to draw attention to what was said in June. I would repeat what I said in this House, if I may, when I reported from the Brussels Council:

I went on to say:

The position is very clear. The opportunity to get the fundamental reform will come through the review. Twelve other countries joined with France in saying that they do not wish to disturb the CAP deal that was done in 2002. Of course, had we not been able to conclude that deal in 2002, enlargement would not have happened, because that summit concerned enlargement in respect of future spending. It is worth pointing out to people who criticise the deal reached in 2002 that, without it, we would never have got those countries coming into the European Union in 2004.

As the right hon. Gentleman said, there will, however, be a major battle when the review is published. As the President of the Commission made clear today, it will be a fundamental review of what the money is spent on and how it should be spent. It will also, of course, be about a proper and sensible way of deciding that according to wealth people should pay, and according to need they should receive. The one thing that is obvious is that the   budget does indeed need fundamental change, but   the whole point about getting this deal in December is that, without it, the new central and eastern European countries could not have planned ahead for the next budget period. That is why we had to have an immediate deal in December so that they could have the certainty of the money coming to them, and then, in the medium and longer term, the prospect of the mid-term review that would allow us fundamentally to change the structure of the budget.

The right hon. Gentleman is right that there will be a   huge battle between the reformers and the non-reformers. But who are our allies in the reform struggle? They are the very countries in central and eastern Europe that, if we had not done a deal, would have been completely alienated from this country. No one should be in any doubt about that. After our ding-dong, I   simply say to the Leader of the Opposition that it is important for the Conservatives to think very
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carefully about their position of withdrawing from the EPP. That would be a disaster in terms of this country being able to procure a good deal in Europe.—[Interruption.] The one thing that is very obvious from today's exchanges is that Euroscepticism is alive and well in the Tory party.

Sir Stuart Bell (Middlesbrough) (Lab): Would it not have been absolutely shameful for this Government not   to have agreed under their presidency of the European Union for transfers from the richer countries to the poorer countries? Would not we all be ashamed of ourselves had that not been the case? Is it not a fact that the forward march of Europe was halted with the referendums in Holland and France in the summer? Has it not been restarted with this presidency, this budget and the reform that will ensure that such last-minute horse trading will never happen again?

The Prime Minister: My hon. Friend is absolutely right. As I said a moment or two ago, it would have been disastrous for this country's future relationship with central and eastern Europe had we not done our level best to get a budget deal. If we had not got a deal, in 2007 the European Parliament would have taken over a   set of annual budgets on the existing financial mechanisms, and those countries would have ended up with about a third or a quarter of the amount of money that they needed. It is hard to overstate the importance to those countries of getting this deal. That is why it would have been a disaster for this country not to have pursued it to a successful conclusion.

Mr. Michael Howard (Folkestone and Hythe) (Con): Did not the Prime Minister know about the costs of enlargement when he told the House in June that he would not negotiate the rebate away, period?

The Prime Minister: Which is why the rebate is rising, not falling.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): As it is the season of good will and new-found co-operation across the parties, when my right hon. Friend addresses the European Parliament tomorrow, will he send our condolences to Conservative Members about their new-found neighbours, now that they have left the EPP? Will he also be very proud when we open negotiations with Turkey on 3 October, because in years to come that will probably be seen as even more significant than the budget negotiations? Will he say more about why he is so confident that the review in 2008 will lead to true reforms of the CAP?

The Prime Minister: I thank my hon. Friend for what she said. It is obviously extremely important that we begin Turkey's accession negotiations.

Three things will drive people towards reform through the Commission's review. First, it is absolutely clear that people want a budget that is more rationally directed towards what they need for the future, including research and development and innovation. Even though the CAP has come down in the last 20 years from about 70 per cent. of the budget to 40 per cent., that still means that 40 per cent. of the budget is spent on 2 or, at most, 4 per cent. of the working population.
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Secondly, the World Trade Organisation negotiations will push people towards that. Thirdly, and   perhaps most importantly—and this is why it is important that we keep the rebate on all CAP spending and on all spending in the European member states—there is absolutely no way that we will be able to get that reformed and restructured budget unless everything is taken into account, and that was why it was important that the review specifically mentioned both the CAP and the rebate.

Rev. Ian Paisley (North Antrim) (DUP): The Prime Minister mentioned that there was a discussion at the talks of terrorism and the counter-terrorist plan. Did he discuss the counter-terrorist plan in Northern Ireland? It seems strange to the people of Northern Ireland that the tragic situation that is developing in Northern Ireland cannot be debated in this House of Commons, but the Prime Minister can discuss it at the talks and skim over it when he makes his report. I remind him of the promise that he made to me on Wednesday that he would consider whether more information could be given to the House of Commons, and I hope that he will keep that promise.

The Prime Minister: On that last point, although it is obviously not the issue of the statement, I am looking at what more we can say and put into the public domain, but it must be done in accordance with the advice that we receive as to what is legally proper. We are looking at that and I think that it would be helpful if we were able to give some more information, but it can be done   only with the consent of the proper authorities. I   emphasise once again, and I hope that the right hon. Gentleman accepts this from me, that neither I, the Secretary of State nor Ministers were involved in the   decision. It was a decision taken by the Director of Public Prosecutions, as it should be. I am looking carefully at what more can be said, but it has to be within the bounds of what is legally proper.

Mr. John McFall (West Dunbartonshire) (Lab/Co-op): I congratulate the Prime Minister on achieving a deal that ensures that enlargement goes on. Does he agree with the shadow Foreign Secretary when he says that it holds out the prospect of an enlarged area of   peace and stability, the former leader of the Conservative party when he says that it will heal the   divide that scarred the continent, and the Leader of   the Opposition, with his short-term memory, who I   remind him stated that enlargement will be extremely important? Can the Prime Minister detail for me how much the budget deal will cost year on year from 2007 to 2014 in addition to what has already been budgeted for?

The Prime Minister: In respect of the first point, it is important that people understand that if we support enlargement, it is absurd to say that we are not prepared to pay our fair share of the costs of enlargement. Over the budget period, the result of giving up a proportion of the rebate—it is only a proportion between 2007 and 2013—is a maximum cost of €10.5 billion. Once the increased budget is taken into account over the next period—this illustrates the absurdity of the suggestion that only Britain is paying—the total cost for France will be in the region of €31 billion. The contribution of Britain will be significantly less than that.
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