Enlargement

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David Cairns: This is the first of the regular reports that I have had the privilege to scrutinise as part of this European Standing Committee. I sincerely hope that it will be the last, not because I have any expectations of ascending the greasy pole that would take me away from this Committee, but because I hope this time next year to be scrutinising actual accessions and examining the progress that countries have made in joining the European Union. For that reason, I hope that this is the last report of its kind, but it is none the less important in allowing us to discuss the big picture of European enlargement and address some persistent

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knotty problems that must be dealt with if we are to discuss the actual accession of candidate countries 12 months from now.

I share the view of the right hon. Member for Wells that much work must be done to convince the United Kingdom electorate, and voters throughout the rest of Europe, of the benefits of enlargement. It might have helped if he had mentioned those benefits, rather than talking about mass legal immigration from countries that currently send people here as asylum seekers. The right hon. Gentleman raised a spectre, rather than seeking to reassure us, but I am sure that did so in good faith.

In equal good faith, I stress the benefits of enlargement, though my views are somewhat in contradistinction to those expressed by my hon. Friend the Member for Luton, North, who holds a well-argued and cogent set of principles in this matter. I do not share all his principles, and I shall state where I believe that he is unduly pessimistic, although only time will tell which of us is right.

European enlargement will bring genuine benefits that fall into two broad categories—the economy of the EU and security. I will not rehearse all the benefits—we are all familiar with them—but they have not been stated sufficiently strongly today. Research shows that EU post-enlargement gross domestic product could grow by as much as 11 billion euros a year. Our own GDP could grow by £1.75 billion a year. On the Floor of the House, I have several times asked my right hon. Friend the Minister what assessment the United Kingdom Government have made of the potential benefit for jobs throughout Europe. He has been kind enough to estimate that the EU should gain about 300,000 new jobs as a direct result of enlargement. We should state that important gain openly. It is in our interest to ensure that as many of those jobs as possible come to the UK. Opportunities for consumers will extend into a new European realm. That also applies to businesses looking for new, imaginative ways of refreshing their supply chain.

On the broader issue of trade, the new market will contain about 500 million consumers—100 million more than at present—and will be larger than those of the United States and Japan combined. My hon. Friend pointed out the pitfalls, but that is a benefit too, and one that we should state.

Mr. Hopkins: I agree with some of what my hon. Friend says, but does he agree that some small economies do extremely well without being part of a large market? They trade, obviously, although they are quite small. One thinks of Singapore, Norway and New Zealand, especially since the latter rejected neo-liberalism.

David Cairns: It is not practical to compare the economy of New Zealand with that of the European Union since the EU exists because of the neighbourliness and proximity of its member countries.

Inverclyde and Renfrewshire, which include my constituency, boast of being the manufacturing exports capital of Scotland. We are responsible for

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about one third of Scotland's manufacturing exports—about £4.6 billion a year, I think. More than three quarters of that goes to the EU. Since that would be put at risk if Britain were not a member of the EU, I was happy to hear reassurances that that is not likely, even if the Conservatives should ever come to power. Given the expertise and knowledge of the workers in my constituency, we can only grow as Europe enlarges. I appreciate the concern expressed by my hon. Friend the Member for Luton, North for workers in New Zealand, but my priority—and his, I am sure—is that the workers in my constituency should benefit from an expanded EU.

Paul Farrelly (Newcastle-under-Lyme): Given the experience of some European countries, does my hon. Friend agree that fears that people from countries such as Poland and eastern Europe might flood their way into this and other richer countries, displacing thousands of jobs, are entirely misplaced? Spain, Portugal and Ireland have seen people returning to their countries as membership of a large trading area has helped with the redistribution of capital to fuel growth. Indeed, we may find that London, in which the construction industry relies greatly on illicit eastern European workers, will face some difficulties when Poland is admitted, as such workers will go back there.

David Cairns: I am grateful for my hon. Friend's expertise in these matters. He is right: countries are attracting inward and direct investment because they are queuing up to join the EU, and that is part of a virtuous circle.

Mr. Hopkins: Does my hon. Friend agree that one advantage of EU membership has been the fiscal transfers and EU disbursements that have helped Spain and Ireland in particular with infrastructure development? That, as much as being part of a larger market, has helped their economies.

David Cairns: I do not entirely agree with everything that my hon. Friend says. He may, unintentionally, be casting aspersions on the quality of the Spanish and Irish workers and the ability of those countries to compete. We should not say that they are enjoying the benefits only because they have had handouts from the EU, although I accept that he probably did not mean to say that. One need only visit Ireland to see that it is experiencing a rising standard of living, and the same is true of Spain. It is not just the elite who are benefiting, but rural communities, because of their own hard work and because they are being competitive and attracting inward investment. They have certainly been helped by structural funds, but that is no bad thing and they are entitled to them.

The new countries are receiving financial assistance. The Conservatives seemed to grumble about the level of that funding, but that is only part of the picture. Those countries will be competitive and win contracts if they make radical reforms to their business and industry that some people might regret but which I would certainly encourage.

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Hywel Williams (Caernarfon): Does the hon. Gentleman accept that the structural funds available in Ireland are the little bit extra that has helped the indigenous community to become entrepreneurs? The structural funds exist to counter the disadvantages that Ireland faced because it lies somewhat on the geographical periphery and because of its economic history. Does the hon. Gentleman agree that similar advantages are available to areas in Wales, particularly my own constituency?

David Cairns: I agree up to a point. My contention is that those funds help, but they are not the whole answer. As my right hon. Friend the Minister for Europe has said, we want to move Wales out of objective 1 status, not because we want to go back, but because we want the standards of living to be brought up throughout Wales through the ingenuity, intelligence and endeavour of the Welsh people. Structural funds play a part, but they are not the full story.

My other broad point relates to the security benefits of enlargement, which include the fight against terrorism, combating international crime, and enhanced stability and security throughout Europe. I shall test your patience and, perhaps, tempt fate, Mr. Illsley, by suggesting that all that will be greatly enhanced following agreement on the common European arrest warrant, which excited huge debate in this Committee a few months.

The possible environmental benefits and the undoubted benefits to democracy and human rights in applicant countries relate to my second point. What emerges from page after page of the documents is the huge amount of effort that applicant countries are putting in to comply with the acquis. There have been some informed and interesting discussions about whether they are being asked to take on too much, a matter on which I look forward to receiving a letter from the hon. Member for West Suffolk. The right hon. Member for Wells has first-hand knowledge and experience and a track record on the matter.

I have a genuinely open mind. We may happily be able to take some things out of the acquis, but those things exist at the moment. We cannot take away from the huge effort being made in applicant countries to adjust structurally their economies and administrative and judicial processes and to introduce much-needed political reforms. Not everything has been accomplished. My hon. Friend the Member for Broxtowe (Dr. Palmer) pointed out some lacunae. However, an immense amount of work has been involved, and we should be not niggardly but open in our praise.

As has been said, applying to join the EU has induced a virtuous circle. Just being in the queue is bringing benefits to those countries, before they have acceded to full membership. The foreign direct investment that my hon. Friend the Member for Luton, North mentioned is just one example. I am especially pleased that, through the 80 or 90 twinning arrangements that we have in place, we are playing a full part in enabling those countries to make their

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economic, legal, judicial and political institutions sufficiently robust to withstand membership of a free market Union.

Might my right hon. Friend the Minister for Europe consider the possibility that, in parallel with the public sector involvement and the transfer of civil servants, a private sector initiative could be run along the same lines, whereby our best captains of industry from the private sector go to the applicant countries. We already trade with them, but the more knowledge and experience we have of the markets of candidate countries, the better placed we shall be to take advantage of the new trading opportunities that will undoubtedly flow from enlargement.

I take the anxieties of my hon. Friend the Member for Luton, North with the sincerity with which he offers them. At the moment, with Hungary and Poland outside the EU, my constituency is losing manufacturing, shipbuilding and electronics jobs to them. We are losing those jobs not because those countries have high socialist principles on wages and terms and conditions, but because they do not pay the wages that we pay in this country and in some cases do not meet all the health and safety and consultation criteria that we meet. I want jobs to stay in this country and levering up wages in Hungary and Poland and attitudes towards health and safety and other matters will help the to reverse the current trend of losing jobs.

It is untrue that the EU, with its neo-liberal, pro-business agenda, is going into countries that are some sort of socialist nirvana. I am caricaturing my hon. Friend's arguments in order to do them down, but the reverse is true: the process will be good for Britain and for British jobs. The right hon. Member for Wells rightly said that we have a major task ahead of us in convincing public opinion. ''Panorama'' last night dealt with a parallel, but related, issue. I took part in a phone-in on Radio 5 this morning, and I mention only in passing the comments of Baroness Thatcher.

The documents refer to the ''Euro-barometer''. I am not sure what it is, and I hope that hon. Members will forgive me if they know. I do not know whether we need to tap it to see if it is still working, but we may be moving ahead of public opinion. It always helps to make the case about the benefits of enlargement. The more that people are exposed to economic arguments and the way in which the single currency and enlargement will benefit their communities and their jobs, the more they swing behind those arguments. That was made clear in ''Panorama'' last night and in a recent Channel 4 programme.

 
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