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7.42 pm

Mr. Jonathan Djanogly (Huntingdon): I enjoyed the speech by the hon. Member for South Thanet (Dr. Ladyman), and the football analogy that he made. However, a football match lasts only for an afternoon, whereas when currencies, freedoms and vetoes are given up, they are given up for ever. That is an important distinction.

I certainly want a forward-looking Europe, but the Bill could lead to a regressive Europe. We want Europe to seek to expand its borders and to enhance its citizens' security, but the Bill will act to compound the introspective, exclusive, rich-member-club mentality that currently pervades many of Europe's institutions.

To my mind, the Europe of the future should place our destiny in the context of the world economy. The new reality is one of reduced tariffs, and there is a move towards ending protectionism. I fear, however, that this Bill will serve to hide Europe under a stone, and that it will defer the inevitable impact of world competition, improved technology and communications, and the massive strides achieved over recent years by the lightly regulated developing nations.

The weakening in the treaty of the position of the individual member state is clear. It is evident in article 4 of protocol A, which relates to the size of the European Commission. It reduces the number of Commissioners for Britain, France, Germany and Italy and will reduce the number again when the EU expands to 27 members.

That weakening is also evident in article 214.2, which provides that the Commission President would be nominated by member states acting by qualified majority voting rather than by unanimity. It is also evident in the re-weighting of member states' votes. That re-weighting means that, in a union of 27 states, the United Kingdom's votes will fall from 12.2 per cent. of the total to 8.4 per cent. That point has not been made yet this evening.

Mr. Hendrick: Does the hon. Gentleman agree that the UK's position will in fact be greatly enhanced? We have the same number of weighted votes—29—as Germany, even though that country has a population of 82 million, which is 25 million more than our 57 million?

Mr. Djanogly: That point has been made several times in this debate. The distribution of weighted votes changes as the number of member states rises. After enlargement, the UK's position is likely to deteriorate.

Of the existing 70 treaty articles requiring unanimity, some 29 are moved to qualified majority voting, and it is important that people fully realise how we will be undermining our current veto powers in many key areas. The point was made very clearly by my right hon. Friend the Member for Wells (Mr. Heathcoat–Amory). Those areas include external border checks, conditions for freedom of movement for third-country nationals, asylum laws, financial assistance to aid member states in financial difficulties, the introduction of the euro, trade policy,

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social provisions concerning working conditions and social exclusion, support for industry, economic co-operation with third countries, procedures and rules for the Court of Auditors and procedures for allowing other states to join. To my mind, there is therefore no doubt that the effect of the treaty will be to reduce our veto powers and thereby our power within the EU.

The treaty goes much further, however. The Bill assumes that by weakening the powers of individual nation states, European institutions will somehow become more adaptable to an enlarged union. To my mind, that is an exercise in papering over the cracks. The problems of the European Union will not be solved by tinkering with the voting systems of its institutions, as the problems do not mainly lie with how votes are cast but with the institutions themselves.

The European Union seems to find it very easy to blame its difficulties on what it sees as its current unwieldy voting systems. It frequently blames the slowness of the enlargement process on the candidate member states' economies, yet it remains reluctant to look into its own structural problems. We need to realise that countries in the east of Europe frequently operate their economies more efficiently than we operate ours. It is all too easy to assume that those countries are backward and ought to comply with our own—sometimes outdated—institutions and regulations.

The Nice treaty almost totally ignores that reality. It looks at ways of bolstering the inadequate institutions of the EU. For instance, its effect will not in any way amend the provisions of the common agricultural policy. Many hon. Members have mentioned the CAP in the debate, but the treaty will provide additional mechanisms to keep new member states out of the CAP.

It is true that there are more farmers in Poland than in the rest of Europe added together, and that the cost of the CAP would mean that it probably would not last a week there, if it were adopted. However, the position of agriculture will not be improved by banning Poland's access to the CAP and by effectively introducing double trading conditions for agricultural products from the east. I should be interested to hear from the Minister how the European institutions are likely to be strengthened by the treaty, or how the basic community concept of free movement of goods and services will be enhanced.

Article 137 of the treaty will subject to qualified majority voting social provisions concerning health and safety at work, working conditions, information and consultation of workers, social exclusion and modernisation of social protection systems. Again, it is quite clear what the aim is. The provisions will be used as a method of curtailing the competitive advantage of eastern states that have lower labour and production costs than we do. I predict that it will also be used to force the UK to adopt more and more European employment regulations, each of which will continue to chip away at our own country's relatively free economy—or what is left of it after this Government's adoption of the social chapter and the raft of new regulations introduced over recent years. Further proposed regulations—such as paternity rights, and statutory rights for paid leave for adoptive parents—will also have an effect. Article 137 will certainly not aid European enlargement in any way.

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In the same way, article 157, which it requires the EU to ensure that the conditions necessary for the competitiveness of its industry exist, could well become a licence to intervene in the businesses of nation states, thus reducing their efficiency, disrupting market forces and creating yet more uneven and politically motivated playing fields. Furthermore, it would be interesting to know whether the Government have considered the costs involved in supporting outdated industries in the context of the Bill, as this policy could be extremely costly.

The days when the Government and the European Union said that they did not want a two-speed Europe are long gone. Now it is quite the reverse. The treaty of Nice is clearly aimed at enabling a multi-class Europe in which certain members can be made second-class citizens to shore up the outdated institutions that were formed on the premise of a single-speed Europe.

In theory, the new voting proposals adopting the concept of a multi-speed Europe could have been drafted so as to provide a flexibility that would have enabled member states to opt out of further integration proposals to which they may have objected, but the abolition of vetoes makes that unlikely. In practice, I fear that we will see the levelling down of members' competitive advantages, the banning of goods from new eastern European members, and the restriction of their people's freedom to work in the west. Unfortunately, rather than aiding enlargement, the treaty of Nice could be used as a baton to reinforce a sophisticated anti-dumping strategy against new eastern European members in particular.

So far I have expressed my concerns about the further loss of our national competitive trade advantages and about how the treaty could effectively be used to hinder rather than aid enlargement. However, I believe that we need to put the treaty of Nice into the global context. Here, too, I have concerns.

One of the effects of the Nice treaty will be to provide the mechanics to support the collection of values, many of them alien to the traditions of this country, that have been built up in western European countries over the past few decades. I refer to the cults of bureaucracy, politically motivated redistribution and inefficient welfare systems. Many eastern European countries are prepared to pay a very high cost for entry to the European Union, so they may well agree to bear the pain of entry—to lose their competitive advantages, to accept being regarded as second-class European citizens and to turn a blind eye to the excesses of "welfarism" to which they will have to subject their young economies. We can, at the same time, be fairly sure that the countries of the far east and the developing countries of the lndian subcontinent, Africa and south America are unlikely to follow the same route.

We live in a global economy—a massive trading area where competition is fierce, the World Trade Organisation is breaking down tariffs and protectionism against developing countries, and wage and production costs are already lower. That is the direction in which we are heading.

The dissolution of the old eastern bloc has made international relations more, not less, complicated. Our recent requests for developing countries' help in maintaining the so-called new world order might not come cheap. Is there any truth in the report that Pakistan is to have a number of the tariffs on its products cut or

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abolished as part of the arrangements for our war on terrorism? ln any event, my point is that the world is moving towards free trade and low production costs, while the Nice treaty will be used for the opposite effect.

I recently spoke to the owner of some call centres in the United Kingdom. The company has recently set up a call centre in India, employing graduates who speak perfect English and cost one fifth of UK equivalent employees. Modern communications mean that calls made to India cost the same as those to a call centre in Glasgow. Thousands of what would have been British jobs are to be lost and we do not seem to appreciate that globalisation is no longer a future threat but a present reality. Indeed, the European Union as a whole does not seem to appreciate that.

The question arises as to whether the forces of federalism in Europe actually want enlargement of the Union. If new member states join before federalism is achieved, it is unlikely that the cause of federalism will be advanced by any of the new members. Could this be part of the reason why a treaty that was meant to be instituted for the purposes of encouraging enlargement could be used for the opposite effect? Could member states that support federalism be holding back on allowing enlargement until such time as plans for federalism are in place, effectively using enlargement as a bargaining chip for their own ends?

The issue will become clearer as we head for the constitutional conference planned by the European Union for 2004. However, I suggest that the countries of eastern Europe are worth more than bargaining chips, and that we ignore the urgent need to widen the Union and enhance European security at our peril.

Europe is at an important crossroads. We can accept the inevitability of the global economy and use the opportunity of enlargement to restructure our European institutions, embrace the new economy and sustain our long-term viability. Alternatively, we can stifle what enterprise and competitive advantages still remain on our continent.

To my mind, the treaty of Nice will be used to facilitate the latter option. That will, I am sure, be to the detriment of British business and employment prospects. That is why I continue to oppose the Bill.

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