What is Her Majesty's Government's policy on joining the arrangements for a single currency on 1 January 1999. [12111]

As the Chancellor of the Exchequer made clear in his statement yesterday, British membership of a single currency in 1999 could not meet the five economic tests that the Government have set out. The Government will therefore be notifying our European partners that we shall not seek membership of the single currency on 1 January 1999.

Will the Foreign Secretary now answer the question that the Chancellor of the Exchequer so obviously ducked yesterday: will the Government be applying for European funding to propagandise for our joining the euro?

I am happy to say that we shall not be making any such application. It is a decision for the British people. As we assured the House yesterday, if and when the Government should take a decision to join the single currency, we shall put the matter to a referendum of the British people, who will have the final veto, as is their right.

Will the Foreign Secretary tell the House what proposals he has and what pressure he intends to put on the European Union to ensure that any central bank is democratically controlled and is accountable to an elected body somewhere, rather than its being an unelected organisation dictating economic policies to member states?

My colleague the Chancellor of the Exchequer yesterday made it clear that it is, and long has been, our policy to press for a strengthening of ECOFIN so that it can set broad economic parameters and strategy within which the central bank would operate. That remains our position, and we shall continue to work for it.

Yesterday, the Chancellor of the Exchequer stated that it was not the Government's intention to join the exchange rate mechanism. How do the Government square that with the exchange rate mechanism requirements of the Maastricht treaty?

I am happy to confirm what the Chancellor said yesterday, which is that we have no intention of joining the exchange rate mechanism. As he himself said, there have been many changes to that exchange rate mechanism since the Maastricht treaty. What will be required of us, should and when we ever wish to join the single currency, is evidence of currency stability. That can be perfectly well arranged without membership of the ERM.

Will then the right hon. Gentleman confirm that the effect of that answer is that the pound will shadow the euro for at least two years before any date of entry to EMU?

No, I can confirm no such thing. We have made it perfectly plain that we do not intend to join the ERM. We have also made it perfectly plain, if and when it appears to be in Britain?s economic interest, that we will join. I am bound to say that I thought that that would have been welcomed by the right hon. and learned Gentleman. In the past three months, his party has gone through three different policies on the euro—

Answer the question.

I have answered the question. The right hon. and learned Gentleman's party began by ruling the euro out for several decades; it then ruled it out for one decade, and now it rules it out for the foreseeable future. It is a matter of relief to the country that the Conservatives will be in opposition for several decades to sort out their policy.

Is my right hon. Friend aware that I am pleased that the Government will not apply to join the exchange rate mechanism? After what happened on 16 September 1992, that would be like a dog returning to its vomit.

I think that my hon. Friend will wish me to clarify to the House that it was not our vomit, but that of the Conservatives. He puts his finger on one of the reasons why we are in office and they are out of office.

If he will make a statement on the United Kingdom's relations with the ASEAN group of nations with particular reference to Indonesia. [12112]

We have good relations with ASEAN countries. My right hon. Friend the Foreign Secretary's visit in August to four ASEAN countries, including Indonesia, underlined the importance that we attach to the region.

Does the Minister accept that Indonesia, which is the fourth largest country in the world by population, is a powerful member of the ASEAN group and an important trade outlet for the United Kingdom? Does he not believe that we should treat Indonesia as well as we treat the People's Republic of China—a country where democracy is non-existent and which has a desperately bad human rights record?

We have good and constructive relations with Indonesia. My right hon. Friend the Foreign Secretary met President Suharto and Foreign Minister Alatas during his visit. I am sure that the hon. Gentleman saw the press statements on the outcome of those meetings and will be impressed by the commitment on both sides to the continuing commercial relationship.

I congratulate my right hon. Friend the Secretary of State on his successful recent visit to Indonesia. May I press the Minister a little further on what progress was made on agreements to encourage proper trading relationships with Indonesia? Will Indonesia become a burgeoning market for this country, apart from in certain sensitive materials?

My hon. Friend recognises the importance of Indonesia as a commercial market. We seek to keep that market open and we will do all that we can to ensure that British goods and services are available at commercial prices in Indonesia. We look forward with great confidence to developing our position in that market.

Will the Secretary of State explain why, given his avowed intention not to trade with countries that have bad human rights records, another 11 arms contracts with Indonesia were signed during the summer recess?

The hon. Lady is misinformed about the Government's policy. We have a series of objectives. Human rights is one, but many others come into play. We have judged each of the contracts to which the hon. Lady refers against the criteria that we have published and we shall continue to make decisions on any contract against those criteria. We are able to do that openly, which the previous Administration were not.

If he will make a statement on his assessment of progress in the middle east peace process. [12113]

The Government share the widespread concern at the lack of progress in the middle east peace process. I spoke with the United States Secretary of State before and after her recent visit to the region. I very much welcome the fact that it has produced a resumption of dialogue, which will have our full support.

I thank my right hon. Friend for that reply. We all want success in the middle east peace process. Does he share my concern at statements made this week by the Israeli Prime Minister that illegal settlement building will continue? Will he tell the House how the Government can assist in persuading Israel that it, along with other parties, should take time out from unilateral actions? That should include illegal settlement building in east Jerusalem and elsewhere.

We have fully endorsed the demand by Madeleine Albright for the Israeli Government to take time out from settlement building in the occupied territories. It is extremely important, if we are to make progress at the negotiating table, that the process should not be undermined by provocative acts on the ground. What is required is an outcome that offers a permanent peace on the basis of security for the Israeli people and justice for the Palestinian people.

What is the nature of the representations that the Foreign Secretary has made to the Government of Israel following the attempted assassination of a Palestinian citizen in Jordan? Does he agree that that is the most astonishing and wicked act? Will he tell the Government of Israel that the British Government cannot share their ambitions in this respect and that they wish to see them begin to make progress in the peace talks, not merely act in a duplicitous manner?

I am happy to assure the hon. Gentleman that we have registered our condemnation in Jerusalem and in Tel Aviv. The Government fully condemn terrorist acts. We are anxious to ensure that terrorism is halted, but we believe that one does not halt terrorism by adopting the tactics of the terrorist.

The Minister will be aware that I recently visited the west bank and Gaza to see for myself the effects on the ground of the Israeli policy of internal closures. Those policies have resulted in Gaza being shut off for, on average, one day in three over the past three years. They have resulted in 65 per cent. unemployment and in Palestinians suffering from less freedom of movement than was the case before the Oslo agreement was signed, which has obviously had a detrimental effect on Palestinian public opinion. Can the Minister assure me that he is taking action to make representations to the Israeli Government, either directly or through the European Union, to get them to stop the unproductive policy of internal closures?

I am pleased to tell my hon. Friend that one of the positive effects of Madeleine Albright's visit was a sharp reduction in the Israeli Government's closure programme. I fully endorse my hon. Friend's general points. The closure process has resulted in a sharp increase in unemployment and a loss of economic trade throughout the Palestinian entity. It is important that the Israeli Government should take on board the fact that they are unlikely to succeed in the peace process if the Palestinian people find that, throughout the peace process, their standard of living goes down rather than up.

If he will make a statement on the enlargement of the European Union. [12115]

Enlargement is a central objective for the United Kingdom and the European Union. It will enhance security and prosperity in Europe, and is strongly in the national interest. We look forward to EU decisions, in December, on the early opening of enlargement negotiations. Reform of key policies is essential if enlargement is to be successful.

Does my hon. Friend agree that, desirable though enlargement is, it is incompatible with the common agricultural policy in its present form? How does he see substantial reform of the CAP meshing with the movement towards enlargement, which most of us wish to see?

My hon. Friend is absolutely right to say that there is a need for reform of the common agricultural policy. That need would be there even if enlargement of the European Union were not under consideration. The fact that enlargement is a top priority for the British presidency of the EU means that we shall give top priority in the negotiations in Luxembourg in December to seeking reform of the agricultural system in order to bring prices more in line with world prices.

Will the Government give a commitment that they will protect Britain's rebate from the European Community budget in those negotiations? Will they further make a commitment that, in those negotiations, they will press for reform of the complete European Community budget to bring about a sharp reduction in the unacceptably large contribution that we now make to the European Community?

The answer to the first question in yes; we will protect the abatement. The answer to the second question is that we are firm in the belief that the Edinburgh criteria on the future size of the aggregate budget—1.27 per cent. of gross national product—should be a sticking point. During negotiations with our European partners, we have realised that there is increasing consensus behind that position.

Given that the Minister has agreed that common agricultural policy reform, along with structural reform and many other essential reforms, must precede any enlargement of the European Union, what measures did the Government take at Amsterdam to ensure that progress was made on those issues? How soon shall we see progress during the British presidency?

The hon. Gentleman knows that some of those issues were covered in Amsterdam. The main forum for discussion will be the Luxembourg summit in December. Last weekend at Mondorf, I discussed those issues, among others, with other European Union Foreign Ministers. Achieving a way forward on structural funds, the budget, agricultural policy and enlargement are top priorities in our negotiations.

The Government have been critical of Turkey and its human rights record. Can my hon. Friend assure us that there will be no further support for Turkey while it continues to violate the rights of Kurds living in Turkey and to bomb the Kurds in northern Iraq, as has occurred almost daily since 13 October? What representations have been made to stop that bombing?

I visited Turkey three weeks ago and raised those issues with the Turkish Government. I made it clear that, while Britain believes that there is a strong case for Turkey to be included in the European conference because of its important geo-political situation and other reasons, it cannot be without condition. Turkey must improve democracy, and that involves a change of attitude to the Kurdish community, progress on human rights and economic reform. All those points were made to the Turkish Government as well as specific representations in respect of the recent incidents to which my hon. Friend refers.

Do the Government now regret not pushing the agenda for enlargement more energetically at Amsterdam? Does the Minister regret pushing for deepening rather than widening the EU? Will he clarify his Government's policy? Is it their policy to press the European Commission to open its arms more widely to other central and eastern European states and not just to the five plus one? Will he clarify that matter?

I am extremely surprised that the hon. Gentleman should refer to the Government making an impact on the negotiations at Amsterdam. His Government could not even find a dialogue with the other European Union countries, never mind have any influence on them. He is the last hon. Member I would have expected to raise that question. In relation to the 10 countries plus Cyprus seeking membership of the European Union, I can assure the hon. Gentleman that we support the European Commission proposals that negotiations should begin with five countries plus Cyprus, but other understandings on the way forward for the other five countries should be an important focus of the negotiations at Luxembourg.

On what dates during 1997 the computer system at Islamabad has failed to operate properly; and how applicants for entry clearance have been informed of the consequences for their applications of problems caused by computer failures. [12116]

During 1997, the computer system at Islamabad has failed to operate properly between 2 and 20 May and between 16 June and 13 July. Applicants for entry clearance were informed of the consequences for applications by means of advertisements placed in the national newspapers. Where interviews were imminent but had to be postponed, applicants were informed by letter. A new system was installed in September and is working well.

I thank the Minister for that reply and congratulate him on the fact that a new system has been installed. Frankly, it was desperately needed. Many of my constituents have suffered as a result of the delays caused by the breakdown of the previous system. It occurs to me that, since the installation of the new system, there has been a reduction in the number of applications and fewer people have been able to visit their relatives here. Given the difficulties that people have faced and the fact that Islamabad is the largest visa-issuing post for Britain, does the Minister have any proposals to make the process easier?

My hon. Friend is right to point out that the situation that we inherited in Islamabad was far from satisfactory. I am delighted to say that we have taken immediate action in respect of the information technology. We have additional good news in that there are five new entry clearance posts, which we expect to be filled by next January. That should facilitate the process and ensure that individuals get a proper deal.

Oh joy, joy!

If the hon. Gentleman feels that people should not be given justice just because they come from Pakistan, that shows how out of touch he and his party are. To finish the litany of good news, my colleague Baroness Symons now has two additional posts in her private office to ensure that correspondence from hon. Members is dealt with more quickly.

What recent discussions the Government have had with representatives of the Indian and Pakistan Governments on the issue of Kashmir. [12117]

I discussed Kashmir with senior political figures during the recent visit to Pakistan and India. My right hon. Friend the Prime Minister also had the opportunity to meet the Prime Ministers of both countries at the weekend. Britain continues to be willing to help, but any offer of help must be acceptable to both countries.

Will my right hon. Friend confirm that he recognises that there is considerable international concern about the on-going conflict in Kashmir between India and Pakistan, in which more than 1,000 people have been killed in the past 12 months? During recent months, there has been renewed shelling over the line of control. Will he make it clear that it is the Government's policy to give full support to the bilateral talks between India and Pakistan, with the hope that that leads to a conclusion of the conflict, while recognising that Pakistan and India have more to gain than anybody else from the solution to the problem?

I entirely agree with my hon. Friend. The two countries have a lot to gain from bilateral discussion, particularly by an improvement in trade, which is at present only 1 per cent. of their two gross domestic products. We warmly welcome the fact that the Prime Minister of India has initiated such a bilateral dialogue and we were glad that we were able at the Commonwealth Heads of Government meeting to ensure that both of them had the opportunity to have a further bilateral dialogue, which I understand went well.

Who authorised Government spin doctors to try to blacken the name of our high commissioner in India, David Gore-Booth? It is surely correct to blame not the servants but the masters for the failures of foreign policy. When will amateur hour at the Foreign Office come to an end?

No spin doctor and no official at the Foreign Office has uttered any hostile word to David Gore-Booth, who behaved—[Interruption.] I am happy to assure the House that that is exactly so. I have seen no reference in any British newspaper to any suggestion that any British spin doctor, official, news briefer—whatever one chooses to call them—has uttered a word of hostility to David Gore-Booth. On the contrary, I have myself said that he conducted himself with great dignity in sometimes very difficult circumstances.

Will the Foreign Secretary confirm that, in deciding the future of Kashmir, the most important people are the Kashmiri people themselves?

I entirely agree with my hon. Friend that although the solution is primarily for both countries to find, that solution, if it is to be permanent and acceptable, must be acceptable to all the peoples of Kashmir: Muslim, Hindu and Buddhist.

Can the right hon. Gentleman clear up the confusion that he caused on "Today" two weeks ago when he said that the state visit to India had been an unqualified success, but that it was all the fault of the previous Government for arranging it at the wrong time?

I shall happily repeat to the hon. Gentleman that I think that it would have been better to be able to look forward to the next 50 years rather than backwards to the past 50 years. I am happy that he has noticed that the state visit was an unqualified success.

That is what you said.

The hon. Gentleman used my own words. Her Majesty was greeted with immense warmth by the people of India and our trade exhibition was an outstanding success. It would be helpful if Opposition Members recognised the contribution that Her Majesty has made to Anglo-Indian relations rather than running it down.

Does the Foreign Secretary accept that, far from being a failure, his policy on Kashmir has millions of friends in this country and around the world who have been greatly cheered by his courage in standing up for an ethical foreign policy on behalf of a people who have been oppressed for the best part of the past 50 years by a Government—India—who have failed to implement the United Nations resolutions calling for self-determination for the people of that occupied territory? Has he had the chance to see the United States State Department report, which has described the line of control between India and Pakistan in Kashmir as the most dangerous flashpoint in international relations today—both sides of course having nuclear potential?

I am well aware of the report to which my hon. Friend refers. He is right to make the point that the issue is of legitimate interest because both countries have near, perhaps undeclared, nuclear capacity. The issue will remain at the front of many minds.

Following the Foreign Secretary's notorious visit to Pakistan and India, would not the best way to solve the Kashmir problem be a period of quiet reflection by the British Government? Does not the difficult problem of Kashmir demonstrate that it would be dangerous for the British Government to act as an arbiter?

As I understand it, I am accused of having said that Britain would be willing to help to find a just solution. I remind the hon. Gentleman that the Prime Minister whom he supported in the previous Government said last April:

"we are prepared to help in the search for a solution".—[Official Report, 23 April 1996; Vol. 276, c. 192.]

If he will make a statement on progress towards meeting the Dayton accords with respect to Bosnia. [12118]

We are making excellent progress with the tougher approach to peace implementation that my right hon. Friend the Foreign Secretary agreed with his steering board colleagues at Sintra in May, but much more remains to be done and we shall be keeping the pressure up until it is. I shall make that clear to all three parties when I visit Bosnia this week.

Are not the Bosnian Serbs driving a coach and horses through the Dayton accord by refusing to hand over indicted war criminals to the court in The Hague? Is it not essential that the criminals should be handed over, if lasting peace is to be achieved in Yugoslavia and if refugees are to be returned to the areas that they came from?

My hon. Friend raises a real question. The Bosnian Serbs should learn the clear lesson given by the Bosnian Croats when Kordic and the other nine Bosnian Croats went to The Hague to face the charges against them. We expect the same from all indictees, whether Bosnian Serbs or Bosnian Croats. On the question of the return of refugees, my hon. Friend will be glad to know that the United Nations High Commissioner for Refugees has a programme to return 100,000 refugees this year. Already, 83,000 have returned and the programme is on course. That is good news. Progress has been made and will continue to be made.

The Minister said that he was keeping pressure on the three parties concerned. Does he agree that he might also need to keep pressure on the Americans, who hosted the Dayton accord, because there seems to be a growing lobby in that country for withdrawing to an offshore commitment, instead of a hands-on commitment in Bosnia?

Let me place on record that we work closely with the Americans and all our allies in Bosnia. Progress is being made. For example, the problems caused by corruption have seen Mrs. Plavsic break with the Pale crowd, including Karadzic and his cronies, in her anti-corruption drive. We have seen the seizure by the Stabilisation Force of the transmitters in Pale, which stopped the transmission of the daily messages of hate. Transmissions will be stopped until we get an agreement from the Bosnian Serbs in Pale that messages of hate are a thing of the past. We have seen an effort by our troops in Prijedor in arresting indictees, which gives a signal to all indictees that we expect to see them at The Hague. We shall see them at The Hague. Progress is being made, because all the allies are working together in the Dayton framework.

What plans he has to meet the UN envoy to Cyprus to discuss the outcome of recent initiatives by the UN. [12119]

What progress has been made in the talks about the future of Cyprus; and if he will make a statement. [12123]

My right hon. Friend the Foreign Secretary has no present plans to meet Mr. Cordovez, whom I met on 18 August. The Foreign Secretary discussed prospects for Cyprus with the United Nations Secretary-General in September, and assured him we would remain actively supportive of his efforts on Cyprus.

I thank my hon. Friend for that reply. Can he assure the House that the British Government, in any future negotiations, will ensure that the sovereignty of Cyprus continues and that United Nations resolutions are maintained? Will he also give especial emphasis to the issue of missing persons when Cyprus is discussed again? I welcome the Government's efforts in helping to move the process along.

I thank my hon. Friend for his question and I can give him the assurance that he seeks on the question of the sovereignty of Cyprus. We believe that the negotiators should consider the issue of missing persons as part of their agenda and I hope that they can reach a solution that is acceptable to all involved.

Does the Minister agree with the recent motion passed by the European Parliament which criticised—yet again—the attitude of the leader of the northern Cypriot regime, Mr. Denktas, to the negotiations? Is it not the case that, in these negotiations and on many occasions before, the belligerence and lack of co-operation of Mr. Denktas have prevented progress from being made?

I hope that all the people of Cyprus recognise that the world is different from the one in which the current divisions were drawn up, many years ago. All those who can bring some intelligence to the process of resolving the difficulties must do what they can. During my recent visit to Turkey, I asked the Turkish Government to put any pressure they could on Mr. Denktas and his colleagues to be positive, and the same message has gone to our friends in the southern part of Cyprus.

Not only do we have a special relationship with Cyprus, but we have a special responsibility for it and its people. Will the Minister ensure that the talks on the accession of Cyprus to the EU will not exacerbate the problems? Will he ensure also that the sensitivities of the people living north and south of the green line are taken on board?

The EU's decision to open talks with Cyprus on its accession to the Union is, as the hon. Gentleman will know, a prior commitment accepted by the Government when we took office. It is one which we welcome and will honour. Every effort must be made by all parties to solve the difficulties in the communities, as that will allow accession to take place successfully.

What assessment he has made of the foreign policy factors leading to the sale of Hawk jets to the Indonesian Government. [12120]

None. Any future application to export licensable defence equipment will be considered against the new criteria that we announced on 28 July.

I am sorry that the Minister has not got to grips with this matter. The decision to sell Hawk jets was made by the previous Labour Government two or three years after the takeover of East Timor. The House and the country would like to know why the Government, who are looking at ethical issues in arms sales, believe that we should not sell Land Rovers to Indonesia some 22 years after the takeover of East Timor, whereas the previous Labour Government sold jets to Indonesia a couple of years after that country—some say because they were urged to do so by the American and British Governments at the time—took over East Timor. It is a confusing issue. May we have some clarification?

I am rather confused by the hon. Gentleman's question. Is he urging the Government to stop the sale of Hawks? If so, he should look at all the faces around him and consider the commercial interests represented by his hon. Friends. We have published clear guidelines for the sale of defence equipment and we will judge every export licence against those criteria. We will take no lectures from the hon. Gentleman and other Conservatives who, when in government, armed Saddam Hussein and cost this country £750 million of taxpayers' money. The Conservatives have no right to talk on these issues—their record is appalling.

Is my hon. Friend aware of the widespread support, not just among Labour supporters, for the new approach to foreign policy, and in particular the Government?s willingness to look again at the sale of Hawk jets, which concerns a great many people who feel that they will be used to support oppression in the area claimed by Indonesia?

I welcome my hon. Friend's warm support for our foreign policy and, in particular, for the arms criteria which we published in July. He may also be interested to know that Jose Ramos Horta, the East Timorean, made a clear statement in Mozambique 10 days or so ago, in which he also expressed strong support for the ethical foreign policy of the Labour Government in the United Kingdom and for our approach to exports and defence sales.

Is not the truth that, considering the licences for arms sales to Indonesia that were disallowed by the previous Government and the licensing of Hawks under the present Government, foreign policy is neither more nor less ethical than it was before 1 May? The only victim of the soundbite diplomacy of the past six months has been the British national interest, as we learn that Malaysia has signed a £1 billion contract for patrol ships with a German company, when Vosper Thornycroft thought that it was in pole position, and that Turkey says in effect that we will be disbarred from a $7.5 billion export market. British jobs and the national interest are bearing the burden of soundbite politics.

The hon. Gentleman has made his argument very clear: he would sell to anyone, anywhere, at any time, and would take no account of the regime and have no regard for human rights. We know where that policy leads: it led to the arming of Saddam Hussein and to the loss of taxpayers' money. It is time that the hon. Gentleman and his colleagues understood the failures of the previous Government and recognised the new Government's positive policies.

If he will make a statement about his meeting with the Lord Advocate in September on the issues arising out of new information on Lockerbie and Libyan sanctions. [12121]

I met my noble Friend the Lord Advocate on 4 September. His view remains that the available evidence supports the case against the two accused Libyans, and that there is no evidence of the involvement of nationals of any other country in the Lockerbie bombing. I fully accept that assessment.

Since one of the reasons given by the Foreign Secretary for objecting to a trial on Lockerbie in The Hague is that the Americans might refuse to submit evidence that they held to a court outside Scotland or the United States, can we reflect on why the Americans should do that? Is there a suggestion that the Americans might be unwilling, after nine years, to give information to the Dumfries and Galloway police?

We have had full co-operation throughout from the United States authorities and they have shared fully with the investigating powers all the evidence available to them. It would not be possible, however, to mount a prosecution without the co-operation of the US authorities, who hold part of the evidence. Most of those killed on the Pan Am jet were Americans, and the majority of their relatives do not want a trial to take place outside Scotland or the United States.

As the interest of those who lost their relatives in the dreadful disaster is that a trial should take place and the guilty parties be identified and punished, is the Foreign Secretary really saying that there are no circumstances in which he will consider a trial outside Scotland, especially as the Libyans have already said that they would willingly surrender the two accused to an independent party—perhaps Egypt—if the trial were held in any third country?

If I may correct the hon. Gentleman, what happened at Lockerbie was not a disaster; it was murder. No one in the House should forget that. I find it strange that it should be argued that a trial by Scots judges under Scots law in another country would be fair, but a trial by Scots judges under Scots law in Scotland would not. We have nothing to be defensive about concerning the impartiality of our courts, and I shall be proud to display that when I meet the delegation.

I welcome the Foreign Secretary's announcement of the invitations that he has extended. Is the assertion that no fair trial can be obtained in Scotland not only unfounded but unnecessarily provocative? If the test of fairness of a judicial system is transparency, does not the Scottish system stand comparison with many others, including the Libyan system? May not fairness be established by the presence of independent observers at every stage of the legal process?

The hon. and learned Gentleman makes some fair points about the nature of the Scottish legal system. It is, after all, the legal system to which we subject our citizens. I see no reason why there should be a separate system for those from Libya, but I understood that other countries may not be so persuaded. That is why I have made in good faith the offer that we are willing to discuss any reservations that other countries may have, confident in the knowledge that we can put them right. We would welcome monitors and observers from them at a trial so that justice could not only be done but be seen internationally to be done.

It is almost nine years since that terrible night when Pan Am flight 103 fell out of the sky. As one who has all along argued that those deemed guilty of that terrible crime should stand trial in the High Court in Edinburgh and not in America, may I offer my sincere compliments to my right hon. Friend for arguing the case that such a trial should take place in Edinburgh?

I am grateful to my hon. Friend for his support.

What assessment he has made of the impact on United Kingdom job creation of the United Kingdom's adoption of the employment chapter in the Amsterdam treaty. [12122]

The employment chapter provides a mechanism for the exchange of best practice, for ensuring that employment is taken into consideration in all the Community's activities and for agreeing guidelines to be taken into account in national employment policies. It will have an impact on job creation when member states have identified policies for promoting employability, competitiveness and labour markets responsive to economic change.

I am still not clear from that answer how many extra jobs will be created in the United Kingdom as a result of this chapter; nor is it clear what the cost of the incentive measures talked of in the treaty will be or what the impact will be on the Community budget and on the United Kingdom taxpayer.

Of course there are no guarantees on anything in life, but the important thing about job creation is ensuring that Government policies are consistent and helpful to those who are creating jobs in the private sector. That is why our position in Amsterdam was to give every assistance to policies that would improve training and competitiveness. The inclusion of the employment chapter in the treaty gives hope for the future, not only for Britain but for other European countries.

Does my hon. Friend agree that it is important that the European Union stands not simply for a free market but for social and employment aspects that affect millions of people throughout our continent? For that reason, many hon. Members are delighted that there is now an employment chapter in the European Union.

I am grateful to my hon. Friend. I can reassure him that the treaty concluded at Amsterdam gave priority both to giving protection to work people throughout the European Union, which I believe is consistent with any definition of a civilised society, and to the creation of jobs, which is primarily linked to competitiveness and getting British and other workers throughout Europe adapted to the skills that will be required to take on world markets.

Does the hon. Gentleman think that there is any connection between the fact that Britain has the lowest unemployment rate in Europe— and falling—and the opt-out from the social chapter so successfully negotiated by the former Prime Minister and so casually thrown away by the Minister?s party?

No.

Does my hon. Friend accept that one of the reasons why so many Conservative Members lost their jobs at the last general election was their opposition to Britain signing up to the employment chapter? There is no future for the European Community on the basis of low wages and poor conditions. I and many other Labour Members welcome the Government's commitment to ensuring that employment will in future be at the heart of what we do in Europe.

There is a great temptation to agree with my hon. Friend, but Conservative Members, who sat on the Government Benches before the general election, were well on their way to redundancy long before that treaty was concluded.

Are not the processes of ever-closer union via economic and monetary union inimical to job creation and sustainment? Do not Britain's large contributions to the European Union—in effect, more every year, especially to the cohesion fund and the structural fund—destroy jobs in this country by providing subsidies to competitor nations in the European Union? Should we not set our face against such job-destructive policies?

There is a temptation among Conservative Members to believe that the big argument in economic policy is between Britain and the other European Union nations: the big argument is about how Britain and other EU countries can modify and change their economies and their employment practices to take on a challenge world wide. I do not believe that the conditions that were agreed in Amsterdam in any way detract from that important objective.

If he will make a statement on Britain's relations with China. [12124]

We wish to establish a new, more constructive phase in our relationship with China, following the successful transfer of sovereignty in Hong Kong. When they met in New York in September, my right hon. Friend the Foreign Secretary and his Chinese opposite number agreed that we should aim to work together on a whole range of bilateral and global issues.

Can my hon. Friend say how the Government intend to apply their welcome ethical foreign policy to China? Does he agree that, although we must be firm on human rights, the most effective way of improving human rights in China is to improve and strengthen all kinds of contact between our two countries, including economic ties?

We are keen to take the opportunity that has been presented by the successful handover of Hong Kong. We will engage with China on a range of issues.

Has the hon. Gentleman given further thought to how we in the House can best monitor developments in Hong Kong?

The way in which we do that is, of course, a matter for the House, not for Foreign Office Ministers. We have a number of opportunities. The hon. Gentleman is successful at raising the question of Hong Kong whenever the opportunity arises. There are Question Times, there will be debates on Hong Kong and an annual report will be published by the Foreign Office on the work of the Joint Liaison Group; so there will be many opportunities in the House, as well as meetings of the Foreign Affairs Select Committee. The House will have a continuing interest in Hong Kong. That is right, because Britain has a continuing responsibility under the Sino-British agreement.

In his discussions with the Chinese Government, will the Minister look closely at claims that the Chinese are making about global warming? They are clear that they need to make pledges and commitments. It is important that there is growth in China, but at the same time will my hon. Friend closely examine China's environmental credentials?

It is pleasing to see that the Chinese Government are tackling the issue of global warming. It is important that the developed countries take a lead. We shall not make progress if the rich hide behind their affluence and put the responsibility for global warming on the developing countries. We need a relationship between the developed and developing countries, and China will play an important part in that.

If he will make a statement about the jurisdiction of the European Court of Justice regarding third pillar issues. [12125]

European Court of Justice jurisdiction in the third pillar is conferred on a case-by-case basis in respect of certain conventions. When the Amsterdam treaty comes into force, the ECJ's jurisdiction within the third pillar will be extended, but will remain limited. [Interruption.]

Order. What is happening on the Front Bench below the Gangway?

It is not us.

I did not recognise you, Dennis.

Thank you, Madam Speaker.

May I refer the Minister to article F.2 of the European treaty on European Union and the decision taken at Amsterdam to amend article L of the Maastricht treaty, which makes article F.2 fully justiciable by the European Court of Justice? Was it really Her Majesty's Government's intention that criminal law passed in this House would be subject to the jurisdiction of unelected judges in Brussels?

I know that the hon. Gentleman has spent a lot of time reading the Amsterdam treaty, but he has failed to understand that there are only limited extensions of the jurisdiction of the European Court of Justice. Asylum and immigration, on which Britain has a distinct policy on asylum and immigration—items which have been moved into pillar 1—are justiciable in other European Union countries. Pillar 3 contains minor adjustments to the previous position. The hon. Gentleman will know that, under the Maastricht treaty which the Conservatives signed when they were in government, the European Court of Justice has the capacity to become involved in the arbitration of conventions agreed under pillar 3.

What discussions about the increase in the United Kingdom contribution to the EU budget took place at the Amsterdam summit. [12127]

None.

Does the Minister think that we are getting value for money for the contribution that we make to the EU budget, which then finds its way into the salaries of Labour Members of the European Parliament? I say that because so many of them have shown themselves to be spineless and have turned themselves into political eunuchs by agreeing to be gagged and not to talk about any issue relating to the way in which they are elected to the European Parliament. Does the Minister agree that we should hold back some of the contribution to their salaries because they have agreed to be gagged?

The House deserves a better question than that on an important issue. What I shall do for the hon. Gentleman is to answer the question that he should have asked, which was—

Order. That is rather too easy. The hon. Gentleman must answer the question asked.

It would have been easy if the hon. Gentleman had addressed the issue that one of his hon. Friends addressed earlier on the budgetary issue, as he would have been given a sensible answer.

The Minister will know that the second largest component of the EU budget is that of structural funds. He will recognise that there are areas of the United Kingdom, particularly in Wales and Scotland, where that is an important issue. We are moving towards the reform of structural funds and we are setting up a Welsh Assembly and a Scottish Parliament. Will the Minister bear it in mind that those bodies will be directly involved in the way in which regional funds are distributed in the next century?

The hon. Gentleman raises an important point. Major structural reforms are necessary in the Union and will be tackled at the summit in Luxembourg; one such issue is that of the structural funds themselves. The rules that currently govern the dispersal of structural funds were drawn up seven or eight years ago when the shape of the European economy and the priorities for development were different from those that pertain today. An important issue that the summit must address is how we should consider what is happening in the European economy today and what change is necessary to the structural funds to ensure that those areas that need essential help receive it, regardless of the country in which they are located.

Does the Minister think that our ability to negotiate a fair contribution to the EU will be increased or decreased by our presence in the single currency?

The United Kingdom's contribution has been decided in previous negotiations. I have already said in reply to a Conservative Member that such issues will be discussed at the summit in December, when a way forward will have to be decided on all such matters, including the future budget. One of the factors that I made clear at the weekend and which my right hon. Friend the Foreign Secretary has made clear in countless negotiations with our European partners is that our abatement is not negotiable in the negotiations.

If he will make a statement on Britain's objectives in respect of common foreign and security policy matters during its presidency of the European Union. [12130]

It will be our objective to demonstrate that, by working together, the countries of the European Union can carry greater influence to our mutual advantage. High priorities for the presidency will be maintaining robust pressure for fulfilment of the Dayton agreement on Bosnia and support for the resumption of progress in the middle east peace process. A major event in our presidency will be the Asia-Europe summit, which Britain will host and which will enable us to strengthen our trade links and our political dialogue with Asia.

I thank the Secretary of State for that response. Will we seek to use the presidency to establish a European code of conduct on arms sales to ensure uniformity of policy across the European Union in line with our ethical foreign policy so that where we do not grant arms export licences, these are not taken up by other countries?

I am delighted to advise my hon. Friend that we have already begun such discussions. I was pleased that both the Prime Minister of France and the chair of its foreign relations committee have welcomed our new criteria on arms sales. We are in discussion with them on how we can turn those criteria into a common code of conduct, which would make sure that we compete against each other by raising commercial standards, not by lowering human rights standards.