European Economic Area Bill [Lords]

HC Deb 21 October 1993 vol 230 cc414-60

Order for Second Reading read

4.56 pm

The Minister for Industry (Mr. Tim Sainsbury)

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

The Bill implements the European Economic Area agreement, which will create the world's largest single market, consisting of 12 Community member states and six of the states in the European Free Trade Association. Perhaps I should remind the House that those states are Austria, Finland, Iceland, Liechtenstein, Norway and Sweden. The seventh EFTA state, Switzerland, chose last December not to participate. For the sake of brevity, I shall use the term EFTA to refer to those states that will be part of the EEA.

May I remind the House at the beginning of this debate that the agreement was considered in a scrutiny debate on the Floor of the House in February 1992. The motion in favour of the agreement was approved without a Division.

The Government have tabled amendments to take account of a protocol signed in March by the participating states, which enables the agreement to enter into force without Switzerland. The Bill as introduced, taken together with the Government amendments, will implement the agreement as amended by the protocol.

We should not underestimate the trade benefits that the agreement will bring. It will create an area of 18 countries throughout which the four freedoms—for the movement of goods, capital, services and people—will apply. Most of the provisions of the Community single market will be extended to apply to the whole of that area.

EFTA countries will have to adapt their legislation to make it consistent with the single market rules. Community member states will have to amend their legislation, where required, to cover the whole of the EEA.

The agreement will create a market with equal conditions of competition and the same trading rules, stretching from the Arctic to the Mediterranean. As the House will recall, the agreement was originally due to enter into force on 1 January 1993. Switzerland's decision meant that that date could not be met. It will now enter into force once all EEA and EFTA states have ratified. We expect the' last states to do so this autumn, allowing the agreement to become effective by the beginning of 1994.

Liechtenstein will probably come on board some time later, after issues relating to its close ties with Switzerland have been resolved. The protocol allows for that, as does one of the Government amendments to the Bill.

When the agreement enters into force, the principal means by which it will extend the four freedoms is through the inclusion in the agreement of articles based on key articles from the European Economic Community treaty. It will include in its annexes some 1,500 single market measures.

Sir Teddy Taylor (Southend, East)

The Minister referred to the extension of rights and entitlements from the Arctic to the Mediterranean. Does he accept that, as part of the EC, some of the alleged advantages do not extend to Gibraltar.

Mr. Sainsbury

I know my hon. Friend's concern about Gibraltar, but the arrangements there have been in position since the United Kingdom's accession in 1972. For some matters, such as Gibraltar-based banks, we hope to make the necessary provisions in due course, but if there are other aspects relating to Gibraltar, perhaps, my hon. Friend would like to enlarge upon those in his own remarks.

As I was saying, the agreement will include in its annexe some 1,500 single market measures, but in addition the EFTA countries will be subject to competition and state aid rules based on those of the Community. The agreement will also establish increased co-operation between the Community and EFTA in Community programmes in areas such as research and development, information services, education, training and youth, small and medium-sized enterprises and tourism.

The EEA is a dynamic agreement, so EFTA will take on new measures related to the four freedoms as they are adopted by the Community. That will ensure that the agreement continues to reflect business reality.

Mr. Bob Cryer (Bradford, South)

The Minister is extolling the virtues of the arrangements and the legislation, so why is it that a country such as Japan seems to have a buoyant economy by and large, without the need for all the countries linking together in a single market? We were told in 1973 that our entry into the Common Market would give us entry into that wonderful market. We are now being told that it is to be made a bigger market, yet it all comes to nothing. We have a high level of unemployment, as do all the EC countries. Could he not make clear the reasons for the distinction between our failure and Japan's success?

Mr. Sainsbury

The hon. Gentleman invites me to depart rather a long way from the measure that we are debating. I hope that he will recognise that one has to look at the economic and geographical circumstances and the historic background of any individual country.

The most interesting point relevant to his scepticism is that not only do the EFTA countries wish to join the EEA of their own free choice—they see the benefits it will bring to their economies—but four of those countries have chosen to become full members of the Community, seeking as we do the advantages it brings to our economies and to our people.

To ensue that EFTA states comply with the rules in the agreement, EFTA will create a surveillance body with powers similar to those of the Commission plus a court with a role similar to that of the European Court and the operation of the agreement will be overseen by a council consisting of Ministers and EC Commissioners on a joint committee. The joint committee will be responsible for the day-to-day running of the agreement, resolving disputes and agreeing amendments to annexes to the agreement in order to take on new Community measures.

Mr. Nigel Spearing (Newham, South)

I am grateful to the Minister because I wish to refer to the point that he has just made and it might be better to get a response from him now rather than later. He said that there will be a joint organisation between the EFTA Governments and Ministers and the Commission. It may be one commissioner, it may be more. Is it not something of an anomaly that representatives of elected bodies and Governments are meeting perhaps as an EFTA or EEA council—six of them meeting one or perhaps two or three commissioners who are, after all, officials? Will they not be meeting the political Ministers to whom the Commission proposes legislation?

Mr. Sainsbury

I can assure the hon. Gentleman that these arrangements were discussed at great length by the Ministers representing the EFTA countries and the Council of Ministers of the European Community. Of course, there will continue to be very close, contact and meetings between all the Ministers of the EEA.

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

I think I am right in saying that the European Court of Justice objected to certain powers being given to the new EEA court. What is the relationsships between the two courts? If a decision were to be taken by the EEA court, could that be appealed to the court in Luxembourg?

Mr. Sainsbury

There were some rather lengthy and complex, and speaking as a non-lawyer, legalistic negotiations on these matters. As a non-lawyer, it might be better if I wrote in response to the point the hon. Gentleman raises to make sure that we that get the legal reply quite correct.

Mr. Bernard Jenkin (Colchester, North)

Will my right hon. Friend give way?

Mr. Sainsbury

I want to make progress in due course, but I shall give way to my hon. Friend.

Mr. Jenkin

I am extremely grateful to my hon. Friend and I may be able to throw some light on this discussion. Was there not a disagreement within the European Community concerning the European Court of Justice and its jurisdiction, in that it was insisting that it would be the supreme body in the overall organisation of the EC and EFTA? Is it not significant that, having established that superiority over the activities in the EEA states, there is a risk that the measure could be more centralising than we would wish, given that the European Court of Justice has tended to be one of the architects of European centralisation?

Mr. Sainsbury

Again, I would say to hon. Friend that the negotiations on this point were lengthy, complex and dominated by the lawyers, of whom I am not one.

There is provision for that committee to consider the, implications of divergent jurisprudence and to take measures to deal with any problems that arise with it. That suggests that the superiority to which my hon. Friend refers was not clear cut and that arrangements were entered into to deal with that complication. Perhaps I could write to hon. Friend as well as to the hon. Member for Greenock and Port Glasgow (Dr. Godman).

Mr. John Biffen (Shropshire, North)

My hon. Friend promises to write, but I think that there might be some virtue in having matters of such moment on the record in Hansard.

Mr. Sainsbury

I take note of what my right hon. Friend says. Perhaps we can put the letter in the Library or arrange for its information to be conveyed.

I do not want to get too far into the complex legal arrangements for the interplay between the two courts, but I would say to my right hon. Friend, as I said to my hon. Friend the Member for Colchester, North (Mr. Jenkin), that there are arrangements for the resolution of any problems arising from what is called a divergent jurisprudence.

I was just about to draw to the attention of the House the fact that Community member states will have to amend their legislation to cover the entire area. That is the purpose of the Bill that we are now considering. It will implement the United Kingdom's obligations under the agreement and allow the United Kingdom to ratify the agreement.

he Bill contains three main provisions. Clause 1 makes the agreement a Community treaty in the United Kingdom law, clause 2(1) is a general rule that affords EFTA nationals and companies treatment equivalent to that already given under United Kingdom law to Community nationals and companies. Clause 3(1) is a general rule that implements the United Kingdom's obligations under the agreement where the first two provisions do not apply.

I will describe the provisions briefly in turn. Clause 1 of the Bill amends section 1(2) of the European Communities Act 1972 by adding the agreement to the list of Community treaties in that section, so obligations arising from the agreement will be treated as Community obligations under United Kingdom law and section 2 of the 1972 Act will apply to them.

EEA provisions that are directly applicable—for example, the competition articles of the agreement and EEA measures corresponding to EC regulations—will take effect in the United Kingdom without the need for further domestic legislation.

Where further domestic legislation is required to implement provisions of the agreement, powers need to be provided for that purpose. An example of that is the provisions in the annex to the agreement corresponding to directives. It is there that the two general rules contained in clauses 2(1) and 3(1) will operate.

Clause 2(1) contains the first general rule. The principle behind the rule is straightforward. Where existing legislation covered by the agreement contains reference to the communities, or some connection with the communities, such as member states, those references will be substituted by corresponding references to the European Economic Area—or some connection with the area—or to both the communities and the area. That substitution will apply where the legislation is limited in its operation by reference to the communities. In that way, EFTA nationals and companies will be treated under the legislation in question in the same way as Community nationals and companies.

The second general rule, in clause 3(1), will operate only where the first does not apply. Clause 3(1) modifies provisions in United Kingdom legislation and certain other instruments where equivalent treatment will not be conferred by clause 2(1). It modifies those provisions only in so far as it is necessary to implement the United Kingdom's obligations under the agreement. It is intended to cater for legislation on which clause 2(1) will not bite, but which has to be amended to implement the agreement.

The agreement is the most ambitious and wide-ranging to be entered into by the Community with third countries. It will create the world's largest single market with 370 million consumers, responsible for more than 40 per cent. of the world's trade. It will lead to benefits for both consumers and companies throughout the 18 countries. It will provide for closer co-operation between the Community and its closest European neighbours.

I should add that we are not ignoring the importance of our trade relations with Switzerland. If the Swiss decide in future to join the EEA, we shall welcome that decision. In the meantime, the Community and Switzerland are working to develop relations by improving on existing EC/Switzerland free trade agreement.

The United Kingdom is particularly well placed to benefit from the agreement. We have well established trade lines with all EFTA countries, partly because of geography and partly because of our previous membership of EFTA. In 1992, we made £5.7 billion of visible exports to the six EFTA states that will participate in the EEA. That business has been won by a wide range of industries and the agreement will bring further opportunities for exports from Britain through opening up services and public purchasing, shared research and development programmes and the extension of common technical standards and regulations.

There is a substantial potential benefit for the services sector. Financial services will be able to "passport" into EFTA countries. The aviation market will be opened up through the extension of EC aviation measures such as those on competition and passenger capacity. United Kingdom professionals will be able to offer their services across all 18 member states of the EEA. I can assure the House that my Department will play a full part in helping our companies take advantage of these new opportunities.

Earlier this year, we set up the Business in Europe service to help firms succeed in the new Europe, created by both the single market and the EEA. We shall give companies help on the practical aspects of selling in Europe, information on the new trade rules and assistance if they face unfair barriers to trade. We are in addition recruiting four export promoters specifically for the EFTA countries, including Switzerland.

The creation of the EEA is entirely in line with the Government's commitment to develop a Community that is open, market-oriented and outward-looking. It will ensure that trade within the larger part of Europe is based on the principles of open market and open economy that we hope will extend one day throughout the whole of Europe.

Sir Teddy Taylor

My right hon. Friend is kind to give way so much. Will there be a further advantage in contributions from the EFTA states of the EC? It seems, from reading this complex treaty, that on page 215, in protocol 32, provision is made for contributions by the EFTA states to the EC. Will that involve a lot of money, and will we benefit a great deal in consequence?

Mr. Sainsbury

There is a cohesion fund—an expression with which I suspect that my hon. Friend is familiar—which will enable the EEA countries to make a contribution to the poorest parts, or poorer parts, of the Community. Among the beneficiaries will be Northern Ireland.

A further and substantial advantage of the agreement is that it is greatly facilitating the negotiations that are currently under way with four of the EFTA states—Austria, Finland, Norway and Sweden—for them to join the Community as full members. The Government strongly support their applications.

Although enlargement of the Community is an important goal, the agreement remains significant in its own right. It creates a market that represents almost half of the world's trade. Its benefits will be enjoyed by consumers and businesses alike. It will ensure that trade within western Europe is based on the principles of an open market economy. British exporters want to win the new business that is available to them from the new opportunities that the agreement creates, and want to do so without delay. I therefore commend the Bill to the House.

5.16 pm

Mr. Stuart Bell (Middlesbrough)

I thank the Minister for his concision on a Bill that is important to the House, as we saw yesterday in the procedural motion that we debated and are now taking through all its stages today.

Her Majesty's Opposition welcome the Bill. We welcome the underlying principle, which is to extend the single market from the European Community to the EFTA countries. As the Minister said, through the agreement that we are debating and the subsequent modification of Community law, we are seeing the creation of a single market of 18 countries, with 380 million consumers.

Notwithstanding the high levels of unemployment throughout the European Community—alluded to yesterday by my hon. Friend the Member for Bolsover (Mr. Skinner), whom I am glad to see in his place, beside my hon. Friend the Member for Bradford, South (Mr. Cryer)—the fact remains that the European economic area will become the largest and richest single marketplace in the world.

The prospect has been opened up that as nation states in central and eastern European countries break away from their communist past, with their centralised economies, they may also join the European economic area, perhaps by the end of the decade.

Mr. Dennis Skinner (Bolsover)

We have heard all these stories about this Common Market claptrap for 22 years: if we can make the market bigger, it will be better for Britain. I remember that, when West Germany annexed East Germany, people said that it was going to widen the market and that everybody would be better off as a result. We all know now that the British taxpayer is footing the bill for the annexation of East Germany, and to some tune.

I remember—those golden days in retrospect—when Britain used to build ships. We used to put manufactured goods in them, send them to the four corners of the earth. They used to come back. Some of them had Commonwealth preference. We used to put food in the ships. It was a nice little earner. We used to sell our manufactured goods. We had a balance of trade surplus. We do not now have a shipbuilding industry; the Government have ruined that. We have a deficit with every Common Market country on trade. The whole thing has been an unmitigated disaster from beginning to end. Now my hon. Friend is saying, "If only we can make it a bit bigger, we can have even more of this claptrap."

Mr. Bell

I am glad that my hon. Friend managed in his intervention to mention Mr. Arthur Daley and his nice little earner.

Yesterday, my hon. Friend talked with his usual eloquence of socialism in one country. He will be happy to note from the response given by the Minister to the hon. Member for Southend, East (Sir T. Taylor) that, under the cohesion agreement, a fund will be set up to assist poorer regions of the Community. It will consist of 500 million ecu in grants over five years plus an interest rate subsidy of 3 per cent. on 1.5 billion ecu of loans. As the Minister said, that covers Northern Ireland, the Republic of Ireland, Greece, Portugal and most of Spain. As socialists, we are all keen on the transfer of wealth from those who have to those who have not and on a proper distribution of that wealth to the poorer regions.

Mr. Christopher Gill (Ludlow)

Given the Government's new stand that a single currency and economic and monetary union are no longer an immediate prospect, is it realistic to think that such importance will be placed on the cohesion funds in future? As I understand it, the purpose of the cohesion funds was to encourage the convergence that made a single currency possible.

Mr. Bell

The hon. Gentleman, who followed the Maastricht debates with great interest and enthusiasm, has touched on a point of great embarrassment to the Government. The Heads of Government will shortly meet again. The Prime Minister and the Government say one thing in the House, but they will have to say something else to the Heads of Government, who propose to continue along the route to a single currency, because they tell the House that we do not. When that debate takes place, it will be interesting to see where we are going.

To return to my earlier train of thought, as the Minister said, we are debating the most ambitious and wide-ranging agreement to be entered into by the Community in relation to third countries.

Sir Teddy Taylor

rose—

Mr. Bell

I just want to make one point to my hon. Friends the Members for Bolsover and for Bradford, South, who are following the debate with interest, as are my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman) and for Newham, South (Mr. Spearing).

We shall hear opposition to the Bill on the Floor of the House, but one should consider the difficulties of the Uruguay round of the general agreement on tariffs and trade, the difficulties of the new American free trade area between the United States, Canada and Mexico, and the long haul of Maastricht not only in Britain but throughout the EC. Here we have European neighbours coming together in an area where there is to be free movement of goods, capital, services and people, under an agreement which includes consumer protection, environmental protection—which is important to the Labour party, the Government and those who consider such issues with care—statistics and company law; an agreement which will lead to the enlargement of the European Community.

Mr. Cryer

My hon. Friend sought to make the case that there was some sort of redistribution of wealth in this arrangement. Would he care to comment on the idea that the common agricultural policy, sustained by Common Market expenditure, on which 70 per cent. of EC funds are spent, destroys the agriculture of the developing nations, results in large quantities of food being dumped on world markets and is harmful to the very poorest of the poor? Year after year, we are told by proponents of the Common Market that that will be changed, but it gets worse. More money is being spent and there are more food surpluses and mountains. Yet now EFTA wants to help to prop up that discredited and disgraceful regime.

Mr. Bell

I am grateful to my hon. Friend for making that point. The common agricultural policy is not part of the agreement and it does not extend to the new economic area. When the matter was raised in the other place, Lord Peston, on behalf of the Opposition, said of those in the EFTA countries, "Lucky them." My hon. Friend's point goes to the heart of the GATT round at this moment and the discussions and debates there.

In the Community that we are seeking to create and enlarge, we want basic freedoms to be enlarged in relation to political identity and harmonisation, with common institutions that will bind us together. I confirm what the Minister said earlier, that the Opposition look on the European economic area as a stage on the way to enable countries in the EFTA area to make their entry into the EC.

Dr. Godman

Part III of the treaty, which relates to the free movement of persons and so on, is of more than passing interest to numerous constituents of mine who work in the offshore oil and gas industries. Is my hon. Friend aware that very few United Kingdom registered vessels operate in the Norwegian sector, whereas in the United Kingdom sector the picture is entirely different? Is my hon. Friend confident that there will be a more even distribution of work in the two oil and gas sectors following the establishment of the treaty?

Mr. Bell

The provisions on the free movement of persons will create a right for Community and EFTA nationals to work anywhere in that area. That is a coherent part of the agreement on the European economic area with the final Act and declarations. Community and EFTA nationals will be able to operate as self-employed persons throughout the area and to set up and manage undertakings under the same conditions as local nationals. Therefore, my hon. Friend's point is covered by the agreement. It is agreed in the text and words, and we hope that it will be shown in deeds.

Sir Teddy Taylor

I do not want to be too hard on the Minister in view of his dramatic announcement a few moments ago that Northern Ireland will now be eligible for grants from the cohesion fund. Will not that be great news for the port of Larne, which was told before that Northern Ireland was not eligible?

Mr. Bell

I hope that it is good news for the people of Northern Ireland. That was clearly stated by Baroness Denton in the other place when she took the Bill through the House last November.

We note that the European economic area agreement does not extend to VAT or to other areas of taxation. That was touched on yesterday in the procedural debate. The EFTA countries will not be obliged to apply VAT in their countries, but as and when they join the Community as full members they will do so. The same applies to customs union. There are no plans for the European economic area to become a customs union. EFTA is not a customs union. The seven EFTA states have different external tariffs. However, on becoming full members of the Community, EFTA states will have to join the union. Community fishermen will have increased access to Norwegian and Icelandic grounds and reduced tariffs for trade in fish between Community and EFTA countries.

Dr. Godman

Will Spanish fishing vessels have the same rights as those few United Kingdom vessels that now fish in Norwegian waters, despite the fact that the former have no history of fishing in those waters yet the latter have fished in northern Norwegian waters for many generations?

Mr. Bell

I seem to be taking over the Minister's role in interpreting the agreement and various documents, such as those on the European economic area and business in Europe. I am sure that the Minister, with his vast staff, can answer those questions better than I can. However, the European economic area is what it says it is, so I think that I can confirm what my hon. Friend says.

Again, I am not the Minister. I suppose that the only good thing is that while I am on the Floor of the House, I cannot be sued for slander, defamation of character or negligence if I get anything wrong. However, the point was made.

Dr. Godman

It was a good point.

Mr. Bell

It was, and an important one for fishermen.

Britain accounts for a large part of protected salmon, herring and mackerel interests, but the Bill does not amount to an extension of the Community's common fisheries policy to EFTA. During yesterday's short debate on a procedural motion, a plea was made for a two-day debate, and my hon. Friend the Member for Bolsover said that the Opposition had asked for two days. That was the wish of the shadow trade and industry team, but the decision to have a one-day debate was made through the usual channels. My hon. Friend the Member for Newham, South said that the usual channels went back to 1992; but the decision had nothing to do with the shadow trade and industry team.

One irony of yesterday's debate occurred when the hon. Member for Southend, East looked across at my hon. Friend the Member for Bolsover and asked whether he had heard a Conservative Minister speaking at the Tory party conference. Some of us have a vivid imagination and can visualise my hon. Friend attending the Tory party conference as a delegate and speaking at a fringe meeting about socialism in one country and in our time. That would be a great wonder to behold.

In fact, the Tory party conference was attended by the Swedish Prime Minister, who addressed a fringe meeting on the merits of the agreement that is before the House. I hope that the Swedish Prime Minister said—although this was not reported in the press—that Sweden supported the social chapter of the Maastricht treaty and that if Sweden ever signed up to it, it would also sign up to the social chapter.

At another Tory party conference fringe meeting, the Secretary of State for Social Security unveiled himself like Superman and declared that there would be two sets of measures to clamp down on benefits paid to foreigners. The first was that foreigners allowed into the United Kingdom on condition that they would not claim benefits would be prevented from doing so. That was at best an illogical statement. How can someone who has entered the country promising that he will not claim benefits subsequently be prevented from doing so? Nevertheless, the Secretary of State received a standing ovation for making such a statement.

The right hon. Gentleman also proposed preventing benefit tourism by introducing a requirement that one must live in the United Kingdom before being allowed to claim. He said that many foreign claimants are allowed into the United Kingdom on the express condition that they would be no burden on the public purse. I hope that those remarks were not made at the fringe meeting attended by the Swedish Prime Minister, because he would have been saddened to hear that he was considered a foreigner and that his subjects should not be allowed to become benefit tourists.

Let our imaginations run wild—

Madam Deputy Speaker

Order. I hope that the hon. Gentleman will not allow his imagination to range so wide that his remarks bear no relation to the Bill.

Mr. Bell

I assure you, Madam Deputy Speaker, and the House that my remarks will relate to the Bill. According to the Secretary of State for Social Security, benefit tourists will be guided away from those beaches that do not meet European directives on bathing waters—a point to which the Minister for the Environment and Countryside referred yesterday.

Mr. Cryer

Does my hon. Friend believe that the comments of the Secretary of State for Social Security at the Tory party conference were a coded indication of opposition to part of the Bill? That part of the explanatory memorandum dealing with its financial effects states: There may be a small amount of additional expenditure as a result of the application of the Income Support Regulations 1987 (S.I. 1967) to EFTA nationals. However, it is not possible to predict how many EFTA nationals, will claim income support, so precise expenditure is not possible to estimate. Does my hon. Friend agree that the Government should provide such an estimate, particularly when income support is under savage attack by the Government?

Mr. Bell

My hon. Friend is perfectly right to draw attention to the coded messages that are sent from one Secretary of State or Minister to another. Yesterday, we heard a sad comment from the hon. Member for Southend, East that statements made by Ministers at party conferences do not always turn out exactly as one would imagine. We believe that the statements to which I have referred reflect the thoughts of Ministers, and that the Secretary of State hoped that we would not notice them—or the fact that he was speaking contrary to the wishes of members of the Treasury Bench, in dealing with the Bill.

Dr. Godman

My hon. Friend seems to have detailed knowledge of all aspects of the agreement, so I will refer to one of concern to many working in Scottish salmon farming. Is my hon. Friend confident that the agreement will protect the interests of those employed in that industry from unfair practices by Norwegian salmon farmers? Before the agreement was signed, the Community, by means of the imposition of tariffs, protected the interests of Scottish salmon farmers against the dumping of Norwegian salmon in Community markets. Is there any protection against that kind of behaviour in the agreement?

Mr. Bell

I am always glad to stand in for the Minister and answer such questions. I repeat my earlier remark shat a large part of the protected herring, salmon and mackerel interests will remain protected in accordance with the agreement, and that the Bill will not extend the Community's common fisheries policy to EFTA. My hon. Friend was right to raise that important issue and to demand an answer from the Minister. We will help the Minister by putting our questions formally, so that they will appear on the Order Paper.

We contrast the remarks made by the Secretary of State for Social Security with those made by the Foreign Secretary at the Cornwall European constituency council lunch on 15 October. I do not know whether my hon. Friend the Member for Bolsover was invited to that function, but there he would have heard the Foreign Secretary say that we must reconquer the high ground of Europe.

That is a remarkable statement by the Foreign Secretary of a Government who found themselves in a minority of one during consideration of the Maastricht agreement. They had to get themselves two opt-outs; they struggled in the House of Commons for six to nine months before they were able to pass the Maastricht agreement; and, at the end of the day, they required a vote of confidence. If that is reconquering the high ground, it astonishes me to think that the Foreign Secretary ever knows where the high ground is.

We have seen the Government fritter away the opportunities of having a European central bank in London. They tell the nation how the City of London will be protected and enhanced by their action, yet we have lost all hope of having a European central bank. [Interruption.] The universal applause from Conservative Back Benchers will please the City of London, which for many years has bankrolled the Conservative party and provided votes at general elections. It is astonishing—

Mr. Sainsbury

Perhaps what was most revealing about the lengthy procedures on the Maastricht Bill was the Opposition's approach. Some Opposition Members, although not those below the Gangway, claimed to be in favour of the European Community but consistently voted against it.

Mr. Bell

We found ourselves in the uncomfortable position of agreeing with a Conservative Swedish Prime Minister on the terms of the social chapter and on the fact that it should be part of the Maastricht treaty. Had the Minister supported the social chapter, we would not have had six months of long and lengthy debate. The social chapter is agreed by the other nation states and would be agreed by Sweden and the EFTA countries.

It was astonishing to see the Government scuttled on so-called black Wednesday, when the pound came out of the exchange rate mechanism. We saw how the Government took refuge in a straightforward devaluation of the pound to become the party of devaluation. [Interruption.] We will remember that applause. We will remember for the nation how the Tory party became the party of devaluation. The Government were unable to hold a common line on monetary policy with our European partners. So they had better find out where to begin the conquest of the high ground of Europe and be sure that they carry enough oxygen to get them there.

The Foreign Secretary said at the Cornwall constituency council meeting that "ours" is a positive message. They are so positive about this Bill that, as the hon. Members for Southend, East and for Stafford (Mr. Cash) said yesterday, it has lain in the Vote Office for a year. That shows how limp the Government are when it comes to getting measures through the House of Commons.

How will the Bill help our business community? The Opposition believe that small firms will be able to benefit from cross-research and development and cross-trading opportunities. We know that United Kingdom business has welcomed the agreement. Our exports to the EFTA countries, referred to by the Minister, are about £7.5 billion —equivalent to two thirds of our exports to the United States.

I referred earlier to the prospect of failure of the Uruguay round of the general agreement on tariffs and trade. There is also the prospect of failure of the American free trade area agreements with Canada and Mexico. The world is drifting towards protectionism, a beggar-thy-neighbour attitude and policies that would lead to more stagnation and recession. We should contrast that picture with the situation in Europe, where a market is developing. It is not a rigged market—examples of which are well known to my hon. Friend the Member for Bolsover—but a single market. We support a developing market which brings closer together the people of Europe and which brings the Community together as a living and expanding entity.

I shall end where I began by saying that the Labour party is committed to the enlargement of the Community, not just in nominal terms but in real terms. The Scandinavian countries want to be part of the Community, notwithstanding the remarks about Norway made yesterday by the hon. Member for Southend, East. The hon. Gentleman commented earlier on the cohesion fund. When the Scandinavian countries join the Community of ours, they will be net contributors. They will make a real contribution to both the political and social context. That was shown by the speech made by the Swedish Prime Minister at the Tory party conference.

The Minister let slip a phrase which is more significant than even he realises. He talked about a new Europe. The Labour party has argued in this House throughout the Maastricht debate and in our entire approach to Europe for a new Europe. The new European economic area—the merging of Community interests with those of the EFTA states and bringing in the eastern European states—is looking towards that new Europe. That is why I commend the Bill to the House and why we will support the Government.

5.45 pm

Mr. John Biffen (Shropshire, North)

I enjoyed the speech of the hon. Member for Middlesbrough (Mr. Bell). Most of it was devoted to an almost Jenkinsite view of the Community and the virtues of its centralising destiny. Towards the end, to show that he was not wholly left behind by events, he talked about the virtues of enlargement. The hon. Gentleman will have an exciting learning curve, aided by his hon. Friends in the Chamber, if he holds these responsibilities when the Labour party has chosen its Front-Bench team. I wish him well. I prefer to oppose a communautaire Labour Front Bench than a revisionist Labour Front Bench.

I hope that my right hon. Friend the Minister will convey to my right hon. Friend the President of the Board of Trade our regret that he could not be with us to move the Second Reading. This is a tremendously important Bill, and it would have given him the chance to put to the House his views on the Community, which perforce he has not been able to do over recent months, for reasons that we all understand. Each and every one of us will be most anxious to see him back at the heart of this debate.

Mr. Skinner

Not closing pits.

Mr. Biffen

It will be a diversion from other activities.

I welcome the Bill, in the sense that it seeks a closer association of this country with the EFTA members that are designated as prospective members of this arrangement. I welcome it because, broadly speaking, those countries are at the edge rather than the heart of Europe. Because they are on the edge of Europe, they will have certain cultural, geographical and economic interests that are more closely aligned to ours than those of many existing members.

Mr. Malcolm Bruce (Gordon)

indicated assent.

Mr. Biffen

That is a casual observation, but I am glad to have the confirmation of the Liberal Democrats. That is the type of common sense which occasionally escapes during debates such as this. We invent for ourselves wonderful trade prospects. As the hon. Member for Bolsover (Mr. Skinner) said, on the whole, the track record of those who have been forecasting economic joy at every stage of our European relationship is not entirely compelling. Therefore, I am basing my case upon other considerations.

There is one point that the House must consider very carefully. There is, as it were, a seamless robe about European Community developments. Just as the original Rome membership led to the Single European Act, and that in turn led to all the arguments about a single currency, what we are seeing here is a staging operation whereby a number of countries, formerly within EFTA, are expected to be incorporated into the European Community.

That development is welcomed by the Government, because it is central to their policy, and it is also welcomed by those on the Opposition Front Bench, and especially by me. I cheerfully endorse the prospect of a wider Europe, because I believe, among other things, that within that widening there will have to be a recognition of the great diversity of Europe and an acceptance that one cannot have, the centralisation which has been fashionable in recent years.

What interests me about the proposals is that, at this stage in the development of the European economic area, which is in fact to do with the consequences of the Single European Act, no significant attempt is being made to loosen the relationships under the Single European Act. The full rigours of the Act will be applied. Is this to be the Community of the future?

As I see it, there is a conflict between the desire to go beyond mere free trade to something more positive contained in the Single European Act—I respect that, and it has, I think, been widely accepted throughout the European Community—but one consequence was not foreseen: the enormous strengthening of the Commission's powers as it sought uniformity on the most massive scale. The reaction against that can be seen in the importance that the Government now attribute to subsidiarity.

I believe that subsidiarity is a means of trying to check and reverse the Commission's growing power under the Single European Act. It is a great challenge, which I welcome—[Interruption.] My hon. Friend the Member for Southend, East (Sir T. Taylor) will have the opportunity to make his own speech, which I am sure will be less generous than mine. I am seeking the greatest possible agreement with the members of the Front Bench.

If our objective is to loosen the arrangements under the Single European Act, let it be an explicit objective. If no attempt has been made to loosen the circumstances in which the Single European Act will be applied in the European economic area, let us understand why. Let us understand that it was purely a temporary measure required of us by the exigencies of the negotiations, but that the objective of the wider Europe, including the EFTA members, is to ensure a loosening of arrangements under the Single European Act, arid especially to use the powers of subsidiarity to limit the authority of the Commission.

This point is not a passing debating point: it is crucial to our relations with our prospective partners in the north, and will also be valid when considering our relationships with the Czech lands, Hungary, Poland and possibly Slovakia. There will not be the homogeneity that exists between the economies of the EFTA countries. The situation is more complex and varied, so the changes for which I plead will be absolutely crucial in the relationships to be developed with prospective partners in the east.

This issue is at the heart of the expansion of Community membership, which is crucial to Government and Opposition policy. It cannot be left as a good-natured avowal or rhetoric to buy off the House, at Question Time or at any other time. It must be clearly spelt out as an integral part of Government policy, to be pursued in the renegotiation of Maastricht and the deals that are expected to be done in 1996.

That is the only point I want to make; it is a headline point and not a detailed point about the legislation, but my experience of EC legislation is that one must take each stage very carefully and ensure that the Government make it clear where they expect the next development to take place. That was not the case with the Single European Act, which was never sold on the basis that it would lead to economic and monetary union. However, I travelled, as ever, hopefully.

Recently, under the rubric "Raise your eyes, there is a land beyond", my right hon. Friend the Prime Minister contributed to The Economist, volume 328, serial No. 7830, pages 23–27. That is a rather prosaic introduction, so I shall summarise the article. It was the "Brixton Manifesto" on the great issues of the European Community. It makes encouraging reading for me. I shall not detain the House much longer but, in the context of tonight's debate, I shall read out three quick quotations.

My right hon. Friend wrote: I believe it is time to look afresh at the community and consider the way ahead. Time to put away the old slogans, dreams and prejudices. All over Europe, what are people worying about? Not to reduce the number of currencies, but to increase the number of jobs. The following quotation could be specific to this debate. He wrote: I believe it is that centralising vision that alarms so many voters in the applicant countries of Norway, Sweden, Finland and Austria. He went on: Community leaders should recognise that danger of centralism and work to avoid it; not imply—as they sometimes do—that these EFTA (European Free Trade Area) countries are lucky to be able to apply. The Community is not Europe. A true European Community needs the EFTA countries and others. That is almost illegitimacy made an art form.

I am delighted to believe that, after the passage of this legislation, the prosecution of policy will be predicated on the overwhelming requirement to ensure that the implications of the Single European Act are not carried to such an extreme that they sustain the present unacceptable authority of the Commission.

5.56 pm

Mr. Nigel Spearing (Newham, South)

Before I comment on the distinguished contribution of the right hon. Member for Shropshire, North (Mr. Biffen), whom I think of as the right hon. Member for Ludlow, may I say that you, Madam Deputy Speaker, and colleagues will know that it is my habit to attend these debates as often as I can to listen to the speeches. If I have to depart because of a long-standing and vital engagement, I hope to return as soon as possible, but if I do not do so before the following speaker has concluded, I hope that the hon. Member, whoever it is, the House and those who wind up will understand.

I refer to the speech of polity that we have just heard. The right hon. Gentleman does not favour the treaty, but he is like those people who favour it while hoping for a change of direction. The Brixton manifesto, which is well named, is also of that persuasion, as are many of my Front Bench colleagues. The right hon. Gentleman put his finger on the central issue—the Commission's power, the demands of the single market and the modification of subsidiarity.

My hon. Friend the Member for Middlesbrough (Mr. Bell) is a little optimistic: not only does the Commission remain the sole fount of legislation in its raw state, but the single market commands and determines almost all commercial, quantitative, monetary or legal obligations. Of course, the famed and over-publicised principle of subsidiarity does not apply where the Community's competence has vires, as it has over the single market. Therefore, all the hopes and flourishes of the Brixton manifesto and of my hon. Friend the Member for Middlesbrough and his Front-Bench colleagues are, alas, bound to end in disappointment.

The demands of a market—I shall return to that theme later in connection with Scandinavia and the other EFTA countries—involve more than simply freedom. There may be freedom for some; we have heard the Minister talking about the four freedoms, about movement of capital and so on. But rules and legislation are required, and the more a level playing field is demanded, and the more we say that there should be no interference with competition by state or Community subsidy or law, the more authority becomes necessary, and the more complex it becomes. Over the wider area that the market covers, with its different geographical conditions—in this case, in the northern parts of Europe—more and more authority is required; more courts and more interpretation are needed.

A great deal more is being required of the EFTA countries, especially Finland, Sweden and Norway, than has been popularly understood in this country. The "treaty of Oporto"—that is what it ought to be called—has not been mentioned so far. It was signed on 2 May 1992, and requires the single market, in all its authoritarianism, to be imposed lock, stock and Commission on all the members of the EEA.

The applicant or semi-applicant states have had to take almost all the legislation on board. I want to find out about the exceptions later, because we should know what they are. The applicants have had to take on, holus bolus, the whole of the famed single market that came into operation on 1 January. Moreover, they are to have only a consultative role concerning any amendments thereto.

Mr. Malcolm Bruce

That is up to them.

Mr. Spearing

It may be up to them to a certain extent, but—I shall now put the argument that I intended to put later—is not what is happening virtually force majeure? If you, Madam Deputy Speaker, were sitting in the Riksdag in Sweden or in Norway in the—

Mr. Bruce

Storting.

Mr. Spearing

Yes, the Storting. The Danes, too, were involved in something similar recently. The economic and social pressures, and the talk of the risks if those countries do not join, do not necessarily lead to willing acceptance. Countries can accept adherence for all sorts of reasons other than absolute willingness. The relative position of those states, and the relative size of their economies and populations, form at least an element. In the Storting, there was a relatively small majority in favour of entry.

Will the Minister who winds up the debate tell us about the exceptions to the authoritarian structural market, about which we are learning more and more? The northern parts of Europe, especially the three states that I have mentioned, are distinctive in climate, in peoples and in social development. Their landscape is one of fjords, fields, forests and farms, and their communities depend greatly on that base.

Norway also depends greatly on the life of the North sea—the marine life, as my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has illustrated so well by his questions. Of course, we all know that the European policies on agriculture and fisheries have been such an outstanding success that we want other people to join in. The communities that live nearest to the earth, the forests and the sea are the most vulnerable.

State aids are prohibited in principle in any part of the single market. They can exist only with permission, and that will be given only if the Commission does not think that they will distort the market. But the Commissioners' job is to protect the treaties, and the treaties require the single market; it is the golden calf of the whole outfit.

A description of the EEA agreement issued by the European Free Trade Association in February 1992 says the following about state aid: The EFTA countries will have to provide information about existing and proposed aid schemes to the EFTA Surveillance Authority, which may order them to be altered or abolished. New aid schemes may not be implemented without the approval of the Surveillance Authority. Anyone who has travelled in those countries will know how important a part state aids—that is an ugly phrase; my hon. Friends and I might use the expression "community support"—play in the life of their communities. Indeed, many Scandinavian countries have the advantage of not having experienced a medieval period dominated by great landowners, as we did in this country.

In harsh conditions, the whole of life is based on presumptions of co-operation and commonality, and on a close relationship with the environment of field and fjord. That attitude is shared by many of the Scots communities. No wonder they, too, feel the problems that arise. The landscapes and the way of life in many parts of Scotland are not dissimilar from those in Scandinavia, which is not surprising, because the people come from common Viking ancestors.

Will most of those communal and state aids now be under threat? I suggest that, in principle, they will. I hope that the Minister he will tell us of any derogations, either permanent or transitional, written into the treaty of Oporto that modify the otherwise harsh requirements of the single authoritarian market as they affect the fundamental ways of life of our neighbours, especially in Scandinavia.

No mention has yet been made of Iceland, but I believe that that is one of the six territories. I bracket Iceland with Scandinavia and, of course, with landlocked Austria. Switzerland, another landlocked country, will not be involved. What country could be more central in financial and geographical terms to the continent of western Europe than Switzerland? Yet the Swiss have examined the matter closely and said, "No, we can do better on our own."

What about VAT? There is to be harmonisation, as we all know, because it is already causing problems. The countries in question, rightly and for their own reasons, have relatively high VAT, but they also have high standards of social support. We all, especially the Opposition, know that their people—perhaps not gladly, but assuredly—put up with high turnover taxes, but that in return they receive a high social wage. That fact is built into the community life of those countries, as I have explained. What will happen if there is freedom of movement of labour?

I suspect that even now some of the people of the north-east, perhaps from the constituency of my hon. Friend the Member for Middlesbrough (Mr. Bell), our Front-Bench spokesman, and some of the people from Scotland, possibly even from the constituency of my hon. Friend the Member for Greenock and Port Glasgow, work in the Norwegian offshore oil industry.

Dr. Godman

That is the problem; they do not.

Mr. Spearing

But some people from the north-east do.

Dr. Godman

I must point out to my hon. Friend that the Norwegian authorities make every effort to ensure that it is extremely difficult for a United Kingdom national to obtain employment in the Norwegian oil and gas industry.

Mr. Spearing

I am grateful to my hon. Friend, because he gives an example that illustrates my point well. I can well understand why the Norwegians act in that way, just as I would understand, if there was an independent Scotland, that the Scots would not be too keen on Norwegians coming in and doing the same thing.

There is some social coherence in Bergen, in Stavanger, in Trondheim or wherever. As my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has said, there is a feeling that it should be Norwegians first. Once the treaty is in force, will what my hon. Friend has told me no longer apply? I suspect that that may be the case.

That may be to the advantage of his constituents, of mine or of those of my hon. Friend the Member for Middlesbrough, but what will people say in a coherent Norwegian society which is predicated on the status quo? What will happen? I put that as a question. What would happen the other way round? What about the different social support systems in that part of the world and here?

Mr. Oliver Heald (Hertfordshire, North)

Is the hon. Gentleman saying that Norway and the other EFTA countries should be allowed to enter the European economic area while maintaining state aid and trade barriers? They would then be able to retain jobs in their countries at the expense of Britain and other member countries by hiding behind trade barriers, which we do not have. Would that not be bad for jobs?

Mr. Spearing

I was expressing a point of view. I was trying to point out some of the problems that may arise. There may be problems and dilemmas that have not yet been sufficiently addressed. Conservative Members, and especially the Minister, have assumed that, the bigger and wider the market, the fewer barriers—which some people might call protection—there would be. Harold Wilson spoke of one man's protection being another man's freedom. It is assumed that taking down all the protections and having a giant economic machine will give everybody more universal benefits. That is the macro-assumption behind the whole of the single market.

Mr. Bell

indicated assent.

Mr. Spearing

My hon. Friend nods.

Mr. Malcolm Bruce

That is the idea.

Mr. Spearing

Of course. However, there may be unexpected or predictable side effects as I have just explained, especially when centuries of tradition and centuries of assumption have been built up by communities which have been in place for a long time.

Another question is the relationship between the Baltic states—Sweden and Finland—with the mainland Baltic states on the other side of that sea. My understanding of history and of trade is that there was a great deal of commonality among the Baltic states, including those in eastern Europe, in trade, in culture and in contact. There are trade arrangements and movement arrangements. How will that mesh with the demands of the treaty of Oporto? Those questions should be asked at this stage and should be answered.

I now come to the all-important question about the political and legal relationships between the EEA and the EC in its central market function. I intervened in the Minister's speech a little earlier on that. Three new institutions will act as couplings between the six EEA countries jointly and the rest of the EC. There will be a Council of Ministers of the EEA, which I suspect will act in a double capacity. It will meet the Community by means of meeting some people from the Commission.

Oh yes, I have no doubt that, as the Minister said, there will be other connections as well. However, it will be the Commission with which the Council of Ministers will tie in primarily, and I believe that that is written into the treaty.

My hon. Friend the Member for Middlesbrough has already addressed the question of decision-making. Who will decide what the treaty means? I presume that it will not be the International Court of Justice under the Vienna convention, although the treaty is probably registered as an international treaty, because the treaty says that we shall have to set up special machinery. The rules of the single market are made by the European Court in Luxembourg. The court will be the interpreter of the rules of the single market when it is enlarged.

Of course, the EFTA countries do not have political control because they have not signed any of the EC treaties, either the treaty of Rome or its successors. They do not intend to sign those yet, although they may consider doing so later. So we have to set up the surveillance body, which has pretty big powers. I quoted the details of one of its powers in respect of state aid. The surveillance body will give opinions, it will police the treaty and it will see how the treaty works out.

There will then be another court between the two groups of countries. The EEA treaty court will, in the end, have to accept what the court in Luxembourg says are the terms of the single market. The connections will be tenuous at a political level, but very strong at a legal level.

Dr. Godman

Is my hon. Friend suggesting that the European Court of Justice will become a supreme court over the whole membership of the EEA, and that the EEA court will seek opinions from the European Court of Justice?

Mr. Spearing

I think that we need confirmation of that point from the Minister. I have expressed my understanding of what will happen, either de jure or de facto. Bearing in mind the economic strength of the partnerships concerned, if it is not de jure, it may well be de facto.

The whole of the single market and its institutions form, by definition, an authoritarian organisation, as they must do if they are to fulfil the purposes of the treaties. The provisions will be extended into a geographical and social area where they are least applicable. Those who will be subject to them will find all the disadvantages that we have found in this country. I include even those who welcomed membership; I am not talking about those who may not have done.

We can learn something about the real nature of the European Economic Community and about union by having a look at the effects of the treaties on our northern neighbours in western Europe.

6.17 pm

Mr. Bernard Jenkin (Colchester, North)

One feels nostalgic about having another of these debates and it is a pleasure to follow the hon. Member for Newham, South (Mr. Spearing). If there is one criticism to be levelled at the Euro-realists, who opposed the Maastricht treaty, which I take seriously, it is that we must not live too much in despair. There is too much lamenting the Community as it is and not enough travelling in hope for the future.

My right hon. Friend the Member for Shropshire, North (Mr. Biffen) showed an attitude that I shall attempt to emulate. I have great admiration for my right hon. Friend, who has given me much advice since I entered the House. I may have been referred to as a man without a father, but my right hon. Friend has been to me a father figure.

The agreement is an important step towards the objective enunciated by my right hon. Friend the Foreign Secretary, which he described as variable geometry. We have created in the Maastricht treaty, if the opt-outs actually work, a Community of at least two tiers. By this agreement to create the European economic area, the treaty of Oporto, we are creating a three-tier, three-speed Community, which is surely a step in the direction of the Government's stated policy.

However, we must ensure that the agreement respects the individual sovereignty of the EFTA states. I share the endorsement of my right hon. Friend the Member for Shropshire, North of the article in The Economist by my right hon. Friend the Prime Minister in which he said that the nation state is here to stay. That is an immutable fact which the architects of the European Community have tended to ignore. The Government must be the champion of the nascent members of the EEA. We must stand by their individuality and their limited exemptions from the acquis communautaire of the Community because therein lies the danger.

I want to analyse the relationship between the legal entity of the EFTA states and the Community and to shed light on the comments of the hon. Member for Newham, South (Mr. Spearing). Protocol 35, the "Sole Article" states: For cases of possible conflicts between implemented EEA rules and other statutory provisions, the EFTA States undertake to introduce, if necessary, a statutory provision to the effect that EEA rules prevail in these cases. Analogous to the treaty of Rome in respect of the EC member states, here is the supremacy of the Oporto treaty over the law of the EFTA member states.

Articles 105 and 106 deal with the homogeneity of interpretations in respect of the relationship between the EEA Court and the European Court of Justice. The EEA Joint Committee is assigned the task of constant review of the case law of the ECJ and the EFTA court to keep interpretation of the EEA consistent. When the interpretations differ the Joint Committee may settle the question or, where the question is one of interpretation of an EC provision, the Joint Committee may ask the ECJ for a definitive ruling.

In other words, the ECJ is the final arbiter of interpretation of EC provisions and may overrule the EFTA Court interpretations of EC rules. However, it would appear that if the disagreement is not over an EC rule, but over the interpretation of an EEA agreement, the EEA Joint Committee must make the decision about interpretation. Any such decisions made by the EEA Joint Committee will apply throughout the EEA, but will not affect the case law of the ECJ in relation to protocol 48.

The importance of that is that it appears that by acceding to the EEA agreement the EFTA countries are acceding to the entire acquis communautaire of the treaty of Rome as amended by the Single European Act. Their only exemptions are those specifically granted to them and it is instructive to glance at the treaty of Oporto because its prose and structure have a deadly ring of familiarity, as they are the same as those in the treaty of Rome.

We must not forget that it is the acquis communautaire, the structure of the Community, which in the words of my right hon. Friend the Foreign Secretary has been

invading the nooks and crannies of our daily lives". Unless we succeed in making the EEA agreement change the nature of the European Community as we know and love it today, the enlargement of the Community that we are seeking will not achieve our hoped for objective of decentralising the Community.

I want to refer briefly to free movement. While I understand that this issue is not covered by the portfolio of my hon. Friend the Parliamentary Under-Secretary of State for Technology who is currently on the Front Bench, perhaps he can tell me what effect the free movement provisions in the EEA agreement will have on our potential dispute with the European Court in respect of the free movement of people within the Community at the moment. Do the Government still stand by our right to check the passport of every person entering and leaving the United Kingdom to check that non-EC nationals are not entering the country illegally?

I want now to refer briefly to the expense of the cohesion fund. If the new cohesion fund which is to be set up under the EEA is to be part of our policy of enlarging the Community, there is here surely another element of subsidy and intervention which will not help our cause in Europe.

There are no opt-outs for the EFTA countries from the social provisions of the Single European Act. Therefore, in respect of our disputes with the Community on social affairs, we might find ourselves not just one against 11, but one against 13, 15 or however many EFTA countries join.

The only opt-outs relate to fisheries and agricultural policies. In that respect, instead of an improvement in many EEA countries, they will be more heavily subsidised and more protected in agriculture than currently in the European Community. Again, that is hardly progress towards reforming agricultural policy in the direction that we want.

Nevertheless, it is a step towards enlargement. We must hope that the EFTA countries do not become so appalled by the intrusive nature and expense of the regulation and imposition of the acquis communautaire that they are driven away from membership of the European Community and so cannot join to help us decentralise.

As the Bill is clearly a step in the direction of enlargement and as, by the very nature of nation states, there is a wish to retain sovereignty in the long term, and because I have faith in the overall sense of the European people, I welcome the Bill. I believe that it will help us to move towards our cause of decentralisation, if only because the friction created between member states by the misplaced ambitions of the bureaucrats who attempt to impose their uniformity over the continent is bound to fail. I therefore strongly support the Bill.

6.26 pm

Mr. Malcolm Bruce (Gordon)

I welcome the Bill. It is interesting to put down a marker by stating that, before we joined the European Community, we were a member of EFTA. It is appropriate to recognise that the gulf which was created by the exit of three members is now being substantially, if not totally, bridged by the creation of the European economic area. Indeed, it may be substantially further bridged if the applications of the four EFTA members go forward for full membership. This is the right way to proceed.

The right hon. Member for Shropshire, North (Mr. Biffen) might be surprised to learn that I agree that one of the welcome points is that the proposal strengthens the northern contribution of the European Community in European thinking and it introduces different strands of thought with which we should be glad to join forces.

Speaking as a Member who represents a Scottish constituency, I have to say that we have established links with Scandinavian countries. However, there are also barriers which the Bill will begin to erode. In that context, the hon. Member for Greenock and Port Glasgow (Dr. Godman) identified an area which is potentially of very important and practical benefit to my constituents who work in the Norwegian sector of the North sea, and others who would like to but who have found themselves excluded. I am sorry that the hon. Member for Newham, South (Mr. Spearing), who has left the Chamber, seems to be more concerned about the interests of the Norwegians than about the interests of the Scots and the British. That is taking nobility and altruism just a little far.

In terms of direct contributions to the budget, the EFTA countries will be net contributors to the tune of 145 million ecu per annum. While some may believe that those countries will add to our burden by joining, in reality they will help to lower our burden. However, we must then consider what motivates those countries.

One motivation is that membership provides access to, or an opportunity to bid for, common research funding. The main reason why those countries wish to join is that membership is likely to lead to an enlargement of their trade potential and an increase in their gross national product. That will help to fund their large social programmes—it is the net benefit that they hope to achieve.

This is a two-way process, of course. It gives us access to these countries' markets, and them access to ours. According to an independent analysis, published and placed in the Library, the net effect on the European Community is minimal. But the benefit likely to accrue to the EFTA countries could be considerable. It is estimated that their output in tradeable goods could increase by 2.9 per cent. I accept that these forecasts are just estimates, and such benefits do not always materialise, but in the long term there is no doubt that the European Community has led to a net increase of economic output which it is unlikely would have been achieved if the member states had remained independent, dealing without the benefits of co-operation.

Sir Teddy Taylor

As the hon. Gentleman seems, so knowledgable about all these things, will he help Members who do not know as much as he does by giving us some broad examples of what the EFTA countries, which freely trade now, will get from the agreement? Will a huge new area of trade be opened up to them?

Mr. Bruce

It is not a matter of tariff barriers, which do not exist even now. It is the non-tariff barriers that should be removed. One should not underestimate the extent to which they can be a restraint on trade—I am talking about technical specifications and internal agreements. This will not happen overnight; it will happen because of the collision of two market systems. I am in no better position to make predictions than any other independent assessor, but there is plenty of evidence for what I say. I am surprised that the hon. Member for Southend, East (Sir T. Taylor), representing a party that claims to believe in free markets, does not accept that benefits will flow from free trade and from exposure to best practice in other markets.

Mr. Iain Duncan Smith (Chingford)

Is not the whole purpose of these countries joining the very opposite of what the hon. Gentleman is saying? It is not that they are going to gain any trade—that trade already takes place. Their fear is that if they do not join they will thereafter be excluded from markets with which they have already been trading. That is one of the great problems. After all, some of these nations have much higher social costs than some of the EC nations.

Mr. Bruce

I reject that argument. I do not believe it, any more than I ever believed that this country joined the EC for fear of being excluded. That was certainly not why I campaigned to stay in the Community when others wanted us to stay out of it. I did so because I firmly believed that our economic and political destiny lay in open frontiers and markets, and in the greater freedom to be had from political, economic and cultural association. I firmly believe in the positive aspirations of most of the EFTA countries. They want to be part of such an association, to ensure that the Community builds on it and develops the sort of political and economic framework of which they want to be a part—not because they fear exclusion, but because they positively want to participate.

I readily concede that the equilibrium is not satisfactory, however. This arrangement can only be transitional—a halfway house. These countries are contributing to a budget for assistance which will not benefit their own populations. They are excluding themselves from the common agricultural and common fisheries policies. They are not full members of the Community.

More to the point, although the countries in question will have the right to negotiate and influence decision making in the EC as it affects the EEA, they will not have voting rights. That is likely to lead in time to the recognition that being full members is better than being associate members, so that they can play their full part in the process.

I wholly accept the argument that we need to reform the structures of the Community to make it less bureaucratic, more open and more democratic. The countries of EFTA have a great contribution to make to improving the democratic structures of the EC.

Dr. Godman

Is the hon. Gentleman of the view that Norway will proceed smoothly from what he calls a halfway house to full membership of the EC? If he is, may I point out to him that many people living in northern Norwegian fishing communities feel growing concern about the implications of full membership, and especially about adopting the common fisheries policy?

Mr. Bruce

My honest answer is—the hon. Gentleman will not be surprised to hear it—that it will not be a smooth, easy transition. Indeed, Norway's last attempt to join the Community did not end in success. I used to work for a Norwegian company. I have visited the country and I have many friends there, and I am well aware of the tensions in Norway and of its desire to preserve its distinctive way of life. Norway has the advantage of large oil and gas reserves and a small population. That gives it a degree of freedom that it might not otherwise have. I suspect that the Norwegians' attitude might have been slightly different had they not discovered those reserves.

The referendum in Switzerland went dead against the wishes of the Government there. I agree with some of the comments made by Tory Eurosceptics about that. We cannot simply proceed at breakneck speed with these changes without carrying the people with us. Doing so in the past has been a mistake. A referendum is only a contribution, not a definitive answer. There still have to be leadership, vision and decisions, not all of which can be determined by referendums. I do not deny that they can play a part, but they do not always solve the problems.

The referendum in Switzerland created a vacuum and no one knows the way forward now. The Swiss Government have said, "The people have decided on something with which we do not agree and which we do not think is in their national interests—and for which we have no alternative policy." The people have rejected their Government's policy, but no one has any idea what to do next. That is democracy, but it does not solve the problems. Indeed, it can add to them, and then politicians have to deal with them.

Whether the economic benefits materialise or not, this is not merely an economic enterprise. There are economic benefits, and co-operation certainly helps to improve the quality of life, the scale of innovation and the degree of human advance. But this is also a political venture. Although it may move in lurches and require reassessment from time to time, the process should not be derailed just because we face the difficulties of recession, of German reunification—we are all paying the price for that—and of enlarging the Community.

My party and I do not see the Community just as a club for the rich which should exclude the aspiring democratic nations of eastern Europe. Nor are we in favour of those who want to use the disparity in Europe as an excuse for making no progress or trying to turn the clock back. We must strive to find ways of narrowing the gaps and of creating diversity in the Community so that it can accommodate these new democratic nations.

Mr. Jenkin

Is that why the hon. Gentleman's party dropped the word "federal" at its conference last month?

Mr. Bruce

We did not. I have campaigned for a federal United Kingdom, never mind a federal Europe, for a long time. Extraordinarily enough, some Members seem to think that Britain is a paragon of democracy, sensitivity and political consultation—unlike those wicked European bureaucratic, dictatorial and dogmatic countries—but I travel widely in those countries, so I know that there is a great deal more democracy in some member states than there is in this country, especially in terms of how the practical decisions that affect people's daily lives are made. We have a lot to learn. Such practical decision making is a feature of the Scandinavian countries, which are the Bill's prime concern. That is one reason why I welcome their closer involvement in the Community.

The right hon. Member for Shropshire, North (Mr. Biffen) spoke about what he called the Brixton manifesto. His extract from the Prime Minister's statement did not amount to a vision. The Prime Minister seems to have severe astigmatism in this area because, while he seems anxious to move towards greater European cohesion, he is trying to ensure that there is sufficient diversity and resistance to change to enable him to reassure the sceptics in his party that it will not make too much difference.

There must be a full and honest recognition that moving forward and enlarging the Community creates difficulties and challenges. We must accept that there is a need to reduce bureaucracy and improve consultation and democracy, and that the objective is to try to ensure that the Community can accommodate a greater diversity of ideas, peoples and countries at different stages of development. That is good and desirable.

The difference between my party and some of the sceptics is that we genuinely want to move in that direction, whereas they want to use that as an excuse to reverse the process. We support the Bill because it is a move in the right direction and because we hope that it will lead to enlargement of the Community.

6.40 pm

Sir Teddy Taylor (Southend, East)

I agree with the hon. Member for Gordon (Mr. Bruce) that it would be a mistake to regard the EC as a rich man's club. Most of the EC states are bankrupt and covered in unemployment, and Europe's share of world trade is going down and down. Those basic factors should be considered by the Government and the Euro-enthusiasts.

In this EC debate, the House is virtually empty: no one wants to hear and no one wants to listen. No one wants to face the fact that the EC is in an appalling economic mess and that unemployment is getting out of control. Those who still live in daydream land should wake up to the brutal facts about what is happening in western Europe and what has happened as a result of decisions made by the House.

Although we should be trying to make friends in the debate, I am afraid that I disagree with the fundamental principle advanced by my right hon. Friend the Member for Shropshire, North (Mr. Biffen). He said that we should be thinking about how to get these nice countries from northern Europe to join so that we can somehow make the Community better. My right hon. Friend gives such wonderful speeches that I usually applaud, but this one seemed to display a kind of selfishness. It was like saying, "We have joined a rotten club which is full of fraudsters and drunks. The way to improve it is to ask four nice people to join, so that somehow this rotten club, which is sponsored by the Foreign and Commonwealth Office, will become better."

We should hope that the poor, wonderful people of Sweden, Norway, Iceland and Finland will not have to subject themselves to the loss of freedom, misery and all the horrendous economic consequences of EC membership. It would be dreadful to say to those countries, "Please come in to try to make things better for us." We should tell them that in their own interests they should stay out. People should wake up to what is happening.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin)

Perhaps we should not be telling those countries anything. They applied to join the Community under their own terms. Austria applied in 1989, and Finland and many other EFTA countries have applied to join the Community.

Sir Teddy Taylor

The Minister is right, but unfortunately he is taking advice from the Foreign and Commonwealth Office, which is usually two years out of date. I accept that some countries were enthusiastic to join, but what has happened in the interim? Switzerland has said, "Go and jump." Norway has just had an election, and I wish that the Foreign and Commonwealth Office would tell the Minister what happened. There was a massive victory for the parties that said that they wanted nothing to do with the EC. A recent opinion poll in Norway showed that 58 per cent. of its people were totally opposed to getting involved in any way with the EC and that 32 per cent. were in favour. That shows the problem with the Foreign and Commonwealth Office.

The Prime Minister has appealed to us to work together and to be unified, but today the Foreign Office published a document listing what it called Euro-myths and Euro-lunacies. One of the lunacies that it listed was about the average family spending £1,000 a year more on food. The Chief Secretary to the Treasury, a wonderful man who knows how to add figures, published a document last week which stated that the average family had to spend £24 a week extra on food. However, the Foreign and Commonwealth Office says that it is lunacy to say that the figure is £20 a week. The Foreign and Commonwealth Office must start to work with the rest of the Government to achieve the Prime Minister's objective of getting us all working together. That is the context in which we should be examining the Bill.

Mr. Austin Mitchell (Great Grimsby)

My intervention relates to the hon. Gentleman's preceding point. Does he not realise that the Foreign and Commonwealth Office has been more cunning than he gives it credit for? In getting such an appalling deal for British fishing, and in its usual sycophantic deference to other fishing nations in negotiating the treaty, it has given a marvellous weapon to those people, especially in Norway, who want to keep their country out. It has agreed to give Spanish fishermen in that predatory Spanish fishing fleet a quota of about 30,000 tonnes, which is three times our catch in Norwegian waters. That Spanish fleet has no historic record in that area, but it is getting the quota in return for catches made in our waters and fish marketed in our markets. Can the hon. Gentleman think of anything better calculated to turn the Norwegians against the whole treaty than that piece of Foreign Office incompetence?

Sir Teddy Taylor

I agree. If the Norwegians have any doubts, they should talk to our fishermen. They should ask them, "Where is all this opportunity, and where is the glorious triumph that access to European waters will give us?" They should ask what has happened to the percentage of the fish that are caught by British fishermen, and about their freedom when the European courts decide that Spanish fishermen are somehow British. They should not go to the Foreign Office but should talk to the fishermen and to other people. I believe that that is what they are doing because they are waking up.

The Bill would probably make sense if we expected all the EFTA countries to join the EC next year. We are asking them to abide by about 65 per cent. of the acquis communautaire laws, and to pay piles of cash into the EC. If they were about to join, that would make sense, because it would be a kind of stepping stone to full membership. But, of course, the people in EFTA have woken up. They have looked at Europe and seen the economic misery from which we are suffering, the bureaucracy, the loss of freedom and the fraud, and they do not want to join at all.

I do not think that any EFTA Government will be able to persuade their Parliament to join. If that is true, is it fair and reasonable for us to go ahead with the treaty? The treaty will impose on those unfortunate countries piles of measures that they will have no part in deciding. For example, the social policy on page 212 has piles of measures attached. Those countries will have to apply them, and they should ask themselves why they should have to do that to have free trade when they have that now. Why should they have to adopt all the education, training and vocation policies on page 211 and all the environment policies on page 210? But they will have to do that. Is it fair and reasonable to say to those countries that they will have to do that to ensure free trade?

What about the cash? The Minister of State gave what I thought was wonderful news when he said that Northern Ireland would get cohesion fund money, but I have been told that it will not get any such money. Now we hear that a second cohesion fund is being set up with EFTA money and that Northern Ireland will get some of it. What advantages will membership confer on the EFTA countries? They will get no more than what they have now, but because we have gone ahead with our single market and all its bureaucracy, we are saying to them. "If you want to keep that, mates, you will have to go ahead." There will be some transitional advantages, such as a little bit on banking and, I am told, something on insurance.

I shall describe to the Minister a test case. As well as being a Member of Parliament I am a major business man and tycoon—the House is probably not aware of that. I happen to be the director of a Swedish company called Ansvar (Temperance) Insurance. It is one of the greatest companies in the world. It is an international company which sells insurance only to total abstainers from alcohol.

How will Ansvar be helped by the Bill? We trade freely in the Republic of Ireland. It is a wonderful country for abstainers from alcohol. We make lots of money. The only country where we have had to close is a place called Germany, which has things called Lander. The Lander make business impossible. They said that our brass plate was the wrong size. They have all sorts of silly rules. We have transferred to a local agency which is working quite well.

Ansvar is a test case. How will that great Swedish company benefit from the Bill? It will be subject to new rules and regulations. We are saying to EFTA countries, "If you want to carry on as you are doing now, you must give us cash and accept masses of laws and rules." It is not a good bargain for them.

My next point is about Euro-scroungers. I am doubtful about going ahead with the Bill following the dramatic speech made by my right hon. Friend the Secretary of State for Social Security at the party conference. I know that few members of the Conservative party appeared to attend the conference. I came to my office during the conference. There seemed to be more Conservative Members in the Norman Shaw building than at the conference. I can understand why. However, if Conservative Members had attended the conference, they would have heard a fantastic speech from my right hon. Friend the Secretary of State for Social Security. He said that the Euro-scrounging would stop.

I have seen a wonderful pamphlet around Florence university entitled "Mrs. Thatcher is like a mother to me." It explains how people can come over here and have their holiday paid for by the Government. I do not know how the Secretary of State intends to stop it. As I understand it from the Commission, the only people who can be stopped are those who have been found guilty of murder or manslaughter. The alternative is to change the law so that no one can receive social security payments until he or she has been around for five weeks. That would mean that our own people would starve in consequence.

If the Bill is passed, we shall have more Euro-scrounging. It is not just my talk. It is in black and white. The money resolution and the guidance on money suggest that there will be far more Euro-scrounging. Exactly how much there will be cannot be estimated. A figure of £1 million is suggested for insurance, and social security is only mentioned. I should like to know what the Government will do if there is more Euro-scrounging. I support the Government's position on Euro-scrounging, but they should tell us how they intend to stop it. It would help a great deal if we had some idea how holiday scrounging will be stopped before EFTA-scrounging is added to it.

The next point is a difficult one. Gibraltar is not mentioned in the treaty so one might wonder how we can refer to it. However, sadly the Bill will have a pretty nasty effect on Gibraltar. Gibraltar is a great place. Its people have stood firm by this country. They have tried hard to be part of the European Community. The treaty says on pages 465 and 469 that the banks of Liechtenstein will have access to the United Kingdom market. The sad fact is that Gibraltar's banks will not have such access. The reason is complicated.

The Minister sent me a lovely fax today when he heard that I intended to mention Gibraltar. The Minister recognised that the problem was serious. He said that it should be possible to table an amendment to deal with the problem. I tried hard to do so, but sadly the Clerks told me to get lost and that it could not be done. Gibraltar has suffered a great deal. It is the only part of the EC that cannot send people to the European Parliament. It would not do Gibraltar much good if it could because no one would notice. If the European Parliament closed down tomorrow, only the taxi drivers of Strasbourg would notice.

Gibraltarians do not have free movement in Spain. They are subject to bureaucratic restrictions. Gibraltar is a lovely place. I have been there twice on holiday. It could not be a nicer place. Aeroplanes have to fly miles out of the way to land at Gibraltar airport because the Spaniards will not allow them to fly through Spanish air space. It is the only airport in Europe which is not protected by some organisation. The Spanish Government compromised by saying that if the airport put up a Spanish as well as a British flag, everything would be well. However, the poor old Gibraltarians, understandably, did not want to do that.

In a recent referendum the Gibraltarians decided by more than 12,000 votes to 45 that they wanted to remain linked to Britain. The Government simply must do something about banking before the Bill is passed. The Bill will make matters an awful lot worse. In his fax, the Minister set out how the Gibraltarians had done everything that the Government had asked them to do. They changed their laws exactly in accordance with Euro-rules. They went out of their way. However, sadly, it seems that because of the silly Spaniards, everything that the Government tried to do was blocked. At one point, the Government said that the problem could be solved; then they said that it could not.

The Bill will damage EFTA countries and add to their expense and bureaucracy. Everyone seems to want to do it. But please can we do something for Gibraltar? Gibraltarians are United Kingdom nationals for EC purposes. The provisions of article 227(4) of the treaty make it clear that they should have the same rights as everyone else. They do not.

Is it sensible that we should pass a Bill that imposes extra bureaucratic controls and expenses on free countries without achieving a great deal for them? Could the Government clarify what they intend to do about Euro-scroungers before we create more of them? Could we do something for Gibraltar? We sometimes laugh at these matters. The Gibraltarians are good, decent, respectable people. They wave the Union Jack. They feel British. They are saying, "Who will speak for us?" They cannot speak for themselves. They do not have a representative on the Council of Ministers. Only the British Government can speak for them and protect them.

It is easy for the Foreign Office to forget Gibraltar when it is doing dirty deals in the EC and wants Spanish votes. We have an obligation to protect Gibraltar. No one else can do it. The Government must go out of their way to sort out the problems of the airport and of banking. Gibraltar does not want privileges. It does not want stupid grants and loans. It merely wants the same freedom as other parts of the EC. It wants its banks to have the freedom to operate in the same way as the banks of Liechtenstein. That seems fair and reasonable.

I know that the Minister is a decent fellow. He is a fair, reasonable and patriotic person. It is a joy to have him here instead of some of the funny people from the Foreign Office team who are now happily no longer part of the Government. It is also a joy to have a nice Whip on the Bench instead of the fat thugs who use obscenities. So we have a nice Minister, a nice Whip, a nice Parliamentary Private Secretary and a happy atmosphere. Therefore, let us try to do a good job for Gibraltar, for freedom and for Britain. Let us hope that the good people of the EFTA countries will know that it is in their interest not to get involved in the nonsense of the EC, even though my right hon. Friend the Member for Shropshire, North has tried to tempt them in. They should look at what we have suffered and what the French have suffered. They should keep their liberty and they should not let themselves down.

6.58 pm

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

It is always a pleasure to listen to the nice Member for Southend, East (Sir T. Taylor) make a characteristically nice speech.

I begin by asking the Minister what appears to be a parochial question. Is he aware that at present the Norwegian state shipbuilding subsidy is about 14 per cent.? Is it likely to be reduced to the level of the subsidy given by the European Community seventh directive on the shipbuilding intervention fund? The gap between the two subsidies places the few British shipyards that are still in existence at a distinct disadvantage when pursuing orders from Norwegian shipowners.

I would like to hear the Minister's response to that question. Will the Norwegian shipbuilding intervention subsidy be reduced to the European subsidies of 9 per cent. and 4 per cent. respectively, depending on the size of the contract?

I would like to respond to a couple of points made by the right hon. Member for Shropshire, North (Mr. Biffen). First, I echo his welcome to the countries which may well obtain membership of the EC, and especially the Scandinavian countries. I shall respond to what the right hon. Gentleman said about the concept of subsidiarity in a moment or two.

I have a great deal of respect and affection for the Scandinavian people. I first came across the people of Norway when I was an 11-year-old schoolboy, and 'was foolish enough to stow away on board a trawler that fished off northern Norway for three weeks. At the time, I bitterly regretted the youthful decision, but it brought me into contact for the first time with the fishing communities of northern Norway. I can well understand why they have such deep reservations concerning Norway's membership of the European Community. The hon. Member for Southend, East and my hon. Friend the Member for Great Grimsby (Mr. Mitchell) referred to those concerns earlier. The fishing communities are deeply worried about what will happen to the stocks upon which they are so dependent once the Spanish and others get in among them. I can well understand those concerns.

I bitterly regret the decision by the Norwegian Government to encourage the resumption of whaling, and that explains my reasoned amendment, which was not accepted, about the abolition of whaling. I would say to the fine people of Norway that, if their country becomes a member of the EC, they will have to accept the abolition of whaling.

That point was made recently by the Minister of State, Ministry of Agriculture, Fisheries and Food, who was commenting on the EC convention on international trade in endangered species. He said: the cumulative effect of the agreements is a whaling ban in Community waters. There is no other way to interpret them. When Norway comes into the Community, it seems to me inconceivable that the Community would wish to relax that ban. Therefore, Norway has just applied to join an organisation that bans whaling.

Mr. Austin Mitchell

Does my hon. Friend agree that if the predatory activities of the massive Spanish fleet, which must be now the biggest fishing fleet in the EC and which operates in a largely uncontrolled fashion, are transferred to Norwegian waters, it will be to the discredit of all European fishing nations? The consequences would fall on British fishermen. Humberside fishermen, for instance, historically have always fished in Norwegian waters. Does my hon. Friend also agree that the reactions, exclusions and difficulties will fall on us rather than on the Spanish fishermen, and that that will create a state of friction between our fishermen and the Norwegians?

Dr. Godman

I have every sympathy for what my hon. Friend says. We tend to forget that fishing, in addition to being a hunting activity, is in every sense an economic activity. Communities such as the one represented so ably by my hon. Friend can suffer because of such agreements.

I do not wish to sound chauvinistic, but the Spanish fishing interests can behave appallingly badly with regard to the regulation and surveillance of fishing activities. In Vigo, for example, there is a type of insurance club which takes contributions from the owners and the skippers of vessels. The club assists with the payment of fines when, as is inevitable, one of the skippers is caught fishing illegally. No matter what the Minister may say about the evening-out of differences between nations, there are groups which will continue to work fiddles.

My hon. Friend is also correct when he talks about our historic tradition of fishing in Norwegian waters, while the Spanish have little or no history of fishing those waters. They, not British fishermen, are the beneficiaries of protocol 9 in the agreement.

I will respond in passing to a comment by the right hon. Member for Shropshire, North concerning subsidiarity. I would love to see a democratic interpretation of article 3(b) of the Maastricht treaty after November 1, which would devolve power, not only away from Brussels, but from London to Edinburgh and down to regional and local government. I believe that I am right in saying that after November 1, article 3(b) will become, in every sense of the word, justiciable. The European Court of Justice will, sooner or later, offer its opinion or a series of opinions on the application of that article among member states.

I would like to suggest to the Minister that the Bill be referred to a Special Standing Committee under Standing Order No. 91. So many implications for our constituents are contained in the Bill that it would be worth while to allow a Special Standing Committee to take evidence over four sittings from Foreign Office and other Ministers. They could deal with some of the concerns that have been voiced in tonight's debate.

It is fair to say that the House has not scrutinised the agreement in a formal or rigorous way. The Select Committee on European Community Legislation was prevented from carrying out that task by its terms of reference. The Select Committee on Foreign Affairs has not reported to the House on the agreement, so this is literally the first examination of the agreement that has taken place.

Mr. William Cash (Stafford)

The hon. Gentleman makes an important point in view of what the Prime Minister said on the importance of scrutiny in an article in The Economist on 25 September. The article, I was glad to note, effectively paid tribute to the Maastricht debate.

The Select Committee on Trade and Industry should be studying the agreement. I made some suggestions that the Committee might try to have a full look at the agreement in relation to the single market. Suddenly, however, we had the embarrassment of the pit closure fiasco, a result of which was that the Committee was not able to give the time that the subject required.

Let us hope that the Committee can have another look at the implications of the single market in the light of the Oporto agreement. I am certain that there are matters in the agreement which no hon. Member will have had an opportunity to look at in the depth that is required. The Select Committee should have a good look at the agreement. I hope that the hon. Gentleman agrees.

Dr. Godman

I do indeed. I think that it would be very useful if that Select Committee examined the agreement in some detail. I am not for one moment suggesting that the proceedings of a Special Standing Committee would be an adequate substitute for the kind of rigorous analysis that could be brought to bear on such a document by a Select Committee and its specialist advisers, not least because—I think that I am right in saying, Mr. Deputy Speaker—a Special Standing Committee can have only four morning sittings. The members of such a Committee—I hasten to point out to the Whip on the Opposition Front Bench that I am not volunteering my services—could cross-examine the Law Officers on the relationship between the European Economic Area Court and the European Court of Justice.

The hon. Member for Colchester, North (Mr. Jenkin) quoted articles 108 and 109 of the agreement, which to some extent refer to that relationship between the two courts. I should have thought that, if a person or a company is deeply unhappy about a judgment reached by the European Economic Area Court, he or it should have the right to appeal that decision and seek an opinion from the European Court of Justice as a supreme court. The Special Standing Committee procedure would allow for questions of that nature to be answered by Law Officers.

I can envisage a potentially turbulent relationship developing between the two courts. I think that I am also right in saying that, after 1 November, an individual will have the right under the Maastricht treaty to take his or her Government to court if he or she believes that they have failed to protect his or her interests vis-a-vis EC legislation. An individual may be able to argue such a case in terms of the failure of the EEA court to protect such interests.

The hon. Member for Gordon (Mr. Bruce) was absolutely right about the need to iron out some of the existing discrepancies in the offshore oil and gas industries. The hon. Gentleman may well have a few constituents working in the Norwegian sector, but it will be only a few, because it is exceedingly difficult for United Kingdom nationals to find work in that sector. I hope that the Minister will be able to tell us that, under the agreement, such discrimination will be illegal.

As regards protocol 9, what protection is afforded to the Scottish salmon industry in respect of the subsidies given to the Norwegian industry? Not so very long ago, we had the terrible experience of the Norwegians dumping farmed salmon on the market in European Community countries. The European Commission took defensive measures to protect those working in the Scottish salmon industry. Presumably, under protocol 9, the Norwegians will not have to face such defensive mechanisms. These are important matters to the people working in that industry, many of whom live in remote communities where there are no alternative employment opportunities. I ask the Minister to assure me that, in matters of employment and the use of vessels, no discrimination will be exercised against United Kingdom nationals.

Following what I said in response to the speech by the right hon. Member for Shropshire, North, I am fairly relaxed about our bringing the Scandinavian countries into the relationship. I think that the European Community will benefit from their involvement. As the House of Commons research paper suggests, the agreement is very much in the Scandinavian countries' interests, being a staging post on the road to full membership of the Community. It may well be, however, that for the foreseeable future, the Norwegian people will chose to stay outwith the European Community. That would be a matter of deep regret for all of us as the Norwegians and the other Scandinavian countries would strengthen the EC in numerous ways.

As I said, my view is that the Bill should be committed to a Special Standing Committee.

7.16 pm

Mr. William Cash (Stratford)

I have found the Bill and the agreement extremely difficult, for a number of reasons. I have the gravest reservations about what is effectively the stepson of Maastricht. The agreement sets out to provide for free trading arrangements but, if we dig a little deeper—underneath the mass of verbiage that the Oporto agreement contains and the density of the Bill—we find that two things are happening at the same time: the EFTA states are, almost without exception, applying to join the European Community, yet on the other hand popular opinion in those other countries is moving against the proposals.

We have already had the Swiss example. In France, 58 per cent. of people are now against Maastricht. If the referendum had been held a year later, Maastricht would be dead and buried. In Germany, the figure is probably running at 70 to 75 per cent. against, and in the United Kingdom it is approximately the same. In Spain, the Partido Popular has the gravest reservations. In Bavaria, Mr. Stoiber is strongly against the whole process of further economic and monetary union and will have a huge tussle with Mr. Theo Weigal, who is also a member of CSU. Meanwhile, all levels of government in Germany are up for election next year. The whole process is in the balance, and the Maastricht debate has moved substantially in the direction of the Euro-realists, for which we can all be thankful.

Notwithstanding all that, I am a single market enthusiast. I believe, as I did when I voted for the Single European Act in 1986, much to the surprise of my hon. Friends, including my hon. Friend the Member for Southend, East (Sir T. Taylor), that it is essential to try to reduce barriers and at the same time create more reasonable and fair competition between member states. One of my greatest worries about the operation of the single market is that it has become increasingly evident that greater opportunities for trade have not materialised, just as the common agricultural policy has not given the British farmer a better deal.

A kind of schizophrenia runs through the debate. On the one hand, we hear promises such as that given by the Prime Minister at the party conference and in the article in The Economist, which provide us with a degree of optimism—which I should be happy to endorse. On the other hand, there is evidence that people—whether in the EFTA countries or in the EC—do not want the arrangements that are being proposed. At the same time, we have to consider the performance of the Community, with its fraud and corruption, and the increasing desire of the federalists to move forward—I suppose at the 29 October summit.

Chancellor Kohl has said that the only way to avoid war in Europe is by deeper political union. That is a significant statement, made by the Chancellor of Germany at the same time as it was agreed to move the capital of Germany to Berlin by the year 2000. We need a dose of reality, but it is not right to prevent an opportunity for greater competition from being realised. I certainly have reservations about the way in which the single market is operating. I am deeply worried about the 13th state—the new bureaucracy which I see weaving its way through the Oporto agreement. All the Commission directives, the Council directives—

Sir Teddy Taylor

And the quangos.

Mr. Cash

As my hon. Friend says, quangos and directives are increasing, with greater power going to the centre.

I also have grave reservations about the hope—if I may call it that—expressed in the most interesting speech of my right hon. Friend the Member for Shropshire, North (Mr. Biffen) that the Bill would provide more diversity and a more loose, enlarged European Community working in our direction. I would like that to be the objective of the Bill and I genuinely believe that the Government think that the enlargement process under the Oporto agreement would provide more diversity and greater flexibility in the European Community.

However, I do not think that the Bill will have that effect. We must remember that, irrespective of the views of people in the member states, their Governments have applied to join the full European Community. The acquis communautaire would be further endorsed by a further step under the Maastricht treaty, creating a consolidated legal framework that many of us believe will destroy the European Community and may have a serious adverse effect on the EFTA countries.

Conflict between the European Court of Justice and proposals for an EFTA court was resolved in favour of the European Court simply because the acquis communautaire includes the assumption that the treaty of Rome, the single market and all the attendant rights, liabilities and obligations will be resolved by the superior Court of Justice. A single market in, for example, competition law cannot operate on the basis of a "pick and choose" legal system. If there is to be one consistent body of law, it will have to be the European Court of Justice.

If all the Council directives covered by the Bill were stacked together in volumes, they would stretch from where I am to the Box at the end of the Chamber. It is a fantastic operation. In a rather curmudgeonly way, I must congratulate the genius of the bureaucrats on being able to produce anything as complex and obscure as this. Another reason for my reservations is that I have not had the opportunity to read the Bill to the extent that I was able to read the Maastricht treaty, yet the Bill is much bigger. I do not believe that the EFTA countries have the faintest idea what it will mean.

If we are optimistic and all the promises are fulfilled—we shall be watching with great care over the next few months—we may be about to create a huge opportunity for a more diversified European Community. That is the hope of the growing number of Euro-realists on the Conservative Benches. However, the Bill represents an underlying political agenda—a stepping stone to a cohesive European union, which is seen by some of our Ministers as a means of preventing the unitary state that the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) and some of his fellow travellers would like to achieve.

The temperate and carefully worded speech of my right hon. Friend the Member for Shropshire, North seemed a serious attempt to bridge some of those gaps, in the hope that we would not lose too much by agreeing to the Bill. Serious practical problems may affect us. For example, increased environmental standards and the manner in which they are applied to, for example, the manufacture of cars, may cost our manufacturing industry dearly.

It is rather like when we were invited to agree to the exchange rate mechanism. We were told that it would help to bring down inflation and many promises were made, but some of us had grave reservations. When it became apparent that it was a pig in a poke, some of us grew more determined to try to stop it in its tracks. Alas, it went on until the Government were forced out of the mechanism. I hope that the Bill will not lead us into a more bureaucratic, legalistic European Community. I also hope that the political agenda underpinning the Bill, which does not have the support of people in the EFTA countries, will not leave us regretting passing the Bill, if and when we do.

7.28 pm

Mr. Bob Cryer (Bradford, South)

Everyone was interested in the speech of the right hon. Member for Shropshire, North (Mr. Biffen) because he has been a consistent critic of the Common Market—except during his period as a Minister, when all things that are difficult happen to people. He made the point that legislation which authorises a treaty to bring in European free trade area countries will make the Common Market a less centralised organisation and more of a trading organisation. If that were all that the Common Market is and was aimed to be, more people could stomach it, but the Common Market has always had the aim of being more than a free trade area.

It would be nice if the view advanced by the right hon. Member for Shropshire, North were credible, but I do not think it is. It is a perfectly valid opinion to express, but on the basis of our experience it is unlikely to happen. It is true that the enlargement of the trade area is much bigger than anything that has been proposed before, but exactly the same arguments were advanced when Portugal and Spain entered the Common Market: that it would inhibit centralisation and that it would become such a large area that it would not be feasible to have the same degree of centralised control.

On the face of it, that is perfectly plain common sense, but the reality is that centralisation has continued apace because the driving mechanism of the Common Market is not common sense but unification and the determination to turn the Common Market into Europe. Indeed, it is a phrase that it uses. The Common Market has appropriated the name of a continent for a trading area, which has now become common parlance. When people talk about Europe, they talk about the Common Market and the European Community. A friend of mine said that he was going to Europe. I said, "Do you mean the Common Market or Europe?" He said, "Switzerland." I said, "Thank God he used the word in its proper context."

Europe has been hijacked as part of the propaganda exercise by the Common Market. We are all part of the continent of Europe. We are all Europeans, but not every European is part of the inward-looking group of nations that calls itself the Eurpean Community.

I recall Spain and Portugal joining the so-called European Parliament. The European Parliament—this is an example of the extraordinary decisions that are taken under the unification process—wanted 250 officials to make way for 250 officials from Spain and Portugal. It simply sent home 250 officials from the existing group of nations—on full pay—where they remain to this day because accountability for expenditure is not part of the Common Market. There is no scrutiny, check or counter-balance, as there is in each nation state, because people are too far from the point of expenditure to exercise it. The European Parliament cannot take such action because it does not work like that.

The arrangement proposed in the Bill is parallel to that in the Common Market. A surveillance body will ensure that all legislation affecting trading is identical, and there will be a court to which appeals against decisions of the surveillance body will be taken. The Minister failed to answer the crucial question about whether the European Court or the new court of the European economic area will decide such cases. The Minister did not know the answer and he said that he would write to my hon. Friend the Member for Newham, South (Mr. Spearing), who asked the question.

The right hon. Member for Shropshire, North said that it would be nice to have the answer on the record. That is what Hansard is for—to provide information to people about the legislation that will affect them. It will not be put on the record if the Minister writes to my hon. Friend the Member for Newham, South. Similarly, it will not be on the record if the answer appears in the Library. It must be uttered here in the Chamber: that is very important.

I mention that to show that the Government are not prepared. They have not done their homework well enough to be able to provide the House with the information that it seeks. I find that fact surprising, given all the resources available to them. They are asking the House to pass legislation the consequences of which are not clear to elected representatives.

The hon. Member for Stafford (Mr. Cash) spoke of his dilemma. He is in favour of free and open competition and a single market—the bigger the better—but in reality the single market does not work and the old cliché that the United Kingdom obeys the rules and the rest break them is, by and large, true.

As I come from Bradford and represent a Bradford constituency, I am heavily involved in the defence of the textile industry. Eleven thousand people, many of whom live in my constituency, work directly in the textile industry, and between 11,000 and 20,000 depend on it. The BBC made a series of programmes on the Common Market. It investigated the Lana Rossi scandal, in which the Italian Government made grants to an enterprise called Lana Rossi. The Italian Government promised to repay money, but the BBC found that the enterprise had been privatised and the money lost.

Another example concerned the Prato region in Italy, where companies do not have to pay national insurance contributions. That gives them a 10 per cent. advantage in wage payments immediately. The Commission investigated firms in the Prato region, which would not allow it to see the books; so it retired defeated and said, "We cannot tell." The inequality continues.

Those are just two of the hundreds of examples that go on all the time. The notion of a single market working in perfect competition with everybody obeying rules absolutely and with only delivery and quality being the competitive element is an illusion. Business man after business man will tell us that it is an illusion because they encounter such difficulties, which are called non-tariff barriers.

We know from fairly recent experience that, if the French want to stop imports of television receivers, they say, "We know we cannot do this but we will send all the receivers to one point of entry for scrutiny where they will spend days, weeks and months," because that is how the French civil service works. Our civil service is subject to rules. It must have authority to undertake import surveillance, but the French say to their civil servants, "Do your best to stop things," and they do.

Mr. Bell

I am grateful to my hon. Friend for giving way, and I hope that I have not interrupted the eloquence of his speech. The scheme to which he referred covered the importation of Sony television sets from Japan. It was a hopeless failure. It was quickly abandoned and the French are no longer following the route that he has just described.

Mr. Cryer

My hon. Friend is quite right, but the fact is that they did it, whereas we have never done anything like that. I can tell my hon. Friend, who has never been a Minister, that, when I was a Minister for two years, we had the greatest difficulty ensuring import surveillance. Sections of British industry that simply did not know the extent of the competition that they were up against repeatedly asked the Department to intervene. We had delegations from, for example, the Sheffield cutlery industry about import surveillance.

The problem was that we found ourselves up against the Department of Trade and Industry, which was penetrated from top to bottom by uncritical Euro-converts, who said, "We cannot do this, because it will upset the Common Market." Unfortunately, that situation happened all too often. The right hon. Member for Shropshire, North, who held a rather more exalted position at the Department of Trade and Industry than I, nods in agreement. It was a battle. At one meeting, some civil servants wanted to exclude all civil servants who had a critical word for the Common Market.

Mr. Biffen

There is nothing more exalted than the Back Benches.

Mr. Cryer

I was being ironic, but I should not do so because it does not record well in Hansard.

The proof of our position is in our trade deficit with the Common Market.

Mr. Skinner

It was £1.09 billion last month.

Mr. Cryer

That is right. If we continue to run at last month's figures, the deficit will be more than £12 billion a year. I do not suppose it will reach that incredible figure, but the deficit will be at least £4 billion or £5 billion a year. That last time we had a trade surplus with the Common Market was before we became a member in 1972. Plainly, something is not working well.

The Government suggest that the legislation will improve matters—that it is an opportunity for our traders and manufacturers to benefit—but the evidence is all against that happening. It is contrary to our experience that extending the Common Market will improve our position. Our experience is that entering the Common Market was disastrous for our balance of trade, and as the Common Market has expanded it has become steadily worse.

The Government's argument is that we have to have access to this huge market in order to succeed, but Japan—one of the most successful manufacturing countries that the world has known—does not have a Common Market. Why? Are the Government looking to see if there is somewhere, somehow, information that they have overlooked in their blind search to extend the Common Market?

Dr. Godman

Non-tariff barriers are to be found throughout the European Community. For example, the Government of the Irish Republic will not grant exploration licences to offshore oil and gas companies unless those companies agree to employ Irish nationals. Because of that, there are occasions when rigs and vessels moving from United Kingdom territorial waters have to shed crew members when entering Irish waters to drill for gas and oil.

Mr. Cryer

My hon. Friend gives a good example, which demonstrates that the realities of Common Market membership are far different from its professed nature.

I remember that, when Ireland entered the Common Market, it negotiated tax holidays for investment in manufacturing, which gave it an advantage that continued for many years. If Germany had not reunited, west Germany would have had a trading advantage because of its treaty with east Germany. That has not happened, because the two countries have amalgamated, to our considerable cost.

My hon. Friend the Member for Middlesbrough (Mr. Bell) said that there was to be a convergence fund contained in the new treaty. The EFTA countries will make a contribution to those that are less well-off, and he hinted that that was some sort of socialist measure. There are two serious objections to the view that the Common Market is a socialist organisation. The Minister has quite rightly said that this treaty does not cover the common agricultural policy. We are dealing with a Government who say that the Common Market is a wonderful organisation. Unfortunately, the Labour Front Bench say it is a wonderful organisation but, given time and experience, it will change things. I hope that it will.

The Government and the Opposition agree that the CAP needs changing. The Government say that the legislation will lead to a very lengthy and complicated sequence of events which will improve the Common Market. All I can say is that the promises made over the years have never been fulfilled. Why should we believe the Government now? Why should we accept the view—which I doubt—that a little bit of redistribution around the edges via this new treaty will offset the massive amount of public expenditure that the CAP represents?

The CAP is totally unfair to the poorest nations of the world. When I was an MEP I asked the Common Market Commissioners why they did not have some of the food moved to the countries facing starvation in central Africa and have it stored in warehouses there. Not a chance. They want the money to go to the Common Market farmers. It is the selfishness of the wealthiest countries that causes mountains of food to go rotten. They would rather store the food here for six years, at great expense, than help other countries that are in difficulty. I do not accept the view that the Common Market has anything to do with socialism.

A consequence of this legislation will be the free movement of capital. I am a member of the Labour party because I have always thought that labour should be at least equal to capital—in fact, it should be superior because we are talking about human beings as opposed to the accrued wealth obtained by exploiting other human beings. If there is free movement of capital, the elected Government of the day will not be able to intervene and say that the priority is people rather than profit. The wealth creators should have the benefits rather than the profiteers. The free movement of capital allows unhindered benefits for the capitalists.

Baroness Thatcher has made many protestations about her criticism of the Common Market. What utter nonsense! She took the country deeper than ever before into the Common Market as soon as she got into government. She did not remove the Exchange Control Act 1948, thank goodness, but she did remove what we call in Euro-speak the derogation—the derogation which gave us some control over capital movements—and thus gave free rein to the capitalists. That took us in deeper because we were denied the advantage that we had negotiated.

The cost of our membership of the Common Market is running at £2.5 billion a year. Will the legislation cost us more, or will we get a net inflow as a result of the influx of capital from the contributions of the EFTA countries? We should be told, as the hon. Member for Southend, East (Sir T. Taylor) said.

There was a distasteful speech by the Secretary of State for Social Security. He makes them at every Conservative party conference. He targets single women and says that they get pregnant in order to jump the housing queue when there is no evidence to support that. I mention that only in passing. He also talked about foreign scroungers. I think that that is distasteful. At the same time, it is legitimate to ask the Minister what the clause on the financial effects of the Bill means. It says: There may be a small amount of additional expenditure as a result of the application of the Income Support Regulations 1987 … to EFTA nationals. I am not being nationalistic or chauvinistic; I am seeking information.

I am not a little Englander in my attitude to the Common Market, but I seek wider relationships outside the Common Market. I think we should trade and establish relationships with the rest of the world rather than have a big barrier built around 12 nations called the Common Market. It is a legitimate question to ask the Minister. If he does not answer me now, there will be money motions and ways and means motions when he will have to produce some answers. Anyone who thinks that I do not raise questions on money motions should look at my past performances in the House, when hon. Members have been mortified because Parliament has continued for an extra 45 minutes.

In introducing the legislation, the Minister claimed that our manufacturing industry would benefit. During the period in which we have been a member of the Common Market, our manufacturing industry has been decimated everywhere. In Bradford there are deserted sites where mills once stood. Coventry Climax was a famous name for engines and forklift trucks. I have been to Coventry, where all that I saw was two pairs of gates with "Coventry Climax" on them, behind which was a desert the size of four football pitches where workers used to produce machinery. Gone. Those were just a couple of examples. As we know, thousands of jobs have been lost in manufacturing industry because of the Government's economic policies and the relevant part of this legislation is our membership of the Common Market.

The right hon. Member for Shropshire, North argues that this measure, by bringing in other countries, will dilute the centralised power. I hope that it will, in view of what has happened. For example, when Bob Clay was a Member of Parliament, he used to argue ferociously in the Chamber for a shipyard in Sunderland—the most modern shipyard in the country, renovated relatively recently with a high capital investment—but the Government had done a deal that there should be an enterprise zone in Sunderland, so the relevant Commissioner told them that the shipyard must not be allowed to open.

It is all on the record. Our economic policy is being dictated in general and in detail by Commissioners who owe allegiance not to any electorate, or to any ruling class, middle class or working class, but to a group of people who have the power of patronage to appoint them; and they make decisions over our lives, and the lives of the people of our country. If the legislation did dilute that power, I would agree with it, but judging from experience I do not believe that it will.

I have no doubt that the Government will have a majority tonight, but there will be a Division and some hon. Members will say no to this constant stream of legislation which has no basis in thought or experience because of the adverse conditions that it entails for the people of our country. It is time that it was brought to a stop, and sooner or later the people of this country will wake up and it will be brought to a stop.

7.51 pm

Mr. Bell

It is always interesting to speak after my hon. Friend the Member for Bradford, South (Mr. Cryer) because he speaks with knowledge and experience; he was a Minister for two years, he speaks with passion and eloquence and he speaks with knowledge, as he comes from Bradford and has seen the decimation of the mills there. He also brings to the debate the passion of the debate and his dealings with the European Community.

Other hon. Members have followed that today and a host of hon. Members have made contributions, from the Minister of State, who opened, to the right hon. Member for Shropshire, North (Mr. Biffen), who referred to the "seamless robe". He made a fascinating speech, which began with the European Communities Act 1972 and took us to the Single European Act and to the treaty of Oporto. He said, "The Prime Minister travels hopefully," but he travels alone.

The speeches made in the House and the speech of my hon. Friend the Member for Bradford, South express arguments that are not made by others in the European Community. The European Community countries hold different views and have a different version of where the future lies from that put forward by the Prime Minister in articles in The Economist—the so-called Brixton manifesto. The right hon. Gentleman can say that in The Economist and he can say that for Conservative spokesmen. When he gets to Heads of Government conferences, whether he makes the same points or not, his voice is not heard. That was the great difficulty which Lady Thatcher, the former Prime Minister, had. When she met the Heads of Government, she wanted to talk about the general agreement on tariffs and trade and the Uruguay round; she was ignored and instead we got the Maastricht treaty.

The Government have suffered in the country and the House by speaking with two voices—the one that says, "We will stand up for British interests here," and the one at Brussels that surrenders those interests and gives the power to the Commission in Brussels to which my hon. Friend the Member for Bradford, South referred.

Mr. Duncan Smith

I must correct the hon. Gentleman on one subject. He said that the Prime Minister travels alone on those aspects about which he wrote in The Economist. Obviously, the hon. Gentleman did not bother to check public opinion across Europe in all the different nation states. My right hon. Friend the Prime Minister does not travel alone. More and more members of the public who voted for their various leaders across Europe have turned against the centralising and the bureaucracy and want less of it. I cannot understand why the hon. Gentleman and his colleagues on the Opposition Front Bench do not sign up to that as well.

Mr. Bell

I am grateful for the intervention. It was the right hon. Member for Shropshire, North who mentioned that the Prime Minister travelled hopefully and I who argued that he travelled alone. The hon. Member for Chingford (Mr. Duncan Smith) should not misinterpret or confuse the European debate throughout the EC, which is a legitimate democratic debate on those important matters, with the overwhelming view or even the majority view of other nation states. When a referendum was held in France, the result was in favour of the Maastricht treaty and the second referendum in Copenhagen came out in favour of it. We must not confuse the debate within a democracy with the eventual decision of the people.

Many speeches have been made. My hon. Friend the Member for Newham, South (Mr. Spearing) made an important speech about free trade, which was also mentioned by my hon. Friend the Member for Bradford, South. There is a difficulty. We talk of free trade, when it affects us. We want to have free trade that allows us to sell our goods to Europe, America, New Zealand and Australia. When it comes to other countries selling their goods to us, we want all kinds of hedges and protectionism. That is our dilemma. We want a free market, but only when we can sell. When it turns out that other countries have to sell to us, the idea of the free market is diminished. That dilemma is never resolved. Our difficulties about that are the starting point of our debate.

Of course we support the idea of a single market. I alluded earlier to the rigged market, which my hon. Friends below the Gangway know so well, in our energy decisions. My hon. Friend the Member for Bradford, South argued that the Adam Smith view of the market, the hidden hand, was based on the premise that investment would be made in the market by those who had the money to invest. The day that we abolished exchange controls in this country in 1979 and allowed capital to go to other markets and not our market formed the basis of our decline, and helped to push this nation state into two recessions and the loss of 1 million jobs.

Mr. Jenkin

rose—

Mr. McLoughlin

rose—

Mr. Bell

I give way to the hon. Member for Colchester, North (Mr. Jenkin).

Mr. Jenkin

I apologise to my hon. Friend, but he has got it completely wrong. By maintaining open markets and allowing imports into the country—unlike the example of the videotape recorders going through Poitiers—we allowed the British consumer to buy videotape recorders much more cheaply here than almost anywhere else in Europe. The result was that the Japanese Sony investment came into the country and now we are becoming net exporters of videotape recorders to the rest of Europe. One can still buy them more cheaply in this country than one can in France.

Mr. Bell

I am trying to explain why our nation state went through two recessions and lost 1 million jobs from 1979 to 1981 and from 1987 onward. It happened because of the link between the treatment of the movement of capital and the market. The hon. Gentleman mentioned the subject of the European Community as a whole and explained why there was investment in this country. Of course there was investment in our country in relation to those products.

Ministers standing at the Dispatch Box seem to give us the impression that all the European investment from Japan comes into this country. Is the hon. Gentleman aware that as much investment goes into France and more investment now goes into the Scandinavian countries because it is movement in EFTA? To say, therefore, that we get investment in this country because we are part of a single market, when other nation states are part of the same single market is a narrow view to take. But we are widening the debate. I was seeking to respond to some of the arguments which had been made by my hon. Friend the Member for Newham, South.

I missed the speech of the hon. Member for Gordon (Mr. Bruce), but I will read it with great interest. We heard the intervention by the hon. Member for Southend, East (Sir T. Taylor), the speech by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), who spoke on behalf of his constituency, the statement by the hon. Member for Stafford (Mr. Cash) and the speech by my hon. Friend the Member for Bradford, South.

People who read our proceedings must wonder where all the supporters of the Bill happen to be tonight. We have not heard many of them speaking and we have had a rather unbalanced debate as a consequence. The only two Members of the House who have supported it have turned out to be the Minister of State and the shadow spokesman, who has not, as the Minister said, yet had the experience of government that he has had—but if the Prime Minister travels in hope, so do I.

7.59 pm

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin)

I must admit that I seem to have been listening to a different debate from the hon. Member for Middlesborough (Mr. Bell), because I thought that a number of my hon. Friends broadly welcomed the Bill.

My right hon. Friend the Member for Shropshire, North (Mr. Biffen), a former Secretary of State for Trade, gave the Bill a very warm welcome. It has been one of the few occasions when there has been a divergence of opinion between my right hon. Friend and my hon. Friend the Member for Southend, East (Sir T. Taylor).

In a concise speech lasting some 10 minutes, my right hon. Friend explained the background to his views far better than the hon. Member for Middlesborough, who spoke for 30 minutes, during which we were given a tour of the Conservative party conference. As we had such a successful conference, I was not surprised that we were given a tour of it. I well understand why the hon. Gentleman did not want to dwell too long on his own party conference. He made a number of points which deserve a response.

One of the questions asked by the hon. Gentleman and by my hon. Friend the Member for Southend, East concerned social security payments. The position is quite simple; it is the same as for EC nationals. Those who are not exercising rights under the agreement and are a burden to social security will not enjoy the right of residence here. The rules are reciprocal. United Kingdom nationals in EFTA states will also benefit. That puts it quite simply and the Bill puts into context the points which my right hon. Friend the Secretary of State for Social Security made at Blackpool.

My hon. Friend the Member for Colchester, North (Mr. Jenkin) also welcomed the Bill, and I was grateful for his support. He highlighted some important points about the jurisdiction of the Bill and the way in which the implementation of the agreement will be taken through the courts.

The hon. Member for Gordon (Mr. Bruce) also welcomed the Bill and set out what he saw as its advantages, such as extending the borders for trade, which I think is particularly welcome.

My hon. Friend the Member for Southend, East asked me a specific question about Gibraltar. One of the reasons why the reasoned amendment he tabled was not selected is that it falls outside the criteria of the Bill.

We hope to be able to make the necessary provisions, which will require primary legislation, to allow Gibraltar banks to passport into the United Kingdom, but it would be completely inappropriate to do this in a Bill to implement the EEA, and the Governor of Gibraltar has explained the position to the Chief Minister. However, I take my hon. Friend's point. I know that it is something that we want to put right and we will attempt to do so, but this Bill is not the place to do it.

The hon. Member for Greenock and Port Glasgow (Dr. Godman) asked me a few questions, one relating to shipbuilding. The hon. Gentleman will find his answer on page 276 of the document that he has in front of him. He also asked about the anti-dumping case against Norwegian salmon. There is justification for a Commission investigation to establish the facts and the Department will consider the results of such an investigation on its merits. The Government are pressing the Commission to take it forward, so I hope to have given him some of the reassurance he requires.

My hon. Friend the Member for Stafford (Mr. Cash), made what was a slightly unusual speech for him as he said that he had not had time to study the document in great detail. I know that my hon. Friend has been rather busy over the past year, however the document was published in October 1992. Therefore, I cannot take too seriously his criticism that he was not able to study it in full detail. Something else which was rather strange for my hon. Friend was his over-reliance on opinion polls. He said that we should judge our remarks and everything we do by opinion polls. He should not dwell too much on those arguments in future for justification of what should and should not be done.

Dr. Godman

The Minister referred to the declaration concerning shipbuilding on page 276. What is stated there is incorrect. It states: The 7th directive expires at the end of 1993. The directive is to continue until the end of 1994. I asked whether the Norwegian shipbuilding subsidy will be brought into line with the level of subsidy awarded under the 7th directive.

Mr. McLoughlin

The point I was making to the hon. Gentleman concerned how it was dealt with in the document. Obviously it will be discussed, but it would not necessarily fall into that category straight away.

I was referring to the comments made by my hon. Friend the Member for Stafford and I was grateful, although slightly wary of some of the arguments he pursued.

Every time I hear the hon. Member for Bradford, South (Mr. Cryer), or the hon. Member for Bolsover (Mr. Skinner) I think of the Jurassic Park of the Labour party. The dinosaurs live on as far as their views are concerned. Although the hon. Member for Bradford, South criticised the Community, that did not stop him joining the European Parliament.

Mr. Cryer

I did not join it; I was elected.

Mr. McLoughlin

The hon. Gentleman was elected to the European Parliament and then elected to the House of Commons. He was taking a dual mandate and doing two jobs, for which he often criticises many people.

I was also slightly surprised at some of the remarks made by the hon. Member for Middlesbrough. He almost gave us a Labour party pledge, but bearing in mind that the Labour party made a pledge not to make pledges until it could decide what its policies were, I can forgive him for that. I half got the impression that he was arguing that the Labour party was in favour of the reintroduction of exchange controls.

Mr. Bell

The Labour party is sufficiently sophisticated to realise how difficult that would be and we have no intention of going down that road. I simply wished to point out to the House and the Minister that it was by freeing capital that we destroyed the principle of Adam Smith and that the hidden hand works in a free market, but the investment comes from the investors in that market. It was when that link was broken in 1979 that we encountered so many difficulties.

Mr. McLoughlin

When one is in a hole, one usually stops digging, but the hon. Gentleman continues to try and dig. He is supposed to be one of the more enlightened hon. Members on the Opposition Front Bench, but he has shown a yearning for control, so the Labour party seems to have learnt nothing in the past 14 years.

Mr. Cryer

Will the Minister give way?

Mr. McLoughlin

I am coming to the end of my speech, but I realise that the hon. Gentleman will have many opportunities to make the points that he wishes to raise so I might as well give way to him.

Mr. Cryer

Is the Minister saying that the Government will never at any time take action to introduce exchange control as Spain and Portugal have recently done in view of movements against their currencies?

Mr. McLoughlin

I was asking the hon. Gentleman whether it was official Labour party policy to reintroduce exchange controls, and he boxed cleverly round that point. The hon. Gentleman also overlooks the fact that we have attracted considerable investment into the country.

The hon. Member for Bolsover represents a constituency in the county of Derbyshire, which I too have the privilege of representing in the House and which has seen sizeable inward investment.

Mr. Skinner

Where?

Mr. McLoughlin

I am sorry if the hon. Gentleman does not travel into the south of the county. Derbyshire has seen considerable investment into the county.

Mr. Skinner

I have seen that almost every pit in my constituency has been closed during the past 14 years of Tory Government. When the Tories came in, there were nine pits; they have all been shut. If the Minister is referring to Toyota, it provided jobs for car workers that had been held by people who had jobs in British factories producing other cars. It has just produced another range of cars with jobs for people already doing that, without proper trade union recognition into the bargain.

Mr. McLoughlin

I think that we might be straying slightly wide. My hon. Friend the Member for Erewash (Mrs. Knight) welcomed the investment that we have seen in the county and the jobs and wealth that it has brought —£770 million of inward investment as a result of that investment. If the hon. Member for Bolsover is saying that the county council neglected to try to get regeneration in his area, he might want to take that up with his party, who run that authority.

We have seen tremendous Japanese investment in the United Kingdom. The hon. Gentleman was unfair when he said that it is going to other countries: 40 per cent. of total Japanese investment is invested in the United Kingdom.

I believe that, as my right hon. Friend said in opening the debate, the Bill will extend our market place quite substantially and bring the advantage of those markets more easily to British manufacturers and British industry.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 152, Noes 9.

Division No.367]	[8.11 pm
AYES
Ainsworth, Peter (East Surrey)	Blackburn, Dr John G.
Alexander, Richard	Booth, Hartley
Ancram, Michael	Boswell, Tim
Arbuthnot, James	Bottomley, Rt Hon Virginia
Arnold, Jacques (Gravesham)	Bowis, John
Arnold, Sir Thomas (Hazel Grv)	Boyson, Rt Hon Sir Rhodes
Atkinson, David (Bour'mouth E)	Brandreth, Gyles
Atkinson, Peter (Hexham)	Brazier, Julian
Baldry, Tony	Bright, Graham
Bates, Michael	Brooke, Rt Hon Peter
Beresford, Sir Paul	Brown, M. (Brigg & Cl'thorpes)
Biffen, Rt Hon John	Browning, Mrs. Angela

Bruce, Ian (S Dorset)	Howell, Sir Ralph (N Norfolk)
Bruce, Malcolm (Gordon)	Hughes Robert G. (Harrow W)
Burns, Simon	Hunt, Sir John (Ravensbourne)
Burt, Alistair	Hunter, Andrew
Butler, Peter	Jenkin, Bernard
Carlisle, John (Luton North)	Jones, Gwilym (Cardiff N)
Carttiss, Michael	Jones, Robert B. (W Hertfdshr)
Cash, William	Kilfedder, Sir James
Chapman, Sydney	Kirkhope, Timothy
Clappison, James	Knight, Mrs Angela (Erewash)
Clarke, Rt Hon Kenneth (Ruclif)	Knight, Greg (Derby N)
Clifton-Brown, Geoffrey	Kynoch, George (Kincardine)
Coe, Sebastian	Lawrence, Sir Ivan
Congdon, David	Legg, Barry
Conway, Derek	Lennox-Boyd, Mark
Coombs, Simon (Swindon)	Lidington, David
Cope, Rt Hon Sir John	Lightbown, David
Couchman, James	Lilley, Rt Hon Peter
Cran, James	Lord, Michael
Deva, Nirj Joseph	Lyell, Rt Hon Sir Nicholas
Devlin, Tim	Lynne, Ms Liz
Dover, Den	MacGregor, Rt Hon John
Duncan, Alan	MacKay, Andrew
Duncan-Smith, Iain	McLoughlin, Patrick
Dunn, Bob	Marlow, Tony
Evans, Jonathan (Brecon)	Martin, David (Portsmouth S)
Evans, Nigel (Ribble Valley)	Merchant, Piers
Evans, Roger (Monmouth)	Mitchell, Andrew (Gedling)
Fenner, Dame Peggy	Mitchell, Sir David (Hants NW)
Fox, Dr Liam (Woodspring)	Moate, Sir Roger
Freeman, Rt Hon Roger	Monro, Sir Hector
French, Douglas	Moss, Malcolm
Gale, Roger	Nelson, Anthony
Gallie, Phil	Nicholson, David (Taunton)
Gillan, Cheryl	Norris, Steve
Goodson-Wickes, Dr Charles	Oppenheim, Phillip
Gorman, Mrs Teresa	Patnick, Irvine
Greenway, Harry (Ealing N)	Pattie, Rt Hon Sir Geoffrey
Greenway, John (Ryedale)	Pickles, Eric
Griffiths, Peter (Portsmouth, N)	Porter, David (Waveney)
Hague, William	Portillo, Rt Hon Michael
Hampson, Dr Keith	Rathbone, Tim
Hawksley, Warren	Redwood, Rt Hon John
Heald, Oliver	Richards, Rod
Heathcoat-Amory, David	Riddick, Graham
Hendry, Charles	Roberts, Rt Hon Sir Wyn
Hill, James (Southampton Test)	Robertson, Raymond (Ab'd'n S)

Robinson, Mark (Somerton)	Thompson, Patrick (Norwich N)
Roe, Mrs Marion (Broxbourne)	Thurnham, Peter
Rowe, Andrew (Mid Kent)	Townsend, Cyril D. (Bexl'yh'th)
Sainsbury, Rt Hon Tim	Trend, Michael
Scott, Rt Hon Nicholas	Twinn, Dr Ian
Shaw, David (Dover)	Vaughan, Sir Gerard
Smith, Tim (Beaconsfield)	Walden, George
Spencer, Sir Derek	Waller, Gary
Spink, Dr Robert	Wardle, Charles (Bexhill)
Squire, Robin (Hornchurch)	Waterson, Nigel
Steen, Anthony	Watts, John
Stephen, Michael	Whittingdale, John
Stern, Michael	Widdecombe, Ann
Sweeney, Walter	Willetts, David
Sykes, John	Young, Rt Hon Sir George
Taylor, Ian (Esher)
Taylor, John M. (Solihull)	Tellers for the Ayes:
Temple-Morris, Peter	Mr. Nicholas Baker and
Thomason, Roy	Mr. Timothy Wood.
NOES
Barnes, Harry	Taylor, Rt Hon John D. (Strgfd)
Beggs, Roy	Trimble, David
Flynn, Paul
Forsythe, Clifford (Antrim S)	Tellers for the Noes:
Godman, Dr Norman A.	Mr. Bob Cryer and
Ross, William (E Londonderry)	Mr. Dennis Skinner.
Smyth, Rev Martin (Belfast S)

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Robert G. Hughes.]

Further proceedings stood postponed, pursuant to Order [20 October].