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Roger Casale (Wimbledon): Will my right hon. Friend reflect on the fact that many Europeans will be looking to him and to other European leaders to bring the same dedication and leadership to a new international initiative aimed at retrieving the peace process in the middle east as they have shown in the international fight against terrorism? Does he agree that while it is right to condemn unreservedly the terrorist attacks on Israel and to call on Yasser Arafat to dismantle Hamas and the Palestinian Islamic Jihad networks, European leaders should also be calling on Israel to stop short of destroying the Palestinian Authority altogether, because without a Palestinian Authority there can be no peace process at all?

The Prime Minister: We have made it clear that anything that weakens the ability of the Palestinian Authority to fight terrorism is a retrograde step. However, it is important that we balance the calls that we make upon Israel with strong calls in respect of the Palestinian Authority, too. We cannot continue with a situation in which, literally week by week, there are appalling suicide bombings and terrorist outrages. We know in the House how we felt after the worst outrages of, first, the IRA and then things such as the Omagh bomb of three years ago: imagine if that were happening in this country literally every week or two weeks. People should have some understanding that that is the background against which Israel is acting.

It is important to get initial security steps in place and then return to a process. In the end, it is only through the political process that any of these difficult issues will be resolved.

Mr. John Redwood (Wokingham): Does the Prime Minister agree that an elected President of the EU would be incompatible with the sort of vision that he has set out of co-operating, independent democratic states in the EU, or has the Chancellor persuaded him that it could be an exciting vacancy for a man of his talents?

The Prime Minister: I am not in favour of a directly elected President of the European Commission, but that is exactly the type of argument that will be fought out over the next two or three years. Some people will say that all the power should be put into the hands of the Commission

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and the European Parliament; others, such as ourselves, will say that the Commission must retain its independent right of initiative, but that we must consider how we strengthen the workings of, for example, the European Council and make it more effective, and how we deal with the issue of a rotating six-monthly presidency—a procedure that cannot be maintained in an enlarged European Union.

It is important to get into those arguments, participate in them and attempt to succeed in them. The trouble is, as the right hon. Gentleman's leader found when he went to the leaders' meeting in Laeken, that if the Conservatives are completely isolated—[Interruption.] The idea that the other Conservative leaders in Europe agreed with the British Conservative party is laughable. Over the past few days we have had a good example of the diplomatic position of the Conservative party, which ends in basic humiliation and failure. Our diplomatic position has secured all the objectives that we sought.

Mr. John McFall (Dumbarton): Does my right hon. Friend agree that the reality of economic and monetary union will be brought home in the United Kingdom in two weeks' time by the circulation of euro notes and coins? People will be able to go into their local Dixons to buy a television set with euro notes and coins and to buy a pint in JD Wetherspoon on the same basis. That may not change the attitude of the owners, but perhaps the attitude of the people will be changed. Will my right hon. Friend take it from me that the European Central Bank misses the democratic accountability element? That is an important aspect if we are to bring the Union much closer to the people of the European Union.

The Prime Minister: It is important that the people understand that in a couple of weeks' time euro notes and coins will be in circulation; twelve of the 15 European Union member states will be using that currency. It is also important for British companies and British firms here, many of which will be trading in euros or using the euro in one form or another, even though Britain is outside the single currency zone. It is extremely important that we do not take the position of sticking our head in the sand and pretending that it will all go away. It is a reality, and in two weeks' time it will be an even greater reality.

Dr. Vincent Cable (Twickenham): Will the Prime Minister say which specific European competencies he wishes to see repatriated to national Governments, and do they include agriculture?

The Prime Minister: No, I think that, over a period, we should analyse carefully all the various competencies. We should decide on those things where Europe may, for example, want to integrate more and those that it wants to repatriate to member states. I do not think that it would be sensible for us to tie our hands at this juncture.

Mrs. Alice Mahon (Halifax): May I assure the Prime Minister that he has the support of all Labour Members for saying that he will not turn his back on the people of Afghanistan? He will be aware that the World Food Programme has estimated that as many as 3 million people may have been displaced because of the military

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action and for other reasons, and that camp Maslakh may be housing nearly 800,000 people in desperate circumstances. Even worse, in the remote rural areas, it is now being reported that some people have already died as a result of cold or hunger. Did the Council discuss ways to get emergency aid in, and will the Secretary of State for International Development make a statement on the position before the Christmas recess?

The Prime Minister: I do not know the precise arrangements that the Secretary of State for International Development may be making, so I am afraid I cannot comment on that, although I will find out and let my hon. Friend know. She is right to say that humanitarian aid is extremely important. Of course, the only reason that we can get that aid through now is that the Taliban stranglehold on many parts of Afghanistan has been broken.

Finally, my hon. Friend is right; we will not turn our back on Afghanistan because it is right to remain engaged—we promised that we would do so—and if we do not, Afghanistan may return to the failed state in which we found it after 11 September. The truth of the matter is that it was a state existing basically on terrorism and drugs, which subjected its people to vile oppression and was a source of instability in its own region and wider. For us to remain engaged in the reconstruction of Afghanistan is not merely right—it is manifestly in our interest.

Mr. David Heathcoat-Amory (Wells): Will the Prime Minister confirm that the summit written conclusions and the declaration are littered with references to the need to cut red tape and reduce labour market regulation but that, simultaneously, the European Union has signed up to the information and consultation directive, which will add red tape and extra labour market regulation? How can he and the European Union be taken seriously when the European Union continues to say one thing in those bits of paper while simultaneously doing something different?

The Prime Minister: In respect of the information and consultation directive, I do not accept that every single piece of European legislation is wrong. Indeed, it is not wrong in my view to make sure that people are properly consulted as a work force. In respect of the attitude of the European Union and how much it legislates and how much it does not, it is worth pointing out that that concern is raised in all member states. The European Union declaration makes it clear that that issue has to be on the agenda, but it is more than simply on the agenda in theory: the recent Mandelkern report was endorsed by European Union leaders and, if implemented, it will mean a much greater number of decisions at European Union level will be taken in principle but implemented in the way in which member states want.

I do not dispute the fact that there is an issue and a problem but, again, the body of opinion in Europe is moving towards an easier and lighter-touch process rather than the heavy-handed regulation that perhaps we had in the past. At least the right hon. Gentleman has read the conclusions and the declaration, but he will find that many of the statements in the Laeken declaration tie in with many of people's legitimate fears about the encroaching power of the European Union. I therefore hope that, in some senses, it is welcomed by Conservative Members.

Mr. Graham Allen (Nottingham, North): Does my right hon. Friend accept that many millions of people are

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still rightly anxious about what they perceive as Brussels interfering in the nooks and crannies of British life and that many individuals, including some Opposition Members, rightly need reassurance about a European superstate not being on the agenda? Does he accept that one of the best ways of providing that is to state clearly and baldly in a European constitution that nation states have their rights, and clearly define those rights and the concept of subsidiarity in the constitution? Does he not agree that Opposition Members do not fear a superstate or intervention in nooks and crannies as much they fear clarity?

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