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(1B)   The Secretary of State shall lay before Parliament a report every six months on the effect of any regulations made on the free movement of workers under this section until the end of the seven year transitional period.'.

The Chairman: With this it will be convenient to discuss the following: Amendment No. 2, in page 2, line 18, leave out 'or transitional'.

Amendment No. 1, in page 2, line 18, after 'supplementary', insert 'and'.

Clause stand part.

Mr. Brady: As we come to consider the part of the Bill dealing with the free movement of workers, one of the unintended aspects of free movement of workers applies to the Conservative Benches: my hon. Friend the Member for Vale of York (Miss McIntosh), who was to have dealt with the amendment, has to be in another Committee shortly, so I am moving into her shoes—an unwise thought, perhaps.

Clause 2 and the amendment tabled by the Opposition Front-Bench team, No. 9, relate to an important aspect of the Bill and some of the implications of membership. It is particularly important because of the recent history of the accession of new member states to the EU. Clause 2 represents a welcome acceptance by the Government that their projections of the consequences of the free movement of workers from the accession countries last year were wrong by a significant factor. Whereas they suggested that only a few thousand workers would come to the UK following accession, some 277,000 workers have come under the registration scheme. I accept that that process has gone smoothly and there have been no particular difficulties.

It is interesting that the Government none the less saw the importance of putting the measures in place in clause 2. As was alluded to by a number of hon. Members, including the hon. Member for Caerphilly (Mr. David) and Opposition Members, the two accession countries that we are considering today are quite different from
 
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many of those that came into the EU last year. The difference in economic strength is much more profound. The provisions that the Government are putting in place and the powers they are seeking to take to control the free movement of workers in that context are wise. It is inevitably possible that, given the marked difference in income between Romania and Bulgaria and the existing member states, especially some of the wealthier member states such as the United Kingdom, there could be significant pressure of migration. It is sensible that the Government should take a precautionary approach regarding the free movement of workers.

That is particularly important in view of the geographical perspective provided by my hon. Friend the Member for Hammersmith and Fulham (Mr. Hands), relating to the routes into Europe that the new accession countries constitute both for people trafficking and for the drugs trade. Bulgaria is known to be a major transit country for illegal drugs, as well as a producer country. It is important and appropriate that the measures should be taken.

The Government have, however, not yet enlightened the Committee about the outcome of their assessment or analysis, whether they anticipate using the powers in clause 2, and whether they envisage instituting any major control for a transitional period, making use of the available derogations to prevent significant unforeseen movement of people into the United Kingdom. That is why my hon. Friends and I have tabled amendment No. 9, which seeks to introduce some transparency to the process. It would require the Government to lay before Parliament no later than four months before the date of accession a report on the Government's assessment of the effect of the free movement of workers from the acceding states, and it would also require subsequent reports on the actual effect of such movements of workers.

As I have said, given the marked difference between the predictions about the previous 10 accession countries and the actual number of migrants who have come to the United Kingdom, it seems important and appropriate that the Government should publish a frank and detailed assessment of what they anticipate will happen and provide this House with regular, detailed updates as the accessions move forwards.

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): The hon. Member for Altrincham and Sale, West (Mr. Brady) has rightly described clause 2 as the provision that will regulate the migration of workers from Romania and Bulgaria to the United Kingdom.

Many negative things have been said about migration. One does not need to look very far in the tabloid newspapers to see migrants being made the butt of nationalism, jingoism and, from time to time, racism. That is not peculiar to the United Kingdom, although our tabloids might be a little bit more energetic than others in generating public heat on the issue. From time to time, political parties are tempted to crawl down that path. We saw that at the recent general election, when more than one political party referred to immigration—they probably regret having done so.

When my right hon. Friend the Minister for Europe interprets clause 2, he should consider "provision" in a positive context. The tabloids, to which I have already
 
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referred, say that immigration sometimes has to happen and that it is generally negative because we do not want to change our way of life. I do not know what our way of life is in the United Kingdom, and I do not exactly know what our way of life is in Europe. Our way of life is internationalised and we operate in a global world. The movement of people is one of the key features of a global economy and an internationalised society, which is not something new—if one reads biblical history, there were lots of movements of people in the period before Christ. If one considers the history of the United States and Canada in the 19th century in particular, there were massive movements of people. From time to time, people have moved into EU countries. In the 1960s, Turkish immigrants into Germany specifically serviced the up-and-coming light engineering industries. In this country, especially in the 1950s and 1960s, we experienced waves of immigration from the Caribbean and elsewhere, again to meet our particular labour needs.

We live in a different world in which the migration of people is not an exception—it is the norm—and people will continue to move more and more. In this country, highly skilled people who are looking for a better opportunity might go to work elsewhere in the EU or the United States. Why should we be different from people from developing countries or people from countries that used to be part of the Soviet Union and that have acceded or will accede to the EU?

I suspect that we will see ever-increasing migration. It used to be said that the catering industry in London was full of people from all around the world, and particularly from some of the eastern European countries, but that is now true throughout the whole of the United Kingdom. In Scotland and the north-east of England, where I travel fairly regularly, many eastern European people are working in the catering industry.

In what I call the direct works industry—house maintenance and, to some extent, house building—there is an ever-increasing need to use skilled labour from eastern European countries. An arm's length management organisation runs council housing in Newcastle, and a programme has been agreed between the local authority, which sadly we do not control any more, and central Government.

Sir Menzies Campbell: Why is that?

Mr. Henderson: My right hon. and learned Friend and I agree on many things, but not on that.

The ALMO cannot meet the targets laid down by central Government because of a shortage of labour. We still have some unemployment on Tyneside, although it is less than half what it was in 1997, but we do not have an adequate supply of skilled labour or people who are prepared to train to take up those skills. In the case of the ALMO in Newcastle, we need to train local people as best we can, but we should not be embarrassed if we fail to train sufficient numbers and must look elsewhere to find skilled labour. We can all provide examples from our constituencies of that pattern, which arises across Europe. Germany is now a honey pot for immigrants from a much wider area than Turkey, and the
 
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Scandinavian countries and Ireland now contain a large proportion of immigrants, who are meeting vital labour shortages.

When I ask the Government to be positive in their interpretation of clause 2, my central point is that migration has changed the nature of our economy in the same way as Mexican migrants have changed the American economy. When I studied economics a very long time ago, we referred to overheating in the south and the lack of heat in the north—the main reason why we had to adopt deflationary policies was that the south overheated when the necessary labour was not available. Labour demand shot up wage rates, which had a detrimental effect on the whole economy.

Migration has enabled a number of countries, including our own, Scandinavian countries and Ireland, to maintain a high level of aggregate demand and to continue to have growth without having wage inflation. Jobs have been filled by people from other parts of Europe, particularly. That is the same pattern throughout the developed world. In that context, migration has been a positive factor in the UK economy. It has not been a negative factor for those who have been left, for instance, in Moldova, Romania or Bulgaria. People working here have been remitting funds to their own countries. That has helped to raise living standards in those countries. Statistics show that more than 40 per cent. of Moldova's GNP is the result of remittances from countries in the EU. That is positive for everyone.


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