The Minister for Europe (Mr. Jim Murphy): I beg to move,

I am delighted to serve under your chairmanship for the next hour and a half, Mr. Pope, and I look forward to the debate on this important issue. I am pleased to introduce the order that will enlarge the European economic area to include Bulgaria and Romania. The Committee will be aware that the Government put in a tremendous effort to ensure that Bulgaria and Romania were able to join the European Union as scheduled on 1 January 2007. The order is a formal step towards delivering the benefits of enlargement. The UK can rightly be proud of the major part that it has played to ensure that the conditions for EU enlargement were right. The Government will continue to promote and support reform in Bulgaria and Romania and to help those countries to fulfil their potential. Both countries are now important partners in tackling global challenges, such as climate change, globalisation and security.

The subject of the order is the agreement signed in Brussels on 25 July 2007, together with four protocols —the protocols are not, of course, subject to the order—that allow the participation of Bulgaria and Romania in the EEA. The EEA allows Iceland, Norway and Liechtenstein to participate in the EU internal market, which benefits them and us in trade and the free movement of people. It is important to bring the EEA agreement in line with an expanded EU, to create a single market that embraces Bulgaria and Romania, as well as Iceland, Norway and Liechtenstein. The single market will encompass 30 countries with a population of almost 500 million citizens.

Under the EEA enlargement agreement, Iceland, Norway and Liechtenstein will make a valuable financial contribution to economic and social reform in Bulgaria and Romania. Negotiations on the contributions to be made by the EEA states were the primary reason for the delay in the entry of Bulgaria and Romania, which should have taken place on 1 January—the date of their EU accession.

Under the agreement and the four associated protocols, Iceland, Norway and Liechtenstein will contribute ƒ,ª72 million from 1 January 2007 to 30 April 2009, to alleviate social and economic disparities in the enlarged EEA. Norway will also contribute ƒ,ª68 million as an additional bilateral financial contribution in the same period. In addition, the Community has signed two supplementary agreements with Norway and Iceland respectively that govern additional market access commitments for certain fish products from Romania and Bulgaria to the Community until 30 April 2009, to take account of the addition of those countries to the single market.

The measure is positive for the UK. It will ensure effective free trade between European partners. The agreement is welcome: it supplements part of the EU enlargement process, thus ensuring that the full benefits are available to Bulgaria and Romania, and I hope that the Committee will agree to it.

Mr. Mark Francois (Rayleigh) (Con): It is a pleasure to serve under your chairmanship this afternoon, Mr. Pope, and I am sure that you will keep us in good order as we debate the European Communities agreement on the enlargement of the EEA.

It is also a pleasure to discuss these matters with the Minister for Europe. He might recall the last time that we debated an order in Committee, and I can assure him that there will be no repeat this afternoon of questions about why the EU was seeking a naval co-operation agreement with land-locked countries. Other members of the Committee may not understand that, but the Minister will, and I am sure that he will be relieved that I will not ask such questions today.

May I also take this opportunity to express my thanks to the Minister for a recent courtesy? I was due to debate a matter with the Minister in Westminster Hall last month, but it clashed with the homecoming parade in Norwich by the 1st Battalion the Royal Anglian Regiment, following its successful tour in Afghanistan. In the event, my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) generously covered for me. However, I had tipped the Minister off in advance about the change, and he was kind enough to place on record the reasons for my absence and, much more importantly, to say some kind things about my local regiment. I therefore want to take this opportunity to thank him on the record for his courtesy, which was appreciated, and I particularly want to do so before we start taking lumps out of each other over the revived EU constitution early next year. I am, however, genuinely grateful to him, and I want to record that fact.

Let me turn, however, to the matter in hand. The order will give parliamentary approval to an agreement on the enlargement of the European economic area. Specifically, the agreement, which the order ratifies, alters the EEA’s arrangements to take account of the recent accession of Bulgaria and Romania into the enlarged EU. As paragraph 4 of the explanatory memorandum notes under the heading “Legislative Background”,

I think that I am safe in saying that this is not the most controversial treaty on European matters that is likely to come before the House in the next few months, and I can assure the Minister that I will not be calling for a referendum on it. Nevertheless, it would not be right to let it go through without at least a few questions to him, and I hope that he will be able to address the four points that I am about to make.

The first question concerns the timing of this debate. I understand why the Government want the order to go through, and we are not opposed to it in principle. I also understand, however, that the European Scrutiny Committee examined the order and the associated agreement only about two weeks ago and that its report on them has therefore not yet been published. When Europe-related orders are debated, the members of the relevant Committee usually have the benefit of the ESC’s thoughts on the matter. Given the Government’s professed desire to improve the scrutiny of European documents in the House, will the Minister explain what has transpired in this case and why are we being asked to debate the order without the benefit of the ESC’s opinion, which the Committee would have welcomed if it had been available?

Secondly, there is the timing of the agreement. As the explanatory memorandum states, the financial contributions and market access concessions that the agreement allows relate to the period from 1 January 2007 to 30 April 2009. As a result of negotiating delays, the agreement was not concluded until after it was due to come into force, so we are, in effect, being asked to approve it retrospectively. Have any payments been made to date—particularly by the Norwegians, who are the major contributors under the agreement—or has no money changed hands?

Thirdly, this new agreement is already due to expire on 30 April 2009—less than a year and a half from now, and unless the Minister has some big announcement to make, I take it that that will not represent the end of such agreements. Given the strength of feeling in Norway about the amount that it must pay, which is partly why the negotiations took so long, will the Minister explain whether the Government think that Norway’s current payments are equitable and what a fair amount would be in future, assuming that the agreement is renewed from 2009?

Fourthly, there are the payments to Bulgaria and Romania. The agreements on co-operation between Norway and Bulgaria and Norway and Romania are intended to promote several different policies—notably, on sustainable development, a reduction in greenhouse gases, technology transfers and co-operation on research and development. A strong environmental theme therefore runs throughout the agreements, and I suspect that the Committee welcomes that in principle. The EEA grant status report of May 2007, which is published by the Norwegian financial mechanism office, states that, consequent to the first EU enlargement in 2004, ƒ,ª640 million has been spent already in countries ranging from Cyprus to Estonia and Slovenia. The projected next portion of ƒ,ª68 million will be spent in Bulgaria and Romania. Have specific projects, rather than broad headings, been agreed? If so, how will the money be spent and how will the projects’ success be evaluated? Will that be done by the Norwegian financial mechanism office or by some other body, and if so, which one?

We are not opposed to the agreement or the order. However, if this represents a treaty, I should be grateful if the Minister answered some of my questions about it before we let it through. First, why is it being debated today without the benefit of advice from the European Scrutiny Committee? Secondly, with regard to timing, have payments already been made before formal ratification of the agreement? Thirdly, what does he anticipate will happen at the end of the agreement in April 2009? Lastly, if it is hoped that the agreement will promote sustainable economic growth in Bulgaria and Romania, have specific projects been agreed to that end, and how will their success be evaluated? I look forward to hearing his reply.

Mr. Michael Fallon (Sevenoaks) (Con): I add one more question to the excellent list that my hon. Friend the Member for Rayleigh has put the Minister to work on. If the market access concessions are being made by the whole Community to Norway in return for its increased financial contribution, to what extent will the concessions impact on UK fisheries? Are all of us making them? Will they include our own fisheries, which are usually most affected by developments in Norway and Iceland?

Willie Rennie (Dunfermline and West Fife) (LD): I have one additional question. Have any lessons been learned from the negotiations between Norway and the other countries about why they were delayed, so that future accessions are not similarly delayed?

Mr. Murphy: I thank hon. Members for what I think was a warm welcome in principle for the treaty, and I thank the hon. Member for Rayleigh for his kind words at the start. He is right to pay tribute to the 1st Battalion the Royal Anglian Regiment. The Prime Minister is in Afghanistan today paying tribute to all our armed forces and the civilian volunteers who are doing such a remarkable job there. If it is any comfort to the hon. Gentleman, the hon. Member for Cotswold (Mr. Clifton-Brown) did a sterling job filling in during our debate.

A number of relatively technical questions have been asked, as is to be expected on such matters. On the timing, the order is not controversial and has strong cross-party support. The Government feel that it is appropriate to ratify the treaty on the basis that it has such strong cross-party support and is without contention. Of course we will consider the details of the European Scrutiny Committee’s report. If, in time, the Select Committee on Foreign Affairs wishes to shine its light on the issue, we will consider that as well. There will be ample opportunity to include the European Scrutiny Committee’s report in the re-negotiations. As the hon. Member for Rayleigh said, the treaty will conclude in 2009. Discussions on the new treaty will start next year. As is the way of such things, we are almost beginning the conversation about a successor treaty before we have even ratified the current one.

On the specifics about money, as I said, the plan is that, by 30 April 2009, Iceland, Norway and Liechtenstein will have contributed ƒ,ª72 million under the agreement. Norway will also contribute an extra ƒ,ª68 million on top of that. As for whether that is a fair amount, the Government have made no assessment of what would be fair in an agreement between the Norwegian Government and other international partners, particularly Bulgaria and Romania. However, they have come to such an arrangement, and on that basis, we have to respect it.

I was asked when the treaty will come into effect. That will happen when all 27 member states of the European Union have ratified it, and we are not quite there yet. However, the process of negotiation on the successor treaty will start next year.

The hon. Gentleman was right to draw attention to the considerable importance of environmental projects in Bulgaria and Romania. Without going into details about the dynamics of competition—both countries face an environmental challenge—it is often repeated by civil society that, having freed themselves from the tyranny of communism, both countries are rightly expected to match the environmental norms of the more economically developed societies. We have to convince Bulgaria and Romania—the order is part of that process—that the economic advancement of both countries should not and must not happen at the expense of the EU’s collective environment. It is about renewables and how nuclear matters are dealt with. The general targets set by the EU and the Commission, too, are part of a wider consideration, as are environmental projects.

I understand that there will be will be an external assessment process, but I shall correct the record if I am wrong. Quite rightly, the European Commission will be involved to ensure that investment is used for the proper purpose and has the proper outcome.

On fishing, the UK Government remain committed to free trade and would like all forms of tariff quotas to be removed. The hon. Member for Sevenoaks will be aware that such issues have been dealt with in the context of the World Trade Organisation discussions. We are working closely with the British fishing industry on that and other issues, as part of the WTO discussions, to ensure that our industry can compete in the global market and that it has the opportunity to thrive. Specific issues within the agreement deal with such matters as the shrimp market, and I could go into more detail if members of the Committee wish to have their patience tested. However, that is an important part of the competition matters under the treaty.

The Norwegian and Icelandic Governments and the authorities in Lichtenstein will have their own reflections on the lessons that have been learned, but I have several: to start a bit earlier, to set a realistic timetable for delivery and to have a better understanding of one another’s priorities at the commencement of such conversations, rather than making assumptions. Those are the sorts of lessons that should be learned.

Mr. Francois: In fairness, the Minister has answered most of my questions, but I wish to follow up on a point made by my hon. Friend the Member for Sevenoaks. I understand that the Norwegians already have access to EU waters to fish. Have payments been made under the agreement, which was meant to come into force on 1 January? It is now nearly a year on. Has any money been paid by Norway—yes or no?

Mr. Murphy: The hon. Gentleman is right to say that I have not responded to that point. If he does not mind, I will do so in writing. He knows that I do not enjoy doing that, but I hope that he accepts that that is my intention.

On the interface of our relations with Bulgaria and Romania in respect of the EEA and the European Union generally, it is important to place on the record once more for the Committee and for the whole House that we celebrate—I think that this is on a cross-party basis—the accession of Bulgaria and Romania to the European Union. Closer union with those two countries will provide a great opportunity for them and for us. However, it is also important that we continue to make strong representations to both countries on areas in which they need to continue reform, whether in their markets on human rights or in civic society. That is why it has been important in the past few weeks in particular that we have made representations about further reform in, for example, the care of children in Bulgaria. That is part of the continuing strong friendship, based on honest assessment and the determination to achieve further reform in Bulgaria and Romania, that is part of our ongoing relationship with both countries.

Having made those comments, given those responses and offered to enter into one brief piece of written correspondence with the hon. Members for Rayleigh and for Sevenoaks, I thank you, Mr. Pope, and all members of the Committee for their interest in this very important matter.

Question put and agreed to.

Resolved,

Committee rose at nine minutes to Five o’clock .