HL Deb 29 April 2004 vol 660 cc933-6

2.15 p.m.

Baroness Symons of Vernham Dean

rose to move, That the draft order laid before the House on 26 April be approved [16th Report from the Joint Committee].

The noble Baroness said: My Lords, I am pleased to move the Motion for this order on enlargement of the European economic area. As the House is aware, the Government have put tremendous effort into ensuring that our friends in central Europe, Cyprus and Malta are able to join the European Union this Saturday. This order is a formal step towards delivering that enlargement.

I apologise for the short notice in bringing the order before the House. EEA enlargement is due to take place with EU enlargement on Saturday, 1 May. However, unfortunately the Foreign and Commonwealth Office failed to take into account the Easter Recess when calculating the 21 sitting days required between the order being laid in the House and the subsequent debate. The command paper was laid in the House on 15 April, but we should like to secure ratification as soon as possible in order to co-ordinate with EEA enlargement. Approval of the order today would allow it to be considered by the Privy Council on 6 May. If the Privy Council approves the order, the UK will be able to ratify in the week of EEA and EU enlargement. Therefore, I apologise to your Lordships. It was, indeed, a slip-up, but I hope that it will not impede our progress.

The European Commission had prepared provisional administrative measures for the eventuality that not all member states would be able to ratify EEA enlargement in time for 1 May itself. I believe that the UK can be proud of the major part that it has played in ensuring that the conditions are right for EU enlargement to take place. We shall continue to promote and support reform in the accession states, helping those countries to fulfil their potential.

The subject of the order—the agreement signed in Luxembourg on 14 October 2003—together with four protocols, which are not the subject of the order, allow the participation of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and the Slovak Republic in the European economic area. The EEA allows our friends in Iceland, Norway and Liechtenstein to participate in the internal EU market, bringing benefits to them and to us in terms of trade and the free movement of people. An effective internal market is crucial to the success of the EU. We must ensure that the market embraces the accession states as soon as they join so that they will be able to trade as liberally as we, or any other EU member states, already do with Iceland, Norway and Liechtenstein.

Through the EEA enlargement agreement, Iceland, Norway and Liechtenstein will make valuable financial contributions to economic and social reform in the accession states over the next five years. Under the terms of the agreement and four associated protocols, Iceland, Norway and Liechtenstein will contribute £415 million over a five-year period to help to alleviate social and economic difficulties in the accession states. Moreover. Norway will contribute an additional £393 million to help to facilitate the integration of the accession states into the internal market.

I believe that this is a positive measure for the United Kingdom, ensuring effective free trade between European partners. I am sure the House will agree that it is a welcome agreement that supplements part of the EU enlargement process, ensuring that the full benefits are available to all. I hope that we shall be able to approve the order today. I beg to move.

Moved, That the draft order laid before the House on 26 April be approved [16th Report from the Joint Committed].—(Baroness Symons of Vernham Dean.)

Lord Astor of Hever

My Lords, I thank the noble Baroness for explaining the order. Despite a small amount of confusion which has been apparent in the relaying of this SI, we do not propose to oppose its passage through this House.

As the Minister said, in essence this is a technical measure to translate the agreement on the European economic area signed at Oporto in 1992, to which the accession countries signed up in 2003, into a community treaty. We are pleased to see these accession countries moving forward to full EU membership at the weekend. That is something which we have always supported, and we support this measure, which is designed to allow accession countries fully to enjoy the benefits of sharing in the internal market.

However, I have a small number of points which I hope the noble Baroness can clarify. First, given that this SI relates to accession countries due to accede on 1 May, why is it being brought before us at this time so near to 1 May? What, if anything, does this SI and the translation from agreement to community treaty substantially change? Finally, when does the noble Baroness envisage that ratification will occur?

Lord Wallace of Saltaire

My Lords, we all welcome—indeed, we are all going to rather too many parties welcoming—the enlargement of the European Union which takes place this weekend. I have to accept that the Government must have found it rather easy to forget about the European economic area in all of this. The EEA is a leftover of an attempted negotiation in the late 1980s between the European Community and the European free trade area countries to provide them with an acceptable alternative to membership which did not impose on them the full obligations of participation in the European Union. As I am sure Members of the Conservative Party remember well—they were then in government—by the time those negotiations were concluded, the majority of members of EFTA had decided that there was no viable alternative to membership and that they were better off becoming full members.

I am not entirely sure whether the Conservative opposition sees the relationship between Iceland and the EU, Norway and the EU or Liechtenstein and the EU as its preferred model for Britain's future association or whether, indeed, it would prefer to reject the EEA as well and take, perhaps, the Swiss position. I heard a Conservative on the radio the other day suggest that Norway was the ideal model for Britain's relationship with the EU. Therefore, I am very pleased that the Minister reminded us that Norway has agreed to become the largest contributor per head of financial assistance to new member states thus reminding the Conservative opposition that one does not entirely opt out of everything one does not want to have if one attempts to renegotiate. Indeed, I am well aware, as I have taken part in conferences both in Oslo and Reykjavik in the past 18 months, of an active debate within both those countries as to whether they would now be better to reconsider and become full members.

Having made that very slightly partisan point, perhaps I may say that we on these Benches welcome the agreement. The EEA is a useful minor part of the European Union's external relations. I hope that once we have got over the celebrations of enlargement, we shall have some time in this House to debate the wider issues of the European Union's relations with its neighbours. After all, its other neighbours are far more difficult than the three covered by this order.

Lord Lea of Crondall

My Lords, perhaps I may add to the point that has just been made. In everything that is done in the European Union, not only in respect of industrial free trade but many of the regulations concerning public procurement, and so forth—the list is very long indeed—Norway, Iceland or Liechtenstein do not sit at the table. Therefore, their interests are not directly spoken to at the time that such arrangements are made, and they are contributing to the funds of the European Union in the guise of the European economic area, which of course, has the characteristics described by my noble friend.

Therefore, this is a very good opportunity to underline the fact that this would be a hopeless formula for a country such as Britain. I think we shall hear more of this question as the months go by.

Baroness Symons of Vernham Dean

My Lords, I thank the noble Lords, Lord Astor of Hever, and Lord Wallace of Saltaire, for the support that they have offered the Government on this order. Perhaps I may say to the noble Lord, Lord Wallace of Saltaire, that we did not forget the EEA. As I attempted to say in my opening remarks, the delay in presenting the order to your Lordships was a miscalculation of the number of sitting days between the day the order was laid before the House and I May. I apologise again to noble Lords for that. I hope that that answers the point raised by the noble Lord, Lord Astor of Hever, about why this is so close to 1 May. It was not meant to be quite so close. As I have said, there was a mistake. I am grateful to both noble Lords for being so generous in passing gracefully over that point.

The noble Lord, Lord Astor of Hever, asked what real difference the order would make. It does not make any material difference to the issues covered, but extends the relationship between the European Union countries which are full members today and the three countries concerned to the 10 countries which will join us on Saturday. So it is not a question of changing the nature of the agreement; it simply changes its geographical coverage. When all the EU members have been through their acceptance process, there will be ratification in the usual way and I would not expect that to present any particular difficulty.

The noble Lord, Lord Wallace of Saltaire, asked whether the arrangements for Iceland, Norway and Liechtenstein might provide a model for the future. As noble Lords would expect, I agree very much with the points made by my noble friend Lord Lea of Crondall. We would not be happy sitting in this position in relation to the rest of Europe, but perhaps that is a debate for another day.

I re-emphasise the comments of my noble friend Lord Lea. The British Government value the United Kingdom's excellent relations with Iceland, Norway and Liechtenstein. Clearly, they contribute far more than just an effective internal market. The figures I have been able to give noble Lords regarding the very generous contributions that all three countries arc able to make over the next five years to the economic and social development of the accession countries speak for themselves. I think that her Majesty's Government would be very pleased to support any of the peoples and governments of those three countries were they to choose to apply for EU membership. We would support that wholeheartedly.

I believe that the House overwhelmingly supported the legislation ratifying the EU enlargement last year and by approving the order on the EEA today the House has had an opportunity to reaffirm its support for the inclusion of the accession states in the process of building a competitive and effective Europe. I thank all noble Lords who have contributed to this brief exchange for their support.

On Question, Motion agreed to.