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Mr. Michael Ancram (Devizes): Revisit.

The Prime Minister: Oh, I see—that is the policy. That is clear, then. When the shadow Foreign Secretary revisits the treaties, what do we think that that visit will entail? Will he revisit it and say, "That was a good treaty; I liked that one."?

The Conservatives' policy on the single currency is, "Never. Not in any set of circumstances." We did not get a single word of dissociation from the remarks of Margaret Thatcher. [Interruption.] Well, does the right hon. Gentleman agree with her remarks? A nod of the head would do.

The Conservative right and the right hon. Gentleman say that nothing good comes out of Europe. How can anyone seriously argue for withdrawal from Europe? How can anyone seriously argue that nothing good has come from Europe in the past half century? What about rising prosperity and peace for our people? What about the queue of countries that want to join the European Union, with only the British Conservative party wanting to exit?

The right hon. Gentleman's policy is to talk about withdrawal and end up ruling out a single currency for ever, whatever the economic circumstances. I say in response that his policy on Europe is not an act of patriotism: it is an act of folly.

Mr. Charles Kennedy (Ross, Skye and Inverness, West): To coin a phrase, it is a joy, as ever, to hear another prime ministerial statement on a European summit. The only thing that was missing in the response that we have just heard was, "And another thing—I had that EU in the back of the cab once".

Does the Prime Minister acknowledge that, in the politics of this summit and increasingly in the politics of British involvement in the European Union, welcome and vital as that is—we obviously strongly support it—the fact that we do not have a clear timetable for a referendum on our participation in a successful single European currency is holding us back from making the diplomatic contribution that we could make in Europe?

When that referendum campaign comes, we will want a broadly based coalition of interests, which will involve some Conservatives, the Government, the Liberal Democrats, the CBI and the TUC. To be seen cavorting with the likes of Berlusconi, given the response that that has elicited from John Monks, is not helping to build that long-term coalition for the referendum.

We welcome the progress that was made on the liberalisation of energy policy, and we would have liked it to go further. None the less, it was a positive step and is to be welcomed.

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On Zimbabwe, when the three leaders are in the country tomorrow, will the Prime Minister take the opportunity to stress to them the continuing British concern, which is certainly shared by his party and by ours, and the need for trenchant action following that rigged election?

The Prime Minister: On the last point, our views have been expressed on many occasions and will be expressed again. What has happened is a tragedy for the people of Zimbabwe. It is important continually to emphasise that the main victims of violence and intimidation in Zimbabwe are not whites: they are black people—ordinary Zimbabweans—who wanted the right to elect a Government freely and fairly.

With regard to the initiatives that we took prior to the summit, as I said in my statement, we took a range of initiatives with seven different countries. Without any apology or hesitation, I shall continue to work with all Governments inside the European Union when I believe that it is in the interests of this country.

The tests, for the single currency must be passed. That is the basis for the referendum, and that is the position that we have taken for many years. I believe that it is right to judge the tests on the basis of the national economic interest, and if they are met, to put the case to the people in a referendum.

Ms Gisela Stuart (Birmingham, Edgbaston): I am sure that we all look forward to receiving postcards from the Leader of the Opposition when he revisits the various treaties of Europe. In the meantime, the Prime Minister referred to the progress that was made in Barcelona on constitutional and institutional reforms. Will he give us more details of how he sees the next steps, especially on reform of the workings of the Council of Ministers?

The Prime Minister: The important thing about the proposals that we put forward with Germany before the summit was that we were saying that, when the European Council enlarges—and, frankly, even now—we should try to deal with a lot more of the detail of the business and the dossiers before we get to the Council, and that we need to make Council proceedings shorter and simpler. It is important to do that now, and it will be essential when we enlarge. The comments and proposals made by Javier Solana in that regard tie in well with that. Many people do not understand—although I know my hon. Friend does—the implications of the probable addition of 10 member countries to the European Union in 2004. That will significantly change the whole nature of the EU. These proposals for detailed change may seem anoraky, but they will be vital to the proper working of the Council.

Mr. Kenneth Clarke (Rushcliffe): First, I congratulate the Prime Minister on the modest advance that has been made towards energy market liberalisation in Europe. I also congratulate him on using arguments about labour market flexibility against his critics in the TUC that are identical to those that were used a few years ago by Ministers in the Major Government when the right hon. Gentleman was leading the Labour movement in opposition to that Government.

Will the Prime Minister comment on progress towards a single market in financial services, from which this country could benefit considerably? It is all very well to

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have seven directives, but they are a modest advance towards the aims of the Lamfalussy agreement. Does he think that it will be possible to improve on the target of 2005 for an integrated capital market, and does he think that his new alliances with centre-right politicians in the European Union might enable him to improve on that?

The Prime Minister: I thank the right hon. and learned Gentleman for those generous comments on the achievements of the summit. [Interruption.] I thought they were fine, actually; I liked them.

In respect of energy, it is worth pointing out that before we got to the summit people thought that we would not be able make advances on any front. In fact, on non-domestic we have done so. The important point is that only one country is standing out against liberalisation, but because we will be able to decide the matter on a majority voting basis we should be able to get round that in time.

On financial services, I agree with the right and learned hon. Gentleman that we have to do far more to make progress on the Lamfalussy proposals, and I think that we will be able to do so. I also hope—this is not directly in relation to financial services—that we can unblock the single European patent negotiations, which are essential for the future.

As for the Governments with whom we work, we work with both centre-left and centre-right Governments when it is the country's interests to do so.

Denzil Davies (Llanelli): My right hon. Friend may know that prior to the summit the European Commission estimated that the European Union's gross domestic product per head of the European Union stood at around only 65 per cent. of the equivalent figure for the United States. In view of that, and given that enlargement will further reduce the European figure, is not it reasonable to assume that Europe may never catch up with the United States and that the euro may never be able to look the dollar in the eye?

The Prime Minister: I think that my right hon. Friend takes too pessimistic a view. If Europe makes the necessary structural reforms—the single currency makes those all the more important because of the lack of exchange rate flexibility—we will indeed be able to compete with the United States and we will have a huge opportunity to do so. When the European Union finally enlarges we will have a market of about 500 million, which is bigger than those of the US and Japan combined. If we look back over the past few years at the changes that have been made in Europe, it is clear that many parts of the continent are enjoying a prosperity that was previously unheard of.

I am not minimising the challenges—that is why I described the progress at the summit as solid but limited. It is important that we continue the process. I repeat the view that I have taken throughout—that we are far more likely to get a Europe that is more shaped in Britain's image and in agreement with what we believe in if we are in there pursuing our interests in a constructive way.

Sir Teddy Taylor (Rochford and Southend, East): Is the commitment to fair and free elections in Zimbabwe wholly consistent with the widely reported comments in

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the Spanish press and in The Daily Telegraph that the Prime Minister and the Spanish Prime Minister discussed making an offer of £35 million to the people of Gibraltar if they voted yes, but offering them not a penny, and the undermining of their financial institutions, if they voted no? If that is in any way true, would not it be worse than Mugabe ballot rigging?

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