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European Council

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 proposed that we have a fundamental review of the EU budget, reporting in time for us to be able—midway through the next financial period—to alter fundamentally the structure of the budget, dealing both with the rebate and the CAP.””" I went on to say:"““In the meantime, of course, we would ensure that we paid our fair share of enlargement.””—[Official Report, 20 June 2005; Vol. 435, c. 524.]" 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? 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 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.