House of Commons Hansard Debates for 21 Oct 1993

Madam Deputy Speaker : Order. I hope that the hon. Gentleman will not allow his imagination to range so wide that his remarks bear no relation to the Bill.

Mr. Bell : I assure you, Madam Deputy Speaker, and the House that my remarks will relate to the Bill. According to the Secretary of State for Social Security, benefit tourists will be guided away from those beaches that do not meet European directives on bathing waters--a point to which the Minister for the Environment and Countryside referred yesterday.

Mr. Cryer : Does my hon. Friend believe that the comments of the Secretary of State for Social Security at the Tory party conference were a coded indication of opposition to part of the Bill? That part of the explanatory memorandum dealing with its financial effects states :

"There may be a small amount of additional expenditure as a result of the application of the Income Support Regulations 1987 (S.I. 1967) to EFTA nationals. However, it is not possible to predict how many EFTA nationals will claim income support, so precise expenditure is not possible to estimate."

y hon. Friend agree that the Government should provide such an estimate, particularly when income support is under savage attack bythe Government? Mr. Bell : My hon. Friend is perfectly right to draattention to the coded messages that are sent from one Secretary of State or Minister to another. Yesterday, we heard a sad comment from the hon. Member for Southend, East that statements made by Ministers at party conferences do not always turn out exactly as one would imagine. We believe that the statements to which I have referred reflect the thoughts of Ministers, and that the Secretary of State hoped that we would not notice them--or the fact that he was speaking contrary to the wishes of members of the Treasury Bench, in dealing with the Bill.

Dr. Godman : My hon. Friend seems to have detailed knowledge of all aspects of the agreement, so I will refer to one of concern to many working in Scottish salmon farming. Is my hon. Friend confident that the agreement will protect the interests of those employed in that industry from unfair practices by Norwegian salmon farmers? Before the agreement was signed, the Community, by means of the imposition of tariffs, protected the interests of Scottish salmon farmers against the dumping of Norwegian salmon in Community markets. Is there any protection against that kind of behaviour in the agreement?

Mr. Bell : I am always glad to stand in for the Minister and answer such questions. I repeat my earlier remark that a large part of the protected herring, salmon and mackerel

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interests will remain protected in accordance with the agreement, and that the Bill will not extend the Community's common fisheries policy to EFTA. My hon. Friend was right to raise that important issue and to demand an answer from the Minister. We will help the Minister by putting our questions formally, so that they will appear on the Order Paper.

We contrast the remarks made by the Secretary of State for Social Security with those made by the Foreign Secretary at the Cornwall European constituency council lunch on 15 October. I do not know whether my hon. Friend the Member for Bolsover was invited to that function, but there he would have heard the Foreign Secretary say that we must reconquer the high ground of Europe.

That is a remarkable statement by the Foreign Secretary of a Government who found themselves in a minority of one during consideration of the Maastricht agreement. They had to get themselves two opt-outs ; they struggled in the House of Commons for six to nine months before they were able to pass the Maastricht agreement ; and, at the end of the day, they required a vote of confidence. If that is reconquering the high ground, it astonishes me to think that the Foreign Secretary ever knows where the high ground is.

We have seen the Government fritter away the opportunities of having a European central bank in London. They tell the nation how the City of London will be protected and enhanced by their action, yet we have lost all hope of having a European central bank. [Interruption.] The universal applause from Conservative Back Benchers will please the City of London, which for many years has bankrolled the Conservative party and provided votes at general elections. It is astonishing--

Mr. Sainsbury : Perhaps what was most revealing about the lengthy procedures on the Maastricht Bill was the Opposition's approach. Some Opposition Members, although not those below the Gangway, claimed to be in favour of the European Community but consistently voted against it.

Mr. Bell : We found ourselves in the uncomfortable position of agreeing with a Conservative Swedish Prime Minister on the terms of the social chapter and on the fact that it should be part of the Maastricht treaty. Had the Minister supported the social chapter, we would not have had six months of long and lengthy debate. The social chapter is agreed by the other nation states and would be agreed by Sweden and the EFTA countries.

It was astonishing to see the Government scuttled on so-called black Wednesday, when the pound came out of the exchange rate mechanism. We saw how the Government took refuge in a straightforward devaluation of the pound to become the party of devaluation. [Interruption.] We will remember that applause. We will remember for the nation how the Tory party became the party of devaluation. The Government were unable to hold a common line on monetary policy with our European partners. So they had better find out where to begin the conquest of the high ground of Europe and be sure that they carry enough oxygen to get them there.

The Foreign Secretary said at the Cornwall constituency council meeting that "ours" is a positive message. They are so positive about this Bill that, as the hon. Members for Southend, East and for Stafford (Mr. Cash) said yesterday,

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it has lain in the Vote Office for a year. That shows how limp the Government are when it comes to getting measures through the House of Commons.

How will the Bill help our business community? The Opposition believe that small firms will be able to benefit from cross-research and development and cross-trading opportunities. We know that United Kingdom business has welcomed the agreement. Our exports to the EFTA countries, referred to by the Minister, are about £7.5

billion--equivalent to two thirds of our exports to the United States.

I referred earlier to the prospect of failure of the Uruguay round of the general agreement on tariffs and trade. There is also the prospect of failure of the American free trade area agreements with Canada and Mexico. The world is drifting towards protectionism, a beggar-thy-neighbour attitude and policies that would lead to more stagnation and recession. We should contrast that picture with the situation in Europe, where a market is developing. It is not a rigged market--examples of which are well known to my hon. Friend the Member for Bolsover--but a single market. We support a developing market which brings closer together the people of Europe and which brings the Community together as a living and expanding entity.

I shall end where I began by saying that the Labour party is committed to the enlargement of the Community, not just in nominal terms but in real terms. The Scandinavian countries want to be part of the Community, notwithstanding the remarks about Norway made yesterday by the hon. Member for Southend, East. The hon. Gentleman commented earlier on the cohesion fund. When the Scandinavian countries join the Community of ours, they will be net contributors. They will make a real contribution to both the political and social context. That was shown by the speech made by the Swedish Prime Minister at the Tory party conference.

The Minister let slip a phrase which is more significant than even he realises. He talked about a new Europe. The Labour party has argued in this House throughout the Maastricht debate and in our entire approach to Europe for a new Europe. The new European economic area--the merging of Community interests with those of the EFTA states and bringing in the eastern European states--is looking towards that new Europe. That is why I commend the Bill to the House and why we will support the Government.

5.45 pm

Mr. John Biffen (Shropshire, North) : I enjoyed the speech of the hon. Member for Middlesbrough (Mr. Bell). Most of it was devoted to an almost Jenkinsite view of the Community and the virtues of its centralising destiny. Towards the end, to show that he was not wholly left behind by events, he talked about the virtues of enlargement. The hon. Gentleman will have an exciting learning curve, aided by his hon. Friends in the Chamber, if he holds these responsibilities when the Labour party has chosen its Front-Bench team. I wish him well. I prefer to oppose a communautaire Labour Front Bench than a revisionist Labour Front Bench.

I hope that my right hon. Friend the Minister will convey to my right hon. Friend the President of the Board

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of Trade our regret that he could not be with us to move the Second Reading. This is a tremendously important Bill, and it would have given him the chance to put to the House his views on the Community, which perforce he has not been able to do over recent months, for reasons that we all understand. Each and every one of us will be most anxious to see him back at the heart of this debate.

oser association of this country with the EFTA members that are designated as prospective members of this arrangement. I welcome it because, broadly speaking, those countries are at the edge rather than the heart of Europe. Because they are on the edge of Europe, they will have certain cultural, geographical and economic interests that are more closely aligned to ours than those of many existing members.

Mr. Malcolm Bruce (Gordon) indicated assent.

Mr. Biffen : That is a casual observation, but I am glad to have the confirmation of the Liberal Democrats. That is the type of common sense which occasionally escapes during debates such as this. We invent for ourselves wonderful trade prospects. As the hon. Member for Bolsover (Mr. Skinner) said, on the whole, the track record of those who have been forecasting economic joy at every stage of our European relationship is not entirely compelling. Therefore, I am basing my case upon other considerations.

There is one point that the House must consider very carefully. There is, as it were, a seamless robe about European Community developments. Just as the original Rome membership led to the Single European Act, and that in turn led to all the arguments about a single currency, what we are seeing here is a staging operation whereby a number of countries, formerly within EFTA, are expected to be incorporated into the European Community.

That development is welcomed by the Government, because it is central to their policy, and it is also welcomed by those on the Opposition Front Bench, and especially by me. I cheerfully endorse the prospect of a wider Europe, because I believe, among other things, that within that widening there will have to be a recognition of the great diversity of Europe and an acceptance that one cannot have the centralisation which has been fashionable in recent years. What interests me about the proposals is that, at this stage in the development of the European economic area, which is in fact to do with the consequences of the Single European Act, no significant attempt is being made to loosen the relationships under the Single European Act. The full rigours of the Act will be applied. Is this to be the Community of the future?

As I see it, there is a conflict between the desire to go beyond mere free trade to something more positive contained in the Single European Act--I respect that, and it has, I think, been widely accepted throughout the European Community--but one consequence was not foreseen : the enormous strengthening of the Commission's powers as it sought uniformity on the most massive scale. The reaction against that can be seen in the importance that the Government now attribute to subsidiarity.

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I believe that subsidiarity is a means of trying to check and reverse the Commission's growing power under the Single European Act. It is a great challenge, which I welcome-- [Interruption.] My hon. Friend the Member for Southend, East (Sir T. Taylor) will have the opportunity to make his own speech, which I am sure will be less generous than mine. I am seeking the greatest possible agreement with the members of the Front Bench.

If our objective is to loosen the arrangements under the Single European Act, let it be an explicit objective. If no attempt has been made to loosen the circumstances in which the Single European Act will be applied in the European economic area, let us understand why. Let us understand that it was purely a temporary measure required of us by the exigencies of the negotiations, but that the objective of the wider Europe, including the EFTA members, is to ensure a loosening of arrangements under the Single European Act, and especially to use the powers of subsidiarity to limit the authority of the Commission.

This point is not a passing debating point : it is crucial to our relations with our prospective partners in the north, and will also be valid when considering our relationships with the Czech lands, Hungary, Poland and possibly Slovakia. There will not be the homogeneity that exists between the economies of the EFTA countries. The situation is more complex and varied, so the changes for which I plead will be absolutely crucial in the relationships to be developed with prospective partners in the east.

This issue is at the heart of the expansion of Community membership, which is crucial to Government and Opposition policy. It cannot be left as a good -natured avowal or rhetoric to buy off the House, at Question Time or at any other time. It must be clearly spelt out as an integral part of Government policy, to be pursued in the renegotiation of Maastricht and the deals that are expected to be done in 1996.

That is the only point I want to make ; it is a headline point and not a detailed point about the legislation, but my experience of EC legislation is that one must take each stage very carefully and ensure that the Government make it clear where they expect the next development to take place. That was not the case with the Single European Act, which was never sold on the basis that it would lead to economic and monetary union. However, I travelled, as ever, hopefully.

Recently, under the rubric "Raise your eyes, there is a land beyond", my right hon. Friend the Prime Minister contributed to The Economist, volume 328, serial No. 7830, pages 23-27. That is a rather prosaic introduction, so I shall summarise the article. It was the "Brixton Manifesto" on the great issues of the European Community. It makes encouraging reading for me. I shall not detain the House much longer but, in the context of tonight's debate, I shall read out three quick quotations.

My right hon. Friend wrote :

"I believe it is time to look afresh at the community and consider the way ahead. Time to put away the old slogans, dreams and prejudices. All over Europe, what are people worying about? Not to reduce the number of currencies, but to increase the number of jobs."

The following quotation could be specific to this debate. He wrote :

"I believe it is that centralising vision that alarms so many voters in the applicant countries of Norway, Sweden, Finland and Austria."

He went on :

"Community leaders should recognise that danger"

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of centralism

" and work to avoid it ; not imply--as they sometimes do--that these EFTA (European Free Trade Area) countries are lucky to be able to apply. The Community is not Europe. A true European Community needs the EFTA countries and others."

That is almost illegitimacy made an art form.

I am delighted to believe that, after the passage of this legislation, the prosecution of policy will be predicated on the overwhelming requirement to ensure that the implications of the Single European Act are not carried to such an extreme that they sustain the present unacceptable authority of the Commission. 5.56 pm

Mr. Nigel Spearing (Newham, South) : Before I comment on the distinguished contribution of the right hon. Member for Shropshire, North (Mr. Biffen), whom I think of as the right hon. Member for Ludlow, may I say that you, Madam Deputy Speaker, and colleagues will know that it is my habit to attend these debates as often as I can to listen to the speeches. If I have to depart because of a long-standing and vital engagement, I hope to return as soon as possible, but if I do not do so before the following speaker has concluded, I hope that the hon. Member, whoever it is, the House and those who wind up will understand.

I refer to the speech of polity that we have just heard. The right hon. Gentleman does not favour the treaty, but he is like those people who favour it while hoping for a change of direction. The Brixton manifesto, which is well named, is also of that persuasion, as are many of my Front Bench colleagues. The right hon. Gentleman put his finger on the central issue--the Commission's power, the demands of the single market and the modification of subsidiarity. My hon. Friend the Member for Middlesbrough (Mr. Bell) is a little optimistic : not only does the Commission remain the sole fount of legislation in its raw state, but the single market commands and determines almost all commercial, quantitative, monetary or legal obligations. Of course, the famed and over-publicised principle of subsidiarity does not apply where the Community's competence has vires, as it has over the single market. Therefore, all the hopes and flourishes of the Brixton manifesto and of my hon. Friend the Member for Middlesbrough and his Front-Bench colleagues are, alas, bound to end in disappointment.

The demands of a market--I shall return to that theme later in connection with Scandinavia and the other EFTA countries--involve more than simply freedom. There may be freedom for some ; we have heard the Minister talking about the four freedoms, about movement of capital and so on. But rules and legislation are required, and the more a level playing field is demanded, and the more we say that there should be no interference with competition by state or Community subsidy or law, the more authority becomes necessary, and the more complex it becomes. Over the wider area that the market covers, with its different geographical conditions--in this case, in the northern parts of Europe--more and more authority is required ; more courts and more interpretation are needed.

A great deal more is being required of the EFTA countries, especially Finland, Sweden and Norway, than has been popularly understood in this country. The "treaty of Oporto"--that is what it ought to be called--has not been mentioned so far. It was signed on 2 May 1992, and

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requires the single market, in all its authoritarianism, to be imposed lock, stock and Commission on all the members of the EEA. The applicant or semi-applicant states have had to take almost all the legislation on board. I want to find out about the exceptions later, because we should know what they are. The applicants have had to take on, holus bolus, the whole of the famed single market that came into operation on 1 January. Moreover, they are to have only a consultative role concerning any amendments thereto.

Mr. Malcolm Bruce : That is up to them.

Mr. Spearing : It may be up to them to a certain extent, but--I shall now put the argument that I intended to put later--is not what is happening virtually force majeure? If you, Madam Deputy Speaker, were sitting in the Riksdag in Sweden or in Norway in the--

Mr. Bruce : Storting.

Mr. Spearing : Yes, the Storting. The Danes, too, were involved in something similar recently. The economic and social pressures, and the talk of the risks if those countries do not join, do not necessarily lead to willing acceptance. Countries can accept adherence for all sorts of reasons other than absolute willingness. The relative position of those states, and the relative size of their economies and populations, form at least an element. In the Storting, there was a relatively small majority in favour of entry. Will the Minister who winds up the debate tell us about the exceptions to the authoritarian structural market, about which we are learning more and more? The northern parts of Europe, especially the three states that I have mentioned, are distinctive in climate, in peoples and in social development. Their landscape is one of fjords, fields, forests and farms, and their communities depend greatly on that base.

Norway also depends greatly on the life of the North sea--the marine life, as my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has illustrated so well by his questions. Of course, we all know that the European policies on agriculture and fisheries have been such an outstanding success that we want other people to join in. The communities that live nearest to the earth, the forests and the sea are the most vulnerable.

State aids are prohibited in principle in any part of the single market. They can exist only with permission, and that will be given only if the Commission does not think that they will distort the market. But the Commissioners' job is to protect the treaties, and the treaties require the single market ; it is the golden calf of the whole outfit.

A description of the EEA agreement issued by the European Free Trade Association in February 1992 says the following about state aid :

"The EFTA countries will have to provide information about existing and proposed aid schemes to the EFTA Surveillance Authority, which may order them to be altered or abolished. New aid schemes may not be implemented without the approval of the Surveillance Authority." Anyone who has travelled in those countries will know how important a part state aids-- that is an ugly phrase ; my hon. Friends and I might use the expression "community support"--play in the life of their communities. Indeed,

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many Scandinavian countries have the advantage of not having experienced a medieval period dominated by great landowners, as we did in this country.

In harsh conditions, the whole of life is based on presumptions of co- operation and commonality, and on a close relationship with the environment of field and fjord. That attitude is shared by many of the Scots communities. No wonder they, too, feel the problems that arise. The landscapes and the way of life in many parts of Scotland are not dissimilar from those in Scandinavia, which is not surprising, because the people come from common Viking ancestors.

Will most of those communal and state aids now be under threat? I suggest that, in principle, they will. I hope that the Minister he will tell us of any derogations, either permanent or transitional, written into the treaty of Oporto that modify the otherwise harsh requirements of the single authoritarian market as they affect the fundamental ways of life of our neighbours, especially in Scandinavia.

No mention has yet been made of Iceland, but I believe that that is one of the six territories. I bracket Iceland with Scandinavia and, of course, with landlocked Austria. Switzerland, another landlocked country, will not be involved. What country could be more central in financial and geographical terms to the continent of western Europe than Switzerland? Yet the Swiss have examined the matter closely and said, "No, we can do better on our own."

What about VAT? There is to be harmonisation, as we all know, because it is already causing problems. The countries in question, rightly and for their own reasons, have relatively high VAT, but they also have high standards of social support. We all, especially the Opposition, know that their people-- perhaps not gladly, but assuredly--put up with high turnover taxes, but that in return they receive a high social wage. That fact is built into the community life of those countries, as I have explained. What will happen if there is freedom of movement of labour?

I suspect that even now some of the people of the north-east, perhaps from the constituency of my hon. Friend the Member for Middlesbrough (Mr. Bell), our Front-Bench spokesman, and some of the people from Scotland, possibly even from the constituency of my hon. Friend the Member for Greenock and Port Glasgow, work in the Norwegian offshore oil industry.

Dr. Godman : That is the problem ; they do not.

Mr. Spearing : But some people from the north-east do.

Dr. Godman : I must point out to my hon. Friend that the Norwegian authorities make every effort to ensure that it is extremely difficult for a United Kingdom national to obtain employment in the Norwegian oil and gas industry.

Mr. Spearing : I am grateful to my hon. Friend, because he gives an example that illustrates my point well. I can well understand why the Norwegians act in that way, just as I would understand, if there was an independent Scotland, that the Scots would not be too keen on Norwegians coming in and doing the same thing.

There is some social coherence in Bergen, in Stavanger, in Trondheim or wherever. As my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has said, there is a feeling that it should be Norwegians first. Once the treaty is in force, will what my hon. Friend has told me no longer apply? I suspect that that may be the case.

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That may be to the advantage of his constituents, of mine or of those of my hon. Friend the Member for Middlesbrough, but what will people say in a coherent Norwegian society which is predicated on the status quo? What will happen? I put that as a question. What would happen the other way round? What about the different social support systems in that part of the world and here?

Mr. Oliver Heald (Hertfordshire, North) : Is the hon. Gentleman saying that Norway and the other EFTA countries should be allowed to enter the European economic area while maintaining state aid and trade barriers? They would then be able to retain jobs in their countries at the expense of Britain and other member countries by hiding behind trade barriers, which we do not have. Would that not be bad for jobs?

Mr. Spearing : I was expressing a point of view. I was trying to point out some of the problems that may arise. There may be problems and dilemmas that have not yet been sufficiently addressed. Conservative Members, and especially the Minister, have assumed that, the bigger and wider the market, the fewer barriers--which some people might call protection--there would be. Harold Wilson spoke of one man's protection being another man's freedom. It is assumed that taking down all the protections and having a giant economic machine will give everybody more universal benefits. That is the macro-assumption behind the whole of the single market.

Mr. Bell indicated assent.

Mr. Spearing : My hon. Friend nods.

Mr. Malcolm Bruce : That is the idea.

Mr. Spearing : Of course. However, there may be unexpected or predictable side effects as I have just explained, especially when centuries of tradition and centuries of assumption have been built up by communities which have been in place for a long time.

Another question is the relationship between the Baltic states--Sweden and Finland--with the mainland Baltic states on the other side of that sea. My understanding of history and of trade is that there was a great deal of commonality among the Baltic states, including those in eastern Europe, in trade, in culture and in contact. There are trade arrangements and movement arrangements. How will that mesh with the demands of the treaty of Oporto? Those questions should be asked at this stage and should be answered. I now come to the all-important question about the political and legal relationships between the EEA and the EC in its central market function. I intervened in the Minister's speech a little earlier on that. Three new institutions will act as couplings between the six EEA countries jointly and the rest of the EC. There will be a Council of Ministers of the EEA, which I suspect will act in a double capacity. It will meet the Community by means of meeting some people from the Commission.

Oh yes, I have no doubt that, as the Minister said, there will be other connections as well. However, it will be the Commission with which the Council of Ministers will tie in primarily, and I believe that that is written into the treaty.

My hon. Friend the Member for Middlesbrough has already addressed the question of decision-making. Who will decide what the treaty means? I presume that it will not

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be the International Court of Justice under the Vienna convention, although the treaty is probably registered as an international treaty, because the treaty says that we shall have to set up special machinery. The rules of the single market are made by the European Court in Luxembourg. The court will be the interpreter of the rules of the single market when it is enlarged.

Of course, the EFTA countries do not have political control because they have not signed any of the EC treaties, either the treaty of Rome or its successors. They do not intend to sign those yet, although they may consider doing so later. So we have to set up the surveillance body, which has pretty big powers. I quoted the details of one of its powers in respect of state aid. The surveillance body will give opinions, it will police the treaty and it will see how the treaty works out.

There will then be another court between the two groups of countries. The EEA treaty court will, in the end, have to accept what the court in Luxembourg says are the terms of the single market. The connections will be tenuous at a political level, but very strong at a legal level.

Dr. Godman : Is my hon. Friend suggesting that the European Court of Justice will become a supreme court over the whole membership of the EEA, and that the EEA court will seek opinions from the European Court of Justice?

Mr. Spearing : I think that we need confirmation of that point from the Minister. I have expressed my understanding of what will happen, either de jure or de facto. Bearing in mind the economic strength of the partnerships concerned, if it is not de jure, it may well be de facto.

The whole of the single market and its institutions form, by definition, an authoritarian organisation, as they must do if they are to fulfil the purposes of the treaties. The provisions will be extended into a geographical and social area where they are least applicable. Those who will be subject to them will find all the disadvantages that we have found in this country. I include even those who welcomed membership ; I am not talking about those who may not have done.

We can learn something about the real nature of the European Economic Community and about union by having a look at the effects of the treaties on our northern neighbours in western Europe.

6.17 pm

Mr. Bernard Jenkin (Colchester, North) : One feels nostalgic about having another of these debates and it is a pleasure to follow the hon. Member for Newham, South (Mr. Spearing). If there is one criticism to be levelled at the Euro-realists, who opposed the Maastricht treaty, which I take seriously, it is that we must not live too much in despair. There is too much lamenting the Community as it is and not enough travelling in hope for the future. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) showed an attitude that I shall attempt to emulate. I have great admiration for my right hon. Friend, who has given me much advice since I entered the House. I may have been referred to as a man without a father, but my right hon. Friend has been to me a father figure.

The agreement is an important step towards the objective enunciated by my right hon. Friend the Foreign Secretary, which he described as variable geometry. We

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have created in the Maastricht treaty, if the opt-outs actually work, a Community of at least two tiers. By this agreement to create the European economic area, the treaty of Oporto, we are creating a three-tier, three-speed Community, which is surely a step in the direction of the Government's stated policy.

However, we must ensure that the agreement respects the individual sovereignty of the EFTA states. I share the endorsement of my right hon. Friend the Member for Shropshire, North of the article in The Economist by my right hon. Friend the Prime Minister in which he said that the nation state is here to stay. That is an immutable fact which the architects of the European Community have tended to ignore. The Government must be the champion of the nascent members of the EEA. We must stand by their individuality and their limited exemptions from the acquis communautaire of the Community because therein lies the danger.

I want to analyse the relationship between the legal entity of the EFTA states and the Community and to shed light on the comments of the hon. Member for Newham, South (Mr. Spearing). Protocol 35, the "Sole Article" states :

"For cases of possible conflicts between implemented EEA rules and other statutory provisions, the EFTA States undertake to introduce, if necessary, a statutory provision to the effect that EEA rules prevail in these cases."

Analogous to the treaty of Rome in respect of the EC member states, here is the supremacy of the Oporto treaty over the law of the EFTA member states.

Articles 105 and 106 deal with the homogeneity of interpretations in respect of the relationship between the EEA Court and the European Court of Justice. The EEA Joint Committee is assigned the task of constant review of the case law of the ECJ and the EFTA court to keep interpretation of the EEA consistent. When the interpretations differ the Joint Committee may settle the question or, where the question is one of interpretation of an EC provision, the Joint Committee may ask the ECJ for a definitive ruling.

In other words, the ECJ is the final arbiter of interpretation of EC provisions and may overrule the EFTA Court interpretations of EC rules. However, it would appear that if the disagreement is not over an EC rule, but over the interpretation of an EEA agreement, the EEA Joint Committee must make the decision about interpretation. Any such decisions made by the EEA Joint Committee will apply throughout the EEA, but will not affect the case law of the ECJ in relation to protocol 48.

The importance of that is that it appears that by acceding to the EEA agreement the EFTA countries are acceding to the entire acquis communautaire of the treaty of Rome as amended by the Single European Act. Their only exemptions are those specifically granted to them and it is instructive to glance at the treaty of Oporto because its prose and structure have a deadly ring of familiarity, as they are the same as those in the treaty of Rome.

We must not forget that it is the acquis communautaire, the structure of the Community, which in the words of my right hon. Friend the Foreign Secretary has been

"invading the nooks and crannies of our daily lives".

Unless we succeed in making the EEA agreement change the nature of the European Community as we know and

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