European Communities (Spanish and Portuguese Accession) Bill [Lords]

HC Deb 04 December 1985 vol 88 cc313-53

Order for Second Reading read.

4.7 pm

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe)

I beg to move, That the Bill be now read a Second time.

I heard the observations of several of my hon. Friends about the timing of the Second Reading in relation to the conclusion early this morning of the European Council meeting, which I attended with my right hon. Friend the Prime Minister over the past two days. My right hon. Friend will make a statement to the House tomorrow about the outcome of the meeting. I shall arrange for the conclusions of the Council to be placed in the Library in the usual way. If those conclusions require the presentation to the House of amendments to any of the existing treaties, there will be further opportunity for debate and consideration.

This afternoon I shall address myself to the principle implicit in the Second Reading of the Bill. Six months ago I had the privilege of attending the ceremonies that took place on the same day in Lisbon and Madrid on 12 June for the purpose of signing the treaties that provided for accession to the European Community. All those present realised that we were taking part in an event of historic significance, not only for Spain and Portugal, but for Europe as a whole. That day was the culmination of eight long years of negotiation that began with the Portuguese application in March 1977 and the Spanish application in July 1977.

The House will recall that following the restoration of democracy in both their countries, Spain and Portugal looked immediately to the Community as the best guardian of their new freedom. Accession, they felt, would end their isolation from the mainstream of European developments. That certainly was the message that came through with great clarity at the ceremonies on 12 June.

Mario Soares, then the Prime Minister of Portugal, described it as a coming in from the cold". Felipe Gonzalez, the Prime Minister of Spain, said it was completing the unity of our old continent and overcoming the centuries-old isolation of Spain". For the United Kingdom and for Europe, that indeed was, and is, the principal significance of enlargement. That has long been recognised in all parts of the House. I acknowledge the interest of the hon. Member for Newham, South (Mr. Spearing), the Chairman of the Scrutiny Committee, which visited Madrid last month.

The accession of Spain and Portugal will reinforce the Community, which stands internationally for progress, liberty and democracy. Twelve democracies —whose fortunes have been linked for centuries, sometimes in alliance, sometimes in conflict —are dedicating themselves to work in future in a new and enlarged partnership towards the common goals set out in the premable to the Treaty of Rome, which are to: strengthen peace and liberty …ensure economic and social progress …lay the foundations of an ever closer union among the peoples of Europe". Accession will serve, too, to enhance our bilateral relations with Spain and Portugal. Next year we shall celebrate the 600th anniversary of our unbroken alliance with Portugal —the Treaty of Windsor dates from 9 May 1386. [AN HON. MEMBER: "Was the right hon. and learned Gentleman there?"]—I claim no responsibility for the treaty. However, earlier this year I was privileged to attend Her Majesty the Queen and His Royal Highness the Duke of Edinburgh on their memorably successful royal visit to Portugal.

Our links with Spain date from the Confederation of Toledo in 1254, although they have been interrupted from time to time since then. This year, 1985, is the 10th anniversary of the enthronement of the King of Spain. I am sure that the whole House will share my pleasure at the fact that in 1986, the year of Spain's accession, we shall be receiving the King and Queen of Spain on a state visit to this country.

Mr. Ivor Stanbrook (Orpington)

Does my right hon. and learned Friend think that it is compatible with the admission of Spain to the European Community that that country should retain restrictions on the use of Gibraltar airfield by British military aircraft? What purpose do those restrictions serve, when Spain is supposed to be a friend and an ally?

Sir Geoffrey Howe

As my hon. Friend knows, those restrictions have been in place for some time. The discussion of the future of those restrictions was one of the things that flowed from the Brussels and Geneva agreements entered into earlier this year. Of course, the fact that both Spain and the United Kingdom are now members of the European Community will facilitate a discussion on differences of that nature.

It is clear, of course, that the Community of Twelve will be very different from the original Community of Six. Enlargement has acted as a catalyst for reform. It has forced the Community to take a long, hard look at its aims, its international role, its procedures, the way decisions are taken and the way that it spends its resources. Much of the drive for yesterday's successful summit meeting in Luxembourg was inspired in that way.

Once, it was only the United Kingdom that argued for reform. Now —and, indeed, yesterday —there is a general readiness to grapple with the Community's problems and a recognition of the need to do more to promote the right conditions for our industries, which will help create jobs. There is still a great deal to be done. but, largely at our instigation, work has been set in hand.

We need to promote the right conditions for our industries, and we are doing just that. A programme is under way for the urgent completion of the Common Market. The bureaucratic obstacle to the movement of goods is being dismantled. Under the Fontainebleau agreement we have dealt with the problem of budget imbalances, so that the United Kingdom will pay only 7 per cent. net at most of any additional expenditure.

In high technology, we have begun to build better prospects for the Community of tomorrow. Esprit, a five-year research programme in information technology, is under way. The Eureka concept, which will help us the better to compete with the United States and Japan, is developing quite well.

With Europe, too, we are successfully contending for the future of the open trading system, which is crucial for prosperity and jobs. Only last week, the Community, with our help, played a major role in bringing about agreement in Geneva on the launch of a new GATT round.

Mr. Tam Dalyell (Linlithgow)

The right hon. and learned Gentleman said that the Eureka project was developing quite well. However, there have been numerous reports in the press of hitches, difficulties and snags. Are those reports without foundation?

Sir Geoffrey Howe

I think that there is almost nothing in human existence that is not the subject of such reports. What I said is true. The project is working and developing increasingly well. However, like every other project or programme, differences are bound to arise from time to time.

A different topic, which is not the scene of universal tranquillity, is that of agricultural surpluses. They are being brought under control, but it is a difficult process, not just in the Community or just in Britain, but in the United States and other countries as well. Milk production quotas have been put in place in the Community, and a reformed wine regime has been agreed. We shall continue to fight, as we must, for a restrictive price policy to bring Community prices more into line with those in the outside world.

These are worthwhile achievements, and they must take their place alongside the striking Community success that we are marking today —the conclusion of the complex negotiations for the entry of Spain and Portugal.

Mr. Eric Forth (Mid-Worcestershire)

Does my right hon. and learned Friend believe that the accession of two countries which are much more dependent upon agriculture than are the existing members of the Community will make the reform of the CAP easier, or more difficult, to achieve?

Sir Geoffrey Howe

I suspect that it will make the management of the problem —which extends far beyond the frontiers of the Community —of the surplus generating capacity of an increasingly technological industry easier, rather than more difficult. I say that because many people speak as though the Community has created the problems, whereas its existence will help to solve them. The problems of surpluses affect agriculture in every country, with the exception of the Soviet Union. I do not believe that the enlargement of the Community will make the problems more difficult to solve.

Mr. Nicholas Budgen (Wolverhampton, South-West)

rose—

Sir Geoffrey Howe

I shall not give way. I shall listen to my hon. Friend's speech with great interest, as I always do when I have that opportunity.

There is a long way to go if the enlarged Community is to make the most of its potential. Already the shape of the agenda for the enlarged Community is clear. It is designed to meet the needs of the people of the enlarged Community, not only for this decade, but to the end of the century. It concentrates on technology, on getting value for money, and on creating real prospects for jobs. Success in meeting those challenges will be the best welcome that we can give to Spain and Portugal and their peoples. That is the purpose of the Bill before the House.

The Bill will incorporate into the law of this country the terms of the accession treaty. When ratified, it will permit the entry into effect of the revised own resources decision.

Mr. Alfred Morris (Manchester, Wythenshawe)

The right hon. and learned Gentleman spoke of the importance of this legislation for relations between this country and Spain. He said nothing about the important issue of the pensions that will be payable to Spaniards who worked in Gibraltar up to the time when the frontier was closed. He must know that it is an issue of the first importance to the Government of Gibraltar. It could cost them £7 million a year for the next 15 years. Can the right hon. and learned Gentleman give them any sort of assurance before he concludes his speech?

Sir Geoffrey Howe

The right hon. Gentleman was right to raise that question. It is clear that the financing of those obligations is a matter of interest. The Government will make a significant contribution for the first year from the date of Spain's accession to assist Gibraltar to meet its obligations while negotiations continue about future years. I shall say something more about Gibraltar later.

I come now to the central points of the Bill. Many members of the existing Community were worried about the difficulties which Spanish and Portuguese accession might cause for one or other sector of their economies, but we all recognised the political importance of success in the main negotiations and the political consequences of failure. Our common aim was to negotiate terms which gave time for the necessary adaptation. and which established a fair balance between the interests of the existing Community and those of the acceding member states. As my right hon. Friend the Prime Minister told the House, the terms are very satisfactory for the United Kingdom".—[Official Report, 2 April 1985; Vol. 76, c. 1063.] I believe that they are also good for Spain and Portugal.

There were, of course, special problems to be considered. Trade in industrial products is one example. For at least 200 years, and perhaps for even longer than that, there has been a history of problems of one kind or another in our trade with Spain. Successive attempts at treaties of commerce have not been able to solve the problem. The barriers have not been all one way. Now, with Spain a member of the Community, those barriers will at last come down. The high tariffs that were allowed under the 1970 agreement between the Community and Spain are to be cut by more than half after the end of only three years' transition, and phased out altogether by the end of seven years. Special arrangements have been made for car exports to Spain, and Portugal's tariffs, which are in any case lower, will be progressively reduced over the same seven-year period. Spain has already passed legislation to introduce value added tax from the date of accession. Portugal is properly allowed a derogation.

The opening of this new market of 50 million domestic consumers offers major opportunities to our exporters. They claim that they should not wait until the end of the relatively short transitional period. If they do not act now, I have no doubt that their competitors will do so. I am sure that the whole House will wish to join me in urging our business community to make the most of this new opportunity.

Mr. Forth

My right hon. and learned Friend mentioned VAT. He will be aware that the Greeks have recently been allowed to postpone yet again their introduction of VAT, even though they entered the Community in 1981. Is my right hon. and learned Friend any more confident that Spain, and more particularly Portugal, will be able to hold to their programme and timetable better than the Greeks have done since 1981? Can he give us some expression of his confidence in this matter?

Sir Geoffrey Howe

Spain has already agreed to do this from the date of accession and, indeed, has already passed legislation to that effect. Portugal has been allowed a derogation for three or four years from now. I think that my hon. Friend will know that derogations of that kind are not usual, and that in most cases the timetable set is fulfilled. I do not think that any country is innocent of having failed to hit such target dates from time to time.

Agriculture was, of course, one of the most difficult parts of the negotiations. Spain is highly competitive in some sectors, and existing member states were worried about the effect of competition on their own producers. In the result, the transitional arrangements for the most sensitive products, such as fruit and vegetables, are to last for 10 years. That gives the fullest possible protecion to Community horticultural producers, including our own. On the other side of the account, both Spain and Portugal are deficit producers for milk, beef and cereals, so that should offer attractive opportunities to exporters in this country as tariffs are phased out.

Mr. Anthony Nelson (Chichester)

My right hon. and learned Friend will be aware that many of us have strong constituency interests in horticulture. There are fears about the viability of some enterprises because of the import of tomatoes in particular. If, during the transition period, the problems of our tomato growers become increasingly apparent, given the unfair competition from the Dutch sector, can my right hon. and learned Friend assure us that the Government will consider providing further financial support to enable our growers to switch to other horticultural products and to compensate them for the much lower heating costs that obtain in the Iberian peninsula?

Sir Geoffrey Howe

My hon. Friend raises a rather different and wider question, which has been considered from time to time by Governments in different contexts. At this stage, all I can say is that the additional transitional period of 10 years was chosen specifically to allow problems of this kind to be considered.

I was dealing with the opportunities available to British agriculture exporters. Special arrangements have been made to help Portugal adjust to the common agricultural policy, and she will receive significant aid to help her develop the necessary agricultural infrastructure.

I reported to the House on 28 November that the Foreign Affairs Council had agreed a mandate for negotiations to ensure that the agricultural trade flows of the Community's Mediterranean partners were maintained.

We have been able to preserve the balance of fishing opportunities under the common fisheries policy. Spain and Portugal are incorporated into the common fisheries policy for its duration. With certain limited exceptions, Spanish and Portuguese access to Community waters is limited to those areas and species to which they currently have access. The number of Spanish and Portuguese vessels fishing in Community waters will continue to be strictly controlled and subject to strict monitoring and reporting requirements. Effective fishing opportunities for United Kingdom fishermen remain undiminished.

Spain and Portugal will build up agricultural receipts only gradually. To ensure that during the first few years of membership Spain should be in rough budgetary balance and Portugal a modest net beneficiary, the Community agreed that both countries should be refunded, at a rate diminishing progressively over the transitional period, a substantial percentage of their contributions —the same treatment as Greece received in the equivalent years after her accession.

It was always the case that enlargement would entail at least some cost to the Community, including the United Kingdom. But, as the House knows, the arrangements negotiated at Fontainebleau by the Government ensure that the United Kingdom will pay only 7 per cent. net of any additional costs.

The Commission estimates that at the end of transition the costs of enlargement may be about 0.1 per cent. of the Community's VAT base. On 1986 figures, this would be equivalent to 1,800 mecu, or about £1,080 million per annum. Under the Fontainebleau arrangement, this means that there will be a United Kingdom contribution of roughly £75 million a year at the end of transition.

The right hon. Member for Manchester, Wythenshawe (Mr. Morris) asked about one aspect of Gibraltar. I said earlier that that was one area in which Spanish accession would bring a new dimension to our relations with Spain. Indeed, a new era began a year ago when I announced the Brussels agreement to the House. On 5 February of this year the Lisbon agreement was finally implemented, and Spain opened the frontier with Gibraltar. Gibraltar and Spain both instituted in advance certain reciprocal Community arrangements. Since then, Gibraltar has been able to judge for herself what the impact of Spanish accession will be.

The impact of the Franco era is not easily forgotten, but, happily, some of the old fears and hostility are receding before the policies of Senor Gonzalez' Government. Certainly the Gibraltar economy has received a major shot in the arm.

Mr. J. F. Pawsey (Rugby and Kenilworth)

I wish to return to the point raised by the right hon. Member for Manchester, Wythenshawe (Mr. Morris) on the payment of pensions to those workers from Spain who formerly worked in Gibraltar. My understanding is that the Spanish Government, when they closed the border, effectively ensured that these people could no longer work. Despite that, Gibraltarians are expected to pay for the pensions of those people. As the right hon. Member for Wythenshawe said, it is some £7 million per annum over a period of about 15 years. That is a substantial sum—£105 million in total. For the 30,000 people of Gibraltar to zany that burden is clearly unfair. Although my right hon. and learned Friend said that a substantial portion of that sum would be made up by Her Majesty's Government, I think that the Gibraltarian Government are looking for a rather better deal than that from us.

Sir Geoffrey Howe

This is a long and complicated story. It cannot be denied that over the years the Government and the people of Gibraltar have received substantial help from this country, and rightly so, and the future pattern in that regard is always open to consideration.

With regard to pensions, it must be remembered that the workers in question contributed to the Gibraltar pension scheme for a number of years and, like other workers who contributed in the same period, are entitled to benefits which match those payable to people who live in Gibraltar. That is the pattern with which we are dealing, and I have nothing to add to what I said earlier about this topic.

Mr. David Young (Bolton, South-East)

Will the right hon. Gentleman clarify the matter?

Sir Geoffrey Howe

I am afraid not at this stage. I do not want to get into a long debate about this aspect of Gibraltar in the context of the wider subject with which we are dealing.

The Gibraltar Government have already completed all stages of their Bill to give effect to Spanish and Portuguese accession. I have no need, in this or any other context, to remind the House of our commitment to respect the wishes of the people of Gibraltar as enshrined in the preamble to the Gibraltar Constitution Order 1969. We look forward to continued fruitful collaboration between Gibraltar and her neighbours in the campo.

Enlargement has helped the Community address its own future and to decide on the steps needed to enable us collectively to play our full role internationally, politically and economically. The enlarged Community will be the largest trading entity the world has known. It will therefore be well placed to defend the interests of the open trading system, on which our economic future depends, against the current wave of protectionist pressures.

Enlargement marks the arrival of democratic Spain and democratic Portugal as our partners in Europe in the widest sense, in the Community and NATO as well, where we hope that Spain, like Portugal, will assume her full place. It represents a commitment by nations with a shared history, which have suffered from the devastation of successive wars, to build together a new Europe in which the conflicts of the past are no longer possible. It represents, in the words of the Treaty of Rome, a commitment to common action to eliminate the barriers that divide Europe and for the pooling of resources to strengthen peace and liberty. I have every confidence in commending the Bill to the House, and that I shall be able to tell Senor Ordonez, my Spanish colleague, when I see him in Madrid tomorrow, that the House joins me in giving a very warm welcome to Spain and Portugal.

4.31 pm

Mr. George Robertson (Hamilton)

The official Opposition have always made clear our support for the accession of both Spain and Portugal to the European Community. Therefore, we are glad to support the Second Reading of the Bill. Accession of these two countries, bringing the Community's membership to 12, makes it more truly European and complete. It will also give reinforcement to the democratic systems in both nations, which have recently escaped the grip of Right-wing totalitarianism. Neither country has the maturity, economically or politically, that other members of the Community share, and we have an obligation as their neighbours and friends, as well as those who encouraged the end of Fascism, to assist with their full integration into western European society.

Both countries have, against substantial pressures, tightened the democratic grip, but we who preach the merits of political choice over dictatorship must also mean it when we have a chance to help those who need it in keeping to the democratic road. Rhetoric will not protect democracy, but a proper recognition of what we can do to assist these nations will be of inestimable value.

Mr. Forth

I am following the hon. Gentleman's argument closely, and I am aware that one of the principal arguments in favour of the accession of Spain and Portugal is that of democracy. However, has the Labour party made any estimates of the cost in jobs, taxes or moneys lost to the British citizens of this protection of democracy? Will he be giving us a bill for the marvellous benefit that he is setting out?

Mr. Robertson

I shall be coming to the hon. Gentleman's special interest —the cost of accession —and I shall be making my own criticism, but that does not negate the welcome that I and my hon. Friends give to the fact that Spain and Portugal will be joining the European Community. There is no price, whether it is measured in terms of money or cost, to be set against the fact that countries under the grip of totalitarianism are now in a pluralist democracy again.

Accession will have profound implications for the European Community and direct effects on this country, and we would be wise to give careful thought and attention to that instead of generally welcoming the new members and the new trade that such a move might bring us. Accession is already having an effect on the routine but damaging prices in the Community budget. It will have a dramatic and so far uncalculated effect on the agricultural policy of the EEC, and it will increase the agricultural bias already too obvious within the Community.

In bringing in two much poorer nations, accession will change the balance in priorities and will yet again move the Community's centre of gravity from the northern industrialised states to the agriculture-dominated Mediterranean south of Europe. The effects on the regional and social policies of the Community will, in many cases, directly affect this country for the worst, and the impact of accession on the budget will also have an effect on our domestic programme. All these issues have been insufficiently debated and discussed in the Community and have not been debated fully in the House.

Those factors make it doubly unsatisfactory that we find that this important and indeed historic debate is squeezed into a three-hour period. It is an inadequate and contemptuous way in which to treat such a crucial and, for this country, far-reaching issue. The European Community may not be the most stimulating and exciting of the affairs debated in the House, and it may attract fewer hon. Members than most subjects, but we have a duty to examine, in adequate time, issues that will have such an important effect on us and on our trading relationships.

The most important aspect of accession will be the effect on agricultural policy and, as this policy dominates the European Community, there is no doubt that this will have a most penetrating effect on the way in which the Community is run.

The provisions for Spain and Portugal in the draft 1986 budget are clearly inadequate. The first draft from the Council of Ministers had no provision for the accession of Spain and Portugal. The latest version still seems to be incapable of delivering on the assurances and guarantees given to Spain and Portugal during the negotiations, which regarded them as being net beneficiaries in their initial years. Either this is to be an additional commitment superimposed on the already overstrained budget, which may at the moment be being thrown out by the European Parliament in Strasbourg, or the commitments that have been made will be reneged on. If they are, the two poorest nations in the Community will find themselves net contributors. Although a merry-go-round of Treasury Ministers have represented us in the Community budget negotiations, not one, as they have paraded in and out of the European Community, has been able to shed any more light on the bizarre intricacies that the Budget Council imposes on the Community.

On top of all this, the agricultural consequences of accession are still unresolved. In protocol 25 of the treaty, the 10 nations recognise that an increase in Portuguese agricultural activity and hence production will follow from accession, but they maintain that it will be accompanied by agricultural discipline. How can this be possible? Would the Minister of State care to explain the use of mirrors by the Foreign Secretary? He managed to say that he recognised the effect that increased production by Spain and Portugal would have on surpluses, but today he told us that the management of the surpluses would be made easier.

Given that surpluses are one of the most challenging and daunting problems facing Britain and the Community as a whole, how on earth will increases in the production of citrus fruit and tomato juice by Spain and Portugal make management of the crisis easier? As we had no answer from the Foreign Secretary, perhaps the Minister of State, in his usual elegant fashion, will give us a demonstration of his skill at making speeches without his officials' notes in front of him.

There is no explanation for the Secretary of State's use of mirrors, because the two items of increased production and managing the surpluses are incompatible. The already chronic problem of surpluses is bound to be exacerbated. This, taken with the existing shortages in the structural fund —the 1986 budget freezes them at the previously inadequate levels, which is a cut in real terms—puts a relentless and intolerable pressure on the difficulties that the Community has already with the common agricultural policy. We learn from this week's discussions that the cuts in the regional and social funds will have a direct effect upon the United Kingdom as a beneficiary of the funds.

Three recent reports have underlined the crisis in the CAP which, in the absence of action, accession is bound to make worse. The first and most weighty report was that of the House of Lords Select Committee which said about the CAP: Left unreformed it could break down. If this were to happen the Committee fear that the existence of the EEC itself would be in jeopardy. It continued: if the reform of the CAP is delayed once again, its excessive demands on available resources will hinder the Communities' economic recovery. This report, by worthy Peers sympathetic to Europe, estimated the cost of the CAP to be as high as £20 billion. It predicted that cereal stocks would rise to more than 89 million tonnes by 1991 compared with the present 25 million tonnes, and that Spain and Portugal's accession would cause further strains. It suggested that the CAP had not resulted in aid for poor farmers who needed it. The Committee recommended that the Community should move to a policy of restricting prices and establishing realistic thresholds combined with direct economic support for those farmers in difficulties. It concluded: The chief obstacle to the success of a prices policy is a lack of political courage to enforce it. The House deserves to know, as we debate this historical milestone, whether the Government have the political courage to force changes in the CAP which alone, according to the Foreign Secretary, will make the accession of Spain and Portugal a guarantee for the future.

The conclusions of the report by the Comptroller and Auditor General and the European Commission's Green Paper make it clear that the existing need for immediate discussion and action fundamentally to reform the CAP will be made more urgent by the accession of Spain and Portugal.

We have heard little or nothing from the Foreign Secretary about the implications of accession on agricultural sectors and on manufacturing sectors relying on light industry and textiles, for example, which have been badly battered by far eastern competition. Surely that is worth a mention.

Why have we heard nothing about the renewed need for a regional policy with bite, which will arise from accession? The hard financial facts are that an adequate social and regional policy with funding appropriate to provide the structural retraining, job creation and redistributive role intended, which is doubly necessary today, is nowhere matched by the resources made available. The payments this year will be cut as the demands on the regional and social funds increase. Added to this topsy-turvy contradiction is the financing of the integrated Mediterranean programmes. The Government's White Paper, Cmnd. 9627, tells us blandly that accession will not have an effect on existing structural funds, and much the same statement appears in the explanatory memorandum. After last week's Budget Council, how can that possibly be true? How can the new demands of the integrated Mediterranean programme be met without affecting existing structural funds? How will accession affect trading with Latin America? Will not Spain's and Portugal's inevitable shift to the Lome countries, as a result of accession, make the debt crisis of Latin America worse? What will happen about the free movement of migrant workers and other workers as a result of accession? Lack of time will prevent discussion of a series of other issues.

The impact of accession on Britain will be of considerable importance, but on this we have heard least from the Foreign Secretary. The social and regional funds are of major importance to projects in Britain and it is not sufficient for Ministers to say that, because of the Fontainebleau arrangement and the rebate mechanism, the amount of money spent from the regional and social funds in Britain is of academic importance. Surely no one believes that it is a substitute for direct aid to our poorest areas for extra cash to be handed to the Chancellor of the Exchequer. Any dissolution or diminution of the social and regional funds which affects Britain's poorest areas must be of consequence and must be considered by the House.

We know that the changes in the guidelines for social fund availability will, at a time of high unemployment, reduce the amount available to the United Kingdom from £350 million to £280 million, a real cut of 25 per cent. The new guidelines laid down by the Government for their own regional policy have led to a cut in the amount of money available in the social fund. We know that under the regional fund, the integrated Mediterranean programmes involved a £3.9 billion package for that region, of which £1.45 billion was to come out of existing structural funds in the Community. The Community budget cannot accommodate the cost of accession, so how can it conceivably accommodate the extra demand that is being imposed upon it?

The start of this debate was marked by genuine and justified complaints that the House and the country were insufficiently aware of the details of the agreement reached last night in Luxembourg. If major changes have been made to the way in which the Community operates and how decisions are arrived at, we deserve to have the fullest details before us in a debate of such historic importance. It is unacceptable for the Foreign Secretary to promise that the details will be available tomorrow. The details are needed today.

Sir Geoffrey Howe

They are now available in the Vote Office.

Mr. Robertson

The generosity of the Foreign Secretary, appearing an hour into the debate like Santa Claus with the finally deciphered documents, hardly assists the ability of the House, and especially the Opposition —[Interruption.] It would be doubly difficult for me to get to the Vote Office and back while addressing the House. Hon. Members on both sides of the House deeply resent the way in which the debate has been handled.

We welcome the accession of Spain and Portugal, and we wish them well. They will have their problems in adapting to the European Community, but these will be nothing as we all come to terms with a Community of 12. Like so many problems which the Community tackles, this has been embarked upon with inadequate preparation, incomplete financing and the already mighty burden of agriculture heavier on top of us all. We cannot turn our back on Spain and Portugal but at some time—

Mr. David Young

rose—

Mr. Robertson

—the arithmetic of the European Community will have to be reserviced and the common agricultural policy subjected to surgery, or there will be precious little Community for Spain and Portugal —or the other 10—to be part of.

4.50 pm

Mr. Albert McQuarrie (Banff and Buchan)

I am grateful to you, Mr. Deputy Speaker, for calling me to participate in the debate at such an early stage. I apologise to you, Mr. Deputy Speaker, and to the occupants of both Front Benches for the fact that I shall have to leave the Chamber immediately after I have spoken to attend an important Back-Bench Members' Committee.

I welcome the Bill because I believe that it is in the best interests of the European Community. It will bring considerable industrial and commercial trading oppor-tunities between Spain, Portugal and the United Kingdom. That will apply especially to fish processing and agriculture products, which are two of the main sources of employment in my constituency. I hope that British support of Spain's entry into the Community will encourage that country to take its full part in working with NATO.

The Bill received welcome approval from the other place. Several of their Lordships, including my right hon. and noble Friend the Minister of State, Foreign and Commonwealth Office—

Mr. George Robertson

On a point of order, Mr. Deputy Speaker. You will have heard the Foreign Secretary say a short time ago that vital documents on the outcome of the summit which ended last night were available in the Vote Office. My hon. Friend the Member for Linlithgow (Mr. Dalyell) has been to the Vote Office and it seems that the only documents available on this issue are glossy pamphlets which bear the date May 1985. The guarantee of the Foreign Secretary has not yet been delivered.

Mr. Deputy Speaker (Mr. Harold Walker)

I shall make arrangements for inquiries to be made.

Mr. McQuarrie

I was saying that when the Bill passed through another place it received welcome approval. Several of their Lordships, including my right hon. and noble Friend the Minister of State, Foreign and Commonwealth Office, spoke about the dependent territory of Gibraltar. My noble Friend the Minister of State reiterated, as my right hon. and learned Friend the Foreign Secretary was kind enough to do this afternoon, the Government's adherence to the preamble to the Gibraltar constitution on sovereignty. My right hon. and learned Friend's reiteration of the Government's adherence to the preamble will be welcomed greatly by the Government and people of Gibraltar.

In this short debate I shall concentrate on a serious problem which has already been mentioned by my right hon. and learned Friend the Foreign Secretary and the hon. Member for Hamilton (Mr. Robertson)—the payment of pensions to the former Spanish workers who were employed in Gibraltar until the closing of the Spanish frontier gates in July 1969. From information which I have received —this has been mentioned by the right hon. Member for Manchester, Wythenshawe (Mr. Morris)—the total cost of the payment of pensions to these Spanish workers will be £7 million per annum for 15 years. My right hon. and learned Friend has said that the Spanish workers contributed towards their pensions, but until July 1969 they were contributing only four shillings in old money per week while their employers were contributing five shillings. That does not relate to £7 million per annum for the next 15 years.

The hon. Member for Bolton, South-East (Mr. Young) tabled a written question in which he asked the Foreign and Commonwealth Office who would be responsible ultimately for the payment to former Spanish workers in Gibraltar of pensions which were frozen as a result of the Spanish Government's action in closing the frontier. The Under-Secretary of State, my hon. Friend the Member for Enfield (Mr. Eggar), replied: Under Gibraltar law and under EC regulations, responsibility for payments of pensions rests with the Gibraltar Government. We are having discussions with the Gibraltar Government about how this responsibility will be met.—[Official Report, 2 December 1985; Vol. 88, c. 38.] A short time ago my right hon. and learned Friend the Foreign Secretary told us that the Government are in consultation with the Gibraltar Government, who will make a substantial contribution to the payment of the Spanish workers' pensions. I shall quote from a press release which the Chief Minister of Gibraltar, Sir Joshua Hassan, issued yesterday. It states: I have just been informed of the answer given by Mr. Tim Eggar to a parliamentary question by Mr. David Young regarding the ultimate responsibility for the payment of social security pensions to Spanish nationals working in Gibraltar before the closure of the frontier by the Spanish Government. Gibraltar Government Ministers have made it clear to the British Government that, while Gibraltar is prepared to meet its moral responsibility in full, and has accordingly offered to contribute the total amount paid into the social insurance fund by Spanish workers, plus accrued interest (a total of some £4,500,000), their view is that the ultimate responsibility lies with the British Government. If the Gibraltar Government are unable to pay that sum, which is equal to 12 per cent. of their budget, the Spanish workers could go to the European Court. However, it would be the British Government and not the Gibraltar Government who would be taken to the court. Therefore, the British Government should address themselves to the issue of ultimate responsibility.

Sir Joshua Hassan added that the Spanish Government should have some responsibility. The press release states: We reiterated previous oral suggestions that the Spanish Government might be asked to acknowledge some responsibility in this matter. The latest communication to London on this issue was dated 29 November.

The press release continues: Secondly, it has been recently alleged in Gibraltar that this matter has been left too late. In fact, it was raised by me"— that is, Sir Joshua— with Sr. Oreja in Strasbourg in 1977 and …more particularly, it has been the subject of correspondence with the Foreign and Commonwealth Office, and of meetings with Southern European Department ODA officials, since August 1984 and throughout 1985. I think that I have said enough to show that it should not be the responsibility of 30,000 dependent territory citizens in Gibraltar, who have been acclaimed, rightly, as more British than the British —they fought for the right to remain British citizens, and they are prepared to accept a moral responsibility for contributing £4.5 million —to pay Spanish workers large sums in the face of the actions of Franco and the present regime in Spain, who are demanding that £7 million per annum should be paid for 15 years by people who saw some of their compatriots imprisoned by the Spanish for 16 years. Why should they be asked to do so? Why does not my right hon. and learned Friend go to the Spanish Government and say, "You have a moral responsibility to pay part of the £7 million. You were responsible for closing the border and not the British Government. The closing of the gates was not the responsibility of the Gibraltar Government. Our gates remained open for 16 years when these people were imprisoned." It is not good enough to say, "We shall give consideration to the payment of £7 million per annum and endeavour to help."

My right hon. and learned Friend is well aware that the offer that he has made to Gibraltar is inadequate to meet the obligation. The Spanish Government should accept some form of liability. It should be realised that Gibraltar is not the sole beneficiary of the opening of the border. The town of La Linea was derelict when Franco closed the border and it has benefited greatly from the opening of the frontier gates by the Spaniards. The town having enjoyed that benefit, the Spanish Government have a moral responsibility.

It is not good enough for the Government to say that they are doing something to meet the problem of the payment of £7 million per annum. No one in Gibraltar can accept that approach. The British taxpayer should not he asked to subsidise £105 million over 15 years. When my hon. Friend the Minister of State replies, I ask him to tell us exactly what the Government propose to do to ensure that the Spanish Government honour their commitment.

4.59 pm

Mr. Michael Cocks (Bristol, South)

I should like to put at rest the mind of my hon. Friend the Member for Hamilton (Mr. Robertson). He is diligent in his preparations and unusually, because he has been so busy working on his speech, he has overlooked the fact that the Prime Minister has very considerately put on the Order Paper a motion to be moved at 10 o'clock to the effect that the European Communities (Spanish and Portuguese Accession) Bill [Lords]…may be proceeded with, though opposed. until any hour. I am glad to be able to reassure any right hon. and hon. Members who wish to take part in the debate that they have plenty of time.

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Deputy Speaker. I apologise to the right hon. Member for Bristol, South (Mr. Cocks) for butting in on his speech, but this load of paper has just been deposited in the Library. It is scarcely legible and there are only three copies. It purports to be a representation of what went on in Luxembourg yesterday. Amongst other things, it says that various matters that have been subject to unanimity are now subject to a qualified majority vote. It says —if I understand it rightly and it is possible that I do not, not because of my lack of understanding but because of the way it is written —that we should harmonise our indirect taxes—

Mr. Deputy Speaker

Order. I am not sure what point the hon. Gentleman is seeking to raise. Is he raising the question of the availability and legibility of the document, or the content of it? The content is more a matter for a speech in the debate, not an intervention.

Mr. Marlow

I am deeply concerned, Mr. Deputy Speaker, about the availability and legibility of the document. I am also concerned about the fact that this document, which is hardly available and hardly legible, states within it, so far as I can understand, that we should-harmonise our excise duties, our currency, and our VAT with these two countries. We are having a debate, but no one in the Chamber realises that by 1992 we should have the same VAT rate as Spain and Portugal—

Mr. Deputy Speaker

Order. I do not know whether the hon. Gentleman is seeking to make an intervention, If so, it is hardly relevant to the point that was being raised by the right hon. Member for Bristol, South (Mr. Cocks). If, on the other hand, the hon. Member for Northampton, North (Mr. Marlow) is raising a point of order, the matters to which he is referring are not for me to deal with.

Mr. Cocks

I am grateful to the hon. Gentleman for his point of order. While I continue my speech, the Government business managers might consider whether both points would be met by adjourning the House until 7 o'clock and then proceeding after 10 o'clock with the full debate, with the full text of the document available for as many people as may wish to have it.

I have got the document to which I think the Foreign Secretary referred. I was hoping that it would be a lifebelt, but it is barely a pair of flabby water wings. I have looked through it, but I cannot find the matters in which I am interested.

The Foreign Secretary was fulsome and euphoric in his introduction. I wondered how long the padding would go on. Eventually he mentioned jobs and the need to promote our industries and said that we were doing just that. I was glad that he came down to earth. This debate is about the principle of the Bill. It was said earlier in answer to the hon. Member for Wellingborough (Mr. Fry) that matters of detail could be debated on the remaining stages, but experience leads me to suggest that the remaining stages of the Bill will be emaciated. Therefore, if we want to raise points, we should do so on Second Reading.

The matter on which I wish to spend a few minutes concerns a constituency interest which I have already referred to in the debate on the Queen's Speech —the takeover bid for Harvey's wine firm by Elders. A sort of Antipodean skinhead is mounting what is called a leveraged takeover —something new in this country. The Government reply at that time was that the matter would be taken seriously. I hope that it is still the case.

There is a long tradition in my constituency and in other places in the United Kingdom of bottling wines that are imported in bulk. The quality is high, there is continuing investment and quite a few people are employed. In recent years there has been a move by producers to try to get the wine bottled in the country of origin. I warn the Government against that, particularly in regard to sherry and port from Spain and Portugal. Approximately 30 million litres of port and sherry were bottled in this country last year. If it were decided by either the Spanish or the Portuguese authorities that those products should be bottled only in the country of origin, it would mean a loss of 500 jobs in the bottling trade alone, of which 200 to 300 would be in Bristol, and of a similar number of jobs in the packaging trade. That is not a small matter; it is vital.

Apart from the effects of that on our domestic economy, we must consider also another matter that has arisen recently, the production of polluted wine. It has been found that some continental wines have been tampered with. Anti-freeze has been added to tone them up and give them body. It is known that such wine is poisonous and I am glad that the Minister of Agriculture, Fisheries and Food was recently able to reassure me about the steps the Government are taking to ensure that that poisonous plonk does not come into this country.

If wine is imported in bulk and bottled here, it is easier to detect by sampling whether there has been adulteration or pollution of the wine. That is another reason why the Government should be firm on the matter.

Mr. Matthew Parris (Derbyshire, West)

Can the right hon. Gentleman confirm that there is no suggestion in what he is saying that wine imported from Spain has been or is likely to be polluted?

Mr. Cocks

I am pleased to say that no cases have yet come to light.

Mr. Parris

What is the right hon. Gentleman talking about then?

Mr. Cocks

I do not think any cases involving Spain or Portugal have been recorded of wines which have been poisoned with anti-freeze, but I am anxious that the British public should be protected. If they want anti-freeze, they should get it from garages and not from off licences or supermarkets.

Mr. Eric Deakins (Walthamstow)

Were not a large number of people in Spain poisoned recently because of the sale of adulterated olive oil?

Mr. Cocks

I believe that that is so. I think that mineral oil was added to cooking oil with disastrous consequences that are still being felt.

Mr. Marlow

By now the right hon. Gentleman will be aware that, whereas in the past we have been permitted to veto any change in certain internal European transactions, now changes will probably be made by majority vote. If he thinks that the health and safety regulations governing the production of food in Spain are not what we would find acceptable in this country, that must give him cause for concern when later this evening he is considering whether to vote for or against the measure.

Mr. Cocks

The hon. Gentleman is tempting me. I am not known for my wide-ranging interest in foreign affairs. I do not believe that I have ever spoken on the matter in the House except during the five-day debate on the great decision that we had to make in 1971. On that occasion I spoke late at night. I have not taken much active interest in foreign affairs. I am not enamoured of the Common Market. I was one of the handful of Members who took part in every Division during the passage of the legislation.

It is disturbing to hear what the hon. Member for Northampton, North (Mr. Marlow) has said about the veto and the change to a majority decision. I could develop that theme, but I do not want to delay the House unduly.

I ask the Government to consider seriously what I have said about the bottling of wine. In a national context the number of jobs may be small, but they are important to the communities involved. I hope that in his reply, whether it is before 7 o'clock or after 10 o'clock, the Minister will be able to give an assurance that the Government will be robust in opposing any suggestion that wine should be bottled only in the country of origin.

5.10 pm

Mr. Andrew MacKay (Berkshire, East)

I hope that the right hon. Member for Bristol, South (Mr. Cocks) will not mind if I do not pursue his ideas down the river of port and sherry that is vital to his constituency.

The hon. Member for Hamilton (Mr. Robertson) came to an amazing conclusion in his speech. I was surprised to hear him say that he wished Spain and Portugal well in entering the EEC. Heaven help anybody who is wished ill by the hon. Gentleman if his speech was meant to wish those countries well. His was a strange and all-too-typical speech from the Opposition Front Bench.

Ten years ago, Spain and Portugal were just leaving a black era of tyranny under a one-party state. At that time, all the fashionable pundits in the House and elsewhere told us that the chance of democracy surviving in those countries was slim. The pundits said that there was a threat of Communists taking over and of the military reasserting its power. The Spanish and Portuguese people deserve great credit for consistently voting in elections —and, I think our Portuguese friends would agree, in too many elections in their case —for democratic, moderate, centralist politicians and Government.

The West has an obligation to ensure that still-fragile democracies continue to flourish. There is no better way to assist them than to ensure that they are part of the European Economic Community.

I voted in favour of continued membership of the Community in the 1975 referendum, principally because I believe in the strength of a politically united western Europe. The addition of Spain and Portugal to the EEC will considerably strengthen that position. I hope that our friends in Spain will remain members of NATO when they hold their referendum next spring. I believe that Spain's membership of the European Community can only strengthen the Western Alliance and lead to peaceful co-existence in Europe.

Spain and Portugal have much to offer the Community. I do not believe that it would have been so easy for the Foreign Secretary to reach such a happy accord with the Spanish on the future of Gibraltar if Spain had not been joining the Community. I believe that Spain's accession will lead to economic regeneration both on the Rock and in the sad town of La Linea.

Europe's important trading links with South America will be improved by the addition of Spain and Portugal and their special relationship with that continent. It saddens me that in a Second Reading debate, which I believe is a historic occasion, some of my hon. Friends and certain Opposition Members are looking too closely at the balance sheet and are not taking a wider historical perspective. It is vital that the Bill be given a Second Reading by an overwhelming majority, so that our friends in Spain and Portugal can see that we truly welcome them into the democratic club. Spain and Portugal will play a vital part in Western defence and a politically united Europe.

5.15 pm

Mr. J. Enoch Powell (South Down)

The brief speech of the hon. Member for Berkshire, East (Mr. MacKay) has brought the debate back to the major realities of the Bill and the political act enshrined in it.

At the beginning of the last decade, when membership of the European Economic Community was commended to Parliament and to the people of this country, it was the economic aspect that was almost exclusively stressed. It was conceded that to acquire a large free market combining the United Kingdom with the Community, there would necessarily have to be a compulsory, common framework of law. The fact that a comprehensive renunciation of the legislative and legal powers of the United Kingdom was effected passed without immediate criticism.

It soon appeared, however, that the internal market we had entered, the market in which we were to prosper, which would bring regeneration to the British economy, the inward-looking market, was related to an economic structure of the other member states, particularly in respect of agriculture, which was very difficult to reconcile with the economic structure of the United Kingdom.

That difference of structure has caused the perpetual difficulties which have dogged the questions of the European budget and the common agricultural policy —difficulties, which, within the existing framework of 10 member states, if they have not been papered over, are at any rate considered by some people to have been rendered tolerable and acceptable.

Now, in 1985, comes the paradoxical proposition that we should add to the Community of Ten two new member states whose economic and agricultural characteristics will cause even more difficulties to combine with our own and those of the rest of the Community than anything faced in the past.

Why should the Government take a step that is bound to exacerbate the difficulties which we already suffer in the Community? The hon. Member for Hamilton (Mr. Robertson) announced at the beginning and again at the end of his speech that the Opposition would support the Bill. It would have been impossible to guess that from the content of his speech, which mostly consisted of a scathing denunciation, a veritable Philippic against the additional difficulties that would be encountered by a Community which included Spain and Portugal.

Mr. George Robertson

rose—

Mr. Powell

I see that the hon. Member for Hamilton would like to intervene. Perhaps he intends to explain why, after their electoral defeat in 1983, the Labour party has consistently been running away from its position on the EEC?

Mr. Robertson

The right hon. Member for South Down (Mr. Powell) is wrong again. The Labour party is not running away from the issues; it is the world that is changing. Unfortunately, for some hon. Members and some parties, the world never seems to change. The Labour party welcomes the accession of Spain and Portugal to the EEC. In my speech I reminded the House and the Government of the need for political courage in dealing with the economic and agricultural problems associated with accession. There is no inconsistency in that.

Mr. Powell

I should like to remind the House of some of the difficulties to which the hon. Gentleman drew attention. He said that the accession would "affect this country for the worse". I am interested in the reasons why we should gaily take a step which in his view will "affect this country for the worse". The accession, he said, will cause the "already chronic problems of surplus to be accentuated". At one point in the hon. Gentleman's speech he even said that the problems would become "insoluble".

Why, if all the difficulties are to be made more severe, and if one section after another of the United Kingdom is to suffer disadvantages from the accession, are we nevertheless accepting this action? Why are both Front Benches commending the action to the House?

They gave the reason, although it was not in the forefront of their arguments. The reason is political, not economic. They say that in recent years those two countries have had the good fortune to have a change in their constitution. To use an American expression, they have become "democratic." It is argued that the way to safeguard their democracy is for them to become members of the European Economic Community. In that context, I hope that no Spaniards or Portuguese were listening when the hon. Member for Hamilton referred to their "political immaturity", which he felt would be much assisted by association with politically mature countries such as West Germany and other member states of the existing Community.

The proposition is, therefore, that the European Economic Community is an organisation for the protection of democracy. I resent the suggestion that it is any business of ours how the Spaniards or Portuguese decide to run their affairs. I resent the modern habit of criticising from a self-righteous pedestal the manner in which the affairs of other countries are regulated.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

The right hon. Gentleman does it all the time.

Mr. Powell

I assure the hon. Gentleman that I do not, but we have got into a bad habit in that respect, and we shall suffer retribution when the same medicine is ladled out to us. I state my objection to the very concept of entering into a community with Spain and Portugal with a view to securing or preventing certain developments in their internal forms of government. That is as much their business as our internal form of government is ours.

Mr. Forth

Is the right hon. Gentleman aware that the preamble to the Treaty of Rome makes no reference to the word or the concept of democracy, and that there is no mechanism within the institutional arrangements of the EEC to expel any member state if its political institutions change during the period of membership?

Mr. Powell

All those things would surely be implicit if it were indeed an organisation for the preservation of democracy and for the enforcement of certain supposedly democratic forms of behaviour on its members.

The real intention is not quite so crude. In this context, "democracy" is used as a term of art to mean adherence to the Western Alliance. The whole business is about Spain's membership of NATO. Distinct advantages which lie within the gift of the European Community and which, as has been admitted in the debate, will have to be paid for in part by this country and the people of this country are being offered as a bribe to Spain to remain what is called "democratic", but really means being a member of NATO. It is all about the integrity, as the United States sees it, of the United States Alliance.

At a critical stage of negotiations between Spain and the EC, the then Spanish Premier deployed in his campaign for membership of the EC the slogan, "No membership of the EC —no membership of NATO." The admission of Spain and Portugal to the EC, with all the economic advantages that they anticipate from it, is the quid pro quo for remaining in NATO, a question which remains open and on which a referendum is to be held in Spain in the near future. Like certain British politicians whom we remember, the present Spanish Prime Minister, in preparing for that referendum campaign, will be on the opposite side from that on which he sought office.

An article in The Times of 3 October states that during the Spanish Minister's tour of Europe: In Bonn Senor Gonzalez had to listen to Chancellor Kohl emphasising the link between EEC membership and Nato. This is a quid pro quo —a deal set up in economic terms between membership of the EC and a yes vote in the Spanish referendum on membership of the NATO Alliance. As they approach the referendum, the people of Spain will be told, "Don't you dare vote yourselves out of NATO. Think of all the economic disadvantages that you will incur if membership of the European Economic Community, which is linked with this, is withdrawn." That is what this is all about. It is a politicisation at the highest level of the European Economic Community.

When we receive the hastily and ill produced document to which reference has already been made, it may turn out to contain something foreshadowed earlier this week. I refer to the proposed treaty on a common European foreign policy which, according to The Times correspondent in Luxembourg, should receive a smooth passage. The economic aspects of the EC have already demanded and obtained from this country a far-reaching renunciation of the powers of self-government and decision centred in the House of Commons, and thus in the electorate of this country; but the political dimension represents a much larger and more subtle withdrawal of power both from Parliament and from the electorate. The very fact that it will be embodied in understandings which lie outside the legal framework of the EC makes it very much more difficult for the people of this country to understand what it is of which they are being deprived.

Mr. Marlow

rose—

Mr. Powell

I am about to conclude. The hon. Gentleman may be able to entertain the House with a speech of his own.

We are reminded of those facts by the very nature of this accession which the Bill makes possible —a deal between members of the EEC on political grounds and a nation reluctant to belong to NATO but trembling on the verge of taking a decision about it. The Economic Community was in itself incompatible with the parliamentary self-government of the United Kingdom through this House of Commons. A political community, which is the direction in which we are now being steered by the same influences, is a far greater withdrawal of power and responsibility from the place where the electorate of this country have always reposed them —that is, in Parliament and in the House of Commons.

I hope that there will be those who will oppose the Second Reading of the Bill. If so, I shall be happy, with my friends, to join them in the Lobby.

5.28 pm

Mr. Matthew Parris (Derbyshire, West)

The right hon. Member for South Down (Mr. Powell), unlike many previous speakers, rose to the terms of the debate, although he reached a different conclusion from mine.

I disagree with the right hon. Gentleman on two points. He reminded the House, as did my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), that there are no mechanisms in the EC for the enforcement of democracy or its continuation on member states, but those are not the terms in which the value to Spanish democracy of joining the EEC have been advanced. Democracy is relatively new in Spain and Portugal. I believe that one of the motives for their desire to become democratic countries is their great respect for older democratic institutions such as those in this country and elsewhere in Europe.

I hope that it is not patronising to say that there is a good deal of respect and admiration in the Iberian peninsula for the democratic traditions in the United Kingdom and elsewhere. To exclude Spain and Portugal from an alliance and a community of which we are part would seem to be a rebuff to the development of democratic institutions in their countries. To include them, and give them a warm and friendly welcome, is to encourage those democratic instincts. In that way we can encourage democracy in Spain and Portugal.

The right hon. Member for South Down said that membership of the EC would be advanced in Spain as a quid pro quo for staying in NATO, and that Spaniards would be told that if they were to leave the Community they would forgo the benefits of EC membership. He is wrong. I do not believe that Spaniards will be told that. Indeed, there would be no point in telling them that because it would not be true. A country does not have to belong to NATO to join the EC. Spaniards know that well, and it will be made clear in the referendum campaign.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind)

There is an additional consideration. By the time the referendum takes place, the act of accession is likely to have come into effect, and Spain will be a member of the Community and cannot be required to leave it, irrespective of the outcome of the referendum.

Mr. Parris

I agree with my hon. and learned Friend.

I listened to the hon. Member for Hamilton (Mr. Robertson) and to the right hon. Member for Bristol, South (Mr. Cocks), who until recently was the Labour Chief Whip. Both belong to a great Socialist party. Spain is being led into the EC by Senor Gonzales, one of the greatest Socialist leaders of his time, with great courage because his party was originally opposed to membership of the EC. The debate is an opportunity for the Opposition to encourage Senor Gonzales and Socialists in Spain. [HON. MEMBERS: "We did."] If that was encouragement, they should provide discouragement. Senor Gonzales has also been brave in changing his mind about membership of NATO. He will advise Spaniards to vote for membership of NATO. As I understand it, the Labour party is in favour of membership of NATO and believes that the organisation has a useful and important role to play. The debate provides a useful opportunity for Labour party spokesmen to encourage the Spanish Socialist party in its new-found desire to join NATO.

Mr. Budgen

My hon. Friend is usually sceptical about interference in the affairs of another nation state. What on earth has it to do with the British Labour party to offer its advice to Spaniards about the political view that they should hold on one issue or another?

Mr. Parris

I make a distinction between offering advice and interfering, and I see no reason why one may not offer advice. If the purpose of belonging to NATO is to safeguard Western democracy and to buttress ourselves against the threat from the Soviet Union, and if it would help those purposes for Spain to join NATO, it would be right to advise Spaniards that the right decision is to join that organisation. The decision is for Spaniards, but my advice is clear, and I feel no hesitation in giving it.

As many hon. Members wish to speak, I shall conclude my remarks. One of the sad inevitabilities of speaking in the House is that one gives a broad and, often, feeble welcome in general terms to a proposal, and then feels it necessary to complain at length about the details and to foresee appalling problems. I hoped that in a debate such as this we could simply say, "Welcome" to Spain and Portugal. On that note, I end my speech.

5.33 pm

Mr. Robert Maclennan (Caithness and Sutherland)

I agree with the hon. Member for Derbyshire, West (Mr. Parris) that this is an important occasion, which merits being so treated. The welcome that I give on behalf of Social Democratic and Liberal Members to the accession of Spain and Portugal to the European Community is unqualified and unreserved.

The Foreign Secretary did not impart a sense of elan or great enthusiasm, but that may be more because of his style than his conviction. He is undoubtedly right to emphasise the importance to the United Kingdom, and the whole of Europe, of the Community's enlargement to 320 million people seeking through ever closer contacts to exercise a greater influence on the affairs of the world.

The political importance to Europe of the two great continental countries of the Iberian peninsula joining the Community is immense. Their strategic importance to our fortunes this century is surely not beyond the recall of the right hon. Member for South Down (Mr. Powell), who seemed to think that the nature of the Governments in Spain and Portugal was a matter of indifference. The neutrality and covert hostility of Spain during the second world war was of great importance to many of our citizens. The right hon. Gentleman's memory is surprisingly short for a historian. His fairy tales about the motivation of Spanish politicians in bringing Spain to the unification of its political objectives with other European countries are matched only by the fantasising, to which we were subjected, about the Prime Minister's motivation in reaching an agreement with the Taoiseach. It is all part of the right hon. Gentleman's convoluted, twisted and self-deceiving imagination.

It is a matter of huge satisfaction that Spain and Portugal, which have played such a notable part in the development of our European culture and history, and whose fortunes have been entwined with ours, sometimes for good and sometimes for ill, should now move in parallel with us. For many centuries the history of our literature, music and religion has been greatly influenced by them. It is a matter of pride that we can now share in a common destiny through common participation in common decision-making. The United Kingdom has sought that adhesion for a long time. It was the policy of the Labour party when it was in government, and it has taken seven long years of negotiation to bring about its consummation.

It is of great importance to our future, as it is to the Iberian countries, that their democracies, now freely chosen and sustained by general elections, should be underpinned by belonging to a free association of democratic states. For their most important sectors of economy —agriculture and fishing —which have caused the greatest difficulty in negotiations, the negotiations mark a significant and important achievement.

Although there will undoubtedly be difficulties for our own horticulture, in particular, in adapting, in the 10 years available to the industry, to the new competition from the fruit growing countries of the Mediterranean, 10 years is not an impossible time in which to achieve the necessary adaptations. I was disappointed that the Foreign Secretary did not respond more positively to the intervention from the hon. Member for Chichester (Mr. Nelson), who asked if the Government would be willing to give assistance to our domestic industry to make the necessary adaptations. I add my voice to that of the hon. Member in asking the Minister of State, who is to reply to the debate, to pay specific attention to that point.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Is the hon. Gentleman's party satisfied with the fisheries agreement negotiated between Spain and the European Community?

Mr. Maclennan

I shall be dealing with fisheries when I have finished what I have to say on agriculture and horticulture.

The major problems that will remain for the Community as a whole relate to wine and oil, and it will be necessary to seek to exert quantitative restrictions on the price support that is available for those two commodities. There has been an important achievement on fisheries. The transitional phase that has been offered is important, but more important is the strict control of fishing, which is a part of the agreement leading to the accession of the two countries.

Spain has the largest fishing fleet in Europe and constitutes perhaps a third of the total fleet of the whole of the European Community. As such, whether within or without the Community, it would constitute a major threat to fishing stocks if it were not subjected to a fishing regime which sought to prevent the depredation of the stocks. By bringing Spain into the fisheries regime, and now applying to Spain the regulations on, for example, mesh sizes, we are exerting a control which would not have been possible if Spain had remained outside the Community.

It is also right that there should be a limitation on the number of vessels allowed to fish at any time in the specified areas which have been agreed. It was a major negotiating achievement. It was very difficult to get, and I congratulate the Government on it.

The geopolitical arguments are the most important reasons for welcoming Spain and Portugal into this family of nations. The decision has had a direct impact on the European Community and has undoubtedly played a part in concentrating the minds of the Heads of Government, who have just completed their summit discussions on the mechanisms for reaching decisions within the Community. In that sense, it is unfortunate that the Government timed the debate to take place before the outcome of the discussions could be made available to us and included in the wider debate.

It is extremely difficult to reach a sensible decision in the interests of the 12 member countries of the Community without the modifications of the Community's decision-making machinery which have been under discussion, and which we shall certainly wish to consider on another occasion. Majority voting and a strengthening of the powers of the European Parliament are essential if the Community is to move forward, particularly in the light of the enlargement of its membership. To that extent, as that development was in any event necessary, I welcome the accession of the two countries.

Mr. Marlow

With regard to majority voting, if circumstances should arise in which the Community, through majority voting, were to agree on a directive with which the hon. Gentleman and his party disagreed, would he be happy that this House would be forced to enact that legislation against his will and against the will of the House?

Mr. Maclennan

The hon. Gentleman has been in the House long enough, and has heard me speak on this subject sufficiently frequently, not to be surprised when I remind him that my party and the Liberal party are firmly of the view that it will be necessary to retain in some form —although in more closely defined circumstances than hitherto —the use of the Luxembourg compromise to protect the vital national interests of this country. That has been repeated by me and by Members of both alliance parties on many occasions.

I recognise that if we are to make progress towards a free market internally, and towards the development of the social and regional policies of the Community for the benefit of our unemployed and suffering citizenry, it will be necessary to make compromises on occasions, and some of them will clearly be less than desirable, but I believe that they will be more palatable than many of the measures which have been forced on this suffering country by Her Majesty's Government in the past six years.

In the debate in earlier days about the enlargement of the Community, the fear of some hon. Members was that the adhesion of these two countries would in some way dilute the European Community and deprive it of the sort of impetus that would be necessary if it was to be an effective force in the world. I doubt whether that was a justified fear, for the Spanish and Portuguese have shown, in the past few years, a dynamism and capacity for self-renewal which are a model to many of the other nations which are rather smugly congratulating themselves on their advanced state of democracy.

Spain and Portugal both have links with one of the parts of the world with which the rest of the European Community is sadly lacking contact —Latin America, one of the most unstable and threatened parts of the world. I hope that the enlargement of the Community by the adherence of Spain and Portugal will not only open up new trading contacts with the countries of Latin America and spread the influence of European thinking in that continent, but will enhance the political influence that we may have there.

I do not shrink, as apparently the right hon. Member for South Down does, from overtly expressing where I believe the interests of Britain lie in relation to other countries' internal affairs. It is perfectly legitimate for us to recognise that in Latin America the prevalence of anti-democratic Governments is positively hostile to Britain's interests, and thoroughly destabilising. The adherence of the two Iberian countries, which have such strong links with Latin America historically, could be a force for stability and for the sort of change towards democracy that we would greatly welcome.

5.50 pm

Mr. Eric Forth (Mid-Worcestershire)

A debate should comprise two sides of the argument. Until now I have heard only one side. With the honourable exception of the right hon. Member for South Down (Mr. Powell), a variety of hon. Members have said in a variety of ways how much they welcome the Bill.

It is clear as we debate this issue that this House has a complete lack of effective power or involvement in its determination. I say that because this matter, which is generally agreed to be vital to the EEC, has not been debated by the House since 1978, with the exception of an Adjournment debate that I initiated on 4 April of this year, when the Minister of State and I went round the course together and rehearsed our speeches for today. At least, I rehearsed mine, although I am sure that his will contain much new material.

How can the Government know the views of hon. Members if we have not been able to express them since 1978? I ask that question because the Foreign Secretary referred with some fondness to the signing ceremony in May 1985 when Foreign Ministers gathered to sign a number of treaties which put the stamp of approval on the entry of Spain and Portugal to the EEC. He said that those countries would become members in 1986.

None of that apparently allows of any involvement or participation by this House in the process. What he said, what has gone before and what has led up to this debate has all been based on the assumption that we would give rubber-stamp approval not just to the principle of the entry of Spain and Portugal to the EEC but to all the details contained in the variety of agreements that underpin their accession. In other words, we can do nothing but give our general approval to what is proposed —or, as in my case, my disapproval or lack of support. That illustrates the way in which the House has no real involvement in the process other than giving its automatic approval.

Another indication of the lack of gravity with which the British Houses of Parliament are dealing with the matter is that, when the Bill was in another place, only one hour and 16 minutes of their Lordships' time was devoted to considering the subject before the measure received its Second Reading and was passed to us. It cannot be claimed that the important principles involved in this grave matter have received detailed examination.

We have a precedent to consider, and that is the entry of Greece to the EEC in 1981. That provides a model from which to judge the effect of a new country joining the Community, and Greece is in many ways similar, geographically and in other respects, to Spain and Portugal.

The history of Greek entry to the Community cannot give us much encouragement because not only have the Greeks suffered severely in their economy since they entered the EEC, but they have held the Community to ransom in foreign policy. We recall their eccentric line on the shooting down of the Korean air liner. They have also blackmailed the EEC into giving them ever more money so that they may at least go through the semblance of behaving themselves.

The latest news from Greece in this respect appeared in Hansard as recently as this week when, in answer to a written question, it was stated that the Greeks had had to take certain economic measures to deal with balance of payments and other problems. The package contained a number of protective measures, including the introduction of an import deposit scheme, which required derogations from Greece's obligations under the EC treaty."—[Official Report, 2 December 1985; Vol. 88, c. 101.] That country came into the EEC on the basis of the promises and rhetoric that we have heard today, yet only four years later it finds itself forced into taking special measures which run contrary to all the principles which are offered to us in defence of the EEC, such as free trade.

Greece has returned to the Community to say, "We require more money from you. By the way, we shall not be able to adhere to the rules of the Community that you said, when we came in, we should have to obey." I am beginning to suspect that the precedent of Greece, which has not been mentioned today, gives us cause for thought.

Mr. Robert Jackson (Wantage)

Does my hon. Friend accept that the real parallel in the case he is describing is between Greece and the United Kingdom rather than between Greece and Spain and Portugal? The essential difference is that the negotiations for Greek entry took place under a Conservative Government, followed by the election of a Socialist Government opposed to Greek membership; and the same happened in this country, which is why Britain and Greece have had political difficulties in accommodating to Europe. The Iberian negotiations were conducted by Socialist Governments, which leads one to suppose that this may be a happier story.

Mr. Forth

The irony of that agreement is that, while we continually refer to the glories of democracy in Spain and Portugal, presumably that democracy could lead to a change of Government in those countries, which could lead to precisely the effect that my hon. Friend denies could take place, so I am not utterly convinced by the logic of his argument.

Let us set aside the Greek precedent —because it appears that the British Government have not given it much thought or are not convinced by it —and consider what we have been offered many times. We were offered it in a graphic sense by the hon. Member for Caithness and Sutherland (Mr. Maclennan) and by my hon. Friends the Members for Berkshire, East (Mr. MacKay) and for Derbyshire, West (Mr. Parris). I refer to what go under the generic heading of the geo-political arguments. They take many forms, and they are the only real arguments that we have been offered as benefits resulting from the Bill.

The first is the NATO argument. I accept what the right hon. Member for South Down said about the bribe to Spain to join NATO. I have always believed that we have all along been saying to the Spaniards that membership of the EEC was a reward for them entering NATO It is a straightforward and basic argument, though it ignores the fact that Ireland is in the EEC and is neutral and riot in NATO, while France is in the EEC and has always had a dubious and individual relationship with NATO.

Meanwhile, the country which is arguably the more important member of NATO, Turkey, is not in the EEC and never will be so long as the Greeks are members. That returns us to the Greek dimension. Thus, I have never been convinced that the connection which is often made in the geo-political context between membership of NATO and the EEC has any validity, and I hope that the House will set it aside in considering the Bill.

The second argument is that of democracy, as the right hon. Member for South Down pointed out. The preamble to the treaty of Rome, the basis of the EEC, makes no reference to democracy; there is no necessary connection between a so-called democratic form of government and membership of the Community. Nor is there any mechanism by which EEC members can judge whether one or other is democratic or, if they deem them not to be democratic, eject them from membership of the Community.

With that in mind, I am at a loss to understand why we are being offered this rather magical but as yet undefined connection between the survival of democracy in Spain and Portugal and their membership of the EEC, apart from the fact that it is a patronising sort of argument to adduce.

I had the honour when I was in the European Parliament of being a member of that Parliament's delegation to Portugal. When I visited that great country, with which we have historic connections, I was impressed with the extent to which the Portuguese have a political tradition every bit as long as ours, and in many ways longer, and it ill behoves us to lecture the Portuguese on principles of politics or about the way in which they will benefit in some ill-defined way from joining the EEC, which is hardly a model of democracy or anything else. That is why I say that the value of the benefits is at the least of considerable doubt.

The serious problem with what we are being asked to accept today is that, however doubtful the benefits, we have heard nothing about the costs. There may be arguments of a geo-political nature, our constituents may wish to support democracy in Spain and Portugal and they may wish to support the concept of the Western Alliance or even NATO. But we are being irresponsible and unfair if we expect our constituents to pick up a tab which is uncosted and unquantified in terms of jobs and many other respects.

Mr. Edward Leigh (Gainsborough and Horncastle)

My hon. Friend is a former member of the European Assembly and he is an expert on matters relating to the treaty of Rome. Will he therefore enlighten the House about the Council of Europe communiquù that has just been deposited in the Library? It says: The Community shall adopt measures intended progressively to establish the internal market. In particular, it says: In article 28 the terms 'unanimously' or 'unanimity' shall be replaced by a qualified majority. Can my right hon. Friend enlighten the House about the ability of this country to stand up for its own interests?

Mr. Forth

I am grateful to my hon. Friend for raising that point. It leads me to my next point about the institutions of the Community. We were told during the early stages of the argument that enlargement would speed up the reform of the European Community's institutions —a much needed and much overdue process. If Spain and Portugal enter the European Community, the Commission will be enlarged and will contain 17 commissioners instead of the existing 14. Those right hon. and hon. Members who have a passing knowledge of European Community affairs know that it has struggled for a long time to devise meaningful portfolios for 14 commissioners. What it will be able to devise for 17 commissioners is beyond my comprehension.

When my hon. and learned Friend the Minister of State, Foreign and Commonwealth Office replies to the debate, I hope that he will refer to what the additional commissioners will do. I can anticipate what he will say. He will tell the House that Her Majesty's Government have argued for a long time that there should be one commissioner for each member state and that he is prepared to recommend that Spain and Portugal should enter the European Community on the existing institutional basis. There will therefore be 17 commissioners. When there are 17 commissioners, it will be difficult to obtain agreement, particularly the agreement of Spain and Portugal, to a reduction in the number of commissioners.

It will also mean an enlargement of the membership of the European Parliament, over which we should perhaps draw a discreet veil. Two additional languages will also have to be dealt with by the interpretation and translation facilities of the European Community, which will result in an exponential increase of the kind that always takes place in the cost of translation and interpretation.

I referred earlier to cost. I shall refer to it under two headings: the cost to the European Community, and the cost to the United Kingdom. The main burden of the cost will come under the heading of "agriculture". Agriculture already accounts for three quarters of the European Community's budget. Spain is the most important, in terms of agriculture, of the two new member states. The accession of Spain will result in an increase of 30 per cent. in the Community's agricultural area, of 25 per cent. in the agricultural labour force, of 32 per cent. in the number of agricultural holdings, of 25 per cent. in the output of vegetables, of 48 per cent. in the output of fresh fruit, and of 59 per cent. in the output of olive oil. However, the number of consumers in the European Community will increase by only 14 per cent.

These figures demonstrate graphically the potential for the exaggeration and exacerbation of the agricultural problem that already confronts the European Community. It is a measure of the extent to which the accession of Spain will add to the problems of agricultural production and cost. I leave out of account Spain's potential as soon as it has irrigation. Her productivity will be increased. With our help, advice and money the production of a wide range of agricultural products will be increased. We shall also have to grapple with two new products —olive oil and tomatoes —which will have a serious effect upon the Community's agricultural policy.

That will be bad enough, but even worse —this is perhaps the most profound problem that will face the Community if it is enlarged to include Spain and Portugal —will be the shift in the political balance from north to south. That will be a permanent phenomenon. There will also be a shift in the political balance from right to left. I hope that that will be a temporary phenomenon. There will be a further shift in the political balance from the rich to the poor countries, a phenomenon that will last for as long as we can resist the redistribution of our national resources to the new southern member states of the Community.

Mr. Maclennan

Has the hon. Gentleman noticed that this year Italy's gross domestic product has outstripped the gross domestic product of this country?

Mr. Forth

That is an interesting thought, if it is true. I accept what the hon. Gentleman says.

I ask both myself and the hon. Gentleman to consider what the effect will be upon our economy, our constituents and our electorate of the accession of Spain and Portugal. If Italy has advanced so much, I suspect that it has been largely at our expense. One only has to consider the extent to which Italian white goods are imported into this country. Furthermore, when I visit factories in my constituency, over and over again I find that Italian machinery is being used there. A great deal of Italy's prosperity is probably at our expense. If Spanish industries made similar progress, that would almost certainly be at our expense, too.

In the countries of the south, which include Spain and Portugal, between 11 and 30 per cent. of their work force is still involved in agriculture and their per capita income is between £1,000 and £3,000 per annum. Between 2 per cent. and 7 per cent. of the work force in the northern countries are involved in agriculture. The per capita incomes are between £4,000 and £7,000 per annum. There is a clear divide between the countries of the south and the north in terms of agricultural commitment and income. Most of the southern countries also have Socialist Governments.

For the first time, therefore, there will be a line up in the European Community between Greece, Italy, Spain, Portugal, Ireland —when it suits her for agricultural purposes —and France, when it suits her for agricultural and other purposes. The new European Community will have the political power to draw the resources of the common agricultural policy and of the other policies from the north to the south. This is the kernel of the true redistribution for the first time of political power in the European Community.

My charge against the Government is that we have not been told about the likely effect of enlargement upon our economy and upon our people because of the change in the political balance. Unless we are told what its effect will be, I fail to see how the House can reach a judgment about the effect of enlargement upon the European Community.

As for the effect of enlargement upon the United Kingdom, it has been said over and over again that one of the benefits of membership of the European Community is access to the regional and social funds. This point was referred to by the hon. Member for Hamilton (Mr. Robertson). When two less wealthy countries enter the Community we shall slip further down the league of claimants on the regional and social funds. Enlargement means that we shall lose out in our claim upon Community resources. We shall be faced by increased competition in horticulture from such products as lettuces, cucumbers, strawberries, potatoes, tomatoes, cut flowers and apples. The Government may say that horticulture will be protected for 10 years, but horticulturists will want to know what will happen after that. We cannot reach a decision on such a matter, which is based upon protection for a certain period, without knowing in full what the effect will be after the 10-year period has expired.

Furthermore, Spain's industrial productivity is about 60 per cent. of that of the United Kingdom. When Spanish industries have access to European Community markets, who can say what the effect will be upon industries such as drop forging in the west midlands and automobile manufacture? Why is it assumed that our industrialists will be able to export goods more successfully when they have access to the Spanish market? They will be faced with competition from West Germany, France, Denmark and Italy.

Mr. Parris

I understood that my hon. Friend's complaint, and that of many of his hon. Friends, in the past was that membership of the European Community disbarred us from buying cheap food outside the European Community. My hon. Friend now appears to be complaining that we may be able to buy cheap food within the Community.

Mr. Forth

I am complaining in the sense that I am concentrating upon the effect that enlargement will have upon the growers of food in the United Kingdom.

The effects of EC membership on consumers since we joined have been a matter of some debate. It is not strictly relevant to the debate today, although I take my hon. Friend's point. However, if we enjoy the benefits of cheap citrus fruits, horticultural products and the like from Spain and Portugal, I leave the effect of that on our indigenous growers of those products to my hon. Friend's imagination. I am worried about that on behalf of my constituency.

Mr. Teddy Taylor (Southend, East)

Why is my hon. Friend worried about the horticulturists? Is it not one of the basic rules of the Common Market that all the extra cucumbers, tomatoes, oranges and apples that we have we simply destroy? I thought that we had a policy of spending about £87 million a week on destroying food, so all the extra tomatoes, oranges and cauliflowers will be destroyed at the taxpayers' expense.

Mr. Forth

I regret to say to my hon. Friend that that is almost certainly correct, arid I bow to his knowledge of such matters.

Mr. Hugh Dykes (Harrow, East)

Why is it that my hon. Friend the Member for Southend, East (Mr. Taylor) never worried about £20 billion spent on dole money for the unemployed because we are not reducing the unemployment figures? Is not that far more important than small amounts of money spent on EC countries?

Mr. Forth

I shall resist the temptation to discuss unemployment at greater length. One of our other concerns must be the effect on Britain's unemployment of Spain and Portugal coming into the EEC. I regret that my pessimistic view is that unemployment in Britain will increase as a result of the entry of Spain and Portugal into the Community.

The case for the accession of Spain and Portugal to the Community has not been made in a convincing manner. Several arguments have been repeated with little substantiation and support. I hope that my hon. Friend the Minister will offer us more when he replies to the debate. However, much more worrying than that is the complete lack of any effort by the Government to tell us in detail and over a wide range what the costs will be for agriculture, horticulture and industry, and the Government's view of the effect of the shift of political balance in the Community from north to south and its effect on the institutions and policies of the Community. Until we are given that information in more detail, I am unable to support the measure.

6.12 pm

Mr. David Young (Bolton, South-East)

I should not be intervening in the debate if the Secretary of State had not seemed to dodge with some agility the effect on the people of Gibraltar of the accession of Spain and Portugal to the Community. Gibraltar is a small community, they are still British citizens, and their main work force is organised by a British trade union. Indeed, they gave Britain tremendous support over many years and more recently during the Falklands conflict. It will be recalled that the Falkland islanders got their British citizenship due to an Argentine invasion.

Let me outline the problems about which Gibraltarians are worried. I am assured that from 1 January, with the Spanish accession, the problem of pensions will come to a head. We are assured that in the current negotiations Her Majesty's Government have allowed a position to arise where 12 per cent. of Gibraltar's GNP will now be given over to the repayment of the pensions of former Spanish employees of the dockyard who were excluded from their occupations by the decision of Franco to close the gates. That amounts to £7 million a year.

Mr. McQuarrie

I must make it clear to the hon. Gentleman that it is not only the dockyard which is affected. More than four thousand other workers went across the border in July 1969 and did not return because Franco closed the gates.

Mr. Young

I accept that. I am saying that, in consultation with the Gibraltar Government, we are told that unless there is some urgent decision on the issue, Gibraltar's economy will be destroyed. That is the kernel of the problem.

We should be aware that we cannot wait for negotiations until 1 January 1986. I am informed that Her Majesty's Government put responsibility for the payment of those pensions on to the Gibraltar Government. But the Gibraltar Government are not in a position to pay. As was said earlier, if the matter were taken to the European Court of Justice, Her Majesty's Government would be in the dock, as they were about birching in the Isle of Man. I hope that the Minister of State will deal with that essential point so that we know precisely the Government's point of view.

Her Majesty's Government closed the dockyard, privatised it and made it commercial. We are now informed that the dockyard cannot obtain skilled labour from within Gibraltar. Therefore, British taxpayers will now be subsidising labour from Portugal to carry out the skilled work in Gibraltar. Will the Minister ask for a clear indication of how that will place us, knowing the strains on our dockyards in Britain and Gibraltar?

In agreeing to the accession of Spain and Portugal, it is the duty of the House not to neglect the rights of 30,000 British citizens in Gibraltar who look to us as their one safeguard. I ask hon. Members to remember that it is Her Majesty's Government who have negotiated the accession treaty, not the Gibraltar Government. I hope that the Minister of State will not dodge those essential issues, as his right hon. and learned Friend did earlier.

6.17 pm

Mr. Michael Knowles (Nottingham, East)

I have supported the Community over the years from a political standpoint. I have never really believed the economic arguments. In the long term, they could turn out either way. But I believe that the way forward for western Europe is through political unification. That intention is clear in the Treaty of Rome. The phrase used there is to seek an ever closer union among their peoples. We put our signature to that treaty, and much of the pressure that Britain has been under over the past few years arose simply because we wanted to treat the Community as some form of free trade area while other members wanted to carry out the original intention and go forward.

I favour the entry of Spain and Portugal. It will be a good thing in the long run, although the long run could be a lot longer than 10 or 15 years. For both countries on the Iberian peninsula, this marks the end of a long dark night, not only in the sense of coming out of the corporate state regime of the past few years but for the past century.

There will be economic difficulties, let no one mistake that. We are bringing into the Community economies which are fundamentally different from our own. The only comparison is with Greece. In my opinion, that is secondary because my support for the Community is from a political standpoint in the first place. It is not just a matter of balancing the books and asking about the price of half a pound of butter or whether we shall be better or worse off. That is the small change of the movement towards European unification. I hope that we shall see the day when the nations of eastern Europe come out of their long dark night able to join the European Community when they, too, are free.

We are trying to create much more than just a "get rich quick" club. There will be problems, and one can see that the cost of accession has now been put back into the budget. When we last debated European affairs, I was critical of the European Council, because it had ignored the costs of the accession of Spain and Portugal and had taken out of the budget the cost of the burden of the past. At least it has now restored the cost of accession. One hopes that it will go further. If the burden of the past is not built back into the budget, hon. Members who said that we were likely to lose out on the distribution of funds in the next year are correct.

Some hon. Members will cynically vote for the Bill in the hope that, with the addition of two more countries, the Community's structure will crack up. I do not believe that that will happen. We still do not have the details. Various hon. Members have been rushing in and out of the Library trying to discover exactly what was agreed at Luxembourg yesterday. No doubt that will become clearer. However, it is obvious that a start is being made to sort out the decision-making process in the Community, and it is about time. But I can be sure, even before I read the agreement, that it will not go far enough. We should have been a long way down the path to majority decision-making and enhancing the powers of the European Parliament. I think that the agreement will be the first hesitant step.

Mr. Deakins

Federalism.

Mr. Knowles

The hon. Gentleman is yelling "Federalism" as if it were a wild accusation. He will be speaking in a moment in favour of a federalist Government, the United States, and presenting their case, as he often does in the argument.

Mr. William Cash (Stafford)

My hon. Friend and I disagree on this point, and he knows that perfectly well. I should like to refer him to the provisional text of the conclusions of the European Council that has just been placed in the Vote Office.

Mr. Knowles

I have not had a chance to look at the agreement. Waving the agreement at me from 3 ft away will not help me at all. I am willing to admit that my view will probably be that it does not go far enough.

My hon. Friend the Member for Mid-Worcestershire (Mr. Forth) said that one of the problems was that the House did not get an early look at European legislation. A Bill has been presented by the Government today and we have had no information. Somehow, the blame for that is put on the Community. It is not the fault of the Community; it is the fault of the House for letting the Government get away with it. There is a Select Committee on European Legislation, with restrictive powers, by the decision of the House.

Mr. Forth

The problem that I was highlighting is that the Foreign Secretary said that he had signed the agreement in May and that we were being presented with a fait accompli, not from the Community but from our own Government. The process that we are going through today gives the House no opportunity to express its view about what is going on.

Mr. Knowles

On that matter, there is no difference between us. The fault lies with the House for letting the Government get away with what it does not like.

Western Europe is now too small for old-fashioned Napoleonic imperialism. We shall have to draw closer together. The choice for us is not between an independent Britain and a Britain taken over by foreigners. If Europe tries to remain a medley of small and middle-rank countries, its future lies in being a series of small-time American and Japanese colonies. Britain's only choice lies in integration.

6.24 pm

Mr. Eric Deakins (Walthamstow)

I realise that this is an open-ended debate, but there is some desire to finish it early. However, I think that it is an important debate. I disagree with virtually everything that was said by the hon. Member for Nottingham, East (Mr. Knowles), except his conclusion.

I welcome the accession of Spain and Portugal to the European Community, not because I think it will strengthen it, but because it will weaken it. I say that as an inveterate opponent over 25 years not only of British membership, but of the Common Market itself. On the federalist lines developed by the hon. Member for Nottingham, East, I think that the Common Market will develop into a superpower and will be a real threat to the peace of the world. It is already a threat to relations between north and south because of its economic imperialism, its network of client states and its trade policies, which discriminate against goods from the poorer countries.

There are two reasons why I think that the accession of Spain and Portugal will weaken the Economic Community —first, cost, and, second, agriculture. Both those subjects have been alluded to by hon. Members in the debate.

On the subject of cost, I draw the attention of the House to the fact that we passed a Bill at the end of the previous Session raising the VAT limits to 1.4 per cent. and 1.6 per cent. respectively over the next few years. A major justification for VAT increases in the EEC was the cost of the accession of Spain and Portugal. However, the explanatory memorandum to the Bill states: Spain's contribution to, and receipts from the Communities' Budget should roughly balance". It also states: Portugal should be a modest net beneficiary, After the end of the transitional arangements, Spain and Portugal may be expected to be net recipients from that Budget. If that is the case, what is the justification for the VAT increase to 1.4 per cent. with a further increase to 1.6 per cent.?

The Foreign Secretary said in his opening remarks that the Commission had estimated that, in the seven years that it would take to complete the accession of Spain and Portugal after the transitional arrangements, the total cost would be no more than 0.1 per cent. of VAT. In other words, of the extra 1.4 per cent. that has just been put on to VAT, only 1.1 per cent. is accounted for by the accession cost. That is not in line with earlier justification of the VAT increases.

How can we believe the Commission's estimate over seven years ahead of what Spain and Portugal are likely to do, which is an unknown quantity? We know from experience that the Commission is incapable of assessing the cost of the common agricultural policy from one year to the next. How, therefore, is it possible for the Commission, with any hope of reasonable accuracy, to assess the cost of enlargement at 0.1 per cent.? That is a sheer guess on the part of the Commission, and it might be miles out, or it might be 2 per cent. or 3 per cent. on the VAT rather than 1.1 per cent.

In his opening speech, the Foreign Secretary gave the impression of being complacent about the additional cost, which he admitted, of the accession of Spain and Portugal to the EEC. He said that it does not really matter because Britain's contribution to that extra cost will be only 7 per cent. Bully for Britain. What about the Community as a whole, when costs go up massively because of the accession of Spain and Portugal? We shall be getting not just the 1.4 per cent. on 1 January but we shall reach the 1.6 per cent. much quicker as a result of increased costs of enlargement. Thereafter, the Government —if they are still in power, and this could happen before a general election in 1987 or 1988—will return to the House with another patched-up agreement with the EEC to raise the 1.6 per cent. limit perhaps to 2 per cent. or even higher. There is no end to the cost implications.

I refer to agriculture. There will be greater pressures for price increases from the producers of Mediterranean crops in Spain and Portugal, adding to the existing pressures from those in Greece, Italy and southern France. There will be greater surpluses of olive oil, horticultural products, citrus fruits and wine. We must not forget that the Community already has a vast wine surplus, and is building up a fairly substantial olive oil surplus, even with existing Mediterranean producers.

Therefore, there will be more disruption of crops, and more wastage of taxpayers' money in storing crops that no one will buy and that will eventually have to be dumped on world markets or destroyed. Will we see the price reductions that the Government hope for? We shall not see them on Mediterranean products. It is doubtful whether we shall see them on the more temperate zone products, such as cereals, which are still in great surplus. When Spain and Portugal enter, they will bring with them a large number of small farmers, small producers, whose average size is probably below the average size in France and Germany. The Community average size is raised because Britain and Denmark have fairly large farms, on average, but when Spain and Portugal enter the average will go down once more and the voting power in Spain and Portugal and therefore indirectly in the Community, through the European Assembly and the Council of Ministers, will be enlarged once more in favour of price increases. I do not forget the cost of the integrated Mediterranean programme, which my hon. Friend the Member for Hamilton (Mr. Robertson) mentioned in his opening speech, which was very good and clearly outlined the deleterious effect on the Community and on Britain of Spanish and Portuguese entry.

While we are debating the matter, we are awaiting the report from Luxembourg. No doubt there will be a statement by the Prime Minister in the House tomorrow. In view of the problems of Spanish and Portuguese accession, which I and other hon. Members have outlined —and which both Front Benches agree on —and in view of the existing problems of the Community on surpluses, agricultural policy, regional policy and so on, one would have thought that a meeting of Heads of Government in Luxembourg would address its mind to those problems. Far from it. Hardly a word has been said about those real problems facing the Community and people in western Europe. We now have an agreement on improved decision-making in the EEC. However, it just shows how out of touch with reality all the Heads of Government, including our Prime Minister, are if they think that improved decision-making is the key to putting right what is wrong in the EEC. Even those who agree with the EEC realise that some things are wrong with it.

It is not speed of decision which is important in the Community, which is holding up the progress of the Community, or which is contributing to the vast costs, inefficiency and bureaucracy; it is the content of decisions that matters. It is the content of those decisions that has been so bad in recent years.

The Heads of Government have said nothing about the common agricultural policy in their bulletin, nothing about budgetary costs, nothing about the cost-effectiveness of the CAP, and nothing about value for money in the Community. They have said nothing about any of the controls on public expenditure that we have and sometimes suffer from in this country, which are not applied in the Community, nor could they be unless, as the hon. Member for Nottingham, East wishes, there was a federalist Government in western Europe with a strengthened European Assembly with powers enhanced at the expense of the House of Commons.

I welcome the accession of Spain and Portugal, which will give us a breathing space before other new members come in, when we can resolve, perhaps at the next general election, the contradictions in our attitudes towards the rest of the countries of western Europe. Thereafter there will be increasing progress towards federalism. I cannot believe that a majority of hon. Members would support that solution to the problem.

6.34 pm

Mr. Peter Fry (Wellingborough)

My hon. Friend the Member for Mid-Worcestershire (Mr. Forth) is not the only one in the Conservative party who has grave reservations about the treaty. His speech was the most impressive that we have had during the debate.

I listened to the hon. Member for Hamilton (Mr. Robertson) with growing incredulity. He seemed to be welcoming the accession of Spain and Portugal as well as finding every reason that he could for objecting to it. If the Spanish and Portuguese Governments were right of centre, I wonder whether his enthusiasm for the accession of the two countries would be as great. To a certain extent, the Labour party is in a bit of a dilemma on the matter.

The right hon. Member for South Down (Mr. Powell) said that, far from the economic Utopia that the EEC was supposed to have become, we have been going through an exceedingly difficult period, when there has been a great crisis of confidence in the future of the Community. As we have failed manifestly to solve the problem of the CAP and all the other problems related to the Community, to take in Spain and Portugal is rather like saying to a man who is deeply in debt, "Go and borrow a lot more money and that will get you out of your difficulties." From an economic point of view, the entry of Spain and Portugal will add considerably to the Community's difficulties.

I speak as one who, after much heart searching, originally voted against this country's accession to the EEC. Later I was persuaded that we should be better off inside it, but I have now come to the conclusion that first impulses are probably right. I think that my attitude is shared by many millions of people.

I do not wish to talk at length about Gibraltar because it is a highly specialised subject, but if we are talking about a so-called friendly power, I wonder how we define "friendly" when we see the way in which the Spanish Government have treated Gibraltar until comparatively recently. There are still problems with the use of the landing strip at Gibraltar and, hitherto, the Spanish Government have been obdurate in allowing flights into other Spanish cities —hardly the action of a so-called friendly power.

Furthermore, there is fear in Gibraltar that allowing Spain into the EEC is, in some people's minds, a roundabout way of getting rid of the Gibraltar problem and trying to help towards the absorption of the Rock and its people into Spain. I know that that is bitterly resented by the people of Gibraltar, who are very pro-British. I should not like the debate to conclude without putting that on record.

The effect of the accession on British industry worries me very much. If the Spanish Government had shown themselves to be broad-minded and that they had a liberal attitude towards world trade, I would have had greater confidence. I speak as the chairman of the all-party footwear group, and my constituency is probably the centre of men's shoe production. For years I have had complaints about the way in which the Spaniards have protected their industry.

It is interesting that only in March this year the Spanish Government passed an order saying that from 18 October all footwear must carry an incredibly detailed swing tag printed to unbelievably strict specifications, all in Spanish. Yet the Government were negotiating to join the EEC for the liberalisation of trade. Is it any wonder that footwear interests in this country concluded that that move can be interpreted only as a blatant attempt to obstruct the entry of footwear imports to the Community?

Therefore, because I doubt the actions of the Spanish Government in relation to trade, and know that the Spanish will be able to compete behind still substantial barriers for many years to come, I believe that the Governments of the EEC have given away all their powers before seeing the true spirit in which the Spaniards intend to enter the Community. I fear for the jobs of footwear workers in Britain, and I suspect that many other hon. Members will come to fear for the jobs of workers in other industries. It is right that that point of view should be expressed.

When the footwear industry representatives spoke to the British embassy in Madrid, the recommendation was to take the matter to Brussels through the British Footwear Manufacturers Federation. We know how long that path can be, and how empty the solutions when one eventually arrives. We must accept that there is a danger to many jobs in Britain. I am not satisfied that that aspect has been taken into account, so I cannot possibly agree to the treaty.

6.41 pm

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

This has been one of the more lively debates on the European Community, even though the Opposition are not opposing the Government on this issue. The last time that I replied to a debate on the European Community, which was on the EC budget, the Minister made a robust speech from which I emerged somewhat scathed and bruised. I caution the Minister of State that that Minister was the hon. Member for Eastbourne (Mr. Gow), and that the following day he returned to the Back Benches. I do not imply that there was a direct connection between the two events —I do not have that influence. However, the Minister should beware of pushing his luck.

At the start of the debate, some of my hon. Friends and some Conservative Members complained about the unavailability of a key document. We now have copies, but it is not easy to read such a large document during a debate. Hon. Members were not joking or raising an unimportant question. An increasing number of hon. Members are worried that Ministers at overseas or Community meetings are more and more acting in our name, and that the House is being contemptuously treated as a rubber stamp. A large majority is no reason for the Government to assume that they can act in that way. It is important that the House is treated properly, and that includes hon. Members being provided with the right documents.

The only useful information that I can obtain from the glossy document is the speed in dismantling tariffs for tomato concentrate and peeled tomatoes, which does not appear to be relevant to the major issues before us. The important question that hon. Members want answered is which issues will be transferred from requiring unanimous decision to decision by a qualified majority. That is important, because we shall be relinquishing our veto on those issues.

We are concerned about the movement towards conformity, led by Lord Cockfield and others. The Government have not fully appreciated the implications of conformity on such issues as banking, insurance and transport, especially in the light of Spain's and Portugal's accession.

The main thrust of the debate is about the membership of Spain and Portugal. The hon. Member for Berkshire, East (Mr. MacKay) questioned the sincerity of the remarks of my hon. Friend the Member for Hamilton (Mr. Robertson). I jump nobly to my hon. Friend's defence. We welcome wholeheartedly the accession of Spain and Portugal, which we believe will help to strengthen the democratic structures in those countries. That view is not paternalistic or patronising.

Even in his speech today, the right hon. Member for South Down (Mr. Powell) was preaching to other people. It serves no purpose for him to tell us that we should not offer advice to other democratic countries. We welcome Spain as a Socialist country and Portugal as a long-term ally. I make no bones about the fact that we welcome the increase that their accession will represent in the Socialist group in the European Parliament after the direct elections in two years.

However, the accession of Spain and Portugal is not without difficulties, and it would be a disservice to Britain, Spain and Portugal not to spell out and recognise those difficulties. There is no contradiction in welcoming them for political reasons. We are all politicians, so why should we be ashamed of that? We welcome them for political and other reasons, but we accept that there are some economic difficulties. However, we can and must work together.

I emphasise the difficulties expressed by my hon. Friend the Member for Hamilton. One is the increased strength of the agriculture lobby. There is also the relative poverty of Spain, and Portugal especially, that will exacerbate the tendency towards economic divergence in the Community. We must also accept that there wilt be increased difficulties in decision making, which no doubt will be welcomed by my hon. Friend the Member for Walthamstow (Mr. Deakins).

Hon. Members were unconvinced by the Foreign Secretary's assurance that reform of the common agricultural policy would be easier following the accession of Spain and Portugal. That is manifest nonsense. Although I did not agree with the hon. Member for Mid-Worcestershire (Mr. Forth), he made an excellent speech. As he said, with the exception of Spain and Portugal, farm acreage is increasing by 30 per cent. and the number of consumers by 18 per cent. It is madness to believe that Spain and Portugal will not increase productivity and thereby take advantage of the CAP. Indeed, one reason for their entry to the EEC is to take advantage of it. Production will rise, and there is a danger that surpluses will increase. That is why the reform of the CAP is even more urgent. At every opportunity, we have asked, pushed, pressed and bullied the Government to try to get some real reform of the common agricultural policy. All we receive is the assertion that something is being done. No real reform is taking place.

There may be problems with the accession of Spain and Portugal, but we should not deny that it will create opportunities. No reference has yet been made to the report of the Select Committee on Agriculture that considered the matter. The hon. Member for Banff and Buchan (Mr. McQuarrie) will especially welcome recommendation No. 18, which states: We look forward to seeing our Scotch Whisky trade expand considerably. The Spanish and Portuguese will be looking forward to the opportunity of drinking more of our Scotch whisky, and we shall be happy to provide them with it. We are concerned that the European Community budget has not been adjusted to take account of the accession and its effect on the CAP.

I return to the political implications. We believe that there will be effects on political co-operation. One point that I have been able to glean from the voluminous document on the conclusions of the European Council is contained in article 1 of the draft treaty on foreign policy co-operation, which states: "The High Contracting Parties"—another Euro-jargon phrase— being members of the European Communities, shall endeavour jointly to formulate and implement a European foreign policy. We have been at odds with our European partners on a number of issues —for example, on South Africa, where the EEC is anxious to impose more vigorous sanctions, but we are holding back for reasons that I do not have time to explain now. On UNESCO, from which we have given notice to withdraw, our EEC partners are attacking and criticising us. Indeed, at the United Nations we were isolated on the issue of the Falklands—

Mrs. Elaine Kellett-Bowman (Lancaster)

Not while the war was on.

Mr. Foulkes

The Prime Minister may think that she can bully our EEC partners into line, in the same way as she can bully Cabinet members into line. That will be more difficult than she imagines. Indeed, there will be pressure on us to come into line with the majority in Europe.

The Opposition welcome wholeheartedly the accession of Spain and Portugal on 1 January. We look forward to a move in the Community towards the Left —a move that, thankfully, will be continued with the return of a Labour Government in Britain.

6.50 pm

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind)

The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) rightly said that this has been a lively debate. I like to think that the Opposition's support of the Government on this matter has contributed, even if only indirectly, to that. However, I hope that the hon. Gentleman realises that if the Labour party enthusiastically welcomes Spain and Portugal into the Community, it is ludicrous that it should reserve the right of a future Labour Government to take Britain out of that same Community.

A number of hon. Members spoke about the democratic identity of Spain and Portugal. The right hon. Member for South Down (Mr. Powell) suggested that to raise that matter as being relevant to the question of Spanish and Portuguese membership represented interference in the internal affairs of those countries. There are circumstances in which the right hon. Gentleman's comment might be justified. If, for example, the existing members of the Community said to Spain and Portugal, "Please come and join the Community because of your democratic requirements and because it will strengthen your democratic institutions", that could rightly or wrongly be described as interference.

However, that does not reflect the true position of the Community, which is that every democratic party in Spain and Portugal has said to its people and to the European Community, "We wish to be members of the Community because we believe that the democratic foundations of the new Spain and the new Portugal will be strengthened by membership." It cannot possibly be interference if the countries of the Community say, "We agree with you —that is a relevant consideration and one that should be taken into account."

That was not the only criterion during the negotiations. Had it been it would not have required seven long years of negotiations for these matters to be resolved. The fact that it has taken those seven long years for the applications of Spain and Portugal to be approved by the Community and for a treaty to be formulated shows that the issues go far wider than the right hon. Gentleman suggested. The original date for Spanish and Portuguese membership of the Community was two years ago. That had to be deferred because of the impossibility at that time of reaching agreement on the essential conditions, relevant to the European Community, before membership could take place. I ask the right hon. Gentleman to reflect on his analysis of the background to Spanish and Portuguese membership. It does not stand up to examination.

A number of my hon. Friends, especially my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie), referred to Gibraltar. My right hon. and learned Friend the Foreign Secretary clearly set out our position. No Spanish citizen will be entitled to a pension from the Gibraltar Government unless he has contributed to the pension fund of that Government. His entitlement will be on exactly the same basis as that of any Gibraltarian who has made comparable contributions through employment in Gibraltar. My right hon. and learned Friend said that the Government had agreed to assist Gibraltar with a significant sum during the first year following Spain's accession. There will be further discussions with Gibraltar on the issue.

The hon. Member for Hamilton (Mr. Robertson) referred to the implications of enlargement for the regional and social funds. He was right to suggest that we should take that into account. The final quota ranges in the regional fund to which Spain and Portugal will be entitled have not yet been determined. However, it is clear that they will be significant, because Spain and Portugal are relatively poor countries within the Community.

That will not necessarily preclude substantial resources coming to the United Kingdom. That will, in part, depend on the total sum of the regional fund. Some time ago the European Council agreed that there should be real increases in the size of the fund, but I accept that our traditional position, where we have been a modest but significant beneficiary, may not continue when the wider entitlement of Spain and Portugal is taken into account. I have no doubt that we will continue to be a major beneficiary of the fund, but the precise amount will need to be determined.

Mr. George Robertson

Why did a Minister representing the Government canvass in favour of a freeze of the regional and social funds at the last meeting of the Budget Council?

Mr. Rifkind

The hon. Gentleman knows that the requirements of budgetary discipline include a reference framework. He is aware that these matters, which come under the non-obligatory side of Community expenditure, have their own constraints, which need to be observed. No quotas are laid down for the allocation of the social fund, so there is no predetermined basis on which we can assume the entitlement of various countries.

The right hon. Member for Bristol, South (Mr. Cocks) spoke eloquently. He raised a constituency interest in asking whether bulk deliveries of wine and sherry would continue to be exported to the United Kingdom for bottling within the United Kingdom. We are not aware of any proposals that would interfere with that traditional practice. We hope that the employment prospects described by the right hon. Gentleman will continue to be available and that nothing will interfere with that.

My hon. Friends the Members for Mid-Worcestershire (Mr. Forth) and for Wellingborough (Mr. Fry), in eloquent speeches, expressed their concern about the implications of Spanish and Portuguese membership. They clearly indicated their opposition to that. I pay tribute to my hon. Friend the Member for Mid-Worcestershire for, sometimes single-handedly, raising this issue over a number of years. There is no doubt of his sincerity on this matter.

My hon. Friend asked about the costs that would arise from Spanish and Portuguese membership, and correctly said that the House must take that factor into account. We must consider the transitional arrangements. It is proposed that Spain should achieve broad financial neutrality over the period of transition, whereas Portugal should be a modest net beneficiary. I am sure that most Members will accept that that is not unreasonable. The gross domestic product per head in Spain is 56 per cent. of the Community average, whereas for Portugal it is only 24 per cent. It is reasonable to take such factors into account.

Mr. Marlow

There is another aspect of the costs that frightens many Conservative Members. My hon. and learned Friend will know that after yesterday's business in Luxembourg more measures will be decided by majority voting rather than unanimously. Within the Community, Spain and Portugal will be pro-Socialist. At times, with those countries in the Community, there will be pressure for more Socialist government. More measures will be presented with a Socialist bias, and that will have cost implications. Is my hon. Friend not concerned about that?

Mr. Rifkind

I have more confidence than my hon. Friend about whether Spain and Portugal should be assumed to have Socialist Governments for all time. They are both democratic societies. Spain had a Conservative Centre-Right Government immediately before its present Administration. Spain and Portugal will no doubt enjoy the democratic pendulum in exactly the same way as it is enjoyed by other member states.

Mr. Foulkes

That will depend upon their electorates.

Mr. Rifkind

Indeed, and that is a sensible criterion to apply.

On the long-term cost implications of enlargement, I agree that we cannot be sure of the exact figures, because many matters cannot possibly be resolved in advance. We do not know what decisions will be taken by the European Community on the details of expenditure. We do not know some of the implications within Spain and Portugal of membership of the Community. The Commission has estimated that, in the long term, the expenditure of the Community on enlargement will represent 1.1 per cent. of the VAT base. The most crucial point is that, thanks to the Fontainebleau agreement, 93 per cent. of any additional, continuing net costs of enlargement will be met by member states other than the United Kingdom. The United Kingdom's involvement is marginal. It is some 7 per cent. of the total, and that is an important consideration.

Hon. Members on both sides of the House have shown by an overwhelming majority that they believe that Spanish and Portuguese membership of the Community is highly desirable. I believe that that view is represented by the vast majority of people in Britain as well as elsewhere in the Community. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Archie Hamilton.]

Committee tomorrow.