European Union (Accessions) Bill

– in the House of Lords at 8:00 pm on 10th January 2006.

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Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Carter) in the Chair.]

On Question, Whether Clause 1 shall stand part of the Bill?

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, Foreign Affairs, Deputy Leader, Parliament, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords

I should make it clear that we object to the clause, not because we wish to challenge the Bill or its purpose, which is reflected in Clause 1, but simply to seek to elucidate some of the Government's thinking on some important questions that still need answering about the accession process and the treaty that underlies the Bill. We strongly support the purposes of the treaty in bringing Bulgaria and Romania into the European Union, we hope by January 2007—although a safeguard clause may lead to a delay of one year. In that spirit, I shall raise a number of questions and I would be grateful if the Minister could shed some light upon them.

First, the European Union that the Bulgarians and Romanians are being invited to accede to in the coming negotiations is a fast-changing structure. One could say that the EU is in a fluid state of debate. A number of views are being aired regarding which way Europe should go and raise some important questions which the Bulgarians and Romanians will have to face as they move towards full membership. The Bill provides that the negotiations can go forward and that accession should take place whether there is a new European constitution or not. I suspect that when the Bill was first drafted it was assumed that there would be such a constitution, but, as we know, time has passed and events have unfolded and there is no constitution in immediate prospect.

However, a third pattern could be taking shape. Our Austrian friends, who have now assumed the presidency of the Union are talking about a "psychological relaunching" of the European project and of filling in the vacuum left by the defeated and aborted constitution with something new. Three possibilities have been aired. The first is that the constitution should continue, which is what the treaty's authors seem to have assumed originally; secondly, that the constitution should be cherry-picked and a new document should be put together quickly that embraces some of the agreed bits of the former constitution; and a third possibility is that the constitution should be dropped. I am concerned about the middle of those three options.

It is true that not much is likely to have been agreed by January 2007, but if the safeguard clause operates and Romania and Bulgaria do not join as full members before January 2008, that is a longer time, and during the next two years it is possible that something will be agreed. How does the Bill, which puts necessary provisions into UK legislation arising from the accession treaty, cope with a situation where there may be a different document that is not a constitution on the basis of what was rejected by the Dutch and French referenda, but does not mean that a constitution is completely absent?

My second question may overlap with an amendment which we shall consider later. The treaty requires, and the Bill endorses, a full acceptance by both Romania and Bulgaria of the acquis communautaire—the full range of competences of laws and powers of the European Union as established as of today. But many people have said, and it is recognised within the Commission, that the vast accumulation of those powers and competences, which are said to amount to no less than 98,000 pages, is out of date. I understand that even now, committees in Brussels are at work filtering it, with the aim of reducing it radically. How does that square with the requirement that the Bulgarians and Romanians must accept the whole acquis? Are they and we prepared to accept adjustments to the acquis that may involve a different Act from what is written in those 98,000 pages?

My third question is regarding whether the treaty will bind Bulgaria and Romania to accept the European Charter of Fundamental Rights. Again the Minister may say that that has not been legislated into existence, that it was part of the aborted constitution and that we do not need to worry about it. But is that right? The charter has become detached from the constitution debate and has developed a separate existence and certainly a separate lobby of support throughout the European Union. It is possible that that charter, although its necessity was originally denied by Ministers, could now be given legislative form under Section 2 of the European Communities Act. That would be a new situation which would confront the new arrivals, Bulgaria and Romania, and it is not clear whether the Bill provides for that.

I repeat that I do not wish to wipe out the clause but to elucidate from the Government their views on those three questions.

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs

Although we would be grateful to the noble Lord, Lord Howell, for posing legitimate questions—given that in his Second Reading speech before Christmas he said that the development of the community was in flux, that there may be a "moving platform", and that there was an ever-changing scene with a large number of new members making a bigger entity that is much more complex than it was before—these Benches would not support his objection to the clause standing part of the Bill, although he was not talking literally and was explaining his position and asking questions. Therefore, I look forward to the Minister's response to those questions and to other points that may arise.

The noble Lord, Lord Howell, in his Second Reading speech, was regarded by a number of noble Lords as being rather pessimistic and curmudgeonly about the development of the Union, as opposed to the more enthusiastic tenor of other speeches. We on these Benches reiterate our view that the Union is developing. New member states are applying all the time, so that must be the proof of the pudding that the EU is developing in an interesting and attractive way. It has been gratifying to see that the focus in the growth from the original six, nine, 12 and then 15 has been, with the exception of Malta and Cyprus, on helping those countries from behind the original Iron Curtain, from 1989–90 onwards, to enter the comity of western democratic nations. It has been a most remarkable development for which enormous tribute must be paid to the Commission, the Council of Ministers and to the representatives of those countries who have negotiated their way in on a complex matter, with very long procedures and some daunting targets to accept. The same will apply to Bulgaria and Romania.

Some people may infer that that should be the limit on enlargement of the Union. However, because, according to the original treaties, the Union is obliged to respond to any approaches by any other country that wishes to join, we do not know what the end of that process will be. But this Committee stage is dealing only with Bulgaria and Romania. Therefore, one need not repeat too many points and make a Second Reading-type speech, and I shall certainly refrain from doing that.

We also want to thank the Government and the Ministers responsible for the way in which they have handled this matter. In particular, it was inspiring to see the way in which the more difficult negotiations for Bulgaria and Romania were conducted both by the Council of Ministers as a whole and by Her Majesty's Government representing this part of the Council of Ministers.

There are observers who have seen events much more closely, and quite a few books have been written about the development of the East European countries as they have come out of the totalitarian nexus and have dealt with more conventional western and democratic needs. That has been a very complicated process for them and, with the different histories that attach to each individual country, it has been both a remarkable and, in many ways, a unique experience for them. That was mentioned in the closing Second Reading speech of the noble Lord, Lord Triesman. I refer to countries that have suffered the horrors of the Second World War, fascism and communism—totalitarian systems—and have then come out of that. When the pent-up energies of those countries are released by new democratic initiatives, the next stage is often corruption and the abuse of power by the entities which may take over in the initial elections, and then gradually the system settles down. That is inevitable and we should not be too critical of it, but we should be vigilant of how that corruption and the disutility of the emerging system are rooted out by the applicant member countries themselves.

In that spirit, I look forward to the Minister's reply to the points made by the noble Lord, Lord Howell. I also re-emphasise that we on these Benches are enthusiastic supporters of the Bill and of this Committee stage.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

I, too, want to intervene briefly on this subject—not, however, in support of the opposition to the clause proposed by the noble Lord, Lord Howell. The noble Lord has explained—and I am grateful to him—that it is not his objective to prevent the accession of Bulgaria and Romania, and that is admirable. However, I find it slightly ironic that after several occasions on which the Benches opposite have taunted the Government with having caused a deterioration in Britain's relations with the countries of eastern and central Europe because of the negotiations over the budget, he should now be opposing a clause, the result of which if carried in this Committee would be to increase the damage to our relations with the central European states exponentially. However, I accept that the noble Lord is not proposing to go to that length.

Although it is of course for the Minister to reply, I also say to the noble Lord that I do not see the problem of the acquis communautaire and whatever institutional arrangements may or may not be agreed between now and the accession of Bulgaria and Romania. Surely the situation is as it has always been with countries that join. They have to accept whatever has been decided by the European Union and has entered into force by the day on which they join. The acquis communautaire will have been shrunk by then and I hope very much that some of its more out-of-date parts will have been removed under the proposals that the Commission is now bringing forward. Then they will simply be lopped off the acquis communautaire, which Romania and Bulgaria have to apply on their accession.

If, on the other hand—as equally I hope will be the case—something like the directive on services is introduced and made law in the European Union by the time Bulgaria and Romania join, then they will have to accept that. I happen to think that that is a very healthy state of affairs. It is of course what the Bulgarians and Romanians themselves have signed and ratified. So I do not see a problem and I do not think that the institutional arrangements—whether they are called the constitutional treaty or whatever—come in a different category. Those arrangements will either be law by the time they join, in which case the countries have to apply them, or they are not law, in which case they do not.

I should like to take advantage of the opportunity to ask the Minister a couple of questions which arise out of this first clause in the sense that this is the clause that makes Bulgaria and Romania ratified members so far as we are concerned. My first question relates to the budgetary arrangements. I should like him to confirm that there will be no change to the ceilings agreed in Brussels before Christmas for all the categories of expenditure when Bulgaria and Romania join. Can he confirm that the same amount of ceiling will apply to two more countries, two of which—the two we are discussing tonight incidentally—are quite substantial agricultural countries? So basically there will be an effective compression on the sums available for agriculture in the existing 25-member European Union. That point seems to me to be frequently overlooked by those who say that absolutely no constraint is being put on agricultural spending in the existing European Union. But my belief—the Minister may confirm this—is that that is not the case and that there will be an effective compression.

Secondly, will the Minister confirm, as I believe is the case, that the substantial sums of money which had been spent by the European Union in Bulgaria and Romania over the past 10 years or so since they threw off their communist dictatorship, are continuing to be spent today, and will continue to be spent up until the day they join, are ones in which Britain pays its full financing share and that they do not come under the abatement? Thanks to arrangements negotiated by the noble Lords and others on the Benches opposite in 1984, because these expenditures are on countries outside the European Union, we pay our full share, we have always done so and will continue to do so.

If you understand that point, it casts in a slightly different light the change that the Prime Minister accepted in December—in my view, quite rightly. We had to continue paying our full financing share for structural fund spending in those countries. No genuinely intellectual or moral argument could justify Britain paying a smaller share than other member states for structural fund spending in the new member states, of which Bulgaria and Romania will be two. If the Minister could reply to those two points, I should be very grateful. Meanwhile, I finish by saying that I do not favour the proposed opposition to the clause.

Photo of Lord Biffen Lord Biffen Conservative 8:15 pm, 10th January 2006

My noble friend Lord Howell of Guildford was right to move his amendment, purely for the technical reason that it enables the debate to now proceed. He made it quite clear that it was not intended to challenge the decision to welcome the accession of Romania and Bulgaria. I find it quite extraordinary that the noble Lord, Lord Hannay of Chiswick, should find it so convoluted that he could not understand the simplicity and—dare I say it?—the innocence of my noble friend's proposal. I am glad that it enabled him to raise the question of the acquis. I think that it is a massive imposition; doubtless not quite as horrific as the 90,000-odd pages would suggest, which is none the less a standing invitation for slim-lining. But I do not want to take up that point. I want to take up a point which was mentioned by the noble Lord, Lord Hannay: the finances implied in the expansion of the European Union. That would fall well within the terms of reference of the stand part debate.

When the House of Lords Select Committee considered the financing of the common agricultural policy, they remarked:

"The majority of our witnesses were clear that the cost of direct payments and other CAP support measures to Romania and Bulgaria is not covered by the Commission's current budget proposals".

The Government responded to that by saying:

"The Government believes that the Brussels ceilings are sufficient to accommodate the accession of Bulgaria and Romania without the need for further increases".

I am certain that the Government's response was given in good faith and I do not challenge it for one moment. However, we are entitled to ask what further consideration has been given to the whole financing of the European Union, and more particularly the common agricultural policy, in light of the events of the past few months. I ask that not in any confrontational sense but with some anxiety over possible ambiguity about what spending is deemed legitimate because it is within the common agricultural provisions, and what spending outside of the common agricultural provisions but none the less on agriculture is also legitimate.

Back in June, when we were approaching these matters under the prospective influence that Britain would have as president of the Community, the Prime Minister said that,

"it is also a fact that no one is saying that countries cannot take a decision to support their farming industry. The question is what should Europe be doing about the amount of money that it puts into the CAP".—[Hansard, Commons, 20/6/05; col. 533.]

That is a clear and explicit distinction between what farming expenditure there might be on the CAP and what is outside of the CAP. I find that that comment—which seemed on the whole to be rooted in the realities of the European situation—does not sit too easily with the Minister's remarks yesterday when, at Question Time, he said:

"Co-financing is one of the options that needs thorough discussion and must be examined as part of the review. If co-financing were to be introduced, it would have to be done in a way that ensured there was no increase in the total public spending in the EU—that is, of the EU plus the national budgets—and any move towards co-financing should also not stand in the way of further reform".—[Hansard, 9/1/06; cols. 2–3.]

That suggests that, with one voice—the prime ministerial voice—there is a degree of independence for independent financing of agriculture; and that the voice of the Minister yesterday—and I would not dream of trying to set him against the Prime Minister—admits of another interpretation. This is of importance to us not least because of the points raised by the noble Lord, Lord Hannay. Romania and Bulgaria are powerful agricultural countries not merely in agricultural output but in the important social significance of agriculture.

"Reform" is such an easygoing phrase for people secure in government and administration. However, reform often implies very substantial social changes in the rural pattern. These changes might easily be dreamed up in Brussels, but if they have to be carried out by people actually taking responsibility in Bulgaria and Romania, then we may find that we are in for periods of some difficulty and tension.

My intervention is only to seek some elaboration from the Minister about the extent to which he sees that there will be reasonable flexibility in trying to bring about changes in agricultural spending within the common agricultural policy and within the spending that is deemed to be within the competence of national governments so that we go through the next few years with as modest a dislocation as may be feasible.

Photo of Lord Kilclooney Lord Kilclooney Crossbench

I rise briefly to support the Bill. It is great to see Romania and Bulgaria, after their history during the last 50 years of the previous century as part of the Soviet empire, now wishing to join the European Union as independent, democratic states. That is welcome. However, the 10 countries that acceded to the European Union in 2005 are becoming increasingly competitive with the United Kingdom for new jobs and investment. Some of their advantages vary: for example, competition from eastern Europe is caused by the fact that there are lower wage rates than in the United Kingdom.

Secondly, there are varying corporation taxes for company profits and I wonder whether that is an additional advantage for Romania and Bulgaria over the United Kingdom in gaining new investment for the creation of new jobs in competition with the United Kingdom. If we take Romania, for example, at the moment there is major investment in industry in anticipation of its membership of the European Union, for example, in the expansion of the motor car industry. Will the United Kingdom be at a disadvantage in competition with Romania and Bulgaria as far as wage rates are concerned? There are major variations in corporation tax across the European Union. Some of our new competitors in the east are able to say that their corporation taxes are very small compared with those in the United Kingdom. Can the Minister tell us what rates of corporation tax exist in Bulgaria and Romania compared to ours in the United Kingdom? Will they, once again, have an advantage over us?

Finally, when the 10 countries acceded to the European Union in 2005, the United Kingdom was courageous, and the Government must be congratulated, because the United Kingdom, the Republic of Ireland and, I think, Sweden—it was certainly one of the Scandinavian countries—were the only countries that agreed to the free movement of people within the European Union. Other countries went slow on that issue. What will be the position when Romania and Bulgaria accede to membership of the European Union? Will the United Kingdom yet again agree to the free movement of people between those two countries and our country?

Photo of Lord Triesman Lord Triesman Parliamentary Under-Secretary, Foreign & Commonwealth Office, Parliamentary Under-Secretary (Foreign and Commonwealth Office)

I thank all noble Lords who have taken part in this debate that Clause 1 stand part. To be candid about it, I think that we have had a Second Reading debate, but, for all that, I would like to try to deal with the substantive issues that have been raised as well as the specific points raised by the noble Lord, Lord Howell, and the questions asked by the noble Lord, Lord Hannay, which are very specific in relation to this stand part debate.

First, I wholly agree with the point made by the noble Lords, Lord Howell and Lord Dykes, that the European Union is in a state of flux—I think that was the expression that was used. I am quite certain that that is for two reasons, one internal, and one external. The internal reason is obvious: the European Union has been growing in size and in the number of states involved. Making arrangements to accommodate those states and to take decisions in the larger group of states, which is an objective that we all share, has given rise to some of the flux that we have all been describing in the course of this debate. It is a function of growth. It is true that we have sought that growth, not least because it was better that countries that were formerly in the remit of dictatorships should move into democracy and the free markets that we aspire to see grow. The more growth there is, the more flux there will be, and were there to be other countries coming into the European Union, I suppose we should predict more flux. If that is the cost of growth, then it is helpful.

I would submit that the external reason is obvious as well. That is, as World Trade Organisation arrangements have developed and as the negotiation of new trading arrangements around the world have developed, these have put pressures on the way in which the European Union as a group of trading nations operating together has had to reformulate its thinking.

So the EU is certainly changing. As it changed, it was not surprising that an attempt was made to make constitutional provisions for the arrangements that were needed internally. We also know what the outcome of the first key decisions on those constitutional arrangements was. The French and the Dutch have rejected those arrangements. There is at the moment no constitutional arrangement being considered as a binding constitutional arrangement anywhere because there is, as it has been put, a period of reflection. I do not anticipate that that position will change very rapidly, nor is it clear to me how it could change very rapidly. It may be that Austria has aspirations as the presidency for a psychological re-launch—it may be looking for something new—but it is extremely hard, in all candour, to see how that could be a realistic prospect over the next period.

The constitution would unquestionably not be put in its current form to those who have already rejected it. If it were not put in its current form, I would anticipate that there would be a process with major negotiation before a new form was found, and before that could be put to anybody, including the French and the Dutch, or, because there would be a referendum, to ourselves.

The question of whether something less than that—the second option of the noble Lord, Lord Howell; a cherry-picked arrangement—would take place has also arisen in your Lordships' House when we have discussed the constitutional position. We have argued that there is no merit in simply cherry-picking. There may be one or two practical arrangements like televising and making public debates in Europe. Those are more practical and technical points, but the broader points about picking out large or substantive issues and producing a new document do not seem to me to be feasible. I entirely agree with the noble Lord, Lord Howell, that it would not be feasible by January 2007; but I cannot see it being feasible by January 2008 either.

Whatever the state of discussion, it will remain true that all the countries will still have to go through whatever process they have agreed to go through to agree any new arrangement—either the old constitution, a cherry-picked one or whatever it may be. They would all have to go through that. And Romania and Bulgaria would have to take their decisions as accession countries on precisely the same text and by arrangements which they would have to undertake in order to come to this, even in circumstances where there were a document, which I do not foresee. I cannot see that they would be subject to any other requirement than to go through the process of debate and decision, whether it is by referendum, by decisions of Parliaments or whatever. So, I do not think that the Clause 1 arrangements, so far as the constitution is concerned, really ought to be of such dramatic importance to us.

Secondly, I turn to the question of full acceptance or otherwise of the acquis. I understand the argument about the extent of the documentation. I also have seen figures of somewhat short of 100,000 pages, and I also know that there are committees at work to see whether it can be slimmed down. But I wholly agree with the noble Lord, Lord Hannay. The fact is that whatever the state that has been reached at the time of the accession of these countries will be the acquis which is put to these countries. That will be what it is. If it is the whole lot because no slimming down has been done, then it will be the whole lot. Some may say that that is unfortunate or inefficient, but that is the status of the set of European laws and arrangements which will be put and will be as significant and binding on those countries as they are on the rest of us.

On the third point, the question of the Charter of Fundamental Rights raised by the noble Lord, Lord Howell, it is true that it is not a constitutional requirement. The European Communities Act would be as binding on the two accession countries as on anyone else. I suppose that decisions of the European Court taken on the Charter of Fundamental Rights will also have a bearing. However, there again I make the essential point that the state of play—the legislative framework—to which the accession countries will be invited to accede will be exactly that in place at the time, to which all of the rest of us will also be subject.

I turn to the questions raised by the noble Lord, Lord Hannay. On the budgetary arrangements, I assert that there is no change to the ceilings on accession. The effect of compression on agricultural spending will continue. The information that was provided on the arrangements for agriculture in the accession negotiations made that clear. The treaty extends the CAP to Bulgaria and Romania on a similar basis to the previous accession. Direct payments will be phased in, starting at 25 per cent of EU 15 levels in 2007 and rising to 100 per cent in 2016, with the option of national top-ups. It is also true to say that when discussions take place that may lead to further reform, as we must all hope that they will, of the common agricultural policy, those discussions and negotiations will also have their bearing.

However, I can confirm the precise point that the noble Lord, Lord Hannay, made. It would be possible to go through all the sets of figures over the years to illustrate the point, but I hope that your Lordships will feel that my assertion is appropriate. Any further discussion of issues such as co-financing in the case of further reform will also apply.

Photo of Lord Biffen Lord Biffen Conservative

I take at once the point that the Minister makes, but would he, for the convenience of your Lordships, place in the Vote Office the list of figures for the future so that we can see how they are foreseen?

Photo of Lord Triesman Lord Triesman Parliamentary Under-Secretary, Foreign & Commonwealth Office, Parliamentary Under-Secretary (Foreign and Commonwealth Office)

I should be very happy to do so and I welcome that suggestion.

I turn to the points made by the noble Lord, Lord Kilclooney, about competition in wage rates and tax. First, there is bound to be competition in wage rates. There is competition in wage rates across the European Union at present. We do not all have the same wage rates, industry by industry—or sector by sector, for that matter. I do not see that, so long as we have wholly free-standing economies and people negotiate their wages or have their wages determined in whatever way, it is ever likely that wage rates will reach a single level across the EU. That is not even true over weeks and months within our economy, let alone across wider geographical areas. It is one of the functions of competition that there will be variation in wage rates.

There will also be competition in tax. One question that arose recently was when people asked whether the European Commission was intent on producing a level of European tax. The Chancellor of the Exchequer, my right honourable friend Gordon Brown, made the point in terms that we see real value in the possibility of competition in tax rates. That is legitimate competition between states. It is not an argument for taxation or avoidance of taxation that gets to the edge of unfair competition—that is always to be avoided—but competition in other respects over tax rates will remain part of the functioning of our economy and, in my belief, of other member states' economies, because there will not be a European tax levied as an alternative to national decisions. I hope that that gives reassurance; that remains firmly the Government's policy. I apologise to the Committee for going through all of those details, but these were substantive points which go to the heart of the Bill. Clause 1 was probably the right Christmas tree on which to hang all of these things.

Photo of Lord Kilclooney Lord Kilclooney Crossbench

Will the Minister answer the question about the free movement of labour from Romania and Bulgaria into the United Kingdom following accession? Will that happen?

Photo of Lord Triesman Lord Triesman Parliamentary Under-Secretary, Foreign & Commonwealth Office, Parliamentary Under-Secretary (Foreign and Commonwealth Office)

When I respond to other amendments tabled by the noble Lord, Lord Howell, that specific question will be addressed. The precise terms under which we will operate will be set out. I hope that the noble Lord will allow me to do it in that way, but I promise him an answer this evening. I hope that the noble Lord, Lord Howell, and other noble Lords will feel that we have covered the ground properly. I urge that this clause stands part of the Bill. As everyone has acknowledged, it is fundamental and was a vehicle for making sure that important questions were asked.

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, Foreign Affairs, Deputy Leader, Parliament, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords

I am very grateful to the Minister for his detailed and courteous reply to the points that I made in opening this short debate. Perhaps I should just explain again for the noble Lord, Lord Hannay, that in putting down an amendment which, if carried, would have rather drastic effects, one's aim simply was to air certain views. It is often necessary in these debates, just as we are told that at times one has to reculer pour mieux sauter, sometimes one has to sauter pour mieux reculer as well. Therefore, I was anxious to establish a few of these points.

Finally, I have never begrudged the need for extra help for the accession states and the ex-communist states of Europe in order to help them into a better world, although I think that their best hope is less through outside subventions than through their own enterprise and dynamism of which they have considerable quantities which they are now demonstrating. But we were led to believe by the Government that if there was extra help it would be paid for within the existing budget by reductions in farm support and not by paying an extra £2.5 billion a year ourselves. So I think that there is a little concern at the way that the whole matter has fallen out. But, that said, we have had an opportunity for this debate. I now complete my remarks because the clause stands without objection.

Clause 1 agreed to.

Clause 2 [Freedom of movement for workers]:

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, Foreign Affairs, Deputy Leader, Parliament, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords

moved Amendment No. 1:

Page 1, line 16, at end insert—

"( ) The Secretary of State shall, no later than four months before the date of accession, lay before Parliament a report on the Government's assessment of the effect of the free movement of workers from the acceding States."

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, Foreign Affairs, Deputy Leader, Parliament, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords

We now come to two amendments to the longer and major Clause 2. I should like to use this opportunity, too, to press a number of points. This clause, to which these two amendments are related, marks quite a big change of approach by the Government from that demonstrated at the time of the previous accessions Bill and accessions Act which brought in the eight central European countries, as well, of course, as Malta and Cyprus. At that time the doctrine was that although there were opportunities to regulate and restrict free movement of people from the new member states, the British Government would not take these opportunities. Other countries were all going to do so, but the British were going to relax about the whole matter and there was going to be no question of restrictions.

This time around regulations and restrictions are very much matters for which powers will be taken, and we can understand why. The reason is that the Government's projections of what would happen after the last accession grouping were spectacularly wrong. In 2003 the Home Office predicted that new arrivals would be in the region of between 5,000 and 13,000 a year up to 2010. Instead, in the period between May 2004 and June 2005, just over a year, some 232,000 applications were made, of which 220,000 were successful. To date there have been 292,000 entrants to the United Kingdom. For the most part, they have been extremely well absorbed. The British people have welcomed these thousands of people, many of them skilled and dedicated, thus probably adding still further to the dynamism of the British economy. But I have to say that the positive effect of this migration is more good luck rather than good policy and gives no confidence that the Government have an overall grip on the situation, or had it at the time because they clearly did not.

This time powers are being taken to regulate the flows, so the question of how will it be done arises. The indication in the other place was that the Government have not made up their mind on how to use these various powers. There might be a tighter transition period in operation. There might be worker registration which eventually, after the last fiasco, the Government found they had to move to and now have in place for workers coming from the other accession states. Alternatively, there might be a continuation or tightening of the present worker permit system. We are entitled to know the Government's thinking on this matter. The Minister in the other place said when debating this issue that the worker registration system introduced by the Government for the last group of accession states is now working fine and that,

"we fully intend to continue the arrangements".—[Hansard, Commons, 24/11/05; col. 1715.]

That causes one to ask whether the system to be applied under the regulations in this Bill for Bulgaria and Romania has already been decided on. It would be useful to know, before accession takes place, how and when the Government envisage using these powers.

I emphasise that we favour the kind of migration that has taken place when it is orderly and part of a coherent social policy. It makes sense and in the past has greatly benefited this country. But if the information is wildly out of line with what is happening, it does not inspire confidence that the exercise will be orderly or part of a coherent public policy. We want to know in this case a little more clearly how the Government will use these regulations and, indeed, their policy.

Given that we are considering the two amendments together, we know that both Bulgaria and Romania have been vigorously and with increasing success fighting corruption and organised crime, conditions they have inherited from the past. Indeed, sometimes I feel that we should not be quite so ready to lecture these brave countries struggling with their condition when corruption and organised crime are not exactly unknown in the existing European Union and Western Europe. But there are particular worries. We hear of human trafficking, prostitution and how Bulgaria acts as a conduit for substantial drugs movement. Indeed, only the other day the Home Secretary said that he still regarded human trafficking as a serious problem. Parliament is entitled to share the Government's assessment of the ongoing situation.

This explains the second amendment, which would create a continuing duty—after accession and through the whole seven-year permitted transition period—for the Government to keep Parliament well informed of what is happening and developing on this front, if only to say, "Here is good material. These are able and useful people who can come to our country". It is only right that there should be a clear understanding of the size of the flow, where and how it is going to develop and how we should adjust our own social policies to match the flow of newcomers.

I repeat, we are not in any way against what has occurred, but we want it to be well managed. I am afraid that many affairs in the European Union these days are not well managed. This is why we propose in the two amendments that there should be monitoring, a report four months before accession and regular reports every six months thereafter. I beg to move.

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour 8:45 pm, 10th January 2006

As the noble Lord, Lord Howell, properly said, the starting point is the precedent of the entry of the EU 10 in May last year. One should perhaps more properly say the EU eight because, of course, Malta and Cyprus are not relevant in this context.

Who can forget the dire predictions made at that time by the press in this country—or, at least, portions of the press, particularly the Daily Mail and others—not only about numbers but about the likely effects on our economy? Although the numbers were not as predicted, the effect has been almost wholly beneficial. Those who have come in—mostly young, thrusting people, gaining positive experience in this country—have gone into areas of shortage such as seasonal employment in agriculture, bus driving and whatever, and there has not been any substantial friction as a result. If noble Lords were to ask their friends what are their views on Polish plumbers, I imagine their response would be, "Let's have more of them". I think there should be a certain amount of contrition on behalf of the Opposition and the Daily Mail and others—although one would not expect it from them—in regard to their anticipation of hordes of Roma coming across and that not being brought into effect.

That must be the starting point of any discussion in relation to Romania and Bulgaria. In both of his amendments the noble Lord asks for various reports. In the first amendment he asks for a report from the Government, no later than four months before the date of accession, on their assessment of the effect of free movement of workers from the acceding states. The first point I make on that is that it would be extraordinarily difficult to make any clear assessment because there are so many variables, not least the effect of the policy decisions taken by other countries in this respect. The flow may or may not go in other directions depending on the policies taken by other of our EU partners.

I also make the point, in respect of both Amendments Nos. 1 and 2, that this is not an obligation which was put on the Government in respect of the other countries. Poland, of course, is not only a relatively poor country but it has a population virtually twice that of Romania. I accept that there are potential problems in respect of Romania. At Second Reading the question of the 1 million residents of Moldova who have Romanian citizenship was mentioned. Moldova is an extraordinarily poor country and many of its most active citizens seek only to leave, and it may be that that issue should be part of an assessment.

But real questions are raised, and even if we do not have regular reports—certainly no such reports were made obligatory in respect of the earlier accession—the questions remain. What form of continuing assessment will be made by the Government? In what way will those assessments be made to Parliament? That was the noble Lord's very valid point about parliamentary consideration of any assessment. What potential sanctions, changes or modifications do the Government have in mind if any adverse effects which we cannot predict were to occur?

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs

I follow with some enthusiasm the remarks of the noble Lord, Lord Anderson of Swansea, who implied that Amendments Nos. 1 and 2 are not really necessary and that a different approach should be taken. The noble Lord, Lord Howell, is entitled to ask legitimate questions about these matters but I hope that the amendments will not be pressed. If I recall correctly, they are the same—literally word for word—as those proposed by the noble Lord's colleague, the honourable Member for Altrincham and Sale West, Mr Graham Brady, in the Commons and they are none the worse for that. After a very thorough debate in the Commons, the amendments were not pressed, and I think the conclusion should be the same today, unless I am incorrect in anticipating the outcome of this debate.

It was bizarre that the Minister who wound up the Second Reading debate was the Minister for the Middle East, Dr Kim Howells. I suppose that was a sharing out of the labour tasks. He said:

"A decision on whether Romanian and Bulgarian nationals will be given complete access to the labour market will be taken closer to their countries' accession.

It would certainly be premature to make any decision now without sufficient information and planning. A final decision will be made after full consideration of the state of the domestic labour market".—[Hansard, Commons, 1/11/05; col. 792.]

With that in mind, I specifically ask the Minister to repeat that reassurance and explain in a little more detail, without taking too much of the time of the House, the way in which the supervision and surveillance of the influx of additional workers in the transitional period will be handled, depending on the overview of the numbers.

The amendments in the name of the noble Lord, Lord Howell, along the lines of the original amendments in the Commons, concern the free movement of workers from the accession countries. We on these Benches feel strongly that the amendments are unnecessary. I would be very reluctant to support the idea of a cumbersome procedure of additional reports for four months in the initial stage and then every six months in the total seven-year transitional period. That would introduce the kind of cumbersome, bureaucratic built-in structure which all good Tories, according to the noble Lord's previous utterances on these matters, should resist with great passion.

Accepting that proposal would lead to the danger of encouraging people in our society who hold extremist views about immigration and giving them scope to complain in the wrong way about the number of people coming here. Although the number was nearly 300,000—way above the initial estimates, as mentioned by previous speakers—generally the reaction of British society—the host society—has been that they are very welcome, they have made a great contribution to our economy and are doing very well working in Britain so far. The amendments, therefore, should be set aside, except that they give us proper scope to make sure—as was requested by the noble Lord, Lord Howell—that the transitional arrangements will be properly constructed, even without his specific suggestions in the amendments. I assume that that will be the conclusion of this debate.

The Minister has already given a part assurance in the debate on Clause 1 that a lot of the modalities of the transitional period for the EU eight would be built into the system, but with the extra vigilance and supervision made necessary by the intrinsic state of the economic systems of Romania and Bulgaria, suffering as they are with the disutilities that we have referred to, including organised crime. With that in mind and with the explanations that we have already received from the Government about how the system for the EU eight—which has run for two years now—was established, with Malta and Cyprus being excluded for obvious reasons, we can be reassured.

I hope that that will be how the Minister will deal with this, because even if we are very enthusiastic about the accession of these two countries—if the remaining problems can be solved in the final year or within the initial year if that is necessary—we need to be reassured. We need to reassure the public that these matters will be properly looked after, controlled, invigilated, supervised, scrutinised and observed very closely by efficient government officials and their political representatives, so that society can move forward when the two new countries eventually come in.

Photo of Lord Biffen Lord Biffen Conservative 9:00 pm, 10th January 2006

I congratulate my noble friend Lord Howell on these amendments because they have enabled us to have this debate. The topic gives rise to genuine concern. One of the difficulties of dealing with European Union legislation has always been to postulate amendments in terms of one's own domestic legislation when all the while you are affecting treaty obligations. That has been a difficulty since 1972, so I am not deeply upset about the flawed nature of these amendments. They serve the exact purpose, which is to enable us to have some thoughts on this topic.

I am entirely happy with the phraseology used by Kim Howells in the House of Commons to describe the Government's approach to freedom of labour from Bulgaria and Romania. He is right to say that nearer the time we will come to a more precise decision. I have no doubt that that will be done in the same spirit as the United Kingdom, the Republic of Ireland and Sweden reacted to the enlargement of the eight.

I think that we are entitled to say that there is a problem with the Roma in Romania on a different scale from that of most of the other countries of the eight, which could provide some difficulty, but we are in a position to monitor that and I am sure that we shall.

I place in this context the Minister's encouraging remarks in the previous debate, when he said that we should remember that one can use the tax system as a degree of one's judgment and independence. That is particularly welcome when we are talking not merely about income tax but more specifically about indirect taxes, excise duties and corporation tax. I welcome the remarks that he made on that occasion and I am glad that it was read into our record, even though it was done rather late on a Tuesday evening and not with a standing-room only audience.

Photo of Lord Triesman Lord Triesman Parliamentary Under-Secretary, Foreign & Commonwealth Office, Parliamentary Under-Secretary (Foreign and Commonwealth Office)

I thank noble Lords for this debate. I recall in the opening speech at Second Reading, the noble Lord, Lord Howell, said:

"In a way it is a pity that we cannot offer these new arrivals a better welcome and a better ambiance to join".—[Hansard, 20/12/05; col. 1688.]

It seems to me that these two amendments, and also Amendment No. 3, would not add to the ambiance for Bulgaria and Romania. I fear that were we to adopt those amendments, we would be indicating that as a country we were nervous, that we felt that enlargement should cause us greater anxiety, and that we were hesitant about welcoming those states to the European Union. I know that that is not the intention, but that is how it could be felt. We would also be going against the entire tenor of the Second Reading debate, as the noble Lord, Lord Dykes, also suggested, when the Chamber as a whole was united in its support for enlargement, as it has historically been.

The noble Lord, Lord Anderson, has struck the right note and the right balance, as has the noble Lord, Lord Dykes, in this debate. This is a matter of taking sensible steps, with all the knowledge that we will need as we take them but without taking them in a way that imposes such burdens so as to make it clear to those two countries that we have very little confidence that they will ever arrive at the right point, as we are looking for a regime of inspection that goes well beyond anything that we have seen before.

I understand the argument that the noble Lord, Lord Howell, put during the Second Reading debate, when he raised questions about the adequacy of the data. I said in response to him on that occasion that the figures came from a paper and research that was done by University College London, which was conducted on the best basis possible, but was plainly not wholly adequate. That must mean that we need to be sure precisely what the position is as we get closer to the point of accession on this occasion.

I am grateful to the noble Lord for explaining his amendments because, like him, the Government take very seriously our obligation to monitor the impact of any regulations made under Clause 2 of the Bill. However, I believe that the amendments are unnecessary. In response to a particular point that he made, I believe that worker registration in the current circumstances has worked well, but I do not believe that it is the only possible way in which to do it—and as we get closer to the time, for reasons that I shall come to, we shall want to see what mechanism might be the right one. It is true that it has not been decided yet.

As I said at Second Reading, no decision has been taken on what level of access to grant Bulgarian and Romanian workers. I make that point to the noble Lord, Lord Kilclooney, who asked the question in the earlier debate. Clause 2 gives the Government a wide degree of flexibility in deciding those terms. For those reasons, I confirm what my right honourable friend Dr Kim Howells said in the other place. We could decide to retain the current work permit arrangements; we could use worker registration; or we could decide to open up our labour market fully. Those are all possible decisions. Or we could allow more lightly regulated access, along similar lines to the regulation put in place for the eight new member states that joined in May 2004.

What is most important to note tonight is that any decision will be subject to the affirmative procedure in both Houses, so there is bound to be full parliamentary scrutiny of the Government's decision at the appropriate time. That is built in to the legislative framework. In short, the decisions will be taken when they are most relevant, when they will count to the greatest possible extent. The Government have undertaken, as a Minister said in Committee in the other place, to carry out research into the potential impact of opening up the UK's labour market before any decision is taken. That research will of course be shared with Parliament to ensure that the discussion is as well articulated as it can be. That was the point on which the noble Lord, Lord Anderson, was asking for a direct assurance with regard to quality of detail.

In addition, were we to open up our labour market, we would be bound at that stage to continue to monitor the impact of any such policy and publish the findings on that as well. That is the approach we have adopted for workers from central and eastern Europe. Indeed, we are publishing the relevant data on a quarterly basis for those countries—more regularly than the noble Lord, Lord Howell, has asked us for and envisages in these amendments in respect of Bulgaria and Romania. Against this background, and given these reassurances, the Government do not see a need to introduce the changes envisaged in these amendments.

I have read through the Hansard transcript of the debate over the last accession Bill, when several noble Lords spoke against a similar amendment—again, moved at that time by the noble Lord, Lord Howell. The noble Lord, Lord Wallace of Saltaire, said on that occasion:

"We welcome regular reporting, but regular reporting is already provided by a range of functions. We do not think that we should be concerned about the 'dangers' of emigration from the countries that are about to join".

That is echoed by what the noble Lord, Lord Dykes, said about having a more cumbersome mechanism: it would be inappropriate. My noble friend Lord Dubs agreed:

"I am pretty confident that this Government—or any British government . . . would provide the sort of information that the amendment seeks. I should have thought that it is not necessary to have this on the face of the Bill".—[Hansard, 27/10/03; col. 15.]

I agree with the noble Lords, because we can achieve the outcome in an effective way.

I should also point out that the second amendment is misleading—and I have no doubt that this is unintentional—in that it implies that the transitional period, before Community rules on the free movement of workers come into force, is for a full seven years. As the treaty makes clear, derogation can be invoked by a member state for a maximum of seven years, but access can only be restricted for the last two of that seven-year period if there are, and I quote the legislation,

"serious disturbances of that member state's labour market or threat thereof".

We could only speculate about that now. But given our experience of previous enlargements, the noble Lord's amendments would quite possibly oblige a future government to produce reports in six or seven years' time that could have no operational impact.

The Government have argued consistently that managed migration makes a significant contribution to economic growth in the UK, as the noble Lord, Lord Anderson, said a few moments ago. The approach adopted for the last wave of enlargement brought us tremendous benefits, even if the numbers were, as has been pointed out, miscalculated. The nightmare scenarios that dominated our media last time have failed to materialise. None the less, as I said on Second Reading, we need to work with considerable caution because of the risk of arms, drugs or people-trafficking, but those are decisions we will take by affirmative action at the appropriate moment. The Government are well aware of the importance of the decision to grant Bulgarian and Romanian workers access to the UK market during the transitional period after they joined. This decision, then, will be taken at the appropriate time, on the basis of appropriate data and subject to full parliamentary scrutiny.

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs

I am grateful to the Minister for giving way, and I apologise for interrupting him. Will he confirm, as the Minister, Andy Burnham, said in the Commons debate, that the CBI strongly recommends and welcomes these proposals for an influx of workers from these countries?

Photo of Lord Triesman Lord Triesman Parliamentary Under-Secretary, Foreign & Commonwealth Office, Parliamentary Under-Secretary (Foreign and Commonwealth Office)

Yes, I completely confirm that point. Experience has shown just how right that point is.

I see no need to introduce new rigidly specified reporting requirements, even though the future arrangements have not yet been decided. For those reasons I hope the noble Lord will be able to withdraw his first two amendments, and that the House will feel satisfied that the reporting arrangements I have described, and the rights of the House to debate the reports that materialise, will give precisely the kind of reassurance that noble Lords have understandably sought. In that light I ask the noble Lord to consider withdrawing the amendments.

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, Foreign Affairs, Deputy Leader, Parliament, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords

Once again, I am grateful to the Minister for setting out his reasoning so clearly. He said that an implication of accepting these amendments would be a sign that we were nervous about this whole development. The fact is the Government are nervous, which is why they have taken all these powers, regulations and restrictions that they did not bother to take at the time of the last accession. They have learnt that things are not quite so easy, and this time, therefore, have moved with much more circumspection and caution, because they are nervous.

I do not know whether they should be nervous or whether they are anxious that this time they feel more in control of the situation than they were the last time. I respectfully say to the noble Lord, Lord Dykes, that I do not think too much bureaucracy is the right excuse for keeping things from Parliament. Governments always say that such measures are expensive, bureaucratic and so on, but Parliament is entitled to be very well informed about big movements that have social impacts. Although we have been lucky regarding the effects of the first 18 months or so of the implementation of the provisions of the previous accession Act, it is curious that there has been an enormous social development but very little information from the Government about it. The amendments that I moved at the time of that Bill were put aside and rejected. We were told not to worry as we would be given a full picture of what happened. We have not had a full picture at all. It is hardly known what has happened to the 293,000 arrivals, many of whom have been of vast benefit to this country and have made a highly positive impact on it. However, there have been some dark developments. To this day there are some dark developments in relation to casual labour, crime and so on, about which we have had absolutely no information at all—no picture has been presented.

Dr Kim Howells says that this time there should be regulations and says, "We will tell you what we are going to do later because it all needs planning". It may seem odd that I on this side of the Committee am in favour of planning but some kind of organised and orderly approach to the social developments which go alongside these big migrant movements is surely no more than common sense and common prudence. I do not have very much confidence that things will go right this time, or rather I do not have any confidence that the Government will be on top of the situation, but at least they are moving in the right direction. At least, as the Minister said, there is the affirmative resolution procedure which will give us an opportunity to ask questions about what is actually happening.

I say out of courtesy to the Committee that because we have discussed a number of issues concerning the next amendment, it seems to me that it would be wasting the Committee's time to discuss it and therefore, I shall not move it. In the light of what I have said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Clause 2 agreed to.

Clause 3 agreed to.

[Amendment No. 3 not moved.]

House resumed: Bill reported without amendment.

House adjourned at eighteen minutes past nine o'clock.