European Union (Accessions) Bill

HL Deb 03 July 2003 vol 650 cc1065-95

5.10 p.m.

Baroness Symons of Vernham Dean

My Lords, I beg to move that this Bill be now read a second time.

This is a short but momentous Bill. Three months ago, heads of state and government from the 15 member states of the European Union and 10 new members from central, eastern and southern Europe signed a new accession treaty. Following that event, this Bill paves the way for the Union's largest ever expansion on 1st May next year.

The Bill has two main purposes. First, it implements our obligations under the accession treaty by amending Section 1(2) of the European Communities Act 1972 and by approving the treaty's provisions on the European Parliament. Among other things, those set out the numbers of Members of the European Parliament in all 25 member states for the parliamentary term starting in June 2004.

Secondly, the Bill provides a power to grant nationals of Estonia, Latvia, Lithuania, Poland, Hungary, the Czech Republic, Slovakia and Slovenia the same rights to work in the UK from 1st May 2004 as are currently enjoyed by nationals of existing member states, and will be enjoyed automatically under the accession treaty by Cypriot and Maltese nationals from the date of accession.

Let me start with Clause 1, by saying a few words about the accession treaty and the principles underpinning it. As in all previous accessions, the new member states have undertaken to take on board the full body of Union and Community laws, subject to transitional measures of limited duration and scope. The accession treaty, which we have published as a Command Paper, sets out exhaustively the terms of accession and the necessary, consequential adjustments to the founding treaties.

Unlike the Bill, the new treaty is an enormous document: more than 5,000 pages long. It is testimony to an extraordinary volume of work: five years of hard labour and preparation by the candidates themselves, by successive presidencies and by the European Commission. But the scale of the treaty, while exceptional, merely reflects the unparalleled historic significance of this enlargement, which promises to transform the face of Europe strategically, economically and politically.

Strategically, enlargement will complete the transition of Europe from a continent scarred by warfare, national and personal tragedies and ideological divisions to a strong Union of nation states, secure in their borders, sharing the same democratic and humane values, and enjoying peace, prosperity and stability.

Since the end of the Second World War, statesmen on both sides of the Atlantic have dreamt about achieving security in Europe. With this enlargement, we shall finally achieve that dream. There has been nothing inevitable about that. The creation of the Marshall Plan; the foundation of the North Atlantic Treaty Organisation; the signature of the treaties of Paris and Rome; and, later, the rise of Solidarity in Poland, the collapse of the Berlin Wall and the fall of communism were all events central to the evolution of the Bill that were brought about by the courage, idealism and determination of successive generations of peoples and their representatives across Europe and in the United States.

The enlarged Union will be a more secure Union. Eight of the new member states have joined, or are due to join, NATO. Accession to the EU will complement and reinforce the benefits of NATO membership across the continent. But, as with the accessions of Greece, Spain and Portugal in the 1980s, we also expect EU accession to produce a dividend through stabilising and strengthening democracy in new member states.

Enlargement will also help us address new challenges to our security, such as global terrorism, the proliferation of weapons of mass destruction and the chaos caused by failed and failing states. New partnerships in Europe will help us to confront those threats. We will need to build on the tried and trusted EU methods: co-operation across borders; intelligence sharing; and joint law-enforcement operations.

Economically, enlargement will give the new and current member states new opportunities: opportunities for greater trade; to invest and attract investment; and to widen markets for producers and consumers alike. Since 1989, reforming governments in central and Eastern Europe have pursued the goal of EU membership with remarkable determination. In little more than a decade, failed command economies have given way to functioning market economies. Enterprise and entrepreneurship have been liberated. Successful economic reforms and restructuring in those countries have given the whole of Europe food for thought and laid the foundation for a prosperous future. We need the economic dynamism of the new member states.

Integrating the accession countries into the Union will, of course, entail costs. The financial package agreed at last year's Copenhagen Council amounted to £26.6 billion between 2004 and 2006. But that is well within the overall budgetary ceilings for enlargement agreed at Berlin in 1999. Between 2004 and 2006, the EU budget is expected to commit an annual amount equivalent on average to 3 per cent of the gross domestic product of the new member states. Given the disparities in wealth between new and current member states, that amounts to a total cost to the EU 15 of only 0.1 per cent of EU gross national product in any one year.

The costs of expansion are far outweighed by the benefits. Studies estimate that enlargement could increase the UK's GDP by £1.75 billion in the medium term and create up to 300,000 jobs across the Union. Our workers will enjoy freedom of movement across the world's largest trading bloc. Our companies will enjoy unfettered access to a market of some 450 million consumers.

Politically, enlargement will stimulate and, in some cases, necessitate further reform and modernisation across a range of Community policies. It will also change the way we do politics in the EU. In this new Europe, decision-making will be more fluid and alliances more diverse. Through the interim arrangements now in place, the new member states are already active participants in the Council and the European Parliament. Although they cannot vote, they can speak. We are working productively with them, collaborating on matters of joint concern. It is already clear that the UK's support for enlargement and our excellent relationships with the new members make us well placed to act as a pivot of influence.

If the EU is to make the best use of enlargement, the institutions originally designed for six founding members will have to be reformed. All advocates of EU expansion on all sides of the House would, I hope, accept that institutional reform is necessary. The task of agreeing such a reform now falls to the intergovernmental conference beginning in October.

This is not the time to comment on the work of the Convention on the Future of Europe; we shall have the opportunity to do so in the weeks ahead. For the moment, suffice it to repeat the words of the European Council in Salonica: the Convention's work is a good basis for starting in the Intergovernmental Conference". Final decisions on the new treaty will depend solely on the governments of the 25 member states, meeting together in the IGC and taking decisions only by unanimity.

The 10 new member states will participate fully on the same basis as the EU 15. Bulgaria, Romania and Turkey will be observers. The new treaty will he signed as soon as possible after I May 2004". Entry into force of this Treaty would then be subject to ratification by the constitutional procedures of the member states. In the United Kingdom such procedures are parliamentary procedures. Ratification by the Crown takes place only after full and proper scrutiny by Parliament, which is the case with the treaty and the Bill that we are considering today.

I turn to clause 2 of the Bill. Under the Accession Treaty, nationals of all the new member states have the right, immediately on accession, to enter and reside in any member state for all purposes envisaged by the founding treaties—except for work. Rights of nationals of the eight central and eastern states to work in the current member states are covered by optional restrictions for up to a maximum of seven years after accession. Under the Treaty of Accession, these restrictions do not apply to Cypriot or Maltese nationals.

Clause 2 will grant nationals from the eight central and eastern European accession countries the same rights to work in the UK from 1st May 2004 as are enjoyed by nationals of the existing member states.

This measure is patently in the national interest. It would attract the workers we need in key sectors, such as hospitality and construction. It will ensure that they contribute to the national exchequer and are subject to decent minimum standards at work, such as the national minimum wage. It will remove the temptation to work illegally and to claim benefits and it will cut through unnecessary red tape. It will help us focus resources on real immigration problems, rather than trying to stop EU citizens enjoying fundamental EU rights.

Recent studies, including research published by the Home Office, suggest that we will not see a substantial increase in immigration from the accession countries. We should look at the experience of Spain and Portugal. Following their accession to the European Community, Spanish and Portuguese workers actually returned home as economic prospects and standards of living improved. When Spain joined the European Community in 1986 there were 109,000 Spanish workers in France. Within eight years that figure had fallen to just 35,000.

However, if such a threat were to emerge—contrary to this experience and all of the available evidence—we would be able to introduce restrictions until the end of April 2011.

Sweden, Denmark, Greece, Ireland and the Netherlands have taken the same decision that we have taken. Many of the other member states are still deciding what to do. However, we expect some of them to follow our lead. Our current estimation is that at least half of the EU 15 will lift restrictions on 1st May 2004.

The Government regret that in Cyprus it did not prove possible for a settlement to be secured before Cyprus signed the Treaty of Accession, despite the exceptional efforts of the UN Secretary-General and his team. Again, I would like to pay special tribute to the Government's Special Representative on Cyprus from 1996 to 2003, the noble Lord, Lord Hannay, who was indefatigable in the search for a solution.

The EU has repeatedly made it clear that it will accommodate the terms of a settlement—most recently at the European Council in Salonica. We now call upon the two sides to negotiate a comprehensive settlement, based on the United Nations' proposals, so that a reunited island can join the EU in May 2004 and all Cypriots can enjoy the benefits and rights of EU membership.

The Government very much hope to introduce a Bill during the next Parliament that would endorse the accession of Bulgaria and Romania in 2007. Turkey should follow thereafter.

The prospect of accession is also helping to stabilise the western Balkans. The Government will continue to encourage and support all the countries of the region as they move towards eventual accession.

The United Kingdom's strong support for enlargement is well recognised—not least by the new member states themselves. Many in this House—on all sides of this House—have played important roles in bringing us to this point. We should be in no doubt that this enlargement is a real success for United Kingdom policy. It is a success for this Government and for the policy of this Government's predecessor. I am sure that all of us here today would wish, in the clearest possible terms, to welcome the 10 new member states as our equals and partners. I commend the Bill to the House.

5.25 p.m.

Lord Howell of Guildford

My Lords, we are grateful to the Minister for moving the Second Reading of this Bill, which is, in her words, one of "unparalleled historical significance". Indeed, why we should be tackling it at rather a late hour on a Thursday evening baffles me. I shall never understand the ways of the usual channels in these things but that is because I have never been a Whip. I would have thought it deserved a greater prominence. There lie ahead vast and very important debates that your Lordships will have about the changing nature of the European Union, to which these countries are seeking accession.

Perhaps I may put four points before your Lordships. First, we support this Bill. We support it very strongly. In our view it carries far forward a brave story and the ambitions of past generations. It is part of that dream of a Europe of free and independent republics and monarchies for which our parents fought and sometimes died. In the eyes of some of us it is already years overdue. However, we are nonetheless thankful that at last the moment has arrived when these vigorous and independent states, many of which have been through terrible trials and experiences, join the enlarged European Union.

This is not a story that ends there. I would advise against the use of the words "completion" or, as is sometimes said, "final settlement". This is because, as the Minister just reminded us, there is further expansion ahead of an open Europe, with more members queuing up. These include Bulgaria and Romania, which are aiming for 2007 and after that Turkey. Those three will change the character and structure of the Union again. Further ahead there are the Maghreb countries and the Ukraine and other nations seeking to join the enlarged and open structure of which the original European Economic Community was the embryo and the seed.

From now on, we can be sure that the whole treaty structure of Europe—of which the accessions treaty is a part and, in a sense, of which this Bill is part—will be under more or less permanent renegotiation. We are not afraid of that. In or out of government, we on this side shall be there, urging and nudging the Union in the direction of greater democracy, much more accountability, much less centralisation of powers and free markets. That is the kind of Union we seek and so do many of the accession states.

This is a highly positive approach and no one should say this is being anti-European —that charge will not stick. Wanting reform of the EU and wanting a larger more flexible European Union that is adapted to the new global conditions is being the best kind of European. To deny that is, in our view, an insult to the public intelligence.

Secondly, the new members epitomise what is being called "the new Europe". They are largely pro-American and Atlantic-minded. They were almost universally appalled at the anti-American stance taken in some Western European member states during the recent hostilities.

We particularly welcome Poland as a major new balancing factor in the European equation. I believe we should lose no time in developing the warmest links with the Poles and with all the central Europeans. These are nations that have suffered terribly. They used to regard Britain as their champion. In some instances, they have been saddened to see us in recent years seemingly siding too much with the big boys in the playground and being too focused on the Paris-Berlin agenda rather than being fully sympathetic to their needs and concerns.

As I have said before and will say again, a change of emphasis in our European policy is very badly needed. Mr Straw, the Foreign and Commonwealth Secretary, has said that we "need more partners in Europe". He is absolutely right. So let us hope that that period is now over and that we shall seek a more equal Europe in which all nations, large and small, have a full voice.

Like the noble Baroness, I too am sad that we are to see Cyprus come in while it is still in a divided state. Let us hope—against hope, I am afraid—that progress can soon be made in the ways that the noble Lord, Lord Hannay, and others have worked so hard to achieve.

Thirdly, the Union to which these new countries are acceding is undergoing huge internal change even while we speak. Indeed, in the language of some, it is in turmoil. If only half the new proposals from the European convention are agreed, the new countries will join next year and then be asked to approve a very different Union from the one to which they originally applied for membership. The noble Baroness has urged that this is not the time to enter a long debate on all that, although she did have something to say about the convention proposals. However, I agree that we do not want to have that debate during this one, although we shall certainly need many hours in debate to consider those issues.

I simply want to say briefly that the new countries will be asked to sign up. Although they will have taken part in discussions beforehand, as soon as they become member states, they will be asked to sign up to a very complex new written constitution; a large accretion of executive, legislative and judicial power to the central EU institutions; a large new charter of rights, applying in theory only to the Union hierarchy itself, but in practice going much wider; a President of the Council, which many of them dislike intensely—and have said so; and a Foreign Minister who will report, in part at least, to the Commission. It will be a Union of weakened states and stronger, more remote central institutions if that kind of agenda goes through. Obviously, we hope that it will not do so.

Qualified majority voting may help from time to time. Ministers often remind us of how it can help this country's interests, but it is a fact that every step in this direction must be a step away from intimate and direct national accountability. Moreover, I reject the rather bullying point of view, which I have not heard expressed on these shores, but I have elsewhere in Europe, that QMV is a necessary instrument to crush the recalcitrant smaller nations even when their crucial national interests are threatened.

Nothing has been done to unwind the 97,000 pages of accumulated powers at the centre of the Union, the acquis communautaire, to which these new countries have been compelled to sign up, or indeed to give back either to the existing or the new states a single competence. So I believe that a huge opportunity has been missed, one that if at all possible should again be seized by us and by the new members, in the near future. It is no wonder that the Czechs, to take one new applicant, are planning a further referendum on the prospective new constitution over and above their recent referendum on the accession treaty. The vote was strongly in favour and I welcome that. It brings the Czechs into line with up to eight other existing member states which have planned, rightly, to hold referendums. The most glaring exception, to which the noble Baroness so candidly drew attention, is that of the United Kingdom.

I am sure that that is a debate for another day, but I note in passing the views of President Chirac, who has not been the most popular figure on this side of the Channel over recent months. He has said that: I am logically in favour of a referendum. It is the only legitimate way". I leave the issue there, but no doubt many of our debates will return to it.

Finally, on the question of the new countries that are about to join the new Union, I would say that to refer to this set of proposals for major change as an exercise in "tidying up" is ridiculous. That must be one of the most stupid statements uttered by a Minister of the Crown in modern times. I hope that we shall see a much more refreshing candour, frankness and honesty in the many debates ahead on this matter.

In the meantime, the Prime Minister of Poland resents and has spoken out strongly against the downgrading of his country in the draft constitution, which he thought had been settled at Nice, as did many others. So that matter will certainly have to be reopened.

The draft constitution has nothing whatever to do with enlargement. It is a quite separate project and I do not understand what the Prime Minister sought to suggest the other day when he appeared to link the two. It is a separate matter, but it has an influence—one that I believe will be largely negative. As the Economist magazine put it—it is not a tabloid and not a hysterical, isolationist or nationalist journal—the draft constitution is, a blueprint for accelerated instability". It will not be a great help to all these bright new nations.

My fourth point is that we have to face the fact that enlargement will not please everyone. There are dangers which we have a duty to monitor extremely carefully. The first of those is that it will intensify competition. The noble Baroness spoke bravely and positively about new trading opportunities, but there are some in the manufacturing sector who see a rather different side. They certainly believe that accession will intensify competition. Personally, I welcome that because competition is always good when it operates within the proper rules and a market framework. But undoubtedly that will be tough for some.

The new nations joining the Union, after years of suppression, are now very sparky and dynamic. Their workers have high skills—an oddity of the communist legacy is that, while most of it was hideous, it left behind quite good educational and skills structures—and low labour costs, so long as they are not tied down by EU red tape and asked, as they have been in some cases, to implement new regulations, controls and tariffs in their existing free markets. Those countries already are and will continue to be tough competitors, which will mean that adjustments will have to be made on our side.

The second issue to which the noble Baroness rightly referred concerns freedom of movement. With the accession, some 73 million more people will be joining the EU, and that is good. Obviously, only a tiny fraction of those millions will contemplate moving westwards. But there is bound to be some increase in migratory pressures, a fact recognised in a number of countries of the Union. Many of the people from central European countries are among the most creative and hard working of all and this nation has benefited vastly from their arrival in the past. I make it absolutely clear that, in my view, if the creative and hard-working ones choose to come here they should be nothing but welcome. However, we must be realistic and acknowledge that there are less-desirable elements. That explains why many member states—like the noble Baroness, I am not quite sure how many at this stage—will apply national restrictions after the accession date for anything between two and seven years to ensure that their labour markets can digest the newcomers smoothly. That is a legitimate aim.

I hope that the Bill will allow the United Kingdom the right to consider restrictions if necessary. I hope that they will not be necessary. Studies have been published since the Second Reading of the Bill in another place which indicate that the impact will be minimal. I hope that is correct. But, if there are doubts, we shall need strong assurances—otherwise we shall need at the Committee stage a further explanation of the United Kingdom stance, which is in contrast to that of several other member states. I hope that is a reasonable way of approaching what we hope will not be a problem.

Thirdly, there remains the question of the common agricultural policy. It now looks at last—one has to cross one's fingers—to be in a process of reform. But it is a very slow reform which still leaves a vast number of farmers of the new states—especially Poland, where the number of farms is larger than in the whole of Germany and France put together—facing competition from imports from French farmers and others who are receiving subsidies four times as high as theirs at the beginning of the transition period. That will not be good news for some of those people. It is bound to cause problems of unemployment and perhaps problems of migration. We shall have to wait and see.

These brave countries—eight of which threw off tyranny only a short while ago—are joining a Union which has still very uncertain ideas on how to organise its future security and foreign policy, and, therefore, their future security and foreign policy.

Most of the newcomers have no difficulty at all with the concept of a reformed NATO, of which most of them are already members, or with a much stronger European branch of NATO, or with a NATO which is developing a global role, an out-of-theatre role, in peacemaking and peacekeeping. Unfortunately—and we have to face this—some of the so-called "core" countries of the existing Union—notably France, Germany, Belgium and Luxembourg—have recently proclaimed a quite different idea. They want a separate command structure and a separate force, and their language is redolent with anti-Americanism. Where Her Majesty's Government now stand on this I have no idea—they seem to have moved—but these are matters on which the accession countries will want great clarity and I am not sure that they yet have it.

At the heart of the Franco-German ambitions, which have been pronounced at various meetings and in documents, lies a flawed concept—the Prime Minister made the same point the other day—that the EU must somehow be a rival and counterweight to the United States rather than a partner. I believe that, for all its technological might, the United States cannot go it alone in the world. The so-called neo-conservatives—the "Neo-cons"—in Washington are wrong about that. Even if it is tired of alliances, the United States needs willing allies, especially in intelligence and nation building. I fervently hope that we will now work with the new accession states, not to form a rival bloc or super-power—heaven preserve us from that utterly false ambition—but to be effective partners in the global security network of which the United States is inevitably the senior partner.

I have one final concern. At the Laaken summit the European leaders called for measures to bring the great EU institutions closer to the people. The draft constitution now before the inter-governmental conference per contra calls for the people to be brought closer to the institutions. In that small inversion lies all the real seeds of wrong thinking which, if not weeded out, will bring a choking crop of measures which may be good for bureaucrats but bad for a truly democratic and flexible Europe and bad for the new partners and new members of the Union. The best news about the Bill is that it may at last bring us lively democratic allies who will help us to change the course of the European Union away from many damaging trends and towards a much better Europe.

5.43 p.m.

Lord Wallace of Saltaire

My Lords, we on these Benches welcome this Bill—a very short Bill summarising a very long treaty. Not thinking carefully, I made the mistake of going into the Printed Paper Office yesterday and asking for Command Paper 5805. The ever-helpful staff said, "You don't want that, you couldn't carry it out of the room, but we'll give you the summary".

The underlying principle of west European integration was, after all, to share security, prosperity and democracy, and in that it has been resoundingly successful. At the end of the Cold War, we found ourselves with a choice of importing insecurity and instability from eastern Europe or taking the opportunity to extend our zone of democracy, prosperity and security eastwards and southeastwards. That is what this now achieves. It has a number of consequences, noted only briefly in the Bill. There are clearly institutional consequences, many of which are dealt with in the convention. I am rather puzzled that the noble Lord, Lord Howell, does not see the link between the convention and enlargement. It was inherent in all the discussions at Laeken and before.

The treaty has a number of financial consequences. If I am not wrong, 0.1 per cent of the EU GDP is very nearly 10 per cent of the current EU budget. That is a not insubstantial figure, particularly if it is going to rise and, as I shall expand on later, if more funds will necessarily have to be transferred to the next neighbours—the ones that are both candidates next in line and those, like Ukraine, Belarus and, of course, Russia, with which we will have to have increasingly complex relationships as an enlarged European Union.

The treaty says a great deal about extending the Schengen arrangements to the new borders and the problems of making sure that co-operation with the police forces and judiciary authorities of these new members are operated according to the highest possible standard. I was privileged to be chair of your Lordships' EU sub-committee when we looked at the eastern border controls of an enlarged European Union two years ago. It was an encouraging and interesting study.

The Bill goes into more detail on the free movement of labour. I see that noble Lords on all three Benches are agreed that this ought not to be a substantial problem for Britain or, indeed, for the EU 15 as a whole. The Minister remarked on the experience with the Mediterranean countries of Spain, Portugal and Greece after they joined. Rising prosperity at home led to a return of not just Spanish farmworkers but also Portuguese and Greek farmworkers. Indeed, those three countries have gone through a very rapid transition from being countries of emigration to countries of substantial immigration as they have become more prosperous over the last few years.

I recall that immediately after the dismantling of the Berlin wall, a number of western European studies by the OECD, the Council of Europe and others suggested that up to 25 million people would move from the former socialist states into western Europe. There was a real fear, mostly in Germany, that there would be a mass migration west.

I still recollect with amusement a conference in 1987 at which a young Russian said to a number of French participants, "We all think Paris is the centre of civilised Europe, and as soon as the wall comes down, we shall move to Paris". They did not, and people have not. All the evidence we have is that as prosperity extends across eastern Europe, so people will be happy to stay there and work there. Indeed, people from further east are moving in to add to their working population. The problems of migration from further afield, which raise awkward questions of border controls and co-operation with the neighbouring countries, are ones to which we should pay more attention in future.

I was fascinated to read in some detail, in the note on the treaties of the implications of the common agricultural policy, the transition period for Czech hen cages, Latvian animal waste plants and Maltese raw milk. It increased my sense that the common agricultural policy is the most amazingly over-complex set of centralised institutions which we all encourage Her Majesty's Government to do their utmost to decentralise as far as possible.

I note that there are implications for Cyprus, as the noble Lord, Lord Howell, remarked. There is a sad possibility—still not necessarily an inevitability—that Cyprus will join as a divided state. I note that there are some very difficult issues about the future of the sovereign base areas whether or not Cyprus enters as a divided island or a united island. My heart sinks at the thought that the United Kingdom may be about to add to the anomalous position of Gibraltar and the Crown dependencies a third anomalous area, half in and half out of the European Union, in which, if I understand correctly, farmers inside the sovereign base areas will he entitled to benefit under the common agricultural policy but will not otherwise be members of the European Union, et cetera, et cetera, et cetera—the sort of thing that only the noble Lord, Lord Williamson, will ever understand.

The weight of interconnected European business in both Houses over the next six to nine months will he considerable. We have this Bill, which I hope will not detain us too long; we have the proposals from the convention to discuss; and then we will wish to follow the intergovernmental conference in some detail. It is very important that we have a proper and informed debate on the convention, which seems to many of us very closely linked to the institutional implications of enlargement. Indeed, those of us who remember the Laeken declaration in detail recall that the greater involvement of national parliaments was one of the underlying points in the entire convention exercise.

I wish that I were more confident that the Government were yet doing enough to encourage an informed national debate. I look forward to seeing a good and well-informed White Paper. I do not know when it is going to be published. I regret that there will not be an opportunity to have a proper debate in this House before the Summer Recess. I trust that there will he adequate time for a proper debate and inquiry when we return in September.

It is also important, I think, to maintain the traditional good humour and tolerance of this House in an area where opinions differ passionately. I came in last Friday to the debate on the Second Reading of the European Union (Implications of Withdrawal) Bill which in many ways lacked that tradition of good humour and tolerance. There were references to the "corrupt octopus of Brussels". There were suggestions that any British citizen who has ever been in the paid employment of the European institutions must unavoidably be tainted by that corruption—which seemed to me to cast unworthy aspersions on a number of Members of this House. There were suggestions that the referenda undertaken by some of the applicant states were not really with the full consent of the population because the turnout had been relatively low. There were, not to put too fine a point on it. undertones of paranoia, even xenophobia, in the belief that there is a vast and malign conspiracy against honest Englishmen.

There were, in a number of the final speeches, some aggressive and repeated interruptions which I felt were a threat to the tradition of self-regulation of this House. I wish to say that because we will be having a number of further debates within the next few months on these issues and I think it extremely important that we maintain the traditions of this House and not allow them to slip.

The Minister said in her opening speech that the process of enlargement will continue—to Bulgaria and Romania, which we may hope will hit the date of 2007, although current developments suggest real problems in reaching that date; and then to Turkey and the western Balkans.

Policy towards the remaining neighbours of the European Union requires much more active attention. I was struck when I read the Commission paper of March 2003, clumsily entitled Wider Europe—Neighbourhood: A New Framework for Relations with Our Neighbours, at the ambitious agenda it was setting out for further extending the zone of security and stability beyond our present boundaries. The Thessaloniki European Council repeated the phrase that we do not wish to draw a new dividing line in Europe. If we are not to draw a new dividing line in Europe, our relations with Ukraine, heaven knows our immensely difficult relations with Belarus and our relations with our neighbours on the Mediterranean are going to have to be a matter of much greater priority. The response of the Foreign Ministers Council to the Commission paper in June was, I thought, flabby and mean. It suggested that our Foreign Ministers are more concerned with haggling among themselves about benefits within the current EU than with thinking about the broader set of issues of Europe's responsibility to the wider world.

I would also like to ask the Minister about the paper that Javier Solana, the High Representative on Common Foreign and Security Policy, presented to the European Council at Thessaloniki which is entitled A Secure Europe in a Better World. I am not entirely sure about the status of this paper. It appears not to have been published exactly, but lots of copies were available in Washington when I was there last week, and lots of people in Washington have written about it. So it is certainly being circulated, but not exactly pushed for larger consumption here. A member of Mr Solana's secretariat, however, told me that it had been put out with the intention of promoting a broader debate on a wider European international strategy intended to lead up to the European Council in December. If that is the case, it would be helpful if it were easier for Members of this House and of the other place to get hold of a copy. I quote from that paper: It is not in our interest that enlargement should create new dividing lines in Europe. We need to extend the benefits of economic and political co-operation to our future neighbours be the East—Ukraine, Moldova. and Belarus—while resolving political problems there … We need to extend the zone of security around Europe". I agree strongly with that view. The deal is a welcome start to extending that zone of security and prosperity. In the next few months beyond this Bill, I urge the Government to provide the maximum amount of information and political leadership for the lengthy debate to come, with all the misperceptions, myths and deliberately misleading arguments that that will sadly include.

5.56 p.m.

Lord Williamson of Horton

My Lords, I intervene in today's debate because the approval by the United Kingdom Parliament, when this Bill is passed, for the enlargement of the European Union by the membership of 10 sovereign states in central, eastern and southern Europe is a political event of the highest importance. I do not wish this occasion to pass without having the opportunity personally to salute it. It is indeed a great event in European history.

I have two reasons to welcome this Bill wholeheartedly. First, there is the substance of the decision. It is evident that the EU will be strengthened by the new members in terms of its common purpose as a community of sovereign states, because the new member states will bring their distinctive contribution in terms of their national attitude to the many questions that will probably confront us for many years to come. For example, I cite: the protection of the environment and the sustainable use of natural resources; the responsibilities of richer countries for development and humanitarian aid elsewhere in the world; the use of energy from fossil fuels, nuclear or renewable sources; and the balance between centralisation and regional policies within the EU itself.

Your Lordships will note from those examples that I look forward to constructive co-operation with the new member states over a long-term perspective. This Bill, by endorsing their membership, sets up that long-term vision. I am relatively indifferent in the context of this important enlargement to some of the minor issues that sometimes cause commentators in the United Kingdom to fret, such as the precise number of full or associate European Commissioners. Nor do I have any particular anxiety about problems that some have signalled about the EU budget for the enlarged union. There will, of course, be some modest re-balancing of the budget in favour of the new member states so that each would be better off after this enlargement.

The transfer of funds between 2004 and 2006, as the Minister mentioned, will be about 3 per cent of the new member states' gross national product. In due course—which I believe is rather too slowly—the costs for agriculture and rural development in the EU as a whole will fall, certainly in real terms. It is also important to bear in mind that total EU expenditure is definitively capped by unanimity, and can only be increased with the agreement of the UK Parliament. Also the budget of the enlarged EU proposed for next year will still be below 1 per cent of the enlarged EU's gross domestic product and probably only just over 2 per cent of total public expenditure in the EU.

The second reason for my wholehearted support is an unashamedly personal one. Over very many years, I have supported the enlargement of the Union, which I believe will add to the voice of reason in international affairs and to a higher quality of life within the Union itself. When I worked in Brussels I made some personal contribution to the basic document "Agenda 2000", which sets out the case for a stronger and wider Union, the challenge of enlargement and the European Commission's opinions on the applications for accession. It effectively launched the negotiations on the basis of a first assessment of what the applicant countries might need to do and, more importantly and wisely, what the existing European Union might need to do in respect of its own policies.

I participated in one way or another in the negotiations for the United Kingdom's accession, together with Ireland and Denmark, and for the Greek, Spanish, Portuguese, Austrian, Finnish and Swedish accessions, so your Lordships will understand that I did not want to stand on the sidelines in this debate. I wanted a royal flush.

Although I believe that the most important gain from enlargement—for existing member states, particularly the United Kingdom, and the new member states—is based on the long-term perspective of a fair and wealthier Europe, better equipped to fight crime, drugs and some of the other problems of modern society, I shall also say a word about the short-term perspective, which I also believe to be favourable.

It is important to realise that, in trading terms, the new member states are already closely tied into the European Union and that the almost complete opening-up of bilateral trade has already shown advantages. United Kingdom trade with the new member states has increased in a little over 10 years by over 400 per cent; over 10,000 United Kingdom firms trade with them. The growth in the exports of the new member states, some of it directly beneficial to our consumers, has been substantial—for example, it has been over 200 per cent for the Czech Republic, 290 per cent for Hungary and 250 per cent for Slovenia. About 67 per cent of the exports of the new member states go to the European Union. For some, the percentage is as high as 77 per cent, as in Estonia, or 75 per cent, as in Hungary. That has contributed to a big increase in wealth. There has been growth of about 40 per cent in the gross domestic product of the former Soviet zone countries. If we believe in a European economic community, this is surely it. In today's terms and in trading terms, we are in an area of mutual benefit.

What of the future for trade, inward investment and the capacity of the new member states to compete in the single market? Many of their exports are highly competitive. In the other direction, substantial improvements in banking and financial services have been introduced, following the arrival of western banks and financial institutions. Despite the element of disruption that goes with the opening-up of markets, such as has taken place, growth has been good. I am sure that the new member states will compete effectively in the single market.

As well as trade liberalisation, direct foreign investment has played a part. The central and eastern European countries have had about 120 billion dollars of foreign investment in the past 10 years. I expect substantial foreign direct investment to continue, although there may he a slight pause for breath, while investors look to see how wage levels, currently about one third of the European Union average, develop.

There has been some concern that the enlargement of the Union will give rise to increased migration into western Europe. That was mentioned by earlier speakers. It is thought that it might exacerbate public disquiet here about illegal immigration and the inflow of asylum seekers. The two questions must be separated. The treaty grants nationals of Cyprus and Malta the same right to work in another member state as is currently enjoyed by nationals of existing member states—that is simple. For the other eight new member states, the Bill provides a power, as the noble Baroness made clear, to grant the same right to work in the United Kingdom as is enjoyed by nationals of other member states.

The treaty would have allowed the United Kingdom to defer the application of that right up to 2009 or, in exceptional circumstances, 2011. The United Kingdom Government have decided not to do so, but to grant it from 1st May, 2004. On balance, I think that this decision is right—although controversial, perhaps—and that the British public will understand that we are speaking of legal entry to work that we are granting, not of illegality or lack of control. It is important to make that point. I put it in that simple form and do not go back to the precedents about migration to or from Spain because I do not wish to enter into any further discussion about Mr Beckham. Furthermore, there will, if I understand the position correctly, be a safeguard power in the regulation to reapply some control if necessary. It is a satisfactory situation, although a little controversial, and I support it.

It is very pleasing that the European Union at this time is dealing with the two big issues of enlargement of the Union and the preparation of a better basic treaty as a result of the consultation of national parliaments and others in the convention. I am very glad that enlargement will be speeded forward in the House today.

6.5 p.m.

Lord Harrison

My Lords, as a prologue, I must say that I deplore what happened in the European Parliament last night. While the Italian presidency got off to an inauspicious start, I hope and believe that the Italians will recover their poise. They are taking up the presidency at a very important time. I say that with all the more feeling because I and the noble Baroness. Lady Crawley, in an earlier incarnation, were friends and colleagues of Martin Schulz, who deserves respect, not insults.

Like Julius Caesar's Gaul, my contribution is divided into three parts. First, I draw attention to the astounding fact that 10 more countries are freely and keenly joining the European Union. That is astounding because for many of us who have lived in the shadow of the Iron Curtain the prospect of a Europe whole and free has always been but a distant hope. However, as each accession occurs, that hope is being gradually realised. It is also astounding because the change has been effected without one applicant country turning down the chance to join the EU. Indeed, eight out of the 10 countries that have already decided did so by handsome majorities in referendums: in Poland and the Czech Republic by about 77 per cent, in Hungary by 84 per cent and in Slovenia and Slovakia by 90 per cent or more. Equally astounding has been the lukewarm—indeed, curmudgeonly—reception given to those countries by our own Eurosceptic press and the Europhobic members of the party opposite. Instead of a fanfare proclaiming the unification of Europe, the Eurosceptic press resorts to belittling the turnouts of the referendums held in the accession countries. It is its last gasp of ill will towards the European project. In turn, it is supported by the politicians who campaign for the United Kingdom to secede from the European Union. That was exemplified in your Lordships' House last Friday in the form of the Bill promoted by the noble Lord, Lord Pearson of Rannoch.

I am constantly amazed by the desire of some noble Lords to leave the European Union while the rest of Europe and beyond knock on the door to come in. I am reminded of the old riddle: As I was going to St Ives, I met a man with seven wives". Like the man bound for St Ives, the Eurosceptics march off into their self-imposed internal exile in the mistaken belief that others in Europe support their vain charge of the lightweight brigade. However, how should we think differently of the party opposite, which is led by the Europhobic lain Duncan Smith, a man who by conviction would prefer Britain to be left abandoned on the continental shelf? I understand that when the noble Lord, Lord Howell of Guildford, makes criticisms, he does so from a positive stance; we always listen to and welcome his criticisms as we advance further down the road.

Lord Howell of Guildford

My Lords, the noble Lord was very kind in his remarks about me but he cannot pick and mix in that way. I speak for the Conservative Party as a whole and the proposition that we are Europhobic or anti-European is completely untrue and should not be asserted, whether in relation to myself or any other member of my party.

Lord Harrison

My Lords, looking at the Benches opposite and after listening to the debate last Friday, pick-and-mix is characteristic of the party opposite.

My second point is that I support the accession of these respected countries. It will be good for them and us. My confidence in this matter is bolstered by the experience of the earlier accessions of Ireland, Spain, Greece and Portugal. For those states joining the European Union meant anchoring democracy, securing human rights and promoting market economies. Prosperity has taken root in those countries aided by the European regional and cohesion funds, which have succeeded in boosting their economies despite their geographical peripherality.

My confident prediction is that the new batch of accession countries will considerably benefit over time. Indeed, independent research suggests that those countries may expand their GDPs by some 20 per cent in the medium term as a result of joining while Britain's own economy will also benefit to the tune of £1.75 billion. In this Eurovision contest of expanding economies, everyone can be on song. I reject the fears of those like David Heathcoat-Amory MP, the Conservative representative on the recently completed Convention on the Future of Europe. He told BBC Radio 4 that he is very worried about enlargement when we try to absorb a lot of other countries with different cultures for which our judicial and legal systems are quite unprepared. He continued by saying that it is also going to be very expensive. What a relief that Great Britain never tried to establish an empire and that the East India Company so quickly faded.

The truth is that we all stand to gain culturally and politically and also in terms of promoting peace, improving the environment and deepening democracy. But the grouting of the Union, which binds it together, is the establishment of the world's richest and largest market which, in May 2004, will swell to about 455 million people. I make that point because all too frequently the disciples of Mr Heathcoat-Amory complain that the single market was all that Britain signed up to back in the 1970s. They scarcely acknowledge that it is the market which has been the engine of the Union and, moreover, that their constant backbiting undermines the efforts of British entrepreneurs seeking to penetrate that widening single European market. If one keeps trying to tell British business people that Europe is the home of red tape, foreign tongues and funny money, then one cannot be surprised if they stay at home. The Europhobes are the very worst ambassadors for Britain backing Europe.

That brings me to my third and final point, which is the Government's wise and intelligent decision in Clause 2 of the Bill to grant immediate free movement for workers from the accession countries to ply their trades and skills in Britain. Not only is that in conformity with the single market's four freedoms of free movement of people, capital, goods and services, but it will also allow Britain to fill the current skills gap in the British workforce. Indeed, I ask the Minister whether the Government are devising any specific strategy to welcome and place such skilled workers when accession takes place in May 2004.

There is one further point as to why the Government's move is both astute and intelligent. By offering freedom of movement to workers from accession countries right at the outset, we immediately stake our claim to be first, firm and fast friends of the accession countries. Such an act of spontaneous friendship will store up for us a pool of goodwill towards Britain, capable of being called on for many years to come as Europe new and old unites in common purpose.

Those with the gall to oppose these beneficial changes prefer to leave Europe a divided trinity. The Bill signals their defeat and provides for a better Europe. I, for one, applaud it and encourage the Minister to proselytise for the Bill as part of the Prime Minister's campaign to promote Europe in Britain and Britain in Europe.

6.15 p.m.

Lord Dahrendorf

My Lords, like the noble Lord, Lord Williamson, I have a personal reason for wanting to say at least a few words in the debate. I cannot claim to have had any practical input into the process of the accession of new countries, but ever since the heady and memorable days of what I call the revolution of 1989, which put an end to communist rule in east-central Europe and beyond, I have been a staunch and firm advocate of enlarging the European Union and having our European friends and neighbours inside.

The result is the present slim Bill, which the Minister has rightly called momentous. It is probably more momentous—if that is not offensive to anyone—than some of the massive tomes that come our way for scrutiny every now and again, and particularly in recent months. It marks a change in the face of Europe and in the direction of peace and liberty.

I said that I had no practical input into the process this time. I had a slight practical input into an earlier process of enlargement of the European Communities, as they were then called, when I was commissioner for foreign trade and foreign affairs at the time of Britain's application for membership. Even at that time I strongly opposed a view widely held in Europe that there is a conflict between deepening European co-operation and enlarging the European Union. I do not believe that that conflict exists. Every time the EU has seen enlargement it has also seen a process of intensified co-operation within. I am convinced that enlargement this time will have the same effect.

The accession comes later than some of us—including, I am glad to observe, Her Majesty's Government—would have wished. It is also rather less generous than the new members deserved, since they nearly became net contributors to a wealthy European Union on entering it. But at least enlargement will now be a fact. Europe is, in the words of President Bush the father, "whole and free"—nearly whole, as several noble Lords have rightly emphasised, for even apart from Norway and Switzerland, much of south-eastern Europe remains outside for the moment. The question of the open borders beyond is one of the major issues ahead of us.

Still, enlargement is a fact. While the United States of America and NATO remain crucial to Europe's security, the level of political and economic co-operation achieved in the European Union puts an end to centuries of internecine struggles and establishes—indeed to some extent guarantees—the constitution of liberty over an entire continent. Apart from North America, no other part of the world has managed such a feat.

The European Union will be different once the enlargement has happened. Even without using the language of an "old" and a "new" Europe, one can predict that what some called "core Europe"—that is, essentially France and Germany—will no longer necessarily be the engine of closer co-operation. What may geographically seem the periphery is in fact the set of countries whose governments signed the "Letter of the Eight", affirming the Western alliance in the face of the Iraq war. After 1st May 2004, their view will be the majority view of the Union, and it is one which we should welcome.

The Bill before us emphasises one of the four liberties of the single market: the freedom of movement for workers. Perhaps it needs to be stressed, as others have done—and the House seems to be largely united on this point—that there is nothing to worry about in this prospect. My own hope is that the new members, especially those in east-central Europe, will begin a process of catching up economically, following in some ways the Irish model. However, it must be said that they would engage in this process at a time when the general economic climate is less favourable to rapid catching up by any country than it was at the time of Ireland's accession.

Workers may come to the old member states in the near future and help to provide essential services, for which we should be grateful. But, judging from the Polish experience—I agree very much with the noble Lord, Lord Howell, that Poland is not only the largest new member but the most significant country among those acceding—the people who come to us are just as likely to go back before long to help to create a sustainable economy of prosperity at home.

In short, the Bill sets the seal on one of the great steps forward in European history. I, for one, support it and its implications wholeheartedly.

6.22 p.m.

Lord Kilclooney

My Lords, I also welcome the Bill and especially the principle of enlargement of the European Union. I am delighted to see that, of the 10 new member nations, two are from the Commonwealth: Cyprus and Malta. I note also that all 10 are republics and, of course, that changes the happy balance between seven constitutional monarchies and eight republics in the present membership of the European Union.

But most important is the fact that eight out of the 10 new members are former communist countries. It is great to see them now becoming integrated as free, independent sovereign nations within the European Union. They are, of course, already all members of the Council of Europe and many are already within NATO. I recall revisiting Warsaw two years ago, having been there previously when the communists were in power. The most dramatic impact for me was walking past the ministry of defence headquarters in the centre of Warsaw and finding the NATO flag flying over the building. That is the kind of impression that one receives and the impact that is made as Europe comes closer together. In trade, we are creating a market of 450 million people. That must be good for United Kingdom business. It must increase the opportunities for trade.

However, the EU is a political, as well as an economic, union. I hope that the 10 nations from the new Europe will be more supportive of a union of independent sovereign states than a federal European Union. Here, I shall say something that may not be welcomed. In Europe, the British—or the English, as they call us—are not particularly popular. That is not because of the behaviour of some louts who follow the English football team—far from it. It goes much deeper. For example. in France, at most levels of society, there is a jealousy of the United Kingdom. In Europe there is resentment of Britain; a perception that the English are arrogant, behave as if they are superior and claim to know better. To deny this is to avoid the reality of politics in Europe. I have witnessed this over the past 17 years in European politics, 10 years as a Member of the European Parliament and seven in the Council of Europe. This perception of the United Kingdom is totally unfair. In the European Parliament and in the Council of Europe, United Kingdom politicians—Labour and Conservative—are among the most hard working and efficient. They make a major contribution to a peaceful and better Europe.

I hope that the accession of the new European nations will strengthen the role and the respect for the United Kingdom in Europe, as the noble Lord, Lord Dahrendorf suggested. I agree that it gives us greater opportunity and support within a larger Europe. But it would be unwise to imagine that the United Kingdom will have no difficulties with old Europe so long as these perceptions exist.

With these 10 new members, the majority of the European Union, like the United Kingdom, will not have the euro as their national currency. I live in the only part of the United Kingdom having a land boundary with a euro-land country—the Republic of Ireland. I say "Long Live The Euro" so long as the Republic of Ireland has it and Northern Ireland does not. As chairman of a family business employing 250 people in five of the six counties of Northern Ireland, I know at first hand the impact of the euro.

The Republic of Ireland has suffered from one of the highest rates of inflation across Europe. In the past year it has had a 15 per cent currency appreciation against sterling, yet it is powerless to address these problems. Both industry and agriculture based in the republic are finding it more difficult to export to countries such as the United Kingdom and the United States. Businesses are being forced to close down and unemployment is increasing. This week alone, some 500 jobs in the Republic of Ireland were lost in long established companies such as Navan Carpets and Powerscreen. Both companies closed their plants and both blamed currency exchange rates—the euro—for their demise. Northern Ireland gets brisk business as a result. Thousands of Republic of Ireland citizens visit us each week to make purchases of food, drinks and household goods which are all much cheaper in Northern Ireland.

I am delighted that in addition to the 10 countries now joining the European Union, there is reference to Bulgaria, Romania and Turkey. I consider the accession of Turkey to the European Union to be of great importance. I despair when I see some people opposing Turkey because its citizens are Moslem. If Turkey does not move towards integration with the European Union, it will go in the other direction towards Islamic fundamentalism. Anyone who knows that country knows that over the past 30 years there has been a tremendous growth in Islam throughout that land—not just secular, but fundamentalist Islam. Mosques have appeared at almost every crossroads. Europe faces a great challenge in how it reacts to Turkey. Reforms are taking place in that country but more have to come. Interestingly, its GDP per capita is higher than some of the 10 included in this Bill. I hope that a more favourable approach towards Turkey's membership of the European Union will continue in the years ahead.

The problem of Cyprus has been mentioned. I fear that we, within the European Union and its institutions, are now about to absorb the problems of that island. With regard to the negotiations, over the past few years I have always stated that we should not have given a blank cheque to the Greek Cypriots and said: "You can join the European Union whether or not there is a settlement". By taking that approach we were not giving the Greek Cypriots any incentive to reach an agreement because they knew they were going to get in without an agreement.

It has been said that the Turkish Cypriots should have accepted the United Nations proposals—proposals which were not even submitted to them in their own language, Turkish. They were asked to accept something which was not in their language. That was not a good start. Then 100 pages in the United Nations proposals, which have been praised by some colleagues, were blank. How can one accept proposals with 100 blank pages? Of course those pages which were not blank involved the movement of 60,000 Turkish Cypriots, who would again become refugees for the second time in 30 years. They included unfair boundaries for the two new entities and, worst of all, they abandoned the idea of partnership between the Turkish and the Greek Cypriots, as was involved in the original constitution of the Republic of Cyprus. Instead, the UN proposals created majority rule of the Greek Cypriots over the Turkish Cypriots. I hope that those who praised the United Nations proposals will read the hundreds of pages in them before they reach the bland conclusion that President Denktash should have accepted those proposals. It would have been great to get a settlement, but certainly the current UN proposals in my opinion are not very fair.

However, congratulation must be given to both Turkish and Greek Cypriots for the changes which have taken place in the island in recent months. Following the decision of President Denktash to open the Green Line, there has been positive movement in the island. Although the Greek Cypriot Government initially opposed that initiative by President Denktash, I am glad to say that the Greek Cypriot people voted with their feet and within 24 hours were moving in their thousands into northern Cyprus.

Greek Cypriots now spend three days per week in northern Cyprus, whereas Turkish Cypriots are still only allowed to spend one day in southern Cyprus. In recent weeks there has been a retrograde step in that the Greek Cypriot authorities are seizing all purchases made by Greek Cypriots returning from the north to the south. Such petty obstacles do not contribute to improved relations between the two communities. Let us see the positive side; that is, Greek and Turkish Cypriots are now allowed to go into each other's territory and they are learning to live with each other again.

In contrast to the opening of the Green Line, however, Her Majesty's Government, after 29 years, have now decided to close the border between the Dhekelia base and northern Cyprus. So United Kingdom citizens who live in northern Cyprus can no longer enter the British sovereign base territory to the east of the island, a territory which is mostly surrounded by northern Cyprus.

Within the sovereign base area, as has been mentioned, Greek Cypriot farmers will now benefit from European Union agricultural policies. All Greek Cypriots on the base will benefit from the European Convention on Human Rights. But, at the same time as movement across the Green Line begins, United Kingdom residents in northern Cyprus resent the decision by Her Majesty's Government to stop them entering their own British territory, having had that facility for the past 29 years. It is extraordinary. I ask Her Majesty's Government to explore an alternative which would allow UK citizens in the north to enter the sovereign base but not to use it as a means of access to the Greek Cypriot territory to the south. That is the issue which must be addressed. With that qualification, I welcome the enlargement of the European Union and support the Bill.

6.35 p.m.

Lord Stoddart of Swindon

My Lords, I have listened very carefully to the debate and so far there seems to have been a unanimous welcome for the Bill. However, I fear that I shall have to shatter that unanimity, because I do not welcome the Bill. Many of your Lordships who know me will understand why. I shall explain, as briefly as I can, why I do not support the Bill.

Before I do so, I say to the noble Lord, Lord Wallace, that I regret that he criticised our debate last Friday, because I do not believe that the people who took part went outside the traditions of this House. Those are to debate freely, forthrightly, rather than to make set speeches. Last Friday's debate was in the best traditions of this House. It was the epitome of decorum, decency and good order, compared with the deplorable and insulting behaviour of the President of the European Council towards the European Parliament yesterday. I am glad that the noble Lord, Lord Harrison, raised that point rather than myself, because I cannot now be accused of being a Europhobe simply and solely because I mention the bad behaviour of the President of the European Council.

The noble Baroness, Lady Symons, in introducing the Bill—as she always does with lucidity and clarity—said that the Bill had far reaching implications over how we are governed, and for the institutions of Europe. She said that it was a small Bill, but the treaty involved 5,000 pages, and there was to be a White Paper. Why did we not have the White Paper before the introduction of the Bill? Would it not have been sensible to have seen the detail of the treaty, and to have had it explained to us, before we and the House of Commons were asked to pass a Bill to ratify the treaty? I wish that that had occurred. We are now being asked to agree to the Bill before we have seen that White Paper. The noble Lord, Lord Howell, supported the Bill and said that it was part of the dream to realise the union of European nations. I hope that that dream will not turn into a nightmare; I fear that it may.

I have opposed all enlargements of the European Union, because I believe that they would lead inevitably to greater centralisation and eventually to a single European super-state—a united states of Europe. Noble Lords have heard me say that before. I have always believed that and I still do so. That is why I oppose the Bill. I have taken issue with those who believe that enlargement would lead to widening but not deepening. I have always believed that widening would always lead to deepening and centralisation. In the light of developments following previous enlargements—the Single European Act and the Maastricht, Amsterdam and Nice treaties—and the new constitution proposed by the Convention on the Future of Europe, my view has been proved to be correct. Widening inevitably means deepening and centralisation. We cannot get away from that; it will not work otherwise and it is absurd to say that it will not occur. Many people who previously took a different view from mine are now coming round in the light of our experience.

So I say again: I am opposed to the Bill, first and foremost because I believe that it is the enemy of freedom and democracy, not its friend, and the friend of undemocratic centralism and the corporate state. It undoubtedly paves the way—perhaps with the best of intentions—to a destination that is bound to lead to the destruction of the nations of Europe. Many European leaders say that that is their aim; they believe that that is desirable. They are entitled to that opinion, but it is not my opinion. That would lead to the destruction of the nations of Europe as we know them and the construction of a new European empire, whose power and impact we cannot foresee at present.

We are told—we have been told this afternoon—that the people of the 10 new countries are desperate to join the European Union. The referendums that have been held so far certainly seem to show that a majority of people are in favour of joining, although one must temper that by saying that the turnout in some countries has not been brilliant. The people of those countries have been promised great benefits from membership of the European Union by their own leaders and by the ubiquitous propaganda machine of the European Commission.

What will happen when those people find that they must submit to the 97,000 pages of the acquis communautaire and the 104,000 regulations that must be implemented, I simply do not know. Nor do I know how they will react when the promised financial, social and economic benefits do not immediately materialise. Many of them will not be theirs for many years—or perhaps at all. The accession states may also reflect that, because they must absorb and implement that mass of regulation, especially as it applies to industry and commerce, they may find themselves much less attractive places for inward investment, which may very well adversely affect job prospects and living standards. They should concern themselves with that.

Many entrant countries have a large agricultural component to their economies. That of Poland is 20 per cent. They will be required to modernise their agricultural methods quickly, but—as I understand it; I may be wrong—not receive subsidy until 2013. So people are likely to be driven from the land into towns and cities that will have difficulty in finding jobs, housing and services for them. As the United Kingdom is allowing free movement of labour immediately, are those poor people not likely to want to come here? That must be considered.

As to any benefits to Britain of this accession treaty, they are hard to find. We already trade freely with all the accession countries. We already have that market. It is not an addition to our export market; it is already there. That is not such a great thing, especially as their combined GDP is quite modest and barely more than the Netherlands. It is unlikely to give a great boost to trade for this country, if any at all. In the short-term, accession could cause a loss of manufacturing jobs in Britain, which also has to be taken on board.

There could be adverse consequences in some areas of Britain. As it is likely that enlargement will divert EU Structural Funds to the entrant countries which are poorer than we are, it is virtually certain that the four regions of the United Kingdom at present enjoying Objective 1 status—Merseyside, South Yorkshire, West Wales and the Valleys, and Cornwall—will have to lose that status after 2006. That is a legitimate concern which the British people might have about this accession treaty.

Where do we go from here? We know that Romania and Bulgaria are now on the invitation list to join. But what about Turkey? That has been raised previously in this debate. Turkey is an Asian country—we cannot get away from geography. It is an Asian country with a large and increasing population. That population has a great propensity to grow because it is a young population at present. The projected population of Turkey by 2050 is 110 million. At the same time the population of many of the Western European countries will be falling. For example, the projected population of Germany will be 60 million. Therefore there are great implications in allowing Turkey to join: first, because of its population growth and, secondly, because it is an Asian country.

What are the limits of a European Union? If we go into Turkey, it will no longer be a European Union, it will be a Eurasian Union. How much further do we intend to go?

This is a very important Bill. I am only sorry that the maximum number of people in this Chamber to listen to the debate—and I have been counting—has been 18. The Bill has huge and wide implications, as was pointed out by the Minister at the beginning of the debate. Matters of such great import should not be relegated to a comparatively late hour on a Thursday evening, as the noble Lord, Lord Howell said. However, there will be other stages and no doubt we shall have further debate about it.

Finally, it would be nice if we could have the White Paper before we deliberate further on the Bill.

6.50 p.m.

Baroness Symons of Vernham Dean

My Lords, I welcome the spirit in which this debate has been conducted and hope it indicates that the new member states can be sure that this country will warmly welcome them to the European Union as our partners in future years. I am also enormously grateful to the noble Lords, Lord Howell of Guildford and Lord Wallace of Saltaire, for both speaking so forcefully on behalf of their respective parties.

Britain has prominently and consistently supported this enlargement. After the convulsions of 1989, this country—and, let it be said, under a Conservative government—was one of the first to grasp fully the implications of the emergence of liberal democracies and market economies on the borders of the Union; one of the first to understand the aspirations of peoples newly freed from authoritarian control.

John Major argued as early as 1991 that the ultimate destiny of eastern Europeans was membership of the Community. The last Conservative government, supported by us when we were in opposition, pushed hard to make that enlargement central to EU policy. Since 1997, this Government have carried forward energetically the British commitment to enlargement. Negotiations began under our presidency and we have encouraged successive presidencies to keep them on track.

Next year's enlargement of the Union is, first and foremost, a credit to the vision, energy and determination of the peoples and governments of central and eastern Europe, Malta and Cyprus, while the successful conclusion of the negotiations last year is witness to the skill of the Danish presidency and that of the Commission.

However, we should not understate our own role in this. Enlargement is a good news story for British policy in Europe. Our advocacy, under both Conservative and Labour governments, leaves us well placed to mould the shape of Europe in the years ahead. Our debate today has roamed around a number of issues and I shall do my best to answer the points which have been made.

I turn first to the question of freedom of movement in Europe. Although the noble Lord, Lord Howell, certainly did not oppose freedom of movement in principle, he raised some concerns about it. Other noble Lords, the noble Lords, Lord Wallace of Saltaire and Lord Williamson of Horton, and my noble friend Lord Harrison also touched on the subject. The free movement of persons is one of the Community's fundamental principles. The accession treaty grants citizens of all the new member states the right to move freely within the Union for most of the purposes envisaged by the EC treaty. We believe that it would have been quite wrong to deny citizens of the new member states such a fundamental right. While I understand that it is a difficult and sensitive issue, it was very much the view taken by the Government.

Such restrictions on free movement as the accession treaty creates relate only to freedom of movement for the purposes of work. However, as I indicated earlier, Malta and Cyprus are not covered by those restrictions.

Let me make it clear why the United Kingdom Government want to waive their right to impose restrictions on other states. We believe that it is in the interests of the United Kingdom to do so. It makes no sense to refuse to allow those who have a right to enter and reside in the UK the right to work here. Those who can work legally do so in the open market. They make a positive contribution to the national tax base and they do not undercut the decent minimum standards of statutory protection that apply to United Kingdom workers.

We took the decision on the basis of a series of independent studies which argued that free movement will not cause large influxes of people into our labour market. Those who argued that the Iberian accession in the mid-1980s would have that effect were proved quite wrong. As a result of joining the European Union, more Spaniards returned home than moved abroad.

If our expectations are confounded, we will be able to repeal or amend the regulations made under this Bill. We will retain this right—and in saying that I respond to a point specifically raised by several noble Lords. I want to make it absolutely clear: we will retain the right, through the safeguards provided by the accession treaty, until the end of April 2011. So we have retained a flexibility of approach from 2004 through to 2011. The noble Lord, Lord Williamson of Horton, was right to seek clarity on this point. I hope that what I have said reassures those noble Lords who were concerned about this.

My noble friend Lord Harrison asked whether the Government would devise a specific strategy to welcome workers from the accession countries. Employers in the United Kingdom already enjoy good relationships with workers in the new member states through schemes such as the Seasonal Agricultural Workers Scheme and the Work Permits Scheme. We expect those relationships to continue and to strengthen after accession. They will continue to ensure that we attract skilled workers, many of whom are very much needed in the United Kingdom to fill our vacancies. But that is not devising new schemes; it merely takes forward the schemes we already have in place.

I shall turn to the points made about the European Convention. Several noble Lords touched on this subject, although I was grateful to noble Lords for not going too far into a convention debate. However, I take the point made by the noble Lord, Lord Howell of Guildford, that he looked forward to a debate. I very much look forward to the debate. The noble Lord quoted from an article in the Economist in regard to concerns about where the convention was taking us. Let me quote from Le Monde of 29th May 2003. In contrast to the article from which the noble Lord quoted, it states: The British Government is pleased with the Convention and has every right to be so. The text meets virtually all its expectations and allays most of its fears". The noble Lord juxtaposed the position of Poland and other eastern European countries with what he described as the Paris/Berlin agenda. But, as he said, we are very much on the same side as the accession countries in the argument over Iraq. We are very much not on the Paris/Berlin agenda and have been severely criticised in many quarters for not being on it. The UK Government have taken the right decision in that regard and we have the common-sense to ensure that we will be strong allies and supporters of the rights of the accession countries to make up their own minds on where they stand on such issues in the future.

The noble Lord was concerned about the new countries not having a voice at the IGC. The new countries will be a negotiating party at the IGC and will therefore take part in deciding which of the convention proposals go forward. They are not being asked to sign up to anything upon which they will not have a say, and any of them can use their veto during the course of the IGC. It is important that I make that point to the noble Lord because I gained the impression that he was implying they would be faced with a fait accompli at the IGC that they would have to pick up as accession countries. That is not the case. They will be full participating members in the negotiations at the IGC.

I turn now to the reform of the common agricultural policy, a point raised in particular by the noble Lord, Lord Howell. Many Members of your Lordships' House have been strong critics of the common agricultural policy in its current form. The Council of Agricultural Ministers last week reached an agreement that I believe will set a new direction for European agriculture. It will simplify the common agricultural policy, reduce the burden on farmers through a single farm payment and free farmers to produce what the market wants, to optimise their production and to cut their costs. It also has the enormous benefit of giving the EU a strong negotiating position in the WTO negotiations.

I mention this because one cannot say often enough how important this shift is on the common agricultural policy. We shall have to work very hard to ensure that it brings forward the benefits we need, but we have seen an important shift. I believe that the advent of the accession countries was one of the drivers in ensuring that we will go forward and at least reach the beginning of some of the new understandings.

The noble Lord was worried about the farmers in the new states not being able to compete without 100 per cent of direct payments. Even without direct payments, the common agricultural policy will provide guaranteed higher prices for most products, raising the incomes of those farmers. They will also benefit from lower costs, particularly in terms of land prices.

Many noble Lords referred to the issue of finances. The noble Lord, Lord Williamson of Horton, is right. The financial package for new member states is generous and very fair. It grants a significant amount of money to the new member states—some £26.6 billion between 2004 and 2006, which, as I have stated already, is 3 per cent of their GDP. The noble Lord, Lord Williamson, is also right that this has been achieved within the overall budget ceilings for enlargement which were agreed in 1999 at Berlin.

My noble friend Lord Harrison referred to the issue of economic benefits. The impact of enlargement on the existing EU member states is difficult to quantify but recent studies estimate that enlargement will add 0.2 per cent to EU GDP growth overall and that the UK's share of that will be about 14 per cent and worth about £1.75 billion. I stress that that figure is at 1999 prices.

I agreed very strongly with the remarks of the noble Lord, Lord Williamson, about trade. The economic benefits of EU enlargement arise from substantial extra opportunities for trade in goods and services, rooted in the expansion of the single market. The UK's total trade with the candidate countries has grown at a faster rate than our total trade elsewhere. Since 1990, UK trade with new member states has increased by some 400 per cent compared with a 43 per cent increase in our trade with the rest of the world. Those figures speak very ably for themselves.

The noble Lord, Lord Stoddart of Swindon, cast doubt on the economic benefits for the accession countries. The noble Lord is a clever man, a sensible man and a logical man. Does he really believe that 10 accession states in Europe have simultaneously been struck by an aberrational desire to wreck their economy? Or does he believe that, after five years of painstaking negotiations, they have not realised that other countries which have joined the European Union enjoy an increase in their living standards as a result?

Some of your Lordships spoke about future accessions. In particular, the noble Lord, Lord Wallace of Saltaire, was concerned about not achieving the target dates for Bulgaria and Romania. The Prime Minister has publicly offered our support for closure of negotiations with Bulgaria and Romania, and has offered specific help. We have 20 and eight consultants and pre-accession advisers assisting the Romanian and Bulgarian Administration respectively to prepare for their EU accession. We realise that there is a lot of work to be done but we are doing what we can to help.

The noble Lords, Lord Kilclooney and Lord Stoddart, raised the question of Turkish accession although, I am bound to say, from very different perspectives. Of course the United Kingdom strongly supports Turkey's EU candidature, as confirmed at the Helsinki European Council in December 1999 and subsequently at the Copenhagen European Council in 2002. Like all other candidates, Turkey must meet the political criteria for membership agreed by heads of government at the 1993 Copenhagen European Council before opening accession negotiations. These include the existence of stable institutions guaranteeing democracy, the rule of law, human rights and respect for the protection of minorities. So in answer to the points raised by the noble Lord, Lord Stoddart of Swindon, we have long been a supporter of Turkey's EU candidature, and under this Government we shall continue to be so.

Questions were raised about what could be described as wider Europe. The noble Lord, Lord Dahrendorf, touched on this point, as did the noble Lord, Lord Wallace of Saltaire. There are a number of countries which aspire to join us—Ukraine and Moldova, as European states, aspire to membership of the European Union, in line with Article 49 of the Treaty of the European Union. But we have a long way to go down the path of reform with those countries.

Albania, Bosnia-Herzegovina, Croatia, Macedonia and the Union of Serbia and Montenegro are considered to be potential candidates, and the UK Government strongly support each country's aspirations. But I stress that, like any other aspirants, they must meet the objective criteria for membership.

The noble Lord, Lord Kilclooney, raised the issue of Cyprus, as he has on previous occasions. Under the terms of the accession treaty Protocol 10, the acquis communautaire will be suspended in the north of the island if there has been no political settlement by 1st May 2004. But if a settlement is reached, the Council will decide, by unanimity, first to lift the suspension and secondly on the terms of the accession for a united island. Whether divided or not, Cyprus will accede on 1st May 2004.

The noble Lord, Lord Wallace of Saltaire, referred to the SBAs. I repeat that under the EC treaty it is clear that the SBAs are outside the EU. I recognise that that may cause him one or two difficulties. No doubt we can discuss this further.

We have a great deal of work before us. I hope that this Second Reading debate and the spirit in which it has been conducted is an indication of the way in which we will be able to take forward its Committee and further stages. Sadly, I did agree with the noble Lord, Lord Wallace of Saltaire, that today's debate has been in stark contrast to that which we had on Friday. It is not that there was disagreement on Friday—of course there is going to be disagreement in your Lordships' House; it is right and proper that there should be—but what I think was a little tricky was the note of somewhat sneering derision about the motives of those with whom some of your Lordships disagreed. I suggest that that was not helpful to debate and was not really in the best traditions of this House.

I should like to pick up on a point of confusion, I think, with the noble Lord, Lord Stoddart, in regard to the White Paper. I am sure that it is my fault and that I have not been clear enough. The White Paper which is being discussed is a White Paper on the IGC, not on the accession treaty. I think that they are two different issues. The White Paper that is planned is on the intergovernmental conference. I also say to the noble Lord that I understand—none of your Lordships can fail to understand—his concerns about federalism and a superstate.

Lord Stoddart of Swindon

My Lords. I am most obliged to the noble Baroness. I did misunderstand her. I believed that she was promising a White Paper on the accession treaty.

Baroness Symons of Vernham Dean

My Lords, I wanted to clarify the point. The White Paper is not on this but on the IGC. However, on the question of the superstate, not only members of Her Majesty's Government but members of the French Government and the German Government have repeatedly said that some sort of federal superstate is certainly not in their vision of the way to carry forward the European Union.

I agree with what the noble Lord, Lord Dahrendorf, said. This Bill will change the face of Europe and the EU will indeed be very different. The Bill sets the scene for one of the greatest steps forward in European history. I was enormously grateful to him for his, as always, very thoughtful contribution.

We have spoken today about the historic nature of this enlargement, but I hope that we are now in a position to look forward. In Brussels the new member states are already making their presence felt as active participants in the Union's institutions. We are working with them on a variety of shared interests—of course on the common agricultural policy reform, on economic reform, and on institutional reform. Enlargement really is a success story for United Kingdom policy, but we do not always recognise that enough. The knowledge of enlargement remains low—yes, I think that it is too low—across the United Kingdom as a whole. I hope that we will be able to address those issues. The Government are committed to doing what we can to rectify that.

Enlargement offers new opportunities for all sections of our country—for businesses, for civil society and for our citizens alike. I should like to see this country seize those opportunities. I think that enlargement is good for Europe and that it is right for the United Kingdom. So I urge your Lordships to grant this Bill a Second Reading.

On Question, Bill read a second time, and committed to a Committee of the Whole House.