TUESDAY 1 APRIL 2003

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Members present:

Donald Anderson, in the Chair
Mr David Chidgey
Mr Fabian Hamilton
Mr Eric Illsley
Andrew Mackinlay
Mr John Maples
Mr Bill Olner
Mr Greg Pope
Sir John Stanley

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MR DENIS MACSHANE, a Member of the House, Minister of State for Europe, and MR KIM DARROCH CMG, Director, European Union, Foreign and Commonwealth Office, examined.

Chairman

Minister, may I welcome you, and again Mr Darroch. I understand you were eavesdropping on the last session with Mr Hain.

(Mr MacShane) Joined-up government, Mr Chairman.

Chairman: Joined-up government; to make sure that there is a glide from one of you to the other, in the case of the Common Foreign and Security Policy. I ask Mr Hamilton to begin the questioning, please.

Mr Hamilton

Thank you, Chairman. Minister, on 10 December you told the Committee, in response to a question dealing with Saddam Hussein, that you felt sure that the EU would provide a united front against Saddam; and yet, on 30 January, eight European signatories were on a letter supporting the US stance on Iraq. What I wanted to ask you was why did that so-called 'Gang of Eight' if we can use that expression, decide not to consult all the EU partners before the publication of the letter, and do you think that, in doing so, we made a contribution towards the breakdown of a common EU front towards Iraq?

(Mr MacShane) I heard the representative of the Hungarian Government Party in Brussels, some ten days ago, when that question was put to him, explain it in these terms, "We were asked to, we were 'phoned up three times," he said, "in Budapest, by Prime Minister Aznar," to sign the letter you refer to, Mr Hamilton. "No-one from Berlin or Paris consulted us before those two countries, some week to ten days previously, in Paris, had unilaterally declared a very different position, in relationship to Iraq." So there was, I think, a Newtonian diplomatic process in action, to every state there comes an equal and, in this case, opposite reaction, and the letter of the eight was very much in response to France and Germany, in Paris, declaring what they thought the position of Europe would be, which clearly was not acceptable to a number of other European countries.

But do you think that letter further broke down the united front that had been shown thus far?

(Mr MacShane) I regret the fact that Paris and Berlin also issued their unilateral declarations at the 40^th anniversary of the _lys_e Treaty, that then produced the response that you refer to. I think that it would have been better to have used the relevant Articles of the consolidated Treaty to work out a common European position.

Minister, President Chirac's announcement that he would use his veto for the so-called Second Resolution, and, in fact, in reality, as we know, the 18^th Resolution, did that come as a surprise to the Government?

(Mr MacShane) I tend to share President Chirac's view that we should leave it to historians now to analyse the diplomatic goings-on in the last nine months before the conflict in Iraq started. I am of the view that it would have been helpful had France made clearer much earlier its intention to veto; the contacts certainly that I had with representatives of the French Government, but not, of course, with the President or the Foreign Minister of France himself, gave me to believe that France would prefer not to impose its veto, and when the veto came, just at the moment when Britain, in particular, was seeking at the last minute to find a non-intervention solution to the Iraq crisis, certainly it came as a shock, and particularly the reference to "whatever the circumstances," to quote the President.

Minister, we have been told time and time again since that announcement that the veto would be used, that that was one of the reasons that many of the non-permanent members of the Security Council decided not to sign up to the Second Resolution; and yet, last week, when the French Foreign Minister, Dominique de Villepin, came to the House of Commons and spoke to Members of Parliament on Thursday, he said that there were only four countries supporting that Second Resolution, or the 18^th Resolution, before President Chirac announced that he would use his veto. What have you to say to that?

(Mr MacShane) I am not in agreement with Mr de Villepin's analysis; but, again, perhaps historians are now the people we have to leave to go over that process. Mr de Villepin is entitled to his point of view, I suppose I am entitled to mine.

But is not that a fundamental point, that that rather changes the way it was explained to us, in this country?

(Mr MacShane) I simply do not accept that point of view. Intensive discussions were going on with all members of the Security Council, and it was clear that a number of them were prepared to support robust action to see the enforcement of UN Resolutions, but it was never put to the vote, at the end of the day, and I just do not think it is helpful for any Government to say, "We know how country X, or country Y, would have voted," other than those countries which had already formally, publicly declared their position.

Chairman

On that particular point, coming back, I think on March 10 that President Chirac said, "Whatever the circumstances, France will vote no." Until that time, were we working on the assumption that we were likely to have nine votes in favour of the relevant Resolution?

(Mr MacShane) Mr Chairman, genuinely, and I am not trying to dodge the question, I cannot answer; there were not sealed, secret statements of voting intentions, the countries that declared their positions, which are well known to be on the record, had done so, and there was a middle bloc of non-permanent and other members of the Security Council who were being consulted by different Governments. In a sense, we will never know.

Mr Hamilton

Can we just move on to post-conflict Iraq. Clearly, the EU has clear ideas about the role of the United Nations in post-conflict Iraq, but they seem to be contradictory to those of the United States. Can we heal this rift, can we avoid another transatlantic row?

(Mr MacShane) I think that the fact that we got all the EU permanent members and a lot of members of the Security Council to vote for the Resolution last week on humanitarian aid is a very good sign that Europe is back, seeking to co-operate and work together; that sent out, I think, a sensible and helpful signal. Then I think we will have to wait, until the end of hostilities and the elimination of Saddam Hussein as the ruler of Iraq, to see what the post-Saddam arrangements are for governing Iraq, it is firmly the British view that the UN should have a role in that at some stage. But I do think the question, frankly, is better dealt with once hostilities are over and we know exactly what kind of post-Saddam Iraq we are dealing with.

How serious is the rift over Iraq for the internal cohesion of the European Union, and do you think we will get over this?

(Mr MacShane) I think it is serious, it would be wrong to deny that. I believe that people in Europe do want to get over that rift, just as we do. The Foreign Secretary, as you know, is on his way tonight to Germany and then to Poland. I will be going to Latvia with my French opposite number to do a joint act on Thursday in Riga. I spent the weekend backing up the more high-level calls that the Prime Minister and the Foreign Secretary made to President Chirac, Chancellor Schroeder, President Putin, and the other leaders, I spoke to nearly every Foreign Minister of the incoming ten new Member States, and without exception, I think I can report to the Committee, they said that they wished Britain and her troops all good luck and God's blessing in the current conflict. They all agreed that the elimination of Saddam Hussein was the utmost priority of European policy, but they said also, when I reported to them that the Foreign Secretary was talking to Mr de Villepin, the Prime Minister was talking to President Chirac, that it was important to rebuild European unity. But, as at the European Spring Council in Brussels, where again I listened to ten Heads of Government make their short speeches at the Heads of Government lunch, standing in for the PM, they all said they wanted to join the European Union, they were disappointed at the lack of unity that Europe had shown, and they certainly were not prepared to enter an anti-American club, and that a Europe that did not want to work constructively with its transatlantic partners would not be a Europe that they thought would advance successfully over the coming years.

Chairman

Is it the view of HMG that the United Nations should provide the umbrella for the civilian administration in post-conflict Iraq?

(Mr MacShane) What we are saying is that really we have to see how the campaign develops and how the conflict comes to an end and the nature that we find ourselves in, in post-Saddam Iraq; but, ultimately, we would want to have UN involvement.

Involvement, or direction of the civilian administration?

(Mr MacShane) The nature of the involvement obviously remains an issue to be discussed. The Foreign Secretary, with Secretary of State Colin Powell, late last week, looked at the differing examples of Bosnia, Kosovo, Afghanistan. There is not an off-the-shelf UN type of administration that can be applied after every situation, each has to be taken on its merits. The most important thing, I would have thought, is to get Iraq back on its feet, to get the infrastructure working again, and for that, as in other countries where there has been the end of a vile dictatorship, I think perhaps of Germany after 1945, one needs professional people on the ground, soldiers usually, who can get things going again. But over time it is clearly in everybody's interests, and certainly I understand it to be the view of the American Government, that the Iraqis themselves will take control of the country.

Is there any difference of view between ourselves and the US administration about the role of the UN in post-conflict Iraq?

(Mr MacShane) There is a continuing discussion, there is not a difference of view, because there is not a fundamental view that has been put forward either by this Government, by other coalition partners, or by the United States. Clearly, we want to see Iraqi political leaders emerging, we need to see the creation of an interim Iraqi authority, we posit the UN on one side and perhaps the United States on the other, but I know it to be the view of our Government, and I believe it to be the view of the American Government, that it is the Iraqis themselves who will have to take control. That will have to involve the UN, as the UN was involved in Afghanistan, but it is not a question of Saddam falls, the shooting stops and there is a UN Government moves in the next day, really I do not think that is realistic or sensible.

Sir John Stanley

Minister, there does appear to be a degree of difference of view between the US and the UK Governments as to the speed with which Iraq can be returned to the Iraqis; and that, of course, crystallised almost at once over the question of the responsibility for the running of the port which we have now opened up, with the report that the US Government has entered into a contract with a Seattle-based American company to run the port, whereas the British military, entirely rightly, in my view, were looking very actively at Iraqis to take over the running and management of the port. We heard this morning on the radio that the US have a plan to establish 23 separate government departments, each under the heading of a US military officer, advised by four appointed Iraqis. Do you see a significant difference between the UK and the US as to how quickly Iraq can be returned to the Iraqis, and on this crucial issue of policy towards recreating a civil administration in Iraq is the British Government doing all it can to create a common position with EU Member States?

(Mr MacShane) These discussions are continuing, they are live, I do not think they are definitive, and I do not expect they will be definitive until we see the exact nature of the post-conflict, or post-Saddam, Iraq. The UN is still, through UNMIC, as it were, administering Kosovo, though we have seen elections to a Kosovo Assembly, we have Presidents of Kosovo. The Foreign Secretary in a speech at lunchtime threw up the example of Cambodia, that countries can take literally years to get back to full functionality after they have been brutalised by the kinds of dictatorships of Pol Pot or Saddam Hussein. So I have to say to the Committee that there is not, I think, a finished blueprint that will be applied to Iraq. I read the newspaper report you refer to, I am reading an awful lot of newspaper reports that do not always seem to coincide with documents that go across my desk, and I think really we have to hold off a bit until we see exactly what post-Saddam, post-conflict Iraq is going to be like.

I have to say, I was rather surprised by your answer, in that this particular requirement to recreate civil government in the post-Saddam Hussein regime would be one that would appear to have been self-evident really from the moment the war started, regardless of what state Iraq was in by the end of the war. And I have to say I was somewhat surprised that the thinking amongst the UK Government and with its coalition partners is not further developed. Are you saying that there is no agreed structure, as of now, between the US and the UK, as to the immediate form of civilian government after the war?

(Mr MacShane) No; we are focusing on getting in humanitarian relief, that is the most important thing. We want a transitional administration to co-ordinate civil relief, we want to see obviously payment for public sector salaries. We regard the contribution that Iraqis can make as very important, but I wrote a long-since remaindered book about the immediate post-war German administration, or aspects of it, and I have to say that plans made either in Washington or London, even as late as the spring of 1945, were not the plans ultimately implemented. It was, after all, a British brigadier who dismissed Konrad Adenauer as Mayor of Cologne, because he thought that the future Chancellor of Germany was not up to the job. So really I am not trying to dodge the question, Sir John, I genuinely think that we should focus on getting through the conflict, winning it as quickly and as efficiently as possible, removing Saddam Hussein and offering the Iraqi people themselves, whether it is to begin with under military administration, a transitional administration, and, at what stage the UN comes in, over time the chance to take control fully of their country, its resources, to invite the many millions of Iraqis, 350,000 in the UK alone, in exile to return home, as 1.4 million Afghani citizens have returned home after we removed the Taliban. Let us get rid of Saddam and then let us rebuild Iraq.

The issue of the award of contracts clearly is going to be a substantial financial, and indeed political, issue after the end of the war, and, given it is apparently the clear intention of the British Government that where the Iraqi capability is there the Iraqi capability should be used, and certainly if that is the policy I very much welcome it, is the British Government giving consideration to establishing, if necessary, a British zone within Iraq and an American zone within Iraq, as certainly has been speculated in some areas?

(Mr MacShane) I have not heard of that proposal at all, Sir John.

Mr Olner

I am just wondering, Minister, whether within the United Nations the bloc of Arab countries will be able to offer some specific help to a post-Saddam Iraq?

(Mr MacShane) I think it is a mistake, if I may say so, to lump all Arab countries, or countries populated predominately by Muslims, into one bloc, I think each country is specific, has its own history, its own culture, in the case of Iraq, as we know, its own different communities. I think we should acknowledge the fact that Iraq, until it was brutalised, particularly since 1980, by Saddam's regime, had produced an educated population, a population certainly in which women had many rights, and many of us know Iraqis in exile, Iraqi asylum-seekers in our own constituencies, who are men and women of great professional ability, and who long to return to their country and help rebuild it. So my view would be, we should trust the Iraqis to be in charge of their nation's destiny, and I am not sure advice from any particular Arab or Muslim country - I am trying to think of the geography exactly - north, south, east or west of Iraq, is really relevant.

Will there be anything done specifically to try to encourage Iraqis, who are over here quite legitimately, having fled Saddam's regime, to go back, post-Saddam?

(Mr MacShane) Yes. We have put in hand measures to help and encourage Afghani asylum-seekers to return home. I myself, following a meeting with the leaders of the Kosovan Assembly, put out a statement on their behalf, from the President of the Kosovan Assembly, inviting Kosovan asylum-seekers in the UK to return home, and the Foreign Office has helped with travel documents and other facilities to encourage the return of Kosovans back to their own country.

Chairman

We would like to turn on to enlargement, in a moment, but just one final question under this heading. What role does Her Majesty's Government think the external opposition, the Iraqi opposition, should play in the reconstruction process?

(Mr MacShane) The Iraqi opposition is heterogeneous, I think it is fair to say, and, as I said, within Iraq there are different communities which we know about, there are contacts with them both here and in Washington. I think that we want to see good people from within and without Iraq going back to help rebuild their country, but no-one, to my knowledge, has been awarded, as it were, or granted an exclusive franchise, and it will require a great deal of consultation, in which I hope the UN will be able to play a role, to get this right. But I think we are talking about medium- to long-term developments, not something that is going to happen overnight once the conflict is over.

The Pentagon would favour Mr Chalabi. Do we have views about Mr Chalabi's aspirations?

(Mr MacShane) Mr Chairman, it is not for me to pick names, endorse names, support names.

Sir John Stanley

Minister, as you know, President Bush has talked a great deal about bringing democracy to Iraq, and can you tell us the British Government's position as to the likelihood, the feasibility, of bringing an electoral system to Iraq, and I am referring particularly to some form of multiparty electoral system, which, of course, is a very, very unusual, and indeed largely unknown, concept in that particular part of the world, I have to say, I make an exception for Turkey?

(Mr MacShane) I think you are right to make the exception for Turkey, and there is another small country to the west and north of Iraq, Israel, which has some experience of the matter. But I have always been very nervous when I have heard that certain peoples were not used to or up for democracy, you are not making that point, I know, Sir John, but we have heard it in relation to decolonial struggles, we have heard that countries in East Europe freeing themselves from Communism, without any previous experience of a fully-functioning, liberal democracy, were somehow not really going to be able to have an electoral system such as we know it. And, lo and behold, the human desire for freedom, the wish of men and women to conduct their own affairs, is, I think, genetically programmed into us, and actually I have got far more confidence, especially based on the meetings I have had with Iraqis from all walks of life, that, given the chance, they may surprise us and show that Iraq can take the democratic and peaceful road.

And so can we take it, from that, that the British Government, if it is sought by the Iraqis, will be ready to provide assistance and technical help in how to arrange and run a multiparty election, a full adult franchise for men and women?

(Mr MacShane) The British Government is always willing to put its 700 years of parliamentary experience at the disposal of others, and, through the Westminster Foundation for Democracy, though I do not know of any specific plans, and I am making a serious point here, I would hope, post-conflict, we will be there, ready to help, in exactly the direction you are suggesting, Sir John.

Chairman

Turning now to enlargement, the Copenhagen Council set out the timetable 1 May 2004 for the ten countries, but also had these 'safeguard clauses' to monitor the position of those countries over the interim period, in terms of their budget, economic development, governance, and so on. Could you spell out to the Committee how these safeguard clauses will operate?

(Mr MacShane) It is a continuation of the very strict process that the EU has applied to the ten applicant countries, setting benchmarks, the technical term was 'chapters' that they had to close to show that they had changed their laws, their systems of national administration, their budget procedures, to be in conformity with EU norms. Now, clearly, that process of observation and monitoring will continue, and it is to put everybody on notice that between signing the accession in two weeks' time, passing the referendums to approve succession, and we have already got good results from Malta and Slovenia, and then full membership from May 1 next year, there is not any kind of backsliding. But, if anything, I think the opposite is the case, that the countries I have been in touch with and have been able to visit are very positive that they want to pursue the European road and use European benchmarking and standards as a way of demanding for their internal administration and other political and economic systems continued improvement.

Before turning to Mr Mackinlay and the economic side, may I ask you to look a little more long term. Copenhagen put forward for Romania and Bulgaria the aspiration year of 2007, I think you had said to the Committee before that you thought it would take ten years or more for Turkey to become a member. Since that time, Croatia has now made its application and will have to be accommodated, and possibly other Balkan countries, and there are many more knocking at the door in the future. Some in the Commission are talking of a period of consolidation before seeking to address the problem of new aspirants or candidates; how does the Government respond to that wish for a period of consolidation?

(Mr MacShane) I believe that if Romania and Bulgaria meet the appropriate criteria then accession talks should begin, and we should open the door to them according to the timetable declared, of 2007, if not earlier. I think that the European Union will only strengthen as it grows, and you are right that Croatia has also put forward this ambition. I will be going next week myself to the Balkans, to Belgrade, Pristina and to Sarajevo, and I have been very impressed by the dynamic way that Prime Minister Zivkovic and President Markovic, the Prime Minister of Serbia and the President of the Serbian-Montenegran Union, are driving forward a process of reform, of closing down the most wicked and evil leftovers from the Milosovic regime, following the tragic assassination of Mr Djindjic. So I think Europe does act as a magnet for countries to clean up administrations and to move forward into democratic modernity.

Do you think the Balkan countries should be dealt with as a package, or under differentiation?

(Mr MacShane) They are independent nation states, they are there with seats at the UN, for the most part, and each is an autonomous government and a parliament, and each will have to be treated on its own merits.

Andrew Mackinlay

Many of the applicant countries, or new countries, coming in on 1 May 2004, have got to address their own domestic budgets, particularly their own domestic public expenditure, they have to do that for the longer-term purposes of joining the euro, longer term, but also need to address the cost of accession, meeting the acquis. But I think the view of most observers is that a number of the significant countries have not really even begun to address that in real terms, that because of their domestic political situation, the unpalatable nature of reducing public expenditure, and so on, it is being kicked into touch. What is our read on that?

(Mr MacShane) I am not sure if you are right, Mr Mackinlay. As part of the process of joining the EU, they had to undertake many of these reforms, they all vary in intensity from country to country, but they are all looking to try to get budgets into balance, not to borrow excessively, to control inflation, the normal criteria one wants for a successful functioning market economy. And the European Union, of course, is helping out, they will all be net beneficiaries, each has got a distinct economic profile, which has been taken into consideration in terms of the different forms of aid they will get from the EU, but actually they know what European Union norms are, in terms broadly of economic management, and have to work towards getting there. From my contacts, certainly with Ministers of Finance in Poland, in Hungary, in the Czech Republic, just to take three, I would say that any of them could sit in the Treasury or the Ministries of Finance in Paris or Berlin, and are applying the same criteria and the same thinking that we have in the existing EU Member States.

I am surprised by your response, but, anyway, you have given your response; so you think there is not a problem in respect of the EU membership in the countries you mention, in terms of their public finances?

(Mr MacShane) Not in terms of their public finances. Clearly, there are going to be periods of difficult adjustment, which is why the EU is offering funds to help on those, but every other example of an EU enlargement, countries came in with economic structures that certainly were not on a par with the best in Europe, and in some cases with public finances that were not as rigorous as the best in Europe, but quickly, over five, ten, 15 years, have been, as it were, I am going to use the word 'contaminated', but in a positive sense, by the better example of good European practice to move forward into market economic modernity.

You can pass legislation to fulfil the acquis, but there is a broad difference between legislation on the statute book and it being fulfilled to the spirit and the letter; and, in fairness, that could be true over the existing European Union to an extent, but there are ways of flagging up deficiencies, neglect and, in some exceptional cases, abuses. But are you satisfied that there is in place sufficient machinery, sufficient oversight, perhaps by inspection, or whatever, to ensure that the new countries will be fulfilling in a robust way the commitments they have entered into in a whole range of the chapter areas?

(Mr MacShane) As you said yourself, this is often a complaint made within or about existing EU Member States. I think that there are weaknesses in the application of legal systems in some of these countries, just as there are weaknesses in the application of legal systems in some existing EU Member States. What has impressed me has been the determination of the government representatives I have met to use EU membership, as it were, as a rod over their own backs to move their game fast and high, up to the best EU standards. It will take time, but compared with, say, the 1920s and '30s, when many of these countries were left alone, as it were, to fester with inward-looking problems, now they know that they have to abide by common EU standards. Those apply to the environmental field, to the health and safety field, to the social field, to the economic field, to the labelling field, to the agricultural field, not all of them are perfect, not all of them will be applied as rigorously as one might wish, but, as I say, I think we could visit some existing EU Member States where the implementation of EU law, EU Directives, is not as rigorous and transparent as some of us would wish, and I am not always sure that, in terms of motes and beams, everything that the United Kingdom does is quite perfect.

I agree with you wholeheartedly. A final question I want to ask you, probably not the most important thing in the world, but, I think to our credit, we have indicated that from 2004 we will extend the free mobility of labour provisions to the new countries, and I think that is correct; but implicit in that is reciprocity. I think I am correct in saying that a number of those countries have not put on their statute book, or put in place, the measures to allow free mobility of labour for you or me to go to work in those countries. What is happening about that?

(Mr MacShane) I am sure, Mr Mackinlay, you would be welcome to work anywhere in East Europe. They are all part of the so-called four fundamental freedoms under the Treaty, so they will have to be respected and recognised.

I know, but you miss the point, do you not, because not all European Union countries are extending the facility which the United Kingdom, boldly and correctly, are doing, so it is to our credit; so Germany is not, I think, or it is going to be a period of transition, but we are, and I think it was either implied or agreed that there should be reciprocity for Brits to go to work in these countries?

(Mr MacShane) Brits are already going to work in these countries.

No, but to have a right?

(Mr MacShane) No, British people can already, and under the enlarged EU will have the fundamental Treaty right to work in these countries. You are right to say that a number of countries, you mentioned Germany, want a transitional period, transitional periods for all sorts of reasons of implementation have been the norm in every EU accession since 1973, but by the year 2011 full freedoms will have to operate, and British people will be able to go to work, live, retire, holiday, set themselves up.

Under the provisions of the Treaty; but, as from 1 April 2004, Czechs, Poles, all can come to work here in the United Kingdom, but, as of right, not all the countries have put in arrangements for the UK to go in before the transfer. Am I right, or wrong?

(Mr MacShane) I am advised that it is wholly reciprocal; so if they are able to come and live and work, and whatever rights we grant to them, then British citizens will have reciprocal rights in those countries. That is what I am advised. But I am happy to write to you, Mr Mackinlay, if it is not the case.

Andrew Mackinlay: Okay; thank you.

Chairman

From that date in 2004, there will be employment rights and it is likely that not only computer specialists will come but also there is a danger that, shall I say gently, less-conforming elements may wish also to take advantage of those provisions. What safeguards will remain?

(Mr MacShane) The normal safeguards that exist in any case, which is that people have the right to work but they have to find employment, so you do not get a mass migration from Greece or Portugal of people simply coming to live in Britain without having jobs to go to; so there are various filters that will exist. But the big advantage, of course, is that the very large, if I may put it this way, black market in employment that we have in the UK at the moment of East European citizens will be regularised, and I think this will be a good thing, these people will start paying tax, National Insurance contributions, and the rest of it.

Mr Pope

If I may, I wanted to turn to EU relations with Turkey and Cyprus. As far as Turkey is concerned, the Minister and I are in agreement that it will be a huge prize for the EU to have it within it functioning as a democracy, and we will work closely towards that end. At the Copenhagen Council in December, it was agreed that talks would be opened up with Turkey if it acceded to the Copenhagen criteria by December of next year; since then it has signed a protocol abolishing the death penalty, which I welcome, but there are still widespread concerns about human rights. Do you think it is moving fast enough?

(Mr MacShane) We have had a very clear statement from the new Government that they want to move Turkish laws and the implementation of those laws to meet the normal European standards; really it is up to them, they know the deadlines, they have got till December 2004 to demonstrate to the European Union that discussions over accession can begin. The ball is in their court.

When we last talked about Turkey and Cyprus, you were very optimistic about a united Cyprus joining the EU next year, and I think we all shared that optimism; since then we know that sadly those talks have ended in failure, at the end of February. Is there a danger, if a divided Cyprus enters the European Union next year, that it could veto, or certainly hinder, Turkey's application?

(Mr MacShane) That will have to be considered. I hope not, because, of course, one of the strongest advocates of Turkey turning towards the EU is its neighbour Greece. Certainly, you are right, I was optimistic; those hopes have had to be put on hold. I think that had a united Cyprus entered the European Union under the Kofi Annan proposals, either its President or Foreign Minister would have had to be from the Turkish community in Cyprus, so Turkey would actually have had a Turkish-speaking friend, as it were, in the court, in terms of its own application towards the EU. I think people now reflecting in Ankara may consider that more pressure should have been put on Mr Denktash. Turkey has had to confront the Iraq crisis, a brand-new Government and the Cypriot question, all of which have enormous importance and a high profile in Turkish politics, in a very, very short space of time. I still keep my fingers crossed about Cyprus, but I do regret deeply the fact that Mr Denktash did not seize the opportunity offered to him of the Kofi Annan plan.

And do you think there is any chance then that, in the gap that we have now between where we are now and May of next year, when Cyprus accedes to membership, that the Turkish Government will put further pressure on Mr Denktash to come to an accommodation?

(Mr MacShane) Certainly I hope so; we will continue to make clear to the Turkish Government, in a friendly way, that we believe the entry of a united Cyprus is good for the EU, good for Cyprus, good for Turkey, good for Greece, good for the Eastern Mediterranean. I think that is self-evident.

Chairman: There is a division. It is now ten to five; we will resume at five o'clock.

The Committee suspended from 4.50 pm to 5 pm for a division in the House.

Chairman: Minister, we anticipate there will be only a few more questions before we wind up the proceedings. I know that Mr Pope was towards the end of his questions.

Mr Pope

Just briefly, one of the things we know about the Cypriot application is that it was said, all the way through, that if the unification talks were a failure this would not be a bar on Cyprus joining the EU; that is a very sensible position to take. What I had not realised was that essentially there was no plan B. When we met Javier Solana recently, he was telling the Committee that the EU, for example, had not addressed the issue of whether or not Northern Cypriots would actually be members of the European Union, would they be citizens of the European Union if a divided Cyprus joined. And I wonder if you could say just a word about what kinds of obstacles this presents to the Cypriot application, and what status do you think people who live in the Turkish Republic of Northern Cyprus will have if a divided Cyprus joins?

(Mr MacShane) The EU is very clear that Cyprus, if it passes the referendum, will accede to the European Union as the Republic of Cyprus, which at the moment governs in a legal sense, or in the real sense, the part of the island that is not under Turkish authority. The question of the status of Northern Cypriot citizens will have to be resolved. I think it is a very good point. What we have seen is the very clear wish of those citizens, some 50,000 of which were demonstrating, waving the blue and yellow flag of the European Union, we have not seen such pro-EU demonstrations for some time, and I hope the politics will change and that their elected leaders will understand that it is the obvious wish of the citizens in Northern Cyprus to accede as a united island to the EU. But the actual technical modalities, because there are also a number of people who have come from mainland Turkey to settle as farmers in Northern Cyprus, we are going to have very considerable difficulties, but right now the citizens of the Republic of Cyprus, living under the jurisdiction of the Government in Nicosia, can travel very freely around Europe and to the United Kingdom, so I do not see there being a big problem. Mr Darroch is more of an expert on this than I am and perhaps can add a few details.

Chairman: It is a very important issue.

Mr Pope

If I may just pursue this point about a perceived gap between the politics that there are, I am sure we would all like to see these people in the European Union, and what Mr MacShane calls the technical modalities of it, whether or not they will be able to join the European Union?

(Mr Darroch) There are some issues unresolved, as the Minister says. What will happen when a divided Cyprus joins is that, in effect, the European Union acquis, the body of EU law, though we would like it to apply to the whole of the island, will not apply in that part that is Turkish Cyprus, in the north of Cyprus. There are quite a lot of citizens up there, an increasing number, you will find, who are acquiring Greek passports, and I think Greek embassies around the world have a policy of giving passports to Turkish Cypriots who bid for them. If you have a Greek passport then you will have the same freedom of movement provisions around the European Union as the Greek citizen has; if you have a Turkish Cypriot travel document, or a Turkish passport, a Turkish Cypriot document is not really recognised, a Turkish passport will be treated as if you are Turkish, so you will not have the same freedom of movement provisions. If you look at the text of the Copenhagen European Council Conclusions and some of the stuff since then, there are proposals that EU assistance should somehow be extended to the north, there should be some EU programmes going on there, and also there should be trade between the north of Cyprus and the rest of the EU, but we have to work out all the details of how that can happen. First of all, whether the "Government" in Northern Cyprus will allow EU money to be spent there, under what sorts of conditions they would set, if any; and second, if you are going to have trade with enterprises, or farms, or whatever, in Northern Cyprus, how they mark their produce and whether that marking is accepted in the rest of the EU. All this stuff needs to be worked out, and it is quite complicated, and politically sensitive as well as technical.

If I can ask just one more brief technical point, which is about the acquis communitaire, and whether or not it will apply only to the Republic of Cyprus, or whether it would actually apply to the whole of Cyprus but be suspended for Northern Cyprus? I think there is a difference between not applying at all and applying with the existing Cyprus.

(Mr Darroch) We may need to write to you, if I have got this wrong, but I think technically and legally it applies to the whole of the island but is suspended in the north. But if I am wrong on that, we will have to write to you.

Mr Hamilton

Just a very brief follow-up to Mr Pope's points and your responses on Cyprus. You alluded to the 50,000, or so, I think it was even more than that, who demonstrated on the streets recently in Northern Cyprus. I wish we had that sort of percentage turnout in our elections, because that is most of the population, as I understand it, who said, "We want to be part of Europe, and we don't agree with our supposed ruler, Mr Denktash, and the view that he's taken." Do you think, apart from the fact it is a great tragedy, that there is anything that we can do by putting pressure not necessarily on Mr Denktash but on the people who have huge influence over him, that is the Turkish military and the Turkish Government, especially the Government now of Mr Erdogan, who has finally taken his rightful place as Prime Minister in Turkey? Is there anything we can do, to say, "Please, please, just persuade him either to step down or at least to come to some sort of agreement," because it would be an enormous tragedy, as well as a legal complication, if those people in Northern Cyprus did not have the same rights and responsibilities of European citizens that the rest of Cyprus will have?

(Mr MacShane) I agree with you, Mr Hamilton, these points have been made over time to the Turkish Government, they have been reinforced with the new Turkish Government, headed by Mr Erdogan, but we know, alas, Mr Denktash's response.

Chairman

Mr MacShane, one final question on Cyprus, before I turn to Mr Mackinlay, that this Committee is on record as favouring Turkish entry; the Copenhagen Council said there was the hurdle of Turkey fulfilling the political criteria before negotiations could start in the autumn of next year. Is there another potential hurdle, and is it feasible that negotiations with Turkey could start when Turkish forces are in illegal occupation of an EU country?

(Mr MacShane) I think that that issue will have to be part of the discussion over the next months, leading up to the report that will have to be made to the European Council in December 2004. At the time the decisions were taken, people were hopeful, of course, that the Annan plans would be accepted. I remain, if not optimistic, very clear in my own mind that it is so self-evidently in the interests of the people of Northern Cyprus, and so self-evidently in the interests of Ankara, that between now and the accession date of 1 April a resolution is found on this, and that the presence of Turkish troops, as presently constituted, because under the Annan proposals Turkey remains a guarantor power, and of course would have had a military security presence in a united Cyprus, those issues will be addressed.

They had better be addressed fairly speedily?

(Mr MacShane) Sometimes diplomacy, it seems to me, marches at a snail's pace, and sometimes it is so fast you barely know it is happening.

Chairman: On behalf of the Committee, may I thank you most warmly. You have answered all our questions when you could, but clearly some of them cannot be answered at this stage. Thank you, and Mr Darroch too.