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Baroness Buscombe: My Lords, I thank the Minister for his very full response. I think that he has sensed that I am not willing to step down at this stage. I want first to thank all noble Lords who have contributed to the debate. First, and most notably, I thank the noble Lord, Lord Redesdale. It is right: we have both worked hard on this to improve the legislation. I believe that we have made some considerable progress. However, other noble Lords have encouraged me to believe that it is right to press on.

There is no question: I am extremely grateful to my noble friend Lord Colwyn who put the question of noise in its real context. He has introduced a sense of reality as to what we are talking about with acoustics and what that means in terms of realistic parameters for live music.

The noble Lord, Lord Phillips of Sudbury, suggested that in proposing the amendment I and the noble Lord, Lord Redesdale, had not mentioned the word "amenity". I fought with the noble Lord, Lord Phillips of Sudbury, on the question of amenity during earlier stages of the Bill. We care very much about local residents. We believe it is important to strike a balance, but we do not believe that this Bill as currently drafted does.

I hear what the noble Lord, Lord Clarke of Hampstead, said—that he respects what I have done thus far and believes that enough has been done. I have to disagree. I do not care to disagree with him, but not enough has been achieved today.

The noble Lord, Lord Lester of Herne Hill, succinctly put the argument on behalf of our amendment. He quoted John Stuart Mill that one does not regulate unnecessarily. Our amendment does not conflict with general law, as the noble Lord said. There are time limits and limits on the number of persons. The regulation proposed is not proportionate and it is not, in our view, consistent. While we are grateful for the concessions for incidental music and for unamplified music, there continues to be this enormous problem for most musicians who need some form of amplification.

We have come a long way, but I remain convinced that I must test the opinion of the House.

5 p.m.

On Question, Whether the said amendment (No. 62K) shall be agreed to?

Their Lordships divided: Contents, 75; Not-Contents, 145.

3 Jul 2003 : Column 1064

Resolved in the negative, and amendment disagreed to accordingly.

Division No. 2


Astor, V.
Astor of Hever, L.
Attlee, E.
Baker of Dorking, L.
Blackwell, L.
Bridgeman, V.
Brougham and Vaux, L.
Buscombe, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlisle of Bucklow, L.
Carnegy of Lour, B.
Chadlington, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Craig of Radley, L.
Crickhowell, L.
Cumberlege, B.
Denham, L.
Dixon-Smith, L.
Elliott of Morpeth, L.
Elton, L.
Erroll, E.
Finlay of Llandaff, B.
Fookes, B.
Freeman, L.
Glentoran, L.
Griffiths of Fforestfach, L.
Hanham, B.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hurd of Westwell, L.
Jenkin of Roding, L.
Kilclooney, L.
King of Bridgwater, L.
Lane of Horsell, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Marlesford, L.
Mayhew of Twysden, L.
Molyneaux of Killead, L.
Mowbray and Stourton, L.
Moynihan, L.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Northesk, E.
Norton of Louth, L.
O'Cathain, B.
Palmer, L.
Pearson of Rannoch, L.
Renton, L.
Roberts of Conwy, L.
Seccombe, B. [Teller]
Sheppard of Didgemere, L.
Skelmersdale, L.
Soulsby of Swaffham Prior, L.
Stern, B.
Stoddart of Swindon, L.
Strathclyde, L.
Swinfen, L.
Taylor of Warwick, L.
Trefgarne, L.
Trumpington, B.
Vinson, L.
Vivian, L.
Waddington, L.
Wakeham, L.


Acton, L.
Addington, L.
Ahmed, L.
Alderdice, L.
Alli, L.
Amos, B.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Avebury, L.
Bach, L.
Barker, B.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Billingham, B.
Borrie, L.
Bradshaw, L.
Brennan, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Carter, L.
Chan, L.
Chandos, V.
Chorley, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clement-Jones, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Colville of Culross, V.
Crawley, B.
Dahrendorf, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dholakia, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. (Lord Chancellor)
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Gilbert, L.
Goldsmith, L.
Goodhart, L.
Gould of Potternewton, B.
Grocott, L. [Teller]
Hamwee, B.
Harris of Haringey, L.
Harris of Richmond, B.
Harrison, L.
Haskel, L.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Hooson, L.
Howells of St. Davids, B.
Hoyle, L.
Hunt of Chesterton, L.
Jacobs, L.
Janner of Braunstone, L.
Jeger, B.
Judd, L.
Layard, L.
Lea of Crondall, L.
Lester of Herne Hill, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McCarthy, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McNally, L.
Marsh, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Mishcon, L.
Newby, L.
Nicholson of Winterbourne, B.
Northover, B.
Oakeshott of Seagrove Bay, L.
Parekh, L.
Paul, L.
Peston, L.
Phillips of Sudbury, L.
Puttnam, L.
Ramsay of Cartvale, B.
Redesdale, L.
Rendell of Babergh, B.
Rennard, L.
Richard, L.
Rodgers of Quarry Bank, L.
Rooker, L.
Russell, E.
Russell-Johnston, L.
Sandberg, L.
Sawyer, L.
Scotland of Asthal, B.
Scott of Needham Market, B.
Sewel, L.
Sharp of Guildford, B.
Sheldon, L.
Shutt of Greetland, L.
Simon, V.
Smith of Clifton, L.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Taverne, L.
Taylor of Blackburn, L.
Thomas of Walliswood, B.
Tope, L.
Tordoff, L.
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Wallace of Saltaire, L.
Walmsley, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Weatherill, L.
Wedderburn of Charlton, L.
Whitaker, B.
Whitty, L.
Williams of Crosby, B.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord President of the Council)
Woolmer of Leeds, L.

On Question, Motion agreed to.

3 Jul 2003 : Column 1065

European Union (Accessions) Bill

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.

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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

3 Jul 2003 : Column 1067

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.

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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 be signed

    "as soon as possible after 1 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.

3 Jul 2003 : Column 1069

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

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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.

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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.

3 Jul 2003 : Column 1072

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

3 Jul 2003 : Column 1073

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

3 Jul 2003 : Column 1074

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 south-eastwards. 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.

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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

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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 be 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 be 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 be 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.

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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

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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

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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

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of foreign investment in the past 10 years. I expect substantial foreign direct investment to continue, although there may be 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

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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 Iain 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.

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