Enlargement

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Peter Hain: It is important that my hon. Friend has raised that issue, because I can lay to rest some of the concerns that may be in the minds of his constituents and others. First, we are, in any case, a target for migrant labour from many of the applicant countries. That is both an opportunity and a problem, but it is one that exists already. There have been difficult negotiations with the Czech Republic and others over the free movement of labour, and we must stand our ground on the need for proper transitional arrangements. That has not been popular, but we must do so from the point of view of our labour market.

As regards competition, I have an example from my constituency, at the top of the Swansea valley. Two and a half years ago, Lucas closed a factory that employed about 100 workers. It shifted production to Poland, a candidate country, because wage costs were 60 per cent. cheaper there. It was an assembly-line manufacturing plant, in which labour costs were a large part of overall manufacturing costs. At the same time, however, International Rectifier, an American company, invested in the same Swansea valley to create 500 jobs in high-quality, high-tech manufacturing. Labour costs were about 15 per cent. of overall costs, and we were much more competitive. The lesson that I draw from that is not that EU accession will expose us to huge competitive threats—such threats already exist—but that candidate countries will have to lever up their standards and we will have to continue to drive our economy down the high-quality, high-tech skill route, because that is the only future that we have. By creating a larger single market, enlargement will allow competitive pressures to be better directed at improving our quality—particularly in manufacturing.

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Mr. Johnson: I am indebted to the Minister for admitting that the Nice treaty is not necessary for enlargement, which he did not admit in the House. Will he explain the Government's understanding of the treaty procedure? If the Irish fail to ratify the treaty, can we go ahead with enlargement? If not, when does he expect the process to begin? It is now 13 years after the fall of the Berlin wall, but only one eastern European country—East Germany—has been admitted to the EU. Will the Minister give us any terminus ante quem by which he sincerely believes that the first wave of candidate countries will be admitted? What is the position of the Foreign Office? Does he believe that the countries will be admitted? They are starting to become cheesed off.

Peter Hain: I have already given an answer. I do not know whether the hon. Gentleman was in the Room at the time, but I said that I expected enlargement negotiations to be concluded by the end of the year for the 10 countries. That is our objective, and we are on track for it. They will then join from early 2004, in order to take part in the intergovernmental conference that will design the future political architecture of Europe, and in the European elections. I am repeating what I have said to the Committee and on the Floor of the House in our debates on the Nice treaty.

The hon. Gentleman must not put words into my mouth. I have conceded that, in principle, enlargement could theoretically be achieved by an entirely different treaty process. However, it would be a cumbersome, complex and burdensome process of individual treaty negotiations, in which each applicant dealt with all the matters in the Nice treaty. I will not hypothesise as to what might happen in Ireland, as I have explained the position on that.

I question the motives of the Opposition. They almost seem to glory in the prospect of the Nice treaty not being ratified. They should talk to our friends in Cyprus, Malta, Poland, Hungary, the Czech Republic, Slovenia, Latvia, Estonia, Lithuania and all the candidate countries. They should tell those countries that they are trying to block their progress towards joining the European Union. By voting not to ratify the Nice treaty, that is what they did.

Mr. Spring: Following the Nice treaty, which considerably extended qualified majority voting, on what subjects does the Minister think that the preservation of the national veto on EU business affairs is still important?

Peter Hain: Taxation, social security, foreign policy and committing our soldiers to enter theatres of conflict are self-evidently red lines for us. In some cases, however, qualified majority voting is in our interests. The hon. Gentleman surely agrees with that, as the Conservative Government agreed to more qualified majority voting under the single market legislation than is proposed in anything that we entertain. That was to our benefit.

As the Prime Minister pointed out in the House this afternoon, we can implement many decisions of the weekend's Barcelona Council on economic reform by qualified majority voting. The French or others cannot

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block. We should judge the matter on its merits, with a set of principles as to where the nation state properly retains the veto and where it is in our national self-interests to take the route of preventing certain countries from blocking progressive measures, whether on environmental policy, the common agricultural policy, or justice and home affairs subjects such as anti-terrorist legislation.

Dr. Palmer: How many decades does the Minister think that it would have taken to lift the European Union ban on British beef had we not had qualified majority voting?

Peter Hain: My hon. Friend is absolutely right.

Mr. Johnson: The French are still banning it.

Peter Hain: There are shrieks of protest from the Opposition about the French not having lifted the ban, but the rest of Europe has. That is what we achieved. The Commission is taking the French Government to court. [Interruption.] The hon. Member for Henley (Mr. Johnson) leers in the corner. There is no alternative but to apply Community law to the French, and that has been done. If they persist, they will be taken to court and they will have to pay compensation. It is because we are in the European Union—which the hon. Gentleman probably does not think that we should be; most of his Conservative colleagues do not think that we should be—

Mr. Spring: Oh, come on.

Peter Hain: Well, Baroness Thatcher clearly does not think that we should be—but I shall not go too far down that road, Mr. Illsley. These questions go to the heart of the debate about Europe. The way in which Conservative Members expose their real views on Europe by their continual questioning is interesting.

Mr. Johnson rose—

The Chairman: Order. Can we return to the subject of enlargement within the European Union?

Mr. Johnson: Enlargement within the European Union is not possible without defining what is outside it. I do not want to leer at the Minister or expose myself—

Peter Hain: I should hope not.

Mr. Johnson: The Minister invited hon. Members to expose themselves, I thought. I want to probe the recesses of his imagination. He gave a very interesting answer to the hon. Member for Luton, North (Mr. Hopkins) about Turkey. Which countries does he think are European and which does he think are not? Does he, for instance, think that the Ukraine, Belorussia and Moldova have European vocations? If so, why not the Russian Federation? Will he give a coherent, intellectual account of what he thinks a European country is?

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Peter Hain: Just to reassure you, Mr. Illsley, I am not inviting the hon. Gentleman to expose himself to me or to the rest of the Committee; it would not be an encouraging sight. In terms of his request for an intellectually coherent position, that is a subject on which an essay in The Spectator might repay reading. However, I shall not progress along flights of fancy when we are dealing with the serious issue of enlargement.

Mr. Johnson: I wonder whether I can press the Minister further. This is of vital concern to many people in eastern Europe. They want to know why some people have access to the club and others do not. Can he succinctly explain what the difference is between Romania, which is on the path towards accession, and Moldova, which is not?

Dr. Palmer: It has not applied.

Peter Hain: Coming to this Committee is evidently an education for the hon. Member for Henley. As my hon. Friend points out, the difference is that one of them has not applied. At the time of Greece's application to join the European Union there was an argument about whether Greece was part of Europe. What matters is that, within reason, Europe should enlarge the zone for stability, security, economic prosperity and high environmental standards, and should do so sensibly and cautiously. If countries apply to join or seek association agreements, as Croatia has done, we should consider them on their merits. I cannot ask the hon. Gentleman a question, but I should be interested to hear his definition of Europe.

Mr. Johnson: I am not allowed to give my view, am I, Mr. Illsley?

The Chairman: No.

Mr. Johnson: Then I shall not.

5.24 pm

Motion made, and Question proposed,

    That the Committee takes note of European Union Documents No. 14117/01, the Commission Strategy Paper and Report on the progress towards accession by each of the candidate countries with Addenda 1 to 13, the 2001 Regular Reports on progress by individual candidate countries, No. 5745/02, the Commission Communication on a Common Financial Framework 2004-2006 for the Accession Negotiations and No. 5638/02, the Commission Communication on Enlargement and Agriculture: successfully integrating the new Member States into the CAP; welcomes the Government's continuing commitment to EU enlargement; and supports the Government's aim to complete negotiations with those candidates that are ready by the end of this year, so that they can participate in the European Parliament elections in 2004 as Member States.—[Peter Hain.]

 
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