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Mr. John Gummer (Suffolk, Coastal): Does my right hon. Friend accept that the situation is made much more difficult by President Bush's determination to make the American farmer the most subsidised farmer in the world by increasing by 60 per cent. the amount of money that he receives? That undermines the position of those of us who have sought reform in that context in the European Union and does great damage to developing countries.

Mr. Ancram: I share my right hon. Friend's concern, but President Bush's actions will not bankrupt the European Union as could unreformed enlargement.

Mr. Kelvin Hopkins (Luton, North): Farming communities in Poland are deeply worried that they could be flooded with cheap, subsidised produce from western Europe instead of benefiting from the CAP. Does not that necessitate fundamental reform of the CAP?

Mr. Ancram: I am grateful to the hon. Gentleman for making the point better than I could have. If enlargement is to work, it is essential to tackle the CAP.

It was worrying, if all too predictable, that the General Affairs Council on 10 June decided to postpone until the autumn talks on the amount of aid to be offered to the candidate countries I am aware that some progress may

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be apparent in the mid-term, but we face the prospect of keeping to the Berlin budgetary limits only by treating the new states of the European Union as second-class members for their first 10 years while doing nothing to push through the necessary fundamental changes. That is unacceptable.

I hope that the Foreign Secretary will affirm that it is essential that the outlines of CAP structural funding reform are agreed before 2004. We cannot afford to allow the CAP to continue as it is—never at the top of the EU's list of priorities—or to become entrenched by enlargement. That would do damage almost all round.

Roger Casale: The right hon. Gentleman claimed that institutional reform was not necessary for enlargement. Not only the Government but the House said that such reform was important for enlargement when hon. Members debated the EU scrutiny report that recommended it. Every Government and Parliament that I can think of in Europe also believes that. Most important, the applicant countries believe that institutional reform is necessary. The right hon. Gentleman is in a minority. If he does not accept that institutional reform is necessary for enlargement, does he accept that it is necessary for reforming the CAP? Or is he, once again, willing the ends without the means?

Mr. Ancram: I am rather puzzled by that. I said that the Nice treaty was not necessary for enlargement. At one stage, the President of the Commission agreed with that. However, I did not say anything further. Fulfilling the target of enlargement by 2004 is a challenge; failure to achieve it would rightly lead to harsh judgments of the member states' Governments.

The second challenge is that of making enlargement a success. We must ensure that the effect of accession on the new member states resembles that on Portugal rather than that on East Germany. It would pose problems for old and new members if enlargement's main consequence was to encourage a mass movement of workers from east to west rather than a mutually beneficial enrichment of expanded markets for us, and a helping hand to greater prosperity for them.

The Foreign Secretary spoke about the European meeting in Seville this weekend. I was disconcerted by his admission that he was setting off for Seville without being quite clear about what he intended to achieve when he arrived. I look forward to hearing about his intentions when the Minister for Europe has received the benefit of advice and can tell us what his officials have written in the communiqué, if not yet in the Foreign Secretary's brief.

We will watch events in Seville closely this weekend to ascertain, for example, whether the Government believe in a Europe of nations or are determined to lock Britain into a centralised, supranational union. The Government appear confused. In November, the Foreign Secretary wrote:

I concur with that. However, a month later, he signed up to a political union in Laeken that would establish a supranational Europe. He cannot have it both ways.

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We will also watch for the Government's attitude in the summit to the urgent reforms that the European Union acknowledges it needs.

Mr. Straw: The right hon. Gentleman quoted me accurately the first time, but will he cite the part of the text of Laeken on which he relies, and explain how I signed up to it?

Mr. Ancram: It is my understanding—[Hon. Members: "Ah."] Perhaps hon. Members will listen. The Laeken agreement constituted the first time that political union was stipulated in terms of a treaty. The Government signed up to it. The right hon. Gentleman should check that or take advice so that perhaps the Minister for Europe can clarify the matter at the end of the debate. He will find that I am right.

Mr. Straw: If we are to have effective debate, it is important to present the sources. No one signed up to the idea of a supranational Eurostate; we would not have done that. The Laeken declaration simply sets a rather discursive agenda for the convention on the future of Europe. It contains nothing that could form the basis for the right hon. Gentleman's claim.

Mr. Ancram: Is the Foreign Secretary telling us that there is a difference between a political union and a supranational state? He will have to be a casuist to prove that point.

I return to what I was saying about the second challenge. We shall also watch to see what attitude the Government take in the summit towards the urgent reforms that the European Union itself recognises it needs. We hope that that issue will not be ducked. As we have heard today, the Government have proposed a number of reforms to the European Council. When I first heard some of them, I thought that the right hon. Gentleman was joking.

The Government's answer to the popular feeling of alienation from European institutions is, apparently, to create an even more remote and more permanent presidency. That may bring some short-term comfort to the retirement plans of the Prime Minister, but it will do nothing to bring Europe closer to its peoples. If we look at the sum of the rest of the proposals that we heard about today, they merely tinker with the problem faced by Europe. By contrast, one of the few decent ideas that the Government have put forward—the creation of a subsidiarity panel—is one that they have taken from us, and we are most appreciative of the compliment.

We have also heard that the Foreign Secretary is going to discuss asylum, with which he dealt at some length in his speech. I welcome—along with their seeking a workable common approach—the Government's plans to discuss the implementation of bilateral agreements such as the one that we had with France until 1997. We have been calling for that for the last eight months. A higher level of co-operation between European Governments on asylum is a necessity, and bilateral agreements are one of the most effective ways forward.

The Council will also provide an opportunity to take in hand the Commission's paper on the reform of EU governance. We welcome some of the proposals. We support, for example, the plans to consult sooner and more

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deeply with interested parties on legislation. That policy is long overdue, and needs to be extended to other institutions within the Union. We certainly endorse the need to simplify and shorten the acquis communautaire. Indeed, we would go further. However, if the Commission can cut it from about 80,000 to 60,000 pages, that will at least be a start. If that had been done earlier, it would have made enlargement easier.

The Commission's proposals on the future shape and powers of European institutions, however, show little understanding of the need for more democracy in the EU. They fail to recognise that the nation states, not supranational bureaucracies, are the fundamental elements of the European Union. Surprisingly, the Government have said that they are "very relaxed" about the proposals. Are they seriously happy with the general centralising drift that has come out of the Commission?

Mr. Foulkes: I want to know whether the shadow Foreign Secretary is serious in what he is saying. Will he remind me which Prime Minister, and which Government, forced the Maastricht treaty and the Single European Act through the House on a three-line Whip and a timetable motion?

Mr. Ancram: It is a pleasure to be able to congratulate the hon. Gentleman on being appointed a Privy Councillor. His voice is no quieter from the Back Benches than it was from the Dispatch Box in his time there. I have to say to him, however, that what we are seeing from the Commission—there is no point in ducking this—is essentially a move further to centralise the way in which Europe works, at a time when it should be moving in the opposite direction. I am alarmed that the Government say that they are relaxed about this, and I hope that we shall hear more about their real view of what is happening.

The Government like to claim that they are constructively engaged in Europe; I think that they used to refer to that as winning for Britain in Europe. As usual, the claims and the reality are very different. The Lisbon process—to which the Foreign Secretary referred in glowing terms again today and which is good for Britain—is badly behind schedule. In some areas, the Government are positively working against the goals of Lisbon. With the active connivance of Labour's MEPs in Brussels, unnecessary, burdensome and costly European legislation continues to flow in our direction, undermining the Lisbon process. The vibrations directive is a good example of such interference from Brussels. Nor did signing up to the social chapter do Britain's competitiveness any favours.

The Government are hardly winning the battle of ideas in Europe. We were assured by the Minister for Europe's predecessor—the hon. Member for Leicester, East (Mr. Vaz), whom I am pleased to see in his place—that the charter of fundamental rights would not be legally binding. However, it is increasingly being used in European Court of Justice jurisprudence. That flies in the face of undertakings that were given about its nature.

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