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Mr. Spring: We have always been—as, in a calmer phase, the Committee accepted—in favour of the enlargement of the European Union. It would be impossible, historically, for us to be otherwise. What the Conservative party did in the 1980s to secure the freedom of millions of people in eastern Europe means that we have an obligation to embrace the peoples of Europe into the European family of nations not only

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for political and economic but for moral reasons. I say that with great sincerity and would totally refute any challenge to that assertion.

I thank the Minister for setting out the proposals and providing some extraordinarily comprehensive information. However, I must mention the fact that documentation important to the conduct of this afternoon's proceedings, including the annexe to the European Union document No. 14117/01 and another document, were made available to us only at 3 o'clock on Friday afternoon. I realise the pressures on the mechanics of Parliament to produce documentation dealing with matters of European legislation, but such timing makes it difficult for everyone involved to consider the documents and scrutinise them adequately. It is absolutely crucial that national Parliaments consider fully and in detail the documentation to enable us to have a considered view about what is happening with the European Commission and other institutions of the European Union.

I appreciate the Minister's explanation of the reform of the common agricultural policy, and its timing, and the fact that there is a difficult juxtaposition with the enlargement countries in that respect. Indeed, that matter is at the core of a successful enlargement of the European Union: there cannot be any enlargement without a dramatic reform of the common agricultural policy and, as a subsidiary to that, of funding as a whole. Opportunities were missed to address the matter at Nice and at Barcelona, as far as I can see without examining the documentation adequately. I am not satisfied that the Government have emphasised sufficiently the issue of agricultural reform, without which enlargement cannot take place. We must have the courage to air that subject constructively. Some subsidies, such as those that apply to tobacco, will have to be phased out if the system is to be more transparent and acceptable in the post-enlargement process.

On Cyprus, we have always made it clear that we want an harmonious relationship with Greece and Turkey, which are both valued NATO members. We have always recognised that the Republic of Cyprus should become a member of the European Union, even if a solution to its problems has not been reached. I hope that the talks between Mr. Denktash and President Clerides will yield a positive result. I urge that that should happen, because it is essential for the stability of that important island, which is a valued member of the Commonwealth.

The Minister and I spent many hours on the Floor of the House discussing the Nice treaty, and he knows my view on the matter, which is also that of other Opposition Front Benchers. From the beginning, we said that nothing should be done to inhibit the enlargement process, given the importance that we attach to it. After Amsterdam, that line of argument was implicitly accepted by the then Foreign Secretary, now Leader of the House, who said that the accession process needed to be simple.

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The Nice discussions related to enlargement to an extent, but ultimately they had little to do with enlargement and everything to do with the political dynamics of the European Union. If the Nice discussions had focused on the mechanics of the enlargement process, the situation in the Republic of Ireland would not be as it is. Of course, the problem will have to be addressed from the point of view of enlargement, if the Republic of Ireland rejects the Nice treaty once again in a referendum.

We are legitimately entitled to raise that issue, because we repeatedly warned the Government about what would happen if they packed in the charter of fundamental rights, the creation of the rapid reaction force and the wholesale extinction of QMV, although in the lead-up to the Nice treaty they said that they would not. If anyone has caused difficulties for the enlargement process, it is the British Government and their lack of leadership in ensuring that the achievements at Nice focused on enlargement, rather than on ratcheting up the whole political process. Our position has nothing to do with a lack of commitment to European Union expansion and everything to do with making the process work. In that respect, the Government have failed, for all their talk of constructive engagement. We were very disappointed that key issues, such as the common agricultural policy, were insufficiently emphasised at Nice.

Although we will, of course, support any moves that advance the process of enlargement—I echo what my right hon. Friend the Member for Wells has said—the whole process of acquis communautaire, which stretches to some 85,000 or 90,000 pages, has placed a huge burden on several accession countries, with the result that some have not been able to address the reform of investment codes and company law, although they wished to, because of the sheer pressure of trying to fulfil all the Copenhagen criteria.

David Cairns: Which bits of the acquis would the hon. Gentleman leave out? It might help our further discussions on the shape of an enlarged European Union to know.

Mr. Spring: I would be very happy to write to the hon. Gentleman about that, because in my conversations with representatives of the Governments of accession countries, they pointed out that it is the sheer detail of the acquis, not the principles or the Copenhagen criteria, that have been the difficulty.

Unfortunately, in what has been a civilised exchange of views, the Minister descended into hysteria about the Conservative party's view. From discussions on the Floor of the House, he knows what our vision of a flexible and modern European Union is. However, he will do himself no favours if he goes on saying, as he repeatedly does, that the only objective of Conservative Members of Parliament is to withdraw from the European Union, when he knows that that is absolutely untrue.

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I have great admiration and affection for the Minister, having shadowed him for some time. In the coming months, when several positions will become vacant in the shadow Cabinet—

Peter Hain: Shadow Cabinet?

Mr. Spring: The Cabinet—I do apologise. I hope that the greasy pole will be climbed and that the Minister will achieve his ambition to be in the Cabinet, but he does himself no favours by making the hysterical and intemperate outbursts for which he is now becoming well known.

We remain absolutely committed to the enlargement process. We have always been in favour of it, and we wish it to be speeded on. However, I urge the Government and the Commission to tackle the problems of enlargement as effectively and with as much concentration as possible, because it is crucial that the process takes place as quickly and smoothly as possible, for all the reasons that I have suggested.

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Mr. Hopkins: It was Sir Edward Heath who, in the previous Parliament, expressed a strong view against enlargement, because he thought that it would weaken what he believed the European Union to be. He thought that the introduction of new members with much lower living standards, different economic structures and recent political experiences very different from those of western Europe would weaken the European Union. It is for the same reasons that I strongly support enlargement. My views are in no way related to any aspirations towards the greasy pole, if there is such a thing. If there is one, I do not think that I shall ever be allowed anywhere near it. Nevertheless, I shall put my view, for what it is worth, hoping that my right hon. Friend will at least take note of some of my points.

I think that the looser association will improve Europe and make the organisation more agreeable—one in which I will feel more at home. We are constantly told, or it is implicit, that Europe is one thing. Europe could become different organisations; it depends on the economic route that it takes. I think that it has started to dawn on my good and old friend, John Monks, the general secretary of the Trades Union Congress, whose colleague I was for many years, that it is not quite the cosy dirigiste association that he had thought.

John Monks and many others in the trade union movement have been strong supporters of the EU because they believe that there will be stronger worker protection, better social protection and better rights at work in the EU. This weekend, and for some years now, we have been aware of tension inside the EU between those who take his view of it and those who want to use it as a building block in a neo-liberal globalised economy with less protection for workers, where markets are free to operate and, according to neo-liberal theory, to increase the sum total of human advantage.

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I happen not to be a neo-liberal, and I think that that view is a terrible mistake, but there is a tension inside the European Union. The debate is going on. Indeed, Mr. Aznar in Spain, Mr. Berlusconi and one or two others have pushed the neo-liberal case strongly, much to the consternation of John Monks and many others. I have had no illusions about the European Union and some of the problems, but some people have deluded themselves that the European Union is a protective, redistributive, neo-socialist organisation. Indeed, some Opposition Members accuse it of being socialist. I suggest that it is not.

Mr. Spring: If the hon. Gentleman reads the Minister's earlier writings, he will find a powerful echo of those sentiments.

Mr. Hopkins: I was referring to many speeches by the hon. Member for Buckingham (Mr. Bercow), who frequently accuses the European Union of being socialist.

I agree with enlargement because I think that it will irrevocably change the economic structures that have been created in Europe. It is inconceivable, at least for decades to come, that some of the applicant nations will be able to join the single currency, adjust to the growth and stability pact, or accept an interest rate—determined by the European Central Bank—that is common with that of Germany and other stronger nations. I think it likely that several existing members will not join the single currency and will take a different economic path. That would be beneficial, because it would reveal alternative approaches, and that may, in the end, present an alternative means for the running of our economy in Europe.

New member nations will also bring their own thoughts about how we operate. The hon. Member for West Suffolk has referred to agriculture. The common agricultural policy will receive a severe shock when the applicant states join because they cannot be accommodated within the CAP as it stands. I have argued many times in this Committee that the CAP should be not reformed—reform can either mean tinkering at the edges or something fairly fundamental—but abolished. We ought to reintroduce a form of agricultural subsidy—where needed—that is based on income support, deficit financing or whatever one wants to call it, and we should eliminate the current price maintenance system. That system causes distortions and problems, such as those that Europe has had for a long time, of supply mountains. The entrance of new nations will contribute to that change.

In today's documents, the European Commission struggles hard with the problem of the new member states' large, poor and rather inefficient agricultural sectors. What are those states going to do, and how can they be accommodated? Clearly it would not work if they were to be drawn into the CAP as it stands. The Commission proposes a system, which already operates to an extent in the EU, of direct payments. In some cases, payments will be made directly to farmers, and in others there will be permission for member states to make direct payments. Indeed, states will be permitted to make their own arrangements to bring

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subsidies up to the level of CAP payments, but they will use their own resources to do so instead of taking resources from the CAP. That already looks like a dog's breakfast, and given that there are many candidate states, each of which will be different, I suspect that the complications will be almost infinite.

That is going to be a serious problem. One way of overcoming it would be to pursue the direct payment route to its logical conclusion. If direct payments to member states were based on acreage and standards of living, we would have a redistributive system, and that would be very fair. It might mean that richer countries, such as Britain and Germany, would have to pay more to help poorer countries. The whole arrangement would be about redistributing towards the poorer countries, but it would be based on direct payments and member states would decide, according to their needs, how they chose to subsidise their own agricultural systems. That would be sensible.

In Britain, some areas of agriculture require no subsidy while others need some sustenance. We could choose to support agricultural areas for environmental or social reasons—there is nothing wrong, for instance, with sustaining Welsh hill farming, and my right hon. Friend the Minister would be happy about that. It might be a good idea to sustain Welsh hill farming because it is part of our culture, our history and the colour of life in this country, and sustaining it would not be that expensive. In other areas, we could withdraw subsidies and let farmers compete on the open market. We can sustain people with direct income support where necessary, and we could persuade some of them to come out of agriculture altogether.

Each member state would make its own decisions on how it subsidised its agricultural systems. It would not be a problem to introduce a system of simple fiscal transfers from the richer to the poorer states on the basis of such criteria as living standards and acreages.

I have mentioned the problems of economics in the European Union as it stands. The Scrutiny Committee talks about living standards in the existing EU being ''dragged down'' when the poorer member states come in. That may happen. Enlargement will not necessarily be a dynamic arrangement that engenders higher economic growth and that raises living standards all round. We may have lower economic growth because we have to help to subsidise our poorer neighbours.

I have mentioned present economic arrangements such as the single currency, the European Central Bank and the growth and stability pact. Germany entered the single currency at an overvalued parity and is already having serious deflationary problems. One can imagine what would happen to a poor country if it were to enter at the wrong rate. Ireland was fortunate to enter at a rather low rate, and it has had relatively high growth as a result. The problem for Ireland may be that if it warmly welcomes other poorer agricultural nations into the European Union, it may suffer.

Ireland's living standards have risen tremendously in recent years and are comparable with those in the United Kingdom; in some senses, they might be considered higher. That rise has had more than a little

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to do with the fact that 5 per cent. of Ireland's gross domestic product is derived from transfers from the EU. If that 5 per cent. were suddenly taken away to help Romania or Poland, for example, Ireland might not be terribly pleased, because there might be a significant effect on its economy. Fortunately, Ireland entered the single currency at a relatively low parity, so it still has room for growth. There is some demand in its economy, which is a good thing.

There are serious problems, then. I welcome enlargement, because it will force us to face up to problems that we have refused to deal with for the past 30 or 40 years. We have assumed that a single currency will work; I do not think that that is necessarily so. We have assumed that the CAP would apply for ever, and certainly that it would continue for the foreseeable future; I do not think that that will happen. Enlargement will prise open all the issues that we have refused to face and make us organise Europe in a better and a fairer way.

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