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Lord Pearson of Rannoch: My Lords, perhaps I may put a brief question to the noble Lord, Lord Wallace, who chaired the committee. During your Lordships' previous debate on enlargement I pointed out that there is a strong and growing strand of opinion which says that enlargement is not a good thing at all and is not in the interests of the applicant countries. I mentioned this 1998 publication from the Centre for Research into Post-Communist Economies, A coming Home--or poisoned chalice? After that debate I handed the publication to the noble Lord. I subsequently received a letter from the Clerk to the Committee assuring me that the next time enlargement was discussed in your Lordships' Select Committee that this publication would be considered by it. I want to ask the noble Lord whether or not that consideration took place?

Lord Wallace of Saltaire: My Lords, it did not fall within the bounds of my own sub-committee to discuss the broader issues. Several sub-committees of the European Committee have discussed enlargement. It is a strategic matter which this House might like to take on board. Personally, I disagreed with the

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argument in the pamphlet. That is only a personal opinion. The noble Lord may wish to press for a debate to take the matter further.

2.12 p.m.

Baroness Harris of Richmond: My Lords, I begin with an apology. I must be in Richmond this evening and have to travel on the East Coast Main Line which is still not fully opened following the Selby rail crash. I may have to leave your Lordships' House before the end of the debate. I apologise in advance should that happen and assure noble Lords that I shall read very closely in Hansard the rest of the debate.

My contribution to the debate will focus mainly on the area of international organised crime and the challenges of combating it which will be faced by the new member states. I do so from a perspective I gained as a former member of the National Crime Squad Service Authority and from some of the impact I know we might suffer more locally--I chair the North Yorkshire Police Authority--should the policing of the new borders not be rigorous enough.

As the background to the report states:

    "One of the fundamental elements of the Convention is the principle that the open internal borders of the Schengen zone require in compensation strictly controlled external frontiers".

Indeed, on page 10 of the minutes of evidence, Mrs Lesley Pallett, Head of the EU and International Unit, Organised and International Crime Directorate, Home Office, said:

    "It is essential, for the effective fight against organised crime and illegal drugs, as well as immigration controls, that the new enlarged EU has effective frontier controls".

Police, drug control and judicial co-operation are only those elements of the acquis in which the UK wishes to participate. But the applicant states, we were told, must comply with all the requirements of the Schengen acquis. No "opt out" will be possible for them.

In his Working Document W112 for the WWR Scientific Council for Government Policy, Professor Jorg Monar, who was our specialist adviser on the inquiry, recognised the difficulties with which the applicant countries would be faced because of the need for them to integrate into the AFSJ with the incorporation of Schengen. He said:

    "Because of the advanced state of development of the Schengen acquis, and its provisions on matters of justice and home affairs, where the applicant countries have particular deficits (such as external border controls) the incorporation of Schengen has added a particularly high new hurdle for the applicant countries. The second consequence, now that Schengen countries can develop their acquis further within the legal and institutional context of the EU, is that any measures they adopt, building on the incorporated Schengen acquis, become automatically part of the EU acquis. The applicant countries have to accept this extended acquis. This 'addition' to Schengen is likely to grow considerably over the next few years as the new EC and EU instruments and the ambitious objectives within the context of the ASJ, provide the Schengen countries with additional incentives to deepen their system. This, too, will add to the demands of the applicant countries".

During our inquiry, we were told that much had been achieved by the applicant countries and much help had been given to them. For example, Mrs Pallett told us of a project in Poland that is dealing with the

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teaching of community policing and which the Dutch and British are overseeing. As we heard from my noble friend Lord Wallace of Saltaire, the European Commission's PHARE programme has given over 100 million euros to improve and upgrade the Polish eastern border. The Commission's Twinning programme, which focuses on training the police services and border management, has also made a significant contribution to the applicant countries. But it is to the areas of police work and resources that I now wish to turn.

In his evidence to us, Mr Neil Bailey, Director of the International Policy Unit of the National Criminal Intelligence Service, spoke of the vital role played by liaison officers, both on a bilateral and multinational front, in helping the applicant countries reach the required levels of Schengen. He referred to them as "diplomats" and the United Kingdom saw them as primarily intelligence gatherers, although this was not necessarily so in other countries. There they may be seen as "facilitators for legal process documents"--a very different concept of their work. In the UK the liaison officer's role went only as far as the point where arrests and seizures were made in this country.

I was particularly grateful for a conversation I had with a drugs liaison officer--perhaps the same one to whom my noble friend Lord Wallace referred--who made some very important points. The first was that he felt there needed to be better co-ordination of drugs strategy. Some applicant countries perhaps had not recognised until recently the importance attached to drug smuggling.

While many improvements were being made, however, there was neither sufficient funding nor knowledge to address this area adequately and governments needed to recognise that. Structures in police forces varied enormously, and were changing, but there was a great need to identify priority areas and distinguish between low level criminality and organised criminality, and adopt methodology to tackle these issues.

There may be a problem accepting intelligence-led policing, which deals with serious and organised crime, drug smuggling and money laundering, because of the perception of its "sinister overtones". This is a real problem and can be tackled only by working away in a multi-agency approach, using co-operation and sharing expertise in law enforcement matters, which will begin to give applicant countries confidence in these new systems and tools of police work.

I was told that the police have a poor image, perhaps not surprisingly understanding their past connections. They are still seen as being corrupt and ineffective, but it is to be hoped that the work being done on community policing, to which I referred earlier, will produce major change in time. Generally, the police are badly paid and that is a sure recipe for corruption. When we spoke to the Polish Minister about that, he told us that many professions were poorly paid, which I rather felt missed the point about the temptation which could be put before police officers in their unique role.

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It was apparent that leadership at all levels of policing was vitally important. Many officers were in charge of policing under the old regimes and needed excellent training to help them move to the new order. In his working document, Professor Monar tells us that,

    "Further structural problems include a shortage of experienced senior officers, due to the dismissal of officers with a questionable political past and major recruitment problems because of relatively low salaries and the better pay in private security services. In many cases effective coordination structures with other institutions involved in the fight against organised crime and money-laundering, such as the ministries of finance and the border guards, are still missing".

I shall turn now to resources. It is vital that we support our liaison officers, who are doing a quite magnificent job helping the applicants to reach their required standards. In order to do that, I shall illustrate the difficulties under which they labour. In the Minutes of Evidence, Neil Bailey tells us that,

    "If the number of member states goes up to 20, the cost of Europol will need to go up because Europol will need to be bigger so it will cost us more. At the same time, because there are more countries contributing, our actual cash contribution may not be that much greater. We may find that we are having increasing requests to assist in the applicant countries during the build-up to accession and the difficulty with that is, although on the one hand the EU will give us the money back to send people to help, the problem for me is that if I send two officers to one of the applicant countries for six months I have two empty desks back in London and work which I should be doing I cannot do".

Currently, 17 NCIS liaison officers are drawn from the police service and HM Customs and Excise, with more posts approved if funding can be found. At present, NCIS is funded principally through levies placed on local police authorities and other partner agencies, although I know that the Government have plans to change this. At times it is difficult for local police authorities to see the benefit derived from funding such complex work, but an illustration of this would be that, during the past financial year, the NCIS drugs liaison officer network contributed to the seizure of drugs with an estimated street value of £270 million. Some 443 people were arrested; 88 major disruptions of criminal organisations took place; and 43 controlled deliveries of drugs were requested or offered by UK law enforcement officers through the DLO network. Furthermore, during 1999-2000, the DLO network was responsible for 32.1 per cent of arrests attributable to the organisation. That is an excellent record which I hope illustrates the effectiveness of the liaison officers' work. It is not difficult to imagine what impact those drugs and criminals would have had on the streets of our local cities, towns and villages had they not been apprehended through the intelligence system.

How much harder it will be for the applicant countries to come up to this level of performance. So I believe that we must have a commitment to employ, train and equip their police to work co-operatively with other border agencies, border guards and customs. As we have heard, massive funding is still required to upgrade eastern borders.

If we have not provided good training, equipment and a commitment to high standards, as well as consistency in applications and procedures to comply

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with the EU acquis, we can expect to see real problems in the future. We know that applicant countries are eager to join the EU, but in order to do so smoothly and with confidence they will also need our support. They will need it in the areas of cross-border surveillance operations, hot pursuit, better data protection systems, better judicial and legislative systems, better crime management and very much more training in multi-agency working.

I shall end on a final quotation, again from Neil Bailey. He stated that:

    "There is a willingness to do it because in the applicant countries there is a great enthusiasm for joining the EU, not just at the political level but we notice it at the level we deal with, the law enforcement level. There is a tremendous enthusiasm. Once you actually explain to people the processes that we go through, they can see the benefits and they go back enthused with the idea. The problem for them is that they have to have resources to implement the idea and that is sometimes more difficult".

2.25 p.m.

Lord Watson of Richmond: My Lords, I, too, welcome the opportunity to discuss this important subject. I congratulate my noble friend Lord Wallace on what he said in opening up the real dimension of this issue.

I notice that the noble Lord, Lord Pearson of Rannoch, who made an earlier contribution, is no longer in his place. In her closing remarks my noble friend Lady Harris spoke of the great enthusiasm of people in eastern Europe for enlargement and of the way in which, despite enormous economic difficulties and challenges--and, in many cases, real economic cost--these people are in no way confused by the choice between the lack of democracy that they had previously and the chance fully to grasp and solidify the opportunity that they now have. To greet the enthusiasm and the genuine determination of the peoples of eastern Europe to join a European Union of not only frontiers but of values by talking about a "poisoned chalice", is not only ungenerous but unwise.

It is very important that our attitude towards applicant states in dealing, for example, with the problem of frontiers, should be as generous as possible. We should show a real and warm welcome to the applicant states in the enlargement of the European Union.

In that regard, I have been struck on a number of occasions, both while travelling in eastern and central Europe and on talking to representatives of the applicant states' governments in the United Kingdom, by the very clear recognition that they all offer; that is, that in this regard Her Majesty's Government have been absolutely consistent in their support for enlargement. Of all the current member states, their clear advocacy and steadfastness on this issue is very much appreciated, understood and welcomed by the applicant states. It is important that we do not see eastern and central Europe as a poisoned chalice, but as a tremendous obligation and as an opportunity, both for them and for us.

The dimensions of what we are talking about are dramatically expressed in the first paragraph of the introductory chapter to the report:

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    "With the next enlargement the European Union's external frontiers will move to the east. The Central and Eastern European candidate countries will take over tasks hitherto mainly fulfilled by Germany and Austria, becoming responsible for controlling thousands of miles of the EU's new land frontiers ... They will also become responsible for controlling long sea frontiers, in the Baltic and the Black Sea".

I shall say something about that in a moment.

    "The new Member States will thus assume a central role in securing the frontiers of the European Union's 'area of freedom, security and justice'--

a union of values, not only of frontiers--

    "especially as regards its protection against illegal immigration and international organised crime".

The Government's response to paragraph 75 of the report is very important. It suggests, quite rightly in my view, that some of the problems are not speculative but all too real. It states:

    "There are currently several points of challenge en route into the EU through Central and Eastern Europe. When the candidate countries join the EU, there will effectively be only one: the frontier control into the candidate country itself".

That is the extent of the challenge involved. That is why it is so important, when we come to the resources being made available, that we understand the danger of a paucity of response on our side.

We are looking at an extraordinary venture of European architecture; that is, the building of the new European home. That phrase came, of course, from Mr Gorbachev.

It is important to understand what is really involved here. We have the construction, in effect, of Schengen standard external frontiers, which are the absolutely necessary quid pro quo of the internal openness of the frontiers of the European Union. So the fundamental architecture must be of sophisticated, strong and dependable external frontiers--not frontiers of a fortress, but frontiers that are dependable in terms of drugs, human trafficking and the other issues--so that we may have the internal exchange within the European Union that is of such enormous importance to the motor of all our economies.

It is a huge economic challenge for the applicant states to match the technology--if you like, the state of the art--of Schengen-type external controls. I hope that I have read the figures in the report correctly, but I understand that under the PHARE programme Poland will receive something like l5 million to 20 million euros to help it during this transitional period. The Poles themselves calculate the actual cost to be somewhere between 400 million and 500 million euros. So the actual amount of assistance, certainly on a multi-lateral basis, is really tiny.

For good reasons, the report focuses on the Luxembourg Six. It does not really say much about the later wave of applicant countries. I should declare an interest here in that I am a member of the so-called "high level group" helping with some of the transitional problems in Romania, which is jointly chaired by the Romanian Prime Minister and my noble friend Lady Nicholson. Three days ago in the Palace of Westminster we enjoyed a visit from the present Foreign Minister of Romania, Mircea

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Geoana. During a meeting that took place upstairs, which I thought was quite dramatic in its own way, he said that Romania's eastern border--and, therefore, second wave--will be the longest with the East from the European Union after Finland. It is in fact longer than Poland's: it is 1,200 kilometres in length and will include the substantial coastline of the Black Sea.

We have talked a little about the problems of Poland in dealing with its external frontier. Let us just imagine what the problem will be for Romania. It is important to start now rather than later in terms of helping Romania. I do not mean that we should revert to the primitive borders that descended across Europe comprising barbed wire, watch towers and all the rest of the ghastly paraphernalia; we are talking about a quite different technology of frontier maintenance under Schengen with very high levels of information technology, mobile units, risk profiling, testing, and so on, all of which costs a great deal of money.

It is a central challenge to the European Union in this enlargement process that we do not in any way replace one iron curtain with another. We must not, because of poverty of resource, replace all the barbed wire, the army patrols and the rest of the dreary business with something that is comparable. It will be apparent to your Lordships that, were we to do so, the affront to Russia would be very great. We have only to bear in mind the oncoming problem of Kaliningrad. I believe that one of the most ghastly nightmares that could be realised in Europe is if Kaliningrad became an enclave surrounded, ironically, by the paraphernalia of a kind of iron curtain defence.

At the earliest point and with considerable diplomacy and sophistication, it is very important for us to ensure that the borders of Kaliningrad with the enlarged European Union really function for Kaliningrad, for Russia and for ourselves. That will be no small challenge because, as your Lordships will be aware, Kaliningrad at the present time is a major centre of drugs, HIV infection and many other major problems.

As I say, we have a major challenge on our hands. It has been rightly noticed and noted in this debate that the quality of our bilateral support to a number of the applicant states on the borders is of a very high order and of a very high human order. Time and time again mention has been made of the sheer quality of the officers and advisers. However, we have only just begun. We seek assurances from the Minister that not only will the quality of British bilateral aid be maintained but that it will be increased; that it will be extended beyond the first wave countries to the second wave countries; and that the United Kingdom will do its very best in the councils of the European Union to ensure that the response of the European Union is co-ordinated and generous and matches the historic challenge that we have, not in defending ourselves against a poisoned chalice but in welcoming the historic opportunity of the opening of Europe.

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2.36 p.m.

Lord Dholakia: My Lords, the debate gives us an opportunity not only to examine the matters relating to enlargement but also to thank my noble friend Lord Wallace of Saltaire for his chairmanship of Sub-Committee F. He has done sterling work, for which we are grateful. I am also delighted that my noble friend Lady Harris of Richmond is to be the new chairman. As one who shares working accommodation with her, I know that she is totally committed to the work of the committee. I certainly wish her well.

The speakers' list clearly demonstrates my party's connection with, and commitment to, the wider Europe. It would have been interesting to hear the views of many Eurosceptics, who unfortunately are not present. Of course I welcome the noble Lord opposite. I have great respect for the views he expounds from time to time which give us an opportunity to produce even better reports.

I had the privilege to serve on Sub-Committee F which was responsible for the production of the report on enlargement. Unlike some previous reports, there was a consensus among members on the conclusions we reached. This is very much a non-controversial report and irrespective of the views we hold about Europe, the report highlights the issues we need to face in the light of the enlargement which will entail new land borders stretching to thousands of miles on the eastern front.

We were delighted with our visit to Warsaw. It gave us the opportunity to discuss key areas of concern with the authorities there. We were impressed with the way the witnesses conducted themselves. I also endorse our thanks to the ambassador and staff at the British Embassy. Perhaps the Minister could convey to his counterparts in the Foreign and Commonwealth Office our thanks for the enormous help that we received from our Embassy staff there.

There is no doubt that there is an overwhelming political commitment on the part of Ministers in the Polish Government to accession. This is further supplemented by the efforts being made by officers, for example, the border guards or the police, to meet the requirements of the justice and home affairs acquis.

Of course, many of our views on border controls are coloured by the entry of asylum seekers in EU member states. However, we should never underestimate the efforts being made in upgrading border control facilities, recruiting staff and equipping them properly. All those matters have serious resource implications, ably set out by my noble friend Lady Harris of Richmond and other noble friends. But one came back with the feeling that the controls are becoming effective. There is evidence that Poland has been partially successful in combating illegal immigration. Professor Okolski of the Institute of Social Studies in Warsaw noted that the numbers of apprehended illegal migrants transiting through Poland had fallen from 30,000 in 1994 to around 5,000 in 1999. The number being readmitted from the European Union had also fallen to around 1,000 in 1999. He argued that organised traffickers had realised that the most

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profitable and efficient way of trafficking and smuggling migrants is no longer by land but by sea. As frequent press publicity has demonstrated, Italy is now a preferred target.

The action taken by Poland clearly demonstrates a need for corresponding effort from the European Union. We welcome the Prime Minister's visit to Warsaw as a welcome sign of his personal commitment and the commitment of our country towards enlargement, but it has to be backed up by a practical commitment to providing extensive and well co-ordinated assistance to the candidate states.

Can the Minister spell out how that is being done following the Prime Minister's visit to Warsaw? I suspect that there is scope for considerable improvement. The political commitment of European Union leaders needs to be visible and unambiguous to maintain support for all EU membership within the candidate states. What is more, the EU should more clearly commit itself to a timetable for enlargement. I shall come to that point later.

Perhaps I may quote from paragraph 77 of the report:

    "Enlargement demands efforts on both side. In adopting the EU acquis the candidate countries are undertaking comprehensive and often painful reform. The Union and its political leaders must be equally committed and vigorous in helping the candidates to complete this reform--in giving them moral as well as practical support. In the candidate states the prospect of early enlargement is vital if the process of reform is to be kept up, and public support for accession maintained--fears over frontier security should not be made to supply a pretext for delay. The precise timetable for enlargement is beyond the scope of this report. However, the most advanced candidate countries have set themselves a target of 1 January 2003. It may not be possible to meet this target; but if so, it is at least incumbent on the EU to offer a clearer indication of the likely timetable than it has done hitherto".

It would be helpful if the Minister could give some indication of the timetable. Would he confirm that it is still the intention of the European Council that the first wave of candidates might be able to take part in the 2004 European Parliament elections?

The area which concerned us most during our visit to Warsaw was that aid was poorly co-ordinated. It was not getting to some areas and was duplicated in others. We have no doubt that there is scope for better co-ordination, possibly through the Commission. Can the Minister elaborate on what is being done towards co-ordinating resource delivery through a single agency?

I support what my noble friend Lady Harris of Richmond said. This is the first enlargement since the incorporation of the Schengen acquis into the treaties. To put it differently, it is the first time that Schengen membership has been part and parcel of EU membership rather than being a separate club. Would the Minister agree that that is likely to create the possibility of delaying enlargement because all new member states are required to adopt the acquis in full as a prerequisition to membership? If that is so, should it not be avoided at all costs? Border controls must not, and should not, be used as a pretext for delaying enlargement. However, there is assurance in the readiness of the member states to continue to apply the

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traditional Schengen procedures--admitting new members but without lifting internal border controls until the existing members are satisfied that Schengen standards are being met. It would be helpful if the Minister could indicate what standard of border controls will be required as a pre-condition of EU as opposed to full Schengen membership.

At present the definition is too vague. The Government described it as,

    "generally severe and effectively managed borders".

That generalisation is not good enough. The Schengen member states must provide a more precise definition. Will the Minister urge them to make their requirements as specific as possible and to do so before the end of this year?

Your Lordships may wish to read the evidence of Mr Adrian Fortescue, the European Commission's Director-General for Justice and Home Affairs. He has expressed concern that, for the first time, certain important Ministers who had not been closely involved in past enlargement negotiations are playing a big part. Is there a danger that justice and home affairs in general could be a factor for delay? His answer is yes.

What part is our Home Secretary playing? There is a contradiction between what Home Office and Foreign Office officials said in their evidence to the committee. I need not elaborate, except to refer your Lordships to paragraphs 52 and 54 of our report. I draw attention to the Home Secretary's comments in the other place on 1st February. He said:

    "The Schengen countries that currently maintain a border with eastern Europe are all absolutely clear that they have to maintain border controls ... for many years to come.

    Although we are not formally a member of the Schengen area, we take part in Schengen. One of the reasons that I want to do so is to stiffen the resolve of my fellow Interior Ministers".--[Official Report, Commons, 1/2/01; col. 485.]

The Home Office cannot have its cake and eat it. Is that a helpful role for the Home Office to play? Jack Straw refers to countries currently maintaining borders with Eastern Europe. That means Germany, Austria and possibly Italy. It is obvious that they have particular and legitimate anxieties, but although the EU must take account of their concerns, it is by no means clear that they are well founded. The Germans, for example, have well known concerns about free movement rights for workers and fear an influx of Polish and other cheap Eastern European labour after enlargement. There is no evidence that that will happen, particularly in the light the EU's earlier experience of enlargement. Given the insistence of the Home Office that the UK must preserve its autonomous border control rather than fully joining the Schengen area, on what basis does the Home Secretary want to "stiffen the resolve" of Schengen members? If the Government are committed to retaining autonomous UK frontier controls, they should not seek to influence the frontier policy of Schengen states. If they accept that the security of UK frontiers depends on that of Schengen frontiers, why is the UK not a full member?

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I trust that EU member states will not constitute themselves into a rich man's club, expecting others to join the enlargement process on their terms. Some of the new countries are still trying to establish economic stability. They will need help, not a diktat from member states.

Border control is closely associated with asylum seekers--a subject that arouses considerable emotion whenever we debate it. The fear and xenophobia reflected at the highest level in the Tory Party should not influence Jack Straw in taking a decision that is good for us, good for Europe and good for those who wish to join us. I want my country--Britain--to be at the forefront of the debate on enlargement.

2.48 p.m.

Lord Howell of Guildford: My Lords, as this fascinating debate has been monopolised so far by the Liberal Democrats, it might be healthy to have an alternative voice, although I assure them that mine will not be a very disputatious one. It is customary for speakers to say how wonderful our reports from European committees are, but I really feel that this is one of the most illuminating reports to have appeared from our European sub-committees in recent months, or even years. It has opened more windows for me into the enormous complexities and importance of the issues than any other that has emerged recently. Its merit is widely recognised outside this House. The relevant committee in another place paid tribute to the work of our committee, which has looked so deeply into the issues.

Therefore, I consider that, in recognising the contribution that the report makes, one should congratulate rather than criticise--at least, to begin with--and I congratulate its chairman, the noble Lord, Lord Wallace of Saltaire.

Two lessons come blasting out of the report. But the stronger of the two is the one about which we deserve to be reminded. It is that freedom of movement between countries is splendid; we all enjoy it and welcome it. It seems to make complete sense and logic. However, it has a price. Quite simply, borders which are open to allow trade, free movement, tourism, and so on, inevitably are open not only for the good but also for the bad.

It is inevitable that the more open that we seek to make the traditional borders between nations in Europe, the more necessary it will be--this is where a more illiberal note comes in--to have controls to replace border controls. It will be necessary to have more bureaucracy, organisation, enforcement, mobile units, checking and documentation behind borders in order to pay for the freedom that one has at the border itself.

I believe that the situation in relation to borders is a little like the Internet. With the Internet we have a fantastic, liberating instrument which gives the world access to information. Of course, it comes with great benefits but also with great dangers. Like the Internet, the open border can be used for licit and illicit

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purposes, for more trade but also for legal and illegal immigration and movement, human trafficking, criminal arrangements and the type of issue to which the noble Baroness, Lady Harris of Richmond, referred in her fascinating contribution. Those represent the dark side of open borders. Nothing comes without a price.

With regard to Schengen and the question of the Schengen acquis--now the EU acquis--being applied to the applicant states--the lively democracies of central and eastern Europe--that price is still higher. The prices, or hurdles, as the noble Baroness, Lady Harris of Richmond, described them, are very high indeed. One quality of the report is that it identifies those problems so candidly and frankly in its analysis.

One has only to start reading the report to discover on page 6 that the possibility of, or rather the need--indeed, the requirement--to move the frontiers of the European Union from the west side to the eastern side of the applicant states raises the prospect:

    "that they will cut through long existing cross-frontier economic, ethnic and political links. Local and regional markets in eastern border areas, relations of ethnic minorities on one side of the frontier with their ethnic homeland on the other side, and political relations with neighbouring non-EU Member [countries] could be affected".

With regard to the trafficking of human beings, the report goes on to say that,

    "a reflection group set up by the European Commission ... suggested that 'tighter border controls"--

that is, on the new, eastern frontiers--

    "will only drive up the price, and thus the profits, of this criminal trade'".

Therefore, for the Schengen countries, undoubtedly that is a very high hurdle indeed.

There are possibilities that frontiers that have been relatively permeable, even in the darkest days of the Cold War and, indeed, even for centuries back, where people went to and fro easily and did their trade, will now not only be created in a new sense--I fully take the point of the noble Lord, Lord Watson, in relation to this--but will also imply the need for visas. Visas will be required in areas where for hundreds of years farmers have been free almost to walk across and see their relatives. These are dangerous areas where new triggers could be pulled to inflame local feelings in south-east and eastern Europe and near-central Asia. We need to watch them carefully.

The noble Lord, Lord Watson, rightly urged us not to fall into the easy phraseology that is rightly referred to in the report. That involves the prospect of replacing the old iron curtain with a new Schengen curtain. That may not happen but there will certainly be a wall of some kind; it may be an electronic or a virtual wall, and it may not have the familiar barbed wire and watchtowers that we associated with frontiers of the past. There will be an extensive and high-technology arrangement, which will create a barrier as surely as any barrier that existed during the Cold War and before it. There will need to be a barrier. If the internal border controls are to be removed, the internal politics of the EU will create enormous pressures for such a barrier. It will be expensive and there will be

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uncertainties. As the report fairly points out, one does not know where the borders of Europe will finally settle.

I hope that there will not be a delay in enlargement as a result of the proposal. I listened closely to the comments of the noble Lord, Lord Dholakia, in that context. Enormous problems could be created.

What are the consequences of saying that the Schengen acquis is part of the EU acquis and that the acquis communautaire must be accepted with, I hope, sensible transition arrangements--the report mentions this--to move the frontiers from the internal western side to the external eastern side? The first consequence--the report is very helpful in making us all face this--is that old controls will be replaced by new controls. The new controls will be extremely extensive and they will range behind borders and involve interference with freedom of movement not across frontiers but down high streets and in towns and villages. Documentation and mobile units will be required.

That brings us to the role of documentation in the form of identity cards. What about them? I am not sure whether the report touched on that issue, but the successor report in the other place clearly faced up to it. The Home Secretary told the Home Affairs Committee in the other place:

    "If you wanted to go down the Schengen road--which, for the avoidance of doubt, I do not, and neither does the Government--and lift border controls, then you would have to have a strong system of internal controls and that would lead you, inevitably, into a system of compulsory identification cards".

That is a difficult issue; it is not clear cut on one side or the other. I am not sure where noble Lords on the Liberal Democrat Benches stand on that issue, which lies near the heart of the matter. Almost all of the relevant countries have identity cards and documentation of some kind. The system will have to be strengthened, made electronic, mobilised and placed under the general system of the Schengen information system, which will become--it already is--an enormous central depot of information and control. The liberally minded among us should ask how that system is supposed to be accountable to our democratic legislatures. It will have enormous power over the movement of almost everybody in the movement-free zone in the new electronic walls of Schengen.

My view is that the internal demands--that if western barriers are to be reduced, eastern barriers must be built up--are carried a little too far. There appears to be a degree of exaggeration about the terrors that are associated with immigration from the east. Many people have the old-fashioned view that Poland is teeming with people who want to come west, but that view is completely out of date. Poland is a dynamic modern economy. If anything, just as British workers ship off to Ireland to do the work for which there are no workers in that country, I suspect that there will be movements from Germany back into Poland because people will go to the new, dynamic and

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reasonably free economies that have not been subjected to the full glories and restrictions of many western European economies.

The truth is that an attempt to build up this great new electronic wall is not going to succeed--but I may be wrong. The new Europe has no eastern frontier. Ideology tried to impose one for 70 years, but it collapsed. The attempt to build a new wall, I believe, will fail, as walls usually do. Europe, in this sense, is an idea--a very powerful idea-- but it is never a single-state identity in the united states USA sense, nor is it a superpower; and it is never going to be complete. There is not a final arrangement for Europe, as you often hear some people saying. It is going, I hope, to be an ever-open and expanding entity.

I like, and treasure, the free movement. It is very enjoyable for us western Europeans, but I fear its replacement, especially if that means a lot more documentation and especially if vast electronic walls have to go up to calm the fears of the existing members of the European Union. Like so many other things about the great European Union, they are excellent up to a point but if pushed too far and with too much dedication and insistence, they achieve the very opposite of what is intended.

3.1 p.m.

Lord Bassam of Brighton: My Lords, I am most grateful, as have been all other speakers, to the noble Lord, Lord Wallace of Saltaire, for instigating this debate this afternoon. The scrutiny committee's excellent report on EU enlargement is a testament and tribute to the noble Lord's interest in and commitment to this area. It is a very well-informed document, well researched and well supported. The kind words that have described it during the debate have been not just well meant but absolutely accurate.

This has been a Liberal debate and the noble Lord, Lord, Lord Howell of Guildford, added to it with his interesting contribution. Certainly I have learnt a lot through being involved in this. The Government are also very grateful to the committee for its expert assessment of the issues facing the EU and the candidate countries in the run-up to enlargement. Certainly their views have helped to inform our thinking, and we hope that a constructive dialogue with Parliament will continue, as I am sure it will, under the careful stewardship of the noble Baroness, Lady Harris of Richmond. Her contribution this afternoon was ample testimony to what we can earnestly and honestly expect from her.

The Government are committed to a swift and successful enlargement of the European Union. This will remove unnatural divisions in Europe and help to ensure the future peace, prosperity and strength of the EU, the candidate countries and the wider Europe. We are pleased that the Nice Council and the Swedish presidency have confirmed the political priority that they attach to early enlargement.

We have set ambitious targets, but they are realistic. With efforts on both sides, there is no reason why the targets should not be achieved. Perhaps I may say to

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the noble Lord, Lord Dholakia, that it is by target setting that we can focus minds. We are working hard, along with the presidency, to ensure that the present position on both the full movement of persons and on home affairs will be completed for the most advanced candidates by the end of this year. Achieving this goal will, in our view, demonstrate a major advance in the process of the negotiations.

As the report rightly identifies, both chapters raise some difficult and no doubt sensitive issues for the accession process. However, may I state again that the Government are committed, as ever, to resolving those. One of the report's main interests was the implications for enlargement of inclusion for the first time of the Schengen arrangements in the EU acquis. Implementing a Schengen-based system for the candidate countries is, as everyone has said, a massive task with significant resource implications. The UK and the EU both recognise that and, in response, EU financial assistance to the candidates specifically for JHA issues--especially through the PHARE programme--now stands at 130.7 million euro for 2000, which represents a 400 per cent increase over the last three years. That is a very significant increase in support.

But the process by which the Schengen acquis is implemented also recognises the scope of the task. The EU does not expect full-implementation on day one. Instead, we expect the candidates to show that they can provide an effective standard of border control by the time they accede to the EU.

There will then be a period of further implementation, and evaluation, before internal borders with other member states are removed, during which time they will have acquired access to the tools of Schengen co-operation, most notably the Schengen Information System--the SIS.

We should be clear that the time taken to become full members of Schengen would not affect the candidates' rights of free movement. The two are quite separate. Accession countries that have not yet passed through the second phase of Schengen implementation could operate dual frontier controls in the same way as we do.

The report was concerned also that the EU had not specifically defined the minimum standards that it would expect to see on day one of accession, and that the candidates were confused, perhaps, about the standards that they were expected to meet. I am pleased to say that that position has now moved on: consultation with the candidates has advanced considerably in the past six months. The Government will press for that dialogue to continue, most immediately in the debate at the JHA Council on 16th March.

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