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The Prime Minister: The summit focused on economic reform as regards the foreign policy issues that we discussed, although of course the issue of the middle east was raised. I agree with my hon. Friend that the acts of terrorism that are taking place in Israel are absolutely appalling. In this country, we have experience of that type of terrorism—as have other countries in Europe—although on nothing like the scale seen in Israel. It is important, however, that the reaction of Israel and the Israeli Government is proportionate. That is why we welcome very much the moves that have been made by the Americans to send General Zinni back to the region. I think that Vice-President Cheney is there today. Without repeating all that I have said before, may I say that some people will condemn the Israelis and some people will condemn the Palestinian terrorists—we can all state our position on this—but the absolute essence of this is what action we are going to take to resolve the situation, because I understand the reaction.

I spoke to Prime Minister Sharon when I was in Barcelona, and I understand how difficult it is for a Prime Minister in situations where he knows that terrorist attacks are about to happen. Does he sit back and do nothing; or does he take pre-emptive action? I understand the problems that Israel has. My only point the whole time is what is the strategy to get from where we are to where we need to be, and that strategy has to involve minimum confidence-building steps of security and then, as soon as possible, going back into a process. There are signs, first, that Israel recognises, as the UN Security Council did in an open way, that there will have to be a viable Palestinian state at the end of this negotiation and, secondly, in respect of Israel itself, that the whole of the Arab world—this is why I welcome the initiative that Crown Prince Abdullah wants to take—must respect Israel's right to exist.

Mr. Nicholas Soames (Mid-Sussex): I very much welcome what the Prime Minister said in his statement about the middle east peace process—or so-called peace process—and the move towards it, but does he agree that, even allowing for the fact that Saddam Hussein and his regime have to be dealt with, it would be an act of culpable folly if any action against Iraq were to take place before there was a proper move towards a resolution towards peace between the Arabs and the Israelis?

The Prime Minister: As I said when I was asked about that at the summit, I totally understand why there is a lot of speculation about action on Iraq, but, as I constantly repeat, no decision has been taken at all in respect of any action. There is a very clear view, which must be right, that Iraq should come back into compliance with UN Security Council resolutions and that it certainly posed a threat on weapons of mass destruction, but no decision-making process has taken place as yet. I think, though, that it is very clear that, for the sake of the whole of relations with the middle east—with Israel and the

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Arab world—we should all be doing what we can to get the peace process back on track there. That is pretty much a statement of the obvious, and there are many signs from the US Administration that they take their responsibilities seriously and are significantly upgrading their efforts to find a way through.

Mr. John McFall (Dumbarton): May I gently chide the Prime Minister for being too hard on the Leader of the Opposition? After all, when that right hon. Gentleman was a humble Back Bencher in the early 1990s, he worked tirelessly with the then Labour Opposition and others to ensure the defeat of his own Government on European matters, so all is not bad. May I remind the Prime Minister of the pre-eminence of London and Edinburgh as financial centres, with more than 1 million jobs involved? Can Europe not learn from our example of having a single financial regulator? What steps is the Prime Minister taking to ensure that the voice of business and finance is heeded when it comes to regulation and EU directives?

The Prime Minister: I agree very much with my hon. Friend about London and Edinburgh being major financial service centres, and I hope and believe that the changes that we agreed at Barcelona will make a difference, although the devil will be in the detail and we must make sure that whatever intentions are expressed in the Barcelona summit are carried forward in the directives that come through on financial services.

On the point about business and regulation, as I say, we agreed to commission a report by Mr. Mandelkern. That has now been agreed effectively, and that will make a difference to the way in which Europe views regulation. An indication of that was the agreement by Europe that industrial restructuring issues should be taken forward by the social partners—by the trade unions and business sitting down and talking together—rather than through regulation.

Mr. Simon Thomas (Ceredigion): What became of the decision in the Gothenburg Council meeting that the following spring Council should be dedicated to sustainable development? How was the cause of sustainable development advanced in Barcelona? Although the extra £7 billion of international development aid is welcome, the target of 0.39 per cent. is barely half the United Nations target of 0.7 per cent. of gross domestic product. Will the Prime Minister at least give an undertaking that his Government will beat the EU average?

The Prime Minister: We have done a substantial amount on sustainable development aid and we led the way in securing that agreement at the EU summit. There are two ways to advance sustainable development: first, through our endorsement of the Kyoto process, our measures to improve energy efficiency and by having regard for environmental considerations in economic growth; and, secondly, through our decisions on aid and development. The hon. Gentleman might be right in one sense by saying that 0.39 per cent. is not ambitious when set against the UN 0.7 per cent. target, but it would be a huge advance if countries achieved the target of 0.39 per cent. because they are so far distant from 0.7 per cent. at the moment. We should not make the best the enemy of the good.

Mr. Mike O'Brien (North Warwickshire): Does my right hon. Friend understand the concern in North

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Warwickshire that while he was building stronger trade links with Europe in Barcelona, he was being undermined in this country by a former British Prime Minister who was in effect calling for us to leave the EU? Companies such as BMW, TNT and the IM Group are investing in the future in my constituency by creating jobs because they need that European trade link. The failure of the Leader of the Opposition to dissociate himself from the comments of a former leader of the Conservative party will raise questions in the minds—

Mr. Speaker: Order. The question is out of order and does not require an answer.

Michael Fabricant (Lichfield): The hon. Member for North Warwickshire (Mr. O'Brien) mentioned manufacturers in the west midlands. Is the Prime Minister aware of the logjam in that region because manufacturers are unable to export to the EU through the channel tunnel? He will be aware that despite all the negotiations between the British Government and the French, there are still only 15 gendarmes and five security men guarding the Calais port. What steps have the Government taken while formulating the Barcelona treaty to ensure the permanent reopening of the channel tunnel for freight? May I remind the Prime Minister, when he says that Britain is in there shaping Europe's future, that the west midlands happens to be in Europe too?

The Prime Minister: This is a serious issue and of course we raised it with France at the summit. It is important that, over the next few days and weeks, the French authorities take proper measures to ensure that the exit route is secure. There is no doubt that the responsibility primarily rests with them. That point has been made repeatedly and will be made again.

Mr. Win Griffiths (Bridgend): Will my right hon. Friend elaborate a little more on the course of action likely to be taken by EU Foreign Ministers on the tragic situation in Zimbabwe? Given the condemnation of the election by the Commonwealth observers and statements by individual members of the Commonwealth refuting those observations, it might be necessary to recall the whole of the Commonwealth to repudiate what happened in Zimbabwe. That would be for the good of democracy in Africa, where other countries are also about to have elections.

The Prime Minister: European Union Foreign Ministers will discuss what further sanctions should be taken in respect of Zimbabwe as a result of what happened there. On the Commonwealth, my hon. Friend probably knows that crucial meetings will take place in the next couple of days. The conclusion of the Commonwealth observers' report, of most independent observers and of the parliamentary delegation from the Southern African Development Community is clear. That is why I believe that there is no serious alternative but for the Commonwealth to act against Zimbabwe. The EU will deliberate, in the limited way that it can, on what further sanctions to take in a couple of weeks.

Mr. Edward Garnier (Harborough): What precise arrangements did the Prime Minister reach with the Spanish, either bilaterally or within the context of the

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Barcelona summit, on the future of Gibraltar? Is he prepared to go to Gibraltar, prior to the conclusion of the Madrid-London talks on the principles, to explain to the people there what he and his Spanish counterpart have in mind?

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