rose to move, That this House takes note of the report of the European Union Committee on Further Enlargement of the EU: Threat or Opportunity (53rd report, Session 2005-06, HL Paper 273).

The report can be found at the following address: http://www.publications.parliament.uk/pa/ld200506/ldselect/ldeucom/273/273.pdf

My Lords, enlargement is one of the weightiest issues facing the European Union today. Developments since this report was published confirm and reinforce some important arguments and conclusions in it. Today—Europe Day—we can reflect on the accession of Bulgaria and Romania on 1 January and on current disquieting developments in Turkey. Efforts to agree a road map for reform of EU institutions continue to be relevant to our conclusions on the pace and scope of future enlargements. I shall refer to these developments again.

I thank most sincerely all members of the committee at the time for the immense energy and expertise they dedicated to this long and comprehensive inquiry. We were aided admirably by our specialist adviser, Dr Katinka Barysch, an internationally recognised expert on this subject, and we are indebted also to Professor Anand Menon for his input. I also thank warmly Simon Burton, the Clerk, and Sarah Price, at that time the second Clerk to the Committee, who managed the inquiry with great skill and produced a draft of the typically high standard that we associate with our Clerks. I also take this opportunity to thank the Government for their comprehensive and thoughtful response.

Enlargement has been an integral part of the EU's development over the past 50 years, and widening and deepening have always proceeded in parallel. The accession of Denmark, Ireland and the UK heralded the introduction of structural funding; that of Greece, Portugal and Spain, the building of the single market and the planning of monetary union; and that of Austria, Finland and Sweden, serious efforts towards a common foreign and security policy. Then in 2004, eight central and eastern European countries plus Cyprus and Malta came in. Was this the point at which public support for further widening and deepening began to weaken? Was that one of the messages that the French and Dutch voters sent when, 13 months later, they rejected the constitutional treaty, and, if so, why?

Our inquiry aimed to establish whether, to quote the title of the report, further enlargement would thus pose greater threats than opportunities. To do that we first assessed past enlargements, especially of 2004, to illuminate current attitudes towards further enlargement. That in turn meant looking at what we call integration capacity and the debate concerning the future borders of the European Union. This involved a detailed look at candidates and potential candidates for membership, which then led us to consider the possible alternatives to enlargement and, crucially, the probable costs of not enlarging.

What evidence did we find? On balance, the Union has coped well with growing membership. The 2004 enlargement in particular—the biggest in the EU's history—has brought benefits to all members because the prospect and process of accession, exporting the EU's brand values of democracy, human rights, openness and accountability, helped to transform so many former communist states into pluralist democracies and liberal economies. As Enlargement Commissioner Olli Rehn reminded us,

"the process of accession triggered a major democratic and economic transformation without a single bullet being fired".

Yet future enlargement faces a major obstacle: lack of public support in western Europe, combined with a hostile or ambiguous stance by many political leaders in member states. Why, for example, did France change its constitution to make any accession after Croatia subject to a national referendum, with all the chances of negative results? We found that attitudes towards enlargement remain fluid, influenced as they are by unrelated developments such as economic growth as well as lack of information. Little attempt has been made to explain the benefits that enlargement has brought. Misunderstandings about the impact of past enlargements, especially that of 2004, have stimulated public opposition to future enlargements.

Member states' Governments, parliamentarians and other opinion-formers, and the European Commission, must do much more to explain the impact of enlargement to Europe's citizens, including issues such as migration, the link between enlargement and globalisation, and the need to find a way of living harmoniously with different religious communities. They must recognise that economic insecurity and employment are uppermost in citizens' minds when evaluating EU policies, and that a full 40 per cent feel that enlargement has been bad economically for their countries and for the EU as a whole.

Our expert evidence almost unequivocally states that enlargement, acting as a catalyst of economic dynamism and modernisation, has helped the economies of both old and new member states to better face the challenges of globalisation. Much of the economic impact had begun to be felt in the early 1990s as the aspirant states prepared for acceptance as official candidates through the gradual demolition of trade and investment barriers, and with the adoption of the acquis communautaire benefiting business. The economic change induced by enlargement has been absorbed smoothly, without disruptive impacts on either product or labour markets.

There is also little disagreement among the economists that higher immigration levels boost the aggregate performance of the economy, raising the supply of labour, filling jobs that are difficult to fill, lifting demand as migrants spend money and boosting output. More than half a million nationals from the latest new member states have registered for work in the United Kingdom. While this has of course put some strain on public services in some areas, there is no statistical evidence that migrant workers from new EU member states mean increased benefit applications.

Many of the post-enlargement flows have been temporary. More than half of those registering for work in the UK intend to stay for less than three months—a proportion that has been climbing since the early days of enlargement. According to the Institute of Public Policy Research, there are signs that the early movers are starting to return home, having saved money and learnt new skills and languages. Meanwhile, arrivals from the three Baltic states—together the second largest group of migrants after the Poles—have fallen dramatically as economic conditions in their countries have steadily improved. This is the kind of message that member states' Governments need to get out to citizens, to counteract lack of information and misinformation.

On the impact of the 2004 enlargement on the EU's institutions, the increased number of member states and the concomitant wider spread of interests and positions have made aspects of EU decision-making more laborious and time-consuming. That said, most witnesses felt that the EU was working rather smoothly. Earlier suggestions that enlargement could lead to institutional gridlock are not borne out by the evidence.

Yet it may be too early to come to any hard and fast conclusions about impact on the institutions. The larger states may see the institutions as working mainly in the interests of the smaller members and would thus prefer informal decision-making outside them. The larger members already co-ordinate their positions before Council meetings, especially on foreign policy. That inevitably reinforces the broader trend towards more variable geometry, towards the use of enhanced co-operation. Voting weight in the three institutions also clearly needs to be sorted out before any further enlargement to take in, for example, the western Balkan states after Croatia.

What further lessons did we draw for future enlargement? First, an official date for accession announced too early in the process does not sustain momentum for reform and the EU's leverage is diminished. A day should be set only when the negotiations are almost complete and the EU is satisfied that the candidate can assume the obligations of membership. This year's enlargement makes that point very clearly.

A second lesson is that new members must not bring disputes into the EU. Countries with outstanding questions of border delineation, separatism or integration of ethnic minorities must settle them before membership. For example, the final status of Kosovo must be resolved before Serbia can expect to enter the EU, as do Bosnia and Herzegovina's statehood and governance.

In that respect, one is bound to ask whether it was wise that Cyprus, still a divided island, following the Government's rejection of the Annan plan for reunification, should have been admitted. I should mention that the high commission of Cyprus expressed to me its concern that what were intended as geographical references in our report had proved capable of interpretation in a more political sense. I replied that I regretted that.

A third lesson is that conditionality needs to be used in a consistent and credible way. The 2004 big bang enlargement rather undermined the credibility of conditionality because not all were at the same level of preparedness. A country must join only when the conditions have been met. The fourth lesson is that in monitoring accession preparations, the emphasis needs to be shifted from mere adoption of EU-conforming laws to implementation and enforcement. That lesson appears to have been learned with the recent introduction of benchmarking. In certain areas, Croatia has to provide evidence that it is applying EU law before negotiations on the relevant chapter can be opened or closed.

Our report addresses the difficult question of absorption capacity, which we now call integration capacity, and the question of whether a final boundary needs soon to be drawn around the Union. As the Maastricht treaty gives any European country the right to apply for membership, any attempt to draw a final boundary that excludes European countries would not be consistent with the treaty. Moreover, it will be politically undesirable for the EU to attempt to define its final boundaries, as that would weaken its ability to encourage positive change by potential candidates.

What of the political context for future enlargement? First, a larger EU will need institutional change and more efficient decision-making procedures, together with a rebalancing of the respective representation of large and small countries. Without those changes, the EU will not be able to grow and continue to function effectively. Sensible and functionally oriented improvements to the working practices of the Union, as set out in our report, could be dealt with in a new intergovernmental conference, as also recommended in our report, which we hope will now take place in time for changes to be made before the European Parliament elections and the formation of the new Commission in 2009.

We next looked at the options for achieving more flexible ways of making policy in a Union of 27 or more members. We rejected the idea of a "core Europe", as proposed by Chirac, Sarkozy and Verhofstadt, and we are happy that Germany is against an idea which we concluded was unfeasible and undesirable. Of course, variable geometry in the form of enhanced co-operation as provided for in the Amsterdam and Nice treaties could, as we conclude in our report, be the method increasingly relied on in an expanding Union. That is no bad thing. Although variable geometry has not so far been formally employed, it exists de facto in, for example, opt-outs, Schengen and the eurozone. But any enhanced co-operation must be transparent, properly publicised, and open to all to participate. It must not endanger existing achievements such as the single market, and democratic accountability must be ensured.

The financial cost of future enlargement is not easy to forecast. The current 80 per cent of the budget for the common agricultural policy and structural funds will not change fundamentally during the 2007-13 financial perspective, but the budget review of 2008-09, intended to point the way to, inter alia, a radical restructuring of spending, must take into account the possible impact of future accessions. The western Balkan aspirant states are already receiving a great deal of EU aid, so the extra cost of accession should be modest, and there is reason to hope that Turkey's continuing rapid expansion of its economy will diminish any demand for regional aid if and when it accedes.

If the countries of the western Balkans are to be able to address their many challenges in terms of economic reform, statehood and the integration of minorities, they must be offered a credible EU perspective. We made commitments to their eventual accession at Thessaloniki and we must keep them, however long the road may be for some, if not all of them. I invite noble Lords to read the convincing evidence of the noble Lord, Lord Ashdown, on that perspective. I add that in the western Balkans, the EU is dealing with more fragile and fractious countries than any that came in in 2004. The EU therefore needs a more proactive approach, devoting sufficient expertise and money and finding ways to maintain momentum for positive change over the extended accession process.

Since our report was published, the Commission has decreed that, as we had urged, negotiations with Croatia and Turkey no longer be linked. Croatia has made good progress but there are still areas needing more, such as public administration, the judicial system and some branches of industry, and more needs to be done to implement the anti-corruption programme. That said, the European Parliament has specified 2009 as the date by which it should give its assent to Croatia's accession, even though the Commission stands by the Council's decision not to set any target dates.

We examined objectively and extensively the pros and cons of Turkish membership. Our findings are in paragraphs 205 to 225. We concluded that it is in both Turkey's and the EU's best interests that the accession negotiations, whatever the hesitation and hostility hanging over them, be pursued in good faith and with a will to bring them to a successful conclusion.

Noble Lords will recall that last December's General Affairs and External Relations Council agreed that eight of the 35 chapters of the acquis will not be opened until Turkey implements the Ankara protocol extending its customs union to the 10 new members of the EU, including Cyprus. Our report also insists that the economic isolation of the Turkish community in Northern Cyprus be ended. Turkey's accession, we argue, is of such strategic importance to the long-term development of the wider Europe that the Cyprus question must not be allowed to derail the accession talks.

Turkey has made significant progress on reforms—another good example of the power that the prospect of EU accession can have. But much remains to be done, not least on human rights and freedom of expression. The current crisis over the election of a new president, which we hope may soon be resolved, reminds us once again of the propensity of the army to intervene in politics, a practice wholly incompatible with EU membership. In Turkey, there has been a sharp fall in public support for EU membership, and the efforts of those who want membership are frustrated not just by Turkey's internal problems, but also by negative views from many European players. As one pro-EU Turkish commentator put it over the weekend:

"Frankly, Sarkozy's election is the last nail in the coffin of Turkey's relationship with the EU".

Yet Commission President Barroso has just said that the Commission's position is that negotiations should continue. In my view, so they should.

Last, we looked at possible alternatives to enlargement and at the cost of not enlarging. The EU needs to work with countries that have no immediate or even medium-term prospect of membership, and its European neighbourhood policy is a promising start, although it has had little impact so far. For the purposes of bringing about positive change in participating countries, its incentives are not attractive enough, its conditionality is not tough enough, and its policies not tailor-made enough for the different countries.

The EU rightly aims to integrate non-members into its single market and let them take part in selected EU policies. The combination of variable geometry among members and growing association and integration with non-members could blur the boundaries of membership. That would be no bad thing. A "fortress Europe" would be.

Some European politicians advocate a "privileged partnership" for EU neighbours as an alternative to further enlargement. Turkey, for one, would never accept that. With its customs union, it already has a privileged partnership. In the western Balkans, a privileged partnership would be seen, according to the noble Lord, Lord Ashdown, as,

"closing the door on them".

We agree. EU Governments should stop talking about privileged partnerships. It can only demotivate candidate countries.

When thinking about the costs of not enlarging, we had to distinguish between countries that have been told that they qualify for membership and those that have not. The political costs would obviously be much larger in the former. Remember the commitments at Thessaloniki. We must recognise that the EU 27 are surrounded by an arc of instability ranging from Russia through Belarus, Ukraine, the potentially explosive Caucasus and Balkan regions, to the war zones of the Middle East. So the EU's toughest task in future years could well be dealing with the challenges in its own neighbourhood. Take away the prospect of EU membership, however distant, and the incentive to change and embrace the EU's brand values in neighbouring countries may disappear with it.

Our witnesses—policy-makers present and past, economists, diplomats, commentators and many other experts—almost unanimously agree that the 2004 enlargement was a success on which the EU now has to build to make it more manageable. Governments have to explain better to their citizens what the real benefits have been and can continue to be; to show, for example, that migration, if properly managed, has been a plus can remove many unfounded fears. In the interests of peace, stability and prosperity in Europe, we must keep the door open to further enlargement and welcome the candidacy of any European state that shows itself capable of meeting the conditions. That is the essential message of our report.

The gains of enlargement have so far measurably outweighed the pains and we believe that they will continue to do so. I beg to move.

Moved, That this House takes note of the report of the European Union Committee on Further Enlargement of the EU: Threat or Opportunity (53rd report, Session 2005-06, HL Paper 273).—(Lord Grenfell.)

My Lords, it was a great pleasure to serve on the EU Select Committee for four years under the chairmanship of the noble Lord, Lord Grenfell, and the report that we are discussing and looking at tonight was an investigation undertaken under his chairmanship. He has spoken tonight in a way that, as all noble Lords will agree, showed great competence, thoroughness and looking at all the different angles involved in the question of how far membership of the European Union should go. It is a privilege to follow him on this subject.

The report is indeed competent and thoughtful. We noted with satisfaction the growth in the economies of the countries that have recently joined the EU. That is well catalogued in some of the appendices to our report. We appreciated the expectations of Bulgaria and Romania. When we were investigating they were still two or three months away from joining, but it was clear how much they were looking forward to and preparing for it. But, when we turn to further enlargement, that was the difficult part of the report. We considered countries that used to be members of the Soviet Union; for example, Ukraine. We considered Croatia and the other Western Balkan countries and of course we considered Turkey, the most difficult of all. Was the EU, already 27 countries, biting off more than it could, in terms of administration and understanding by European people, reasonably chew? We came to the conclusion, as the noble Lord, Lord Grenfell, has just said, that the process for Croatia would certainly continue; accession talks were on the way. But if Croatia joined—when Croatia joined, I should probably say—it would not be possible then to exclude other western Balkan countries. In that we were helped and advised by the noble Lord, Lord Ashdown, who drew on his profound experience of the western Balkan countries. It was a great pleasure to listen to his advice on that subject.

For the Ukraine and the other ex-Soviet Union countries our conclusion was that that could wait; there was no one pressing at the door and therefore we did not have to hurry. However, as the noble Lord, Lord Grenfell, has just said, Turkey was difficult. I make it covered in our report by three more paragraphs than the noble Lord; it is paragraph numbers 205 to 228 and it forms a large part of our report and of the appendices to it.

In summary, we believe that it is in both Turkey's and the EU's best interests that accession negotiations be progressed and should proceed. But six months have passed since our report was published and in that time Turkey has recently suffered difficulties about the future presidency. There is a rise of political Islam in Turkey and it is not clear how the Turkish people themselves intend at this stage to proceed to deal with that. Most of all, there has been the arrival of Nicolas Sarkozy as president of France. The noble Lord, Lord Grenfell, quoted one recent remark about him from a British newspaper; I should like to quote another. In its leader yesterday on the TV debate last week between Nicolas Sarkozy and Ségolène Royal the Times repeated comments that Sarkozy made in that debate. Sarzoky believes that Turkish membership of the European Union would spell,

"the death of political Europe".

The Times added that it thought that that was mistaken judgment, but that that was Sarkozy's judgment. Equally, in the Times yesterday, a spokesman for Angela Merkel said:

"In what is one of the crucial phases for Europe, it is important to continue the close, trusting and intensive co-operation between Germany and France".

That surely means that we have to think carefully in Britain about what the next steps of our approach to the European Union should be. If there is to be a powerful alliance between France and Germany, between Chancellor Angela Merkel and the new president Nicolas Sarkozy, do we want to be part of that tripartite alliance or are we prepared to stand away from it, to be alone with some of the smaller countries but not in partnership with France and Germany? I suspect that this is a moment when Her Majesty's Government must pause and think carefully on what their next step should be.

The issues of reducing the number of areas subject to veto by a single country and of a modified but much simpler written constitution are ones that will be debated in the future whether we like it or not. I do not think that at this stage we are clear in our own minds as to what we want to happen. There is no harm in standing back and careful thinking at times. There is an old Latin tag: tempora mutantur nos et mutamur in illis—times change and we have to change with them. Is that what our position should be at the moment? I hope that this is the moment when the Government will pause, take time and think out what the next movement is, and with an EU that I profoundly wish to see prospering, what the right steps should be.

My Lords, it is an indication of the effectiveness of the chairman of the Select Committee that he was able to arrange that we could have a debate on this topic on Europe Day. It is obviously useful that we should have a chance to celebrate what has been one of the real achievements of the European Union in this century, the fifth range of enlargement. I also want to say how much I welcomed the Government's response to our report because it picked up and in almost every respect agreed with the points made by the Select Committee. I regret, as the report does, that less was done in 2004 to reinforce not only in this country but throughout the whole of the European Union the remarkable achievement we had made in making sure that there was an enlargement first to the 10 countries and then to 12—the point made by the noble Lord, Lord Grenfell. To some extent, that enlargement in 2004, finalised by the addition of Bulgaria and Romania at the beginning of this year, marked the end of the 20th century. It was a significant point in the historical development of our continent.

Despite its overall success I should like to say how much I agreed with two points made by the noble Lord, Lord Grenfell, in his remarks about flaws in that enlargement. First, we may have made a mistake over Cyprus. Failing to ensure that it had solved its internal problems before entry may have been a mistake, but we have to remember that at the time the European Union was possibly faced with the risk of Greek action to prevent any enlargement unless Cyprus was allowed to come in. However, it was a very unsatisfactory solution, and, as we can see in the consequences for Turkish accession, we are suffering from the decisions we took at that time.

The second point made by the noble Lord, Lord Grenfell, with which I concur, concerned the mistake—this applies particularly to the cases of enlargement to Bulgaria and Romania—of fixing target dates. The announcement of target dates in advance removed the leverage the European Union would otherwise have had to ensure adequate judicial administrative reform before accession. Certainly, recent developments and instability in Romania's political structure since enlargement are worrying.

Before going on to look in more detail at the issues of the next round of enlargement to the western Balkans and Turkey, we should remember the members of the European Economic Area and Switzerland, four further countries—the others are Norway, Iceland and Liechtenstein—that could all presumably become members fairly quickly if they so wished. We tend to think about the difficult countries, but there are four countries in Europe that would be very welcome if their people were prepared to look at membership. From time to time, we hear from Norwegian and Icelandic politicians, occasionally even from a Swiss politician, who would argue that enlargement to them should be encouraged.

Politically, the situation in the western Balkans has become probably more complex and more difficult than last year, when we were considering the countries en bloc in our report. I totally agree with what was said by the noble Lord, Lord Grenfell: the Thessaloniki commitment of the European Union to the countries of the western Balkans must be maintained. We are pleased that Croatia is making such significant progress. The European Union Committee recently had an opportunity to hear the ambassador from Croatia, who was able to give us evidence of the progress being made. When we go beyond Croatia, however, we begin to find problems. I hope that the Minister will tell us why there has been a delay in opening negotiations with Macedonia, even though it was agreed that that country should have candidate status.

In two of the other smaller countries, things seem to be going somewhat better. The technical negotiations are complete on the stabilisation and association agreement with Montenegro, and Commissioner Rehn and the Prime Minister initialled it on 15 March 2007. It looks as if Montenegro is moving in the right direction. Similarly, although Albania has a long way to come and has a number of difficult internal political problems at the moment, there is slow but steady progress.

It is when we come to the remaining three countries in the western Balkans that we really have some difficulties. In Bosnia-Herzegovina, the situation has probably slowed down since we considered the matter last year. A Government has still not been formed. There will be a replacement for Dr Schwarz-Schilling as High Representative, but there are still noises from Mr Dodic in Republika Srpska suggesting that he will want to see the knock-on effect of a Kosovo agreement. We should obviously continue to work with Bosnia-Herzegovina, but the progress will be slow. It is necessary that the option of membership is maintained.

Serbia, if anything, is more difficult. The domestic politics are depressing. The news yesterday that the parliament has elected a speaker from the Radical party suggested that the rather more democratic parties were not able to hang together even to choose a speaker for their parliament. It is a paradox: if there is a country in the western Balkans that, in terms of its administrative structure and economic readiness, could be a member and begin negotiations relatively quickly, it is Serbia. The stabilisation and association agreement is virtually negotiated. None the less, it is difficult to be optimistic, given the continued "ambiguity", to be polite, of Serbian attitudes regarding General Mladic and the failure to deal seriously with those who are protecting him.

The only grounds for optimism are that if a decision is made in the United Nations in the next few weeks over Kosovo, the Serbs will then perhaps have to accept reality and may be in a better position both to form a Government and to start some serious negotiations with the European Union. I will not say too much about Kosovo because, even as we meet here, discussions are going on at the UN about a possible settlement. If agreement is not reached, however, that will again be a problem.

Turkey is much more difficult even than the western Balkans. I support the view in our report that we should look forward to the continuation and, we hope, the completion of negotiations with Turkey. Since we completed the report, however, I have become more aware of a need for us in this country to have a dialogue with our partners in other European countries trying to deal with the fears and misgivings that exist in other member states about Turkish membership. It is no use Britain just appearing as a country that is in favour of enlargement for enlargement's sake; we have to make the argument for why Turkish membership would be to the advantage of the European Union, and I am not sure we do that enough at the moment. We need to look at that.

I am less worried than some about the election of Nicolas Sarkozy. It is likely to be at least 10 years before Turkish negotiations are continued, and while some prime ministers remain for 10 years, many of them do not do so for much more than that. There may well be a different president of France in office when we come to the conclusion of the negotiations.

Here perhaps I am wrong, but I take a different view on the question of the current debate between the secularists and the political parties within Turkey. This is a dilemma in the development of Turkish democracy that is bound to occur, and needs to. The debate may be healthy for those in Turkey if they are able to work out a new and more appropriate balance—at least, I would like to think so.

In our report we referred to the European neighbourhood policy, which is sometimes suggested as an alternative to membership of the European Union. It would be a mistake to see it in that way. In some countries—those in North Africa, for example—it is a sensible alternative, but for those who are European neighbours it should be seen as a situation where they can work, modernise, improve and perhaps adapt themselves so that they become valid candidates for membership. I believe that we could see, not necessarily in my lifetime but perhaps in the next 20 to 30 years, European Union membership for the Ukraine, Moldova and Belarus. They should not be excluded, nor should they automatically be offered membership at this stage.

This is an important report. It points the way to a number of the areas of policy that we in this country have to take forward in the development of the Union in the years to come.

My Lords, I congratulate my noble friend Lord Grenfell on his thoughtful and wide-ranging speech about the future of the European Community. He has presented certain recommendations that are embraced in the report and which we ought to take seriously.

The committee has undertaken a monumental and invaluable task. However, it is crucial that we should face up to the challenges and advantages which could accrue from the European Union's enlargement. Before saying anything else, I should declare an interest. I had the honour to be a European Commissioner from 1985 to 1989. In that respect, I owe a great deal to two Members of the House. The first being the noble Lord, Lord Williamson, who I met before taking office—in 1984, I think—when he had moved from the Ministry of Agriculture to the Cabinet Office. He later became a most successful Secretary-General of the European Commission. I also owe a great deal to the noble and learned Lord, Lord Howe of Aberavon. He displayed an unstinting interest in the Commission's activities, something which I could not say of all members of the then Conservative Government.

When the European Union was established, it was never intended to be a union of 12, still less of 27, or more, nations. However, it was designed—and in this regard has succeeded—to offer sound economic advice and, coupled with that, social progress. It stood for durable and strong values and ensured that Europe's voice was heard when and where it counted.

As I have said, the European Union has largely succeeded but it has inevitably also encountered failure. Its principal success has been to establish peace over a wide area, one in which war was, all too often, a debilitating factor. It has also played a vital part in bringing democracy to the lives of so many where dictatorship of the right or of the alleged left was often the order of the day.

Enlargement brings its own problems but it also has immense rewards, which are insufficiently voiced by those in power and, as a consequence, are not felt enough by the people living in the various countries of the European Union.

In contrast to Euro-sceptic views, the United Kingdom has enjoyed huge benefits in trade, exports and investment from other countries within and without the European Union, all of which have grown exponentially and that trend persists. The UK, together with Ireland and Sweden, has benefited enormously from large employment growth and has accrued immense advantages in the development of the single market. In that regard, I say, in passing, how much is owed to my then colleague, the late Lord Cockfield. In three months—it took him only three months—he went from being a Euro-sceptic of the highest, or, should I say, the lowest, order, to being a valued member of the Commission.

In tackling international crime, the UK has enjoyed co-operation from other countries, but this is especially marked between the UK and other EU members. The UK has fully participated in environmental schemes and has helped make Europe's contribution so much more meaningful. We face enormous challenges in that respect, especially regarding climate change. However, the leadership being shown by our country is of great value, not only to the European Union, but also more widely than that.

The most intractable problem confronting the UK and the EU is the possible accession of Turkey, of which we have heard a great deal in today's debate. Despite its abolition of the death penalty, improving the lot of women, the diminution of torture and many hard-won benefits, much more needs to be done. Turkey must guarantee the political and economic rights of Cyprus and, as far as I can judge, it has simply not done enough. My hope is that common sense will prevail, but in this important respect, we are entitled to expect that Turkey will exhibit its bona fides—so far, alas, the auguries are not very benign. To this end, the report expresses the view, which I wholly endorse, that the UK should do whatever it can to ensure that Turkey plays its full part in bringing the negotiation to an honourable and successful conclusion. It can do no less. How will Turkey respond? We do not know the answer to that vital question. We can only hope.

Further enlargement is key to the EU's continued progress. However, I emphasise—as does the report and the Government's response—that this has to be a two-way process. It will never be easy to manage a union of 27—perhaps more—member states but the European Union's team, led by Mr. Barroso, is proving capable of achieving a great deal. As a country, we should actively participate in this endeavour and not simply snipe from the sidelines.

My Lords, I add my congratulations to the noble Lord, Lord Grenfell, and his committee on this excellent and informative report. Having sponsored a debate on Turkish membership of the Union in your Lordships' House in December 2004, I wish to focus my brief remarks on that issue. As the noble Lord, Lord Grenfell, stated, the report concludes in paragraph 293:

"Whatever the hesitation and hostility hanging over Turkey's accession negotiations, we believe that it is in both Turkey's and the EU's best interests that the accession negotiations be pursued in good faith and with a will to bring them to a successful conclusion".

The report deals with all the pros and cons of Turkish membership and rejects the idea of a privileged partnership as an alternative to full membership. But let us suppose that the Cyprus issue is resolved, that Turkey manages to maintain its secular status and to meet the Copenhagen criteria, and that full membership is finally achieved at some moment in the future. The European Union will then be changed in three important respects.

With a population, by then, of around 100 million, Turkey will be the largest member of the Union, which will have all sorts of implications for management and voting strength. It will also have more Members of the European Parliament than Germany, France or the UK. Secondly, given free movement of labour, there will inevitably be a substantial migration from Turkey to the west, and thus a substantial increase in the Muslim population of existing member states. Thirdly, Turkey's geographical location takes the Union beyond the boundaries of Europe and links it more directly with the problems of the Middle East.

These are major changes and involve huge uncertainties. It is easy to see why, for some, the risks outweigh the proposed benefits. But, accepting the risks, we must agree with the conclusions of the report that it is in the best interests of both parties, at this stage, to pursue the negotiations in good faith.

My Lords, I was for a period a member of the European Union Committee, during which time I developed a considerable appreciation of my fellow members—the officials, the advisers and, above all, the chairman, then, as now, my noble friend Lord Grenfell. I am currently only a member of Sub-Committee E, which deals with law and institutions, but I try to keep up with more general EU matters through such reports as this one on enlargement.

In the early years of the EC and the EU, the approach to enlargement was appropriately cautious and gradual. Then came 2004 and the major addition, all in one go—a grand slam, as some people called it—of 10 new states. The increase in population, however, was relatively modest. But it was a tremendous breakthrough, particularly into countries of eastern Europe that had not long before been locked into the totalitarian regimes of the Soviet empire. That year was 15 years after the end of the Berlin Wall, giving those countries some limited exposure to democratic freedoms, the rule of law, economic liberalism and the enhancement of human rights.

I am doubtful about some of the countries admitted in 2004, in terms of their adherence to the principles that I have just mentioned, and about the latest two countries to accede, in January 2007—Bulgaria and Romania. I have graver doubts about further enlargement, particularly the enlargement covered by the noble Lord, Lord Cobbold. Somewhat contrary to the report, I believe that it is perhaps time for a pause—a period of contemplation for the absorption process to demonstrate clearer adherence across the European Union as it exists to European values and more positive results from the enlargements of 2004 and 2007. One particular difficulty has been referred to by at least two speakers. It has even been suggested by those who very much favoured the 2004 enlargement that perhaps one aspect, affecting the island of Cyprus, may have been worsened by the accession to the European Union of Greek Cyprus only, so soon after the Greek rejection of the Annan plan for reunification of the island.

I should like to mention something which has not been specifically mentioned, although I recall references to the institutions of the EU needing some attention. Each of the new members, no matter how small, is entitled to an EU Commissioner. So the Baltic states have between them three Commissioners, while Britain and, for that matter, Germany and France, have only one each. If each of the Balkan states formerly comprising Yugoslavia were admitted to membership, they would have six or seven Commissioners between them. Even the greatest enthusiast for European Union enlargement would balk at that unless some changes are made. Further enlargement of the European Union beyond the number we now have without institutional change regarding the number of Commissioners seems neither desirable nor credible.

Since about 2000, there has been a tremendous momentum favouring enlargement among those who wanted to join but were not members and among the existing members. However, there is a risk of it dissipating—in other words, the enthusiasm of the original members of the EU may have lessened. To eastern Europe, it should be no surprise that accession has been seen as a desirable completion of the changes brought about by the end of the Berlin Wall. However, I am not sure—and I think that some speakers would agree—that the EU has been exacting enough in its conditions for membership. I would put it this way: assurances and promises from candidate countries seem to have been accepted as equivalents of actual change prior to the grant of membership of the EU. Basic freedoms and the rule of law are not adequately respected in some countries. As a small example, I am anxious that in Poland freedom of speech is somewhat at risk. Academics and journalists are being sent questionnaires about how far they co-operated with Poland's communist regime, which fell in 1990. Failure to complete those questionnaires results in the loss of their jobs.

High-level corruption and organised crime in Romania and Bulgaria, our two latest adherents to the Union, continue to be a serious problem. A report in the Financial Times last month said:

"Several EU member states claim Commission officials have been told privately to not be too critical of the two countries, even though Bulgaria has a non-existent record for convictions for high-level corruption".

The report and my noble friend Lord Grenfell in opening the debate are surely right to say that the EU should not endorse target dates for EU entry in the future until it is fully satisfied that the candidate can assume the obligations of membership. The noble Lord, Lord Cobbold, referred to Turkey, which is on track to enter the EU by 2014. It could be 2017; it could be some later date. Aside from the particular problems of Cyprus, there are longer-term concerns about Turkish membership. The noble Lord, Lord Grenfell, referred to the anti-democratic threats of intervention by the army. That, of course, would not be the first intervention in recent years, but one of three or four. I am not sure whether that is the greatest worry or whether it is the other worry, mentioned by the noble Lord, Lord Renton of Mount Harry, which I would term influence on government of Islamist ideology despite the country's secularist constitution. It would not be a happy situation for the existing members of the EU if the new President of Turkey were to allow such ideology to influence the vital powers that he has to appoint judges, heads of universities and senior posts in the civil service.

Under Article 49 of the treaty on European Union, any European country may seek membership of the EU if it respects and applies European values of decency—I am sorry; decency would be all right, but I meant democracy—human rights, the rule of law and fundamental freedoms. The so-called Copenhagen criteria of 1993 put flesh on the bones of that list. It is most important to stress the significance of those factors in establishing and retaining a common purpose, identity and culture for Europe that those who started it all off in 1957 would still recognise.

In my view, the European values set out in these documents should not be unduly stretched, like a piece of elastic, in the cause of pushing ahead and continuing almost relentlessly the momentum to enlargement of which I have spoken. Apart from other considerations, it is recognised by the noble Lord, Lord Grenfell, and in the report that public opinion on these matters is problematic or, if the noble Lord, Lord Grenfell, prefers, fluid. Too often the EU fails to carry public opinion with it on a number of matters and, as we all know, the institutional and policy changes necessary to accompany enlargement have not yet taken place. That is why I believe that a pause is desirable.

My Lords, first, I reiterate my position on the EU, which is, as it has always been, that we should never have gone in and that we should come out tomorrow. Having said that, I congratulate the committee on the work that it has put in on the subject of enlargement. It is a highly important subject and needs a great deal of consideration and discussion. I wish to comment on some aspects of the report. I had thought that I should be an odd man out today, but that has not proved to be the case. I am very encouraged by the cautionary tone of some of the speeches. In some respects, I shall follow what has already been said, in particular about the accession of Turkey.

From my point of view and that of many others, widening has always meant deepening. Some people have taken the view that widening would lead to less deepening. I have always taken the view that widening is bound to lead to more deepening. That has been the case. The committee commented on current attitudes of the public to enlargement. The Government do not give the public enough credit for knowing what is going on. They feel that they need to explain the benefits of the EU and enlargement. When I have asked, "What are the benefits?". I have always been told by the Government that they are self-evident. Clearly, the Select Committee does not feel that that is the case. In this case, the Government agree with it and want to convince the people one way or another. One of the ways in which they could do so with regard to the policies of the EU is to produce a cost-benefit analysis. That has been requested by the noble Lord, Lord Pearson, who is present today.

Indeed, the public are not unaware of many of the implications, especially the dilution of Britain's voting strength in the institutions, extra costs and the potential for large waves of immigration after each enlargement. Although the noble Lord, Lord Grenfell, said that the general view is that immigration helps the economy to grow, and is beneficial to the economy, other people believe that that is simply not true; they believe that, when you take infrastructure costs, housing and what have you into account, far from there being a benefit, there is a detriment. There are different points of view among the public and they are aware of the difficulties.

The impact of previous enlargements has led to more centralisation—an increase in powers. Already some 70 per cent of policy emanates from the European Union. I do not know how much more there will be. There are the present demands to bring back the EU constitution in one form or another to deal with the latest influx of new member states. These suggestions include a two-and-a-half-year presidency, a foreign minister, a legal personality and the relinquishment of most of the remaining vetoes. If those are brought about, that would be a serious deepening of the European Union and a huge increase in its powers and influence.

On costs, the committee points out that the budget review will have to take into account future enlargements. So it will. The committee refers to the fact that discussions will take place in 2008-09. What, I should like to know, will happen to our rebate during those discussions? That has been under attack for a very long time. The French in particular see 2009 as the date when Britain will lose its rebate, in part to finance future enlargements.

What about future enlargements? I have read the details in the report with some astonishment. Under the heading "Candidates and potential candidates", the report states:

"The Union could be faced with the stark choice between integrating ... or having to take responsibility for running them as protectorates".

Have you ever heard anything like that in modern times? It smacks of old-fashioned imperialism. The noble Lord, Lord Triesman, gives me a look of disagreement, but we are talking about "running them as protectorates". If that is not imperialism, I do not know what is.

We need to know the limits of enlargement. Are there any limits at all? The treaties referred to an ever closer union among the peoples of Europe, but recent indications of government policy seem to envisage a much wider union embracing a geographical area beyond Europe. There are 13 possible entrants in Europe if Belarus and the former Soviet republics are included, but the present drive—and we have heard about it in practically every speech tonight—is to admit Turkey. Turkey is an Asian country. It has ancient roots and an ancient culture as well as an overwhelmingly Muslim population. By 2016, the target date for accession, the population of Turkey will be between 90 million and 100 million, as the noble Lord, Lord Cobbold, pointed out. That would make it by far the largest country in the European Union—far bigger than Germany, which is the largest country at present.

Turkey's accession would have enormous implications for the European Union and our own country would suffer from them. These profound implications are not being considered by Governments, let alone their populations. If Turkey is admitted, there will not be a European union; it will be a Eurasian union. Make no mistake; you cannot get away from the geographical position of Turkey. It is an Asian country.

Furthermore, if we cross that Rubicon, once the precedent has been set, what is to stop further eastern expansion into Asia? How will the EU be able to refuse applications from countries such as Armenia, Kazakhstan, Uzbekistan and Turkmenistan if Turkey is admitted? That would add a further population of 70 million to 80 million to the Union and bring additional problems, including the governance of such a diversity of peoples.

There is now talk of the EU's relationship with north Africa. Mr Nicolas Sarkozy, the newly elected French President, specifically mentioned north Africa in his speech following his election. Some people are arguing already that the colonial relationship of north Africa with many European countries gives it a superior claim to join the club than the likes of Turkey and other Asian countries.

We really ought to get down to defining the limits—if there are any in the minds of Governments and others—of EU expansion. If we do not, we will find ourselves facing unimaginable, insoluble problems and difficulties that could lead to a complete collapse of the whole edifice. The report is entitled, "Enlargement of the EU: threat or opportunity?". I have made it clear that I believe it to be a threat.

My Lords, I am delighted to have been on the Select Committee that produced the report, and that we have an opportunity today to debate it. I am very grateful to my noble friend Lord Grenfell for the way in which he led the committee and to the staff for their helpful support.

When the 10 countries joined the EU, I felt quite emotional as I watched the ceremony in Dublin on television. It was an important occasion. Eight of the countries had been communist, living under a dictatorship, and had moved towards accepting the principles of freedom, democracy and market economies. That was an important and significant occasion. Joining the EU was one of the main aims of many countries under communism, because it was their chance to demonstrate their commitment to democracy, freedom and human rights. Some of the countries said, way back, that one benefit of wishing to join the EU was that changes that they wanted to make anyway had to be made a bit faster under persuasion from the EU. They thought that that was a good thing.

I welcome the British Government's positive attitude to enlargement and know that that stance has been much appreciated in the accession countries and others hoping to join the EU. I am aware that in many EU countries there is now less enthusiasm for enlargement; we see phrases such as absorption capacity, which has now been called integration capacity. We had a taste of that a minute ago from the noble Lord, Lord Stoddart, whose remarks I will comment on as I go on.

One issue highlighted in the report is that public opinion in some countries in western Europe is not that enthusiastic about enlargement. However, I agree fully with the report's finding that the Governments of the EU have made far too little effort to bring their populations with them, to explain the arguments and the benefits of enlargement, and to try to win over public opinion. If there is no attempt by western Governments to persuade our voters and educate them about the benefits of EU membership and enlargement, of course the only voices that we will hear are those of the noble Lords, Lord Stoddart and Lord Pearson. That is to the detriment of the whole process, and I hope that EU Governments will be aware of what is happening.

The noble Lord, Lord Stoddart, said that wider meant deeper. I am bound to say that that assertion has no argument to support it. Most of the people I have spoken to who do not want a deeper Europe welcome enlargement, because they see it as a way of widening the EU and of not going down the federal path, which I do not think any of us here particularly wants. But one cannot do that by arguing in terms of assertions; one has to prove a point.

One of the difficulties for the Turkish Government, who want to join the EU, is that the negative voices towards Turkey from many western European countries are having an adverse effect on public opinion in the country. It is hard for a Government to maintain enthusiasm for their policy of trying to join the EU in the fairly distant future, if their own public hear such negative expressions from here. I will say a little about economic benefits and some of the countries on the route to accession, and then turn to some of the arguments about how we might look ahead.

I am satisfied that there are massive economic benefits for this country in European enlargement. The ultimate test has to be: what is in the interests of this country? Clearly, however, there are also benefits to Europe as a whole, which I equally welcome. After all, 14,000 British firms export to central and eastern Europe. There has been a big increase in trade between Britain and the A10 countries. We have seen benefits in Britain in our economic growth, at least partly as a result of the movement of labour from some of the A8 countries. It is certainly clear that the three countries that opened their doors to labour movements from the A8 countries have seen larger economic growth than the other members of the EU. I know economists differ in their assessment of this, but I have seen estimates of up to 1 per cent of GDP growth being attributable to the beneficial effects of inward migration.

In turning to specific countries, I shall start with Poland, also referred to by my noble friend Lord Borrie. I was at a party at the Polish embassy to watch the referendum and, because it achieved more than 50 per cent, to celebrate its success and the fact that Poland would soon be a member of the EU. I was very enthusiastic. I say to Poland that, when her friends are dismayed by some of the things that are happening, we are dismayed as friends and people who have supported Polish entry for a long time. I refer, of course, to the process referred to by my noble friend Lord Borrie, which is now called lustration.

It is very sad that people who held out against the communist regime, people who were distinguished members of Solidarity, should now have to stand out against their Government because of what they are trying to do. I refer in particular to Tadeusz Mazowiecki, Poland's first non-communist Prime Minister, who has been dismissed from a particular committee; and Bronislaw Geremek, a former Foreign Minister, who has been threatened with losing his seat in the European Parliament. Why? Because they believe that the Polish Government are indulging in a witch hunt by making them sign statements when they have already been cleared. I am delighted that the European Parliament has come out in support of Mr Geremek. I am not clear whether the Polish Government are able to dismiss a member of the European Parliament, but the threat is there. It is not a happy policy to come from Poland. I hope that they will realise that it is against the spirit of human-rights-based policies that characterise the EU.

I turn now to Turkey. I was in Ankara a couple of months ago, where I was able to indulge in serious discussions with various people. I was, of course, critical of some of the things that are happening in Turkey. We should recognise the progress that Turkey has made. It is no good saying that we do not like what the army is doing and that it is not a good omen for the EU, if we do not, at the same time, realise that Turkey has made significant progress, is working very hard on this and wants to go on making progress. The people I spoke to were very keen on our understanding that they have made some progress, but they realise that they have some way to go.

It is clear that Turkey would not accept second-class status. They are a proud people and the idea, which some EU Governments might suggest, of having some sort of relationship with the EU is not acceptable; nor, indeed, would the countries of the western Balkans accept it.

Our report is clear about Cyprus, but it is important that this should not be allowed to halt the process of moving towards accession talks. We need to deal with Cyprus separately. The Turkish Government must take action on the commitments that they made some time ago. There also have to be moves on the part of the EU and the Cypriot Government. These difficulties can be overcome.

There are still difficulties over human rights and basic freedoms in Turkey. Article 301 of the constitution is a particular problem, but Ankara recognises that. We are all dismayed by the Turkish army's threat to the elected Government because of the discussion about the future presidency. Whatever the Turkish army has done in the past was before Turkey wanted to join the EU. The situation is different now and it is totally unacceptable for a military force to operate independently of, and in opposition to, a democratically elected Government. I hope very much that wiser spirits will prevail in Ankara. I give way.

My Lords, before the noble Lord leaves Turkey, could I, as a friend of Turkey, raise a problem that he has not covered? The French and Austrian people have been given binding referendums on whether Turkey should be allowed to join the European Union when the time comes. Does the noble Lord see opinion in France and Austria changing quickly enough to allow Turkey to enter the European Union, whatever the political negotiations may be in the mean time?

My Lords, I do not want to underestimate the difficulties presented by an ill advised move by two Governments in holding referendums. That has never been the case before and it raises the possibility of some very unhealthy arguments taking place about the accession of Turkey. All I can say is that Turkey's accession is, at best, many years ahead. Opinions can change by then. We shall see how things develop. That does not mean that we should say no to Turkey because the previous French President said that there would be a referendum. That would be a most ill advised approach.

I turn to the situation in Moldova, which I had the chance to visit last year. Moldova, with its close economic, political and social ties to Romania, is now separated from Romania by the European Union border. This has posed enormous difficulties, particularly as the country is also having problems with the policies emanating from Moscow. For example, Moldova makes more wine than any other product. Until the Russians boycotted Moldovan wine, 65 per cent of it went to Russia, so the country is under economic pressure. There is also pressure in a small part of Moldova called Transnistria, where there are still some Russian troops. These are all serious problems, exacerbated by the fact that their easy relationship with Romania has now been severed by the EU border. I hope that the Government will look at Moldova as almost a special case in the support and help we can give them, given that their difficulties are greater than those experienced by any other country adjacent to an EU member.

It would be wrong to set a limit on EU expansion, to say today that Europe will go so far and no further. Equally, I am unhappy with the idea of a pause, as put forward by my noble friend Lord Borrie, because it would simply destabilise the applicant countries. It is not clear what would bring a pause to an end. There is, anyway, plenty of breathing space in the fairly long process of negotiating accession agreements. A pause would not be helpful; in the present decade only Croatia is likely to be able to join the EU.

The countries of the western Balkans should be offered a credible EU perspective for their way forward; otherwise they face enormous difficulties. The EU would look odd in the long term if some west Balkan countries were members but others were not. The lesson of Cyprus is that we should be very careful about existing border disputes in any country that seeks to join the EU, but we should not give third countries a veto over the process, as the report makes very clear. The EU treaty gives every European country the right to apply for membership. It is better not to define Europe's boundaries, because at present the EU can encourage positive changes in potential members. If we say that they cannot join, we discourage that.

I trust that the constitutional treaty is effectively dead, and the idea of a referendum with it. We need relatively small changes in EU governance to cope healthily with an enlarged EU membership. Those do not require a referendum and can be brought through fairly easily, without all the difficulties attributed to the constitutional treaty. It is important to bring the people of this country and the people of Europe with us. The process of enlargement is important; it will lead to a more democratic and healthier EU. I welcome the progress that we are making in that direction.

My Lords, I apologise to the House and to the noble Lord, Lord Grenfell, for missing the beginning of his speech. I congratulate him and his committee on the report on EU enlargement. I am pleased to say that for once I agree with almost every comment or recommendation.

Enlargement has benefited not only those countries that have joined in recent years but also, in many cases, existing members. Although immigration into the UK appears to be uncontrolled, there is no doubt that the 0.5 to 1 million people who have come in since 2004 have stimulated the economy. The Government, we are reminded, forecast 26,000 over that period. However, with so much to agree with, I think that the Dutch would be disappointed to read that their GDP is only just greater than that of Malta, and it would have been informative to have included an analysis of population trends. The old EU has a rapidly ageing and declining population, as we all know, thus placing a huge burden on the working population. The new members tend to have younger and growing populations, particularly Turkey—although it is not a member—which will be absolutely essential if the EU is to grow and expand. I am sure that without the influx of foreign workers the UK inflation rate would have been immeasurably higher.

I was encouraged to read that new members have a preference for a Europe of nations, because they fear that in a federal Europe their voices would be lost. However, I was discouraged to read that there was no evidence that enlargement had led to gridlock in EU institutions. That might have forced a reform of them, which most agree is desirable.

The conflict between the deepeners and the wideners, as they are termed, reflects a disenchantment with the EU as it now is. To have the EU as a large and growing single market is surely better than having continued political integration. Let us hope that the desire to sort out the constitutional question is not speeded up at the impending June meetings, and is not shuffled through as minor changes not requiring a referendum in the desire to agree to further countries eligible for enlargement.

I was delighted to read that the committee recommends that the constitutional treaty described by the Prime Minister as a tidying-up exercise should not be adopted in its present form. I very much hope that Turkey will be offered full membership; to offer less would be insulting to a great nation and not in our best interests, although how that can be reconciled to President Sarkozy's views will be difficult.

In June, Europe's leaders meet to try to revive the European constitution. Their desire to do so is contrary to the desires of many of their electorates and, what is more, electors want a direct say in any decisions that are taken. Some 75 per cent of them in a recent poll said that they wanted a referendum. As I have said, our Prime Minister said that the earlier constitution was a tidying-up exercise. In the same breath, he said that he recommended it as a success and a major step forward in creating the kind of Europe that the British people want. It is strange that he did not have the courage to put it to the referendum that he had promised us. Now we are told that we should have a mini-constitution and that without it the EU would stop functioning. However, as the committee so ably points out, the EU has not ground to a halt since the no votes in 2005. Indeed, nearly 5,000 directives and/or regulations have been produced in the past two years.

Our leaders are now trying to bring in a mini-constitution by the back door, without referendums—a single legal entity with a single foreign policy and full authority over home affairs. The word "constitution" is of course not being used, and the suggestion is that the contents of the Charter of Fundamental Rights should be cross-referenced to give it the same legal value. If only some effort were made to roll back the EU's powers from the largely unaccountable Brussels bureaucracy, to repatriate employment and fishing and reform the common agricultural policy or even sign off the accounts, the electorate might be more interested.

In this age of globalisation, the EU needs to look outward, not inward, and adapt to the challenges of a fast-changing world, to recognise that restrictions and regulation will not meet the opportunities awaiting China, India and the developing world with a population of nearly 4 billion compared to the EU's 460 million. In the absence of this, a core Europe with the UK excluded or variable geometry, as it is called, may be the way forward. But the EU must go on taking new members for the many reasons so eloquently set out in the report. The more members there are, the more diverse will views become and, one hopes, in the absence of reform of Brussels from within, the larger EU will become ungovernable and will be forced to perform the rationalisation that most agree is now urgent. So my objective is the same as that of the noble Lord, Lord Stoddart, but I believe that it will be achieved by enlargement, creating so many problems that the EU as we know it today will cease to exist.

My Lords, I join those who have thanked the noble Lord, Lord Grenfell, and all the members of the committee for this helpful and reflective report. The committee has a distinguished membership with a lot of experience and I believe that the House is fortunate to have people of that calibre following European affairs so closely on our behalf.

At the outset of my remarks I endorse what my noble friend Lord Dubs and others have underlined. I welcome the honesty of the committee in recognising that an obstacle to enlargement is the existing state of public opinion. I also welcome the candour of the committee in bringing home that one reason for this is the inadequacy of political leadership in explaining exactly what the community has achieved, what it means for the people of its members, what its potential is and in taking a positive approach to building it for the future, instead of that leadership wanting to come home from every meeting claiming how it has fought for our exclusive interests more successfully than anybody else.

The community is not, was never conceived as being and must not be allowed to become just an administrative top-down arrangement. The quality of its democracy is crucial to its success. Perhaps it is worth pondering what we mean when we say that democracy is crucial to its success. The words flow easily, but what do they really mean?

First, democracy matters in terms of the values and culture of the society of which it is the political system, but it matters equally because it is a sound step towards stability by ensuring the accountability of government. Therefore, when we talk about the importance of the quality of democracy in the European Union, that is not just a light refrain; it is absolutely fundamental to its effectiveness and sustainability.

We all know—and the committee has certainly recognised it—that for most people in this country Brussels appears to be a remote, authoritarian body. We also know that if Brussels seems to be remote, the Parliament—whether it is in Brussels or under this absurd arrangement in Strasbourg, commuting backwards and forwards at God knows what expense to the taxpayer—is even more remote. The challenge is to bring democracy nearer to people. Here I want to take issue with Polly Toynbee. I do not often do that, but I read a recent article by her, and although I normally regard her as almost infallible as a political pundit I found myself very much in disagreement. She suggested that the recent elections in our country demonstrated not that people wanted localism, but that the voting system was unsound and what people wanted was proportional representation. I must not allow myself to be drawn into a long analysis. That is an unfortunate contrast; I think that they want both. I am certain that people want to feel that they have more influence and that decisions are made in a context which they can feel part of and understand.

Let me go further. In recent years I have become convinced that identity matters desperately to stability in national and world affairs. People need a meaningful sense of identity. In its absence there is a danger of alienation. Therefore, I, for one, am a positive enthusiast for what the Government have done in terms of devolution. They have acted ahead of time, rather than finding themselves with an increasingly impossible unstable situation in the United Kingdom. It was imaginative and essential to our future—I sometimes wonder whether they realised just how imaginative it was.

Of course, identity and devolution are not enough in themselves. The other reality that we are faced with is the world's total interdependence, not least in the age of terrorism. We have a world in which international co-operation must be seen as not just a nice option but absolutely essential to the management of human affairs. Therefore, the challenge to political leadership is, having established a sense of identity, to lead people to support the international institutions and the co-operation which are essential if any of us are to have a future.

In the sense of what I have argued, enlargement is to be welcomed. If I am committed to enlargement, there must be no question but that undertakings which have been given must be honoured. The instability and dangers that could be provoked by rejecting people who have set out upon a particular course in good faith, and by taking the ground from under the imaginative leaders who are trying to work for what we all want, is incalculable.

I do not find myself in agreement with some of those who have spoken on Turkey. My thesis is that we, and certainly our children and grandchildren, need inclusive and not exclusive political institutions—institutions which face diversity and turn it into a rich and positive dimension of society, as distinct from something to be feared and rejected. Therefore, an increasingly democratic Turkey—of course there is a way to go yet—with an Islamic culture is going to be a positive asset for the Community as a whole, not least for the stability of our multicultural society in the United Kingdom. The Turkish army has given grounds for concern. Surely our message to the army should be, "Please understand: it is because your country is an increasingly democratic country in which the army must be servants of the political order, and because it has a strong Islamic tradition—which we value—that we want you within the Community". If the army does not recognise that then it had better be told in no uncertain language that the road that it is taking is the one thing that could wreck the progress of Turkey towards membership.

My noble friend Lord Clinton-Davis spoke movingly about the values of the Community. It is good to hear that from someone who has been a Commissioner. There is one dimension to enlargement which we all have to take seriously; that there could be a tendency for the values to become aspirational rather than substantial. That is a possibility that we must not discount. For a number of years I have been on the delegation of the Council of Europe. I have no doubt that it has changed. Its culture now is more aspirational and rhetorical, rather than substantial in its commitment to the values about which we are speaking.

While I am making this observation and talking about the experience of the Council of Europe in this context, I will make another observation. There is a temptation to see European Union institutions as preserving the human rights that we see as central. It would be a retrograde step to move away from the European Court of Human Rights as it is today. What might begin to happen is that members of the European Union would be seen as having a commitment to human rights and a court to underwrite them but that they did not apply equally to wider society in Europe, its fringes or beyond. The point of and strength of the court is that it has a wider application.

The logic of how I see it all is that we should be more relaxed about the principle of a confederal rather than federal European Community, as we used to call it, because I want it to be strong and effective—a European Union of co-operating states with which ordinary people can feel a greater identity. Back in the 1970s when I was the Minister of State in the Foreign Office responsible for Europe I sometimes felt, with some sadness, that the European Parliament had gone down the wrong road—that it was a mistake to have a directly elected institution. It would have been better to have an indirectly elected Parliament. The responsibility is not soundly based. That might have been a better arrangement, but so be it. Whatever the intention was, it is perceived—if it is not all fear and reality—that we have parliamentarians who are not engaged with the daily reality of substantial politics in their societies. Parliamentarians in the individual member countries can make a lot of fuss, get a high profile and news coverage by being hostile to Europe and its institutions.

I will finish by saying, with conviction, that I am certain that the way history will judge us all in this period of the 21st century is by how we build the European institutions—the way that the European Union adds to the quality of accountable government and democracy as I described it earlier, and to the effective contribution that Europeans are making to the stability of the wider world—and on recognising that the problems of our children and grandchildren, whether the environment, security or economic affairs, cannot be solved in a European context alone. They can only be solved in a global context. The test of the institutions, therefore, will be how they play in to the global institutions which have become so vital.

My Lords, I wondered for a moment whether the noble Lord, Lord Judd, was going to take us on to the implications for British politics of the recent local elections. I am tempted to follow him for half a minute. For me, the most glorious point in those elections was watching the newly elected Member of the Scottish Parliament, the noble Lord, Lord Foulkes, saying, in an irritated fashion to a "Newsnight" presenter, "But you have to understand: we have a four-party system". I am glad that he now understands that, and I look forward to his altered behaviour the next time that he visits us in this Parliament.

This was an extremely valuable report. It showed us a number of important issues, which I hope the committee will continue to study. Enlargement, it points out, has been a continuing process since the British application in 1961. I tell the noble Lord, Lord Stoddart, that I, as a young researcher, wrote an article in 1976 called "Widening and Deepening". It argued that widening—in those days, that meant taking Spain, Greece and Portugal on board—would necessarily involve deepening rather than the reverse.

The issue of what the borders of Europe are has been with us since 1989. I then had the mildly painful experience of getting the LSE maps unit to draw some maps on European fault lines for a Chatham House paper and giving a presentation at Harvard. An elderly professor called Samuel Huntington got rather excited at one of those maps and reproduced it to demonstrate that Croatia is European but that Bosnia is on the other side in the clash of civilisations. That is one of the reasons why I very much hesitate to go along with the noble Lord, Lord Borrie, in suggesting that after Croatia we have a pause. That is the Catholic western Europe that some right-wing Americans and some in the Vatican wish us to hold to and which many of the rest of us wish to move away from as far and fast as we can.

I am not at all sure that Cyprus is really in Europe, as one defines Europe. I am not entirely sure, if you want to be deeply geographical, that Iceland—or at least the western half of Iceland—is in Europe; it is certainly the other side of the Atlantic divide. We need to be very careful when playing around with these geographical ideas.

We have had awkward states in the European Union for a long time. Many of us remember how difficult Greece was in its first 10 years of membership—it looked after its own national interests and did not think that it had anything to give in return. Sadly, Cyprus has now clearly taken on that role. That is part of the reason why we have to take much greater care in assessing the criteria for future accession. The report clearly says that the most recent enlargement has been an enormous success. The transformation of central and eastern Europe since 1990 has been astonishing. The support for economic transformation and the conditionality imposed on political and administrative reform has worked remarkably well.

However, I think that we all accept that the transformation of Romania and Bulgaria still has some distance to go and that allowing those two countries to join the European Union, though necessary in order to maintain the pace of reform, strengthens the argument for much stronger mechanisms for scrutinising the implementation of EU legislation and the quality of courts and public administration post-joining in all member states. After all, this is not just a question of Romania and Bulgaria; the water standards in Brussels are in many ways lower than those in Warsaw because of the difficulty of the Flemish and French-speaking communities in sorting out problems of sanitation. The noble Lord, Lord Triesman, looks surprised; I thought that that was a well known fact. Agricultural funds in southern Italy have not always been distributed entirely without corruption; nor, indeed, have structural funds in Spain or fisheries policy in any country that one might care to name—not to mention the acceptance that cross-border smuggling between Ulster and southern Ireland was something that one could not prevent.

We need stronger scrutiny. The European Parliament is beginning to address that; it could have a very useful role in that regard. We must also recognise that this involves not just the resistance among our publics to further enlargement but the resistance of many of our publics to eastern enlargement. That was a factor in the French and Dutch referendums—people felt that they had not been consulted about Poland, Hungary and the Czech Republic coming in and that that threatened their jobs and social welfare and would bring higher taxes. That was certainly part of the negative response to the constitutional treaty. There was a clear failure of political leadership and communication by all member Governments, including our own. But that is, of course, part of the greater failure of our Government to make any greater effort to carry their own public to understand the advantages of European integration. Further enlargement has some distance to run. The question is: how much further should it go?

On the western Balkans, I argue, as do all of us on these Benches, that we have obligations that we must fulfil. I say in passing that my noble friend Lord Ashdown very much wanted to have been here tonight but, unfortunately, is attending a ceremony to unveil his own portrait in the National Liberal Club. I say to the noble Lord, Lord Stoddart, that we on these Benches used, jokingly, to refer to my noble friend as the viceroy when he was in charge of Bosnia; it was, after all, a protectorate—and, so far, it has been a relatively successful protectorate. Does one prefer to allow parts of south-eastern Europe to deteriorate into disorder or do we recognise that it is in our shared interest to help to reconstruct conflict-ridden societies and rebuild broken states and weak economies? That would allow us to stop transnational crime, drug smuggling and people smuggling—those are all things that south-eastern Europe and the western Balkans were exporting to the rest of Europe—and, over the long haul, bring those weak and small states into full membership of the European Union.

We do not need to have deliberate pause after Croatia. There will be a natural pause, because the process will be long and hard—more like 10 years than five. However, the cost of leaving those countries out might well be too high, even though the process of bringing them up to the standards required for membership will be long and painful.

We have all agreed that Turkey is a much more difficult issue. It is a far larger and much more diverse country. I remember at a conference in Istanbul two years ago that a professor from Ankara University said to us that we had to understand that there were four different societies in Turkey: there were half a million Turks who were fully part of the sophisticated cosmopolitan global society; there were 5 million Turks who were urbanised and educated, and would adapt very easily to European Union membership; there were 35 million Turks who were first generation in the cities; and there were a further 35 million Turks who were still in the villages and living in conditions, he said very brutally, that were not totally unlike those of Pakistan.

Turkey is a very diverse society, which is developing very rapidly and which now has the least corrupt Government since the Second World War; the current Government have many very attractive features. I agree entirely with the noble Lord, Lord Judd, about the development of an Islamic democracy. I find deeply unattractive the army and those representatives of the deep state, who are nationalist, authoritarian and brutal in their attitude towards minorities and the Kurds in particular.

I wish that Her Majesty's Government had thought through more fully the implications of offering unconditional membership to Turkey at an earlier stage. As with so many other issues, this was an area in which Her Majesty's Government took our policy from the Americans, who wanted us to offer membership to Turkey without thinking through its implications for the European Union. We must maintain negotiations with the Turkish Government in good faith, because the reform process is well under way, which means that we have to bring increasing pressure on the Government of Cyprus to fulfil their obligations as a member of the European Union on opening their ports to trade with Northern Cyprus. However, it is quite possible that the long-term process of negotiations with Turkey will not end in full membership.

The question of the states beyond is more difficult. It is partly an issue of integration capacity and is certainly a question of relations with Russia. I very much hope that the committee will return to the issue of neighbourhood policy, into which it rightly states the European Union has not yet put much effort, nor has the committee defined what it wants neighbourhood policy to achieve. The report did not say, although I wish that it had, that the European Union needs a much more active approach towards the "frozen conflicts" in Moldova, Georgia and elsewhere, of which the noble Lord, Lord Dubs, spoke. We need a much better accompaniment to enlargement to provide the sort of partnerships that the countries around the EU, if they ever approach membership, will need to offer—and that will require 15 or 20 years or more.

What about the institutional implications? Again, I welcome the report's argument that we need some further institutional reform—not as an end in itself, but as a means of ensuring that a widening European Union retains the capability to take and implement decisions that represent the common interests of its members. The report makes the case, therefore, for an amending treaty and for some further extension to qualified majority voting. I note that; I trust that, when we in this House come in a few months to debate the proposals for an amending treaty, other Members of this House will take it fully on board.

There will be real problems for the workings of the Council when there are 27, 28 or more members, and for the patience of representatives of larger states, because they will have to listen to the representatives of smaller states. I sometimes wonder whether our next Prime Minister will have the patience to sit and listen for long hours as the heads of Governments of smaller states, of which he is dimly aware, go on at great length.

I wish that the committee had been a little more critical about the number of Commissioners, which is a taboo subject. We have to break that taboo. People in Brussels now say that no one will ever give up their Commissioner, but that is part of the treaty that we would wish to break. It is in Britain's interest for there to be a small and efficient Commission, even if that means that, from time to time, there is no British Commissioner. I wish that the British Government would say so.

The consensus of the report, which I welcome and with which I agree, is that we must be committed to a long haul in the western Balkans that ends in full membership, that we should maintain continued negotiations with Turkey, which is also a long haul that may or may not end in full membership, that we should strengthen the neighbourhood policy both to the east and the south, and that the necessary institutional changes must follow, including the extension of scrutiny to implementation within the EU after states have joined.

My Lords, like all other noble Lords, I congratulate the noble Lord, Lord Grenfell, and his team on another most authoritative and informative report. Although there has been a time lag before your Lordships' House has been able to discuss it, the timing has turned out to be extremely apposite. This a good moment to look at the issues raised. I must confess that I am concerned about all such reports that tackle the issue of the future shape of Europe and what kind of Europe we want.

I shall put my concerns in the following way: of course there is a case for an integrated European bloc—if not a superstate, which we are told is not on the cards, then at least a tight-knit grouping which is mainly western European and may be extended to the geographical areas of historic Europe, but with substantial features of political union. It would be a harmonising, gathering and integrated body. That is what Jean Monnet and many others wanted and what many leading Europeans still want today. They want an efficient, strong-centred, integrated entity that is capable of turning out fast decisions and of reaching a unified world view. We have heard that case put by some noble Lords in this debate. With that goes the idea with which not all people wish to be associated of a much better protected Europe, maybe even a fortress Europe, which in this age of global challenges has somehow to defend itself. That vision finds a clear echo in the pronouncements of Monsieur Sarkozy, who is to be the new French president. He has spoken explicitly about the need for more protection of Europe against outside forces. That is one view.

By contrast, there is a different case for a wider and more open association that stretches far outside western Europe and far beyond the Europe of geographical definition, including not only the east and west Balkans, which are in our idea of Europe, but Turkey and, in due course, Ukraine, Belarus and even Armenia and Azerbaijan. All those countries have aspirations to join the EU, which would then reach deep into central Asia and be more Eurasian than European. Such an arrangement could certainly share the so-called brand value of the Union, as one witness to the committee described it. However, it would not be economically uniform in any way; indeed, it would be deeply divided, with vast contrasts in incomes and cultures. Realistically, it could never be the tight-knit body that the old federalist Europeans dreamt of. It would be bound to be more confederal than federal, as the noble Lord, Lord Judd, said.

Whatever has happened regarding past enlargements, that prospect for the years ahead means that you can have one Europe or the other, but not in the end—or even from now on—both. Nor can the fundamental differences between those visions be papered over for much longer by calling it variable geometry. There comes a point when the variable geometry stretches so much that there is no geometric pattern left. The position to which we and Europe are now moving is a matter of careful choice. My noble friend Lord Renton of Mount Harry commented on that in a typically profound speech and I am not sure that we can continue to fudge the issue.

My concern is that this excellent report only touches on that central, old dilemma between deepening and widening, but it does so in a new context. That is mentioned specifically in paragraph 157, which is probably the most significant section of the whole report. However, the report sails on past, without recognising that now is the time for that issue to be addressed and for strategic choices to be made on the kind of Europe that we want. The report simply states that there should be no boundaries to Europe or to the EU. That is okay and, in a way, it is realistic so long as one does not then argue in the same breath that the EU should, at the same time, become more integrated and more centralised with tighter rules, more efficient decision machinery and more political integration, as, I am afraid, the report is slightly inclined to do in the paragraphs that follow the crucial paragraph 157. We have reached the stage where it cannot; nor, anyway, is it so obvious that more efficient decision-making procedures are necessary or beneficial.

In practice—here, the report is on very good ground and makes an interesting section—the already enormous enlargement and widening, up to 27 members from the old 15, nine or six before that, has all gone rather smoothly with no real sign of slowing the Brussels speed or capacity for reaching new decisions and making new laws. On the contrary, as the Economist recently pointed out, more regulations and directives than ever are now flowing from the Commission and there is no slow-down there, as the committee rightly confirms in its report from the evidence it heard and as my noble friend Lord Stevens of Ludgate reminded us. That is the choice that those who are serious about dealing with these issues now have to face. The report helps us to go that way but it does not quite face up to those issues.

I now come to the subject of Turkey, on which some fascinating comments have been made. In one sense, it is indeed a real and immediate problem. Turkey is huge, as noble Lords have said; it has the second biggest army in NATO; it has moments of deep turbulence, as now; and there appears to be a growing anti-European Union sentiment, which mirrors the strong antagonism from within the EU to Turkish membership that is growing more evident, especially in France. There is also the intractable Cyprus issue. I do not intend to go into that in detail now, partly for reasons of time but also because some thorough and illuminating comments have been made on it in the debate. However, as one commentator put it—I am not sure whether it was in evidence to the committee or whether it was in the Economist, but it was an unfair and insulting comment—Turkey is,

"too large, too poor and too Muslim".

That is the sort of view that informs the very anti-Turkish feelings to be found in parts of continental Europe.

With wonderful irony, it seems that the present—and successful—non-secular, Islamic-inclined Government are more pro eventual accession to the EU and the so-called secular movements, which in some ways seem to be allied with the military organisations, are most opposed. As Turkey is a central player in the Middle East jigsaw and is inextricably involved in the Kurdish problem, which means being involved in the Iraqi and Iranian problems, there is no doubt that, if these things were to happen now, the EU would be brought into the centre of these tortuous issues even more than it is already, as the noble Lord, Lord Cobbold, reminded us. In one sense, the situation is immediate, extremely worrying and complex but, in another, it is not such a problem for the simple reason that it is all years away—at least a decade.

As the noble Lord, Lord Roper, asked, in 10 years' time, what kind of EU will we have? I predict that it will be quite different. I believe that a much looser, wider version of Europe, with less centralism and fewer ambitions to be a bloc, a superpower, a counterweight to the United States or whatever the phrase is, will by then have prevailed, and the integrators will have been finally defeated. I am not quite with my noble friend Lord Stevens in saying that the EU will have ceased to exist but it will certainly have changed and adapted. It will have to have done so in a very big way. This will prove to be a correct response to world events because, as, for example, Monsieur Vedrine, the former French Foreign Minister, pointed out the other day, Europe will by then no longer be setting the global agenda at all. The pacemaker's baton will have passed to Asia.

We need a good, friendly and co-operative European neighbourhood, and we must never tire of working for that. But it is the rising powers of Asia and elsewhere that will really count. That is where the wealth and the political power already increasingly lie. The world is no longer Euro-centric; it is not even Atlantic-centric. Globalisation and microchip power have changed everything, as they were bound to do. To survive and prosper, we in western Europe must each work with agility to build up our strengths, links and networks with the "developing world"—it is rather patronisingly so called, but is now rapidly becoming the fastest advancing high-technology world—and we must work to the utmost to provide good links and commerce with those nations.

I sum up my feelings on this subject by saying that a wider, enlarged, flexible and open Europe will be a great help and benefit to our neighbourhood, as—in many, although not all, ways—the European market, the European Community and the European Union have been of benefit so far. But it will never make the European Union a world power or a cohesive superbloc, and nor should wise politicians try to push and divert it that way. There is no bullet to bite, as one Euro-phile official misguidedly urged on Britain the other day.

Therefore, in 10 years' time, it may be far easier for Turkey to join the European Union, as it will have changed. The choice for the type of Europe that we want will then, by default and by the power of global trends, have already been made. It will indeed turn out that there is no alternative, as one of your Lordships said, to progressive enlargement. Perhaps unintentionally, that seems to be the central and realistic message of this report, and that is why, like others, I strongly welcome it.

My Lords, it is always an exceptional privilege to hear the noble Lord, Lord Grenfell, as it was today when he introduced this important debate. In a remarkable overview, the noble Lord—Julian Grenfell, if I may refer to him as such—made a genuine, nuanced and sensitive analysis, which results from considerable expertise. I think that the House will thank him for it, and I shall try to address what he described as his lessons.

I also thank the European Union Committee for its report, which is a valuable contribution to the debate on enlargement and the future of Europe. I wholeheartedly endorse its findings. Enlargement remains one of the EU's most successful policies and it is one to which the United Kingdom has made a strong contribution. Full credit is due to this House for its support in that.

The noble Lord, Lord Howell of Guildford, with, as ever, a penetrating analysis, introduced the very real concept of strategic choice. We are not at the point of final choice; nor am I clear that some of the contradictions between the strategic directions can be resolved at this moment. However, it is absolutely clear to me that that debate will have to be had. It will be not just about the consequences of economic differentiation, important though those are, but also, in a cultural sense, about the essentials of a social Europe and how will they be understood across a terrain as large as the one that the noble Lord has painted.

As this debate has demonstrated, EU enlargement covers a wide range of topics. I shall focus on a few themes: the success of past enlargements, the challenges ahead and the need to ensure a flexible yet rigorous approach to accession. The Government and all the major parties have favoured enlargement—a sensible, careful process—for reasons that we need to discuss briefly. They are not, I know, the mischievous reasons entertainingly advanced by the noble Lord, Lord Stevens of Ludgate; none the less, I hope that he will bear with me as I express ours.

The noble Lord, Lord Roper, made the point that we do not celebrate enough what has been achieved. The noble Lord, Lord Clinton-Davis, made the same point—as did my noble friend Lord Dubs—although he said that the contribution made by the United Kingdom to the outcome of the success was perhaps not the predicted one when people saw a much smaller Community but have had to adjust to a much larger one.

Enlargement has been at the core of the development of the EU. It enabled the peaceful reunification of Europe after the Second World War and across the Cold War divide. It continues to be the engine for security and prosperity. Of course, I cannot agree with the noble Lord, Lord Stoddart, least of all with the phantom that he raises of new imperialism. With the greatest courtesy, I say to him that we crossed the Rubicon long ago—as I recall it was in Italy and certainly not on the route to Turkey.

The security issues, touched on by the noble Lord, Lord Wallace, require a special relationship with those places where wars and ethnic conflict have not yet been resolved. I would have thought that, since the Dayton accord, we have all understood exactly what was involved in that and what one had to do to secure peace. Each round of enlargement has helped. It has brought new jobs, new markets and new investment opportunities. With a population of 490 million, the EU now represents the largest internal market in the world. Together we are better able to respond to increasing global competition.

For the United Kingdom, the economic benefits of the 2004 accession are clear. Our exports to the A10 were worth almost £8 billion in 2006, compared with £4.6 billion in 2004. Exports to Poland alone rose by 67 per cent in 2006. UK firms such as Tesco, Unilever, Vodafone and BP are successful investors in new member and candidate countries. Our labour markets have benefited from increased output and jobs.

I know that some in the media will continue to peddle their fears of mass immigration to the United Kingdom, but I suggest that this House understands the reality in a rather different way. Migrants have contributed to our growth and tax revenues while gaining new skills. The noble Lord, Lord Stevens of Ludgate, may be right about the impact of the age structure as a factor. That is an extremely important and interesting point but, even without that, the preliminary economic analysis shows that this has been a positive development.

Enlargement, more than any other policy, has transformed poverty to prosperity and conflict to peace across Europe. While the path to accession provides incentives, it also involves challenging economic reforms for candidate countries. I commend Romania and Bulgaria, our two newest EU partners, for their progress. For example, until 2000, 36 per cent of Romania's population lived in poverty, inflation was running at 54 per cent and the budget deficit had spiralled out of control. In 2006, Romania's economic growth stood at 7.7 per cent, inflation was down to single digits and the budget deficit stood at 1.7 per cent. There is more to do, of course, but what a remarkable advance that has been.

It is right to focus on economic benefits, but the figures do not always tell the full story of EU membership. For centuries, Europe has been disfigured by conflict. Tens of millions of innocent Europeans died in two world wars. Again, in the 1990s, Europe witnessed ethnic genocide in the former Yugoslavia. The noble Lord, Lord Judd, summed it up throughout his speech, particularly by saying that it is the movement to democracy—and the quality of Europe's democracy—that is critical for success in overcoming these scars.

It is easy to take Europe's stability for granted. In the last half of the last century, we forged a different way so that today's young Europeans will be the first generation who do not listen to tales of what their grandparents did during the war, fearing that they, too, might have to make those terrible sacrifices in conflict. Over the past 50 years, more and more of us have decided to share mutual security arrangements and to build close trade links. Of course, national rivalries do not vanish easily, but they are now insignificant compared with international co-operation. President Clinton rightly described the new architecture of Europe as the greatest and most successful example of fixing in place peace and community.

As the noble Lord, Lord Judd, said, EU membership has fostered democracy, the rule of law, trade and deep commitment to human rights. My parents' generation chose that path and succeeded. Indeed, some Members of your Lordships' House were party directly to that success. In my view, all of them are to be congratulated. I hope that we have the ability to build on their vision, which is why I have no time for the scepticism that denies the achievement of that period. Of course, there are practical challenges ahead. The noble Lord, Lord Judd, was right to emphasise accountability in those challenges. I agree that the enlargement process needs to be robust and based on the Copenhagen criteria. As the committee notes, this should not prevent us from tailoring our approach in the light of experience.

We have learnt lessons from the fifth wave of enlargement; for example, in the administration of justice and the fight against crime and corruption. We recognise how difficult it can be to tackle those issues. That is why European leaders agreed last December to ensure that those issues are focused on early in the negotiation process. There are, for example, now defined benchmarks for justice and home affairs issues. These new requirements will help—not hinder—Turkey, Croatia and the western Balkans as they move towards EU membership. The noble Lord, Lord Wallace of Saltaire, demanded stronger scrutiny, and those are the areas in which stronger scrutiny would be invaluable.

That brings me to Turkey. We should be more rigorous in pursuing the terms for enlargement here, but that does not mean that we should set impossible conditions. The accession process is a compact. It requires commitment from the candidate to be matched by a firm commitment from the European Union that, if the standards are met, accession will ensue. The noble Lord, Lord Cobbold, raised the issue of risk in all this. Although the boundaries of Europe are perhaps wisely not defined—I am not sure that I understood the point entirely—as prescriptively as he was suggesting, I strongly share his balanced judgment of the advantage. The noble Lord, Lord Wallace of Saltaire, also made that point about borders. Incidentally, the borders are defined not only in geopolitical terms, but often through popular culture—through competitions in things such as football or singing, or what passes for singing—and they spread across into wider areas.

The noble Lord, Lord Borrie, called for a pause in this context. Like others, I fear that much progress will stop if we have the kind of pause that was advocated. I am quite certain that a decade of debate is quite a pause in its own right, as we work through those issues. So we welcome last December's European Council reaffirmation that it would honour existing commitments to Turkey and other countries in the enlargement process. A Turkey anchored in the EU will make all Europe more secure, stable and prosperous. The prospect of membership alone has already brought positive change.

In recent years, Turkey has abolished the death penalty and is working hard on a zero-tolerance policy toward torture and on improved rights for women and minority groups, although it is clear to me that there is much further to go in all those respects. Those reforms must continue and, unfortunately, we should acknowledge that the pace has slowed. As the noble Lord, Lord Clinton-Davis, said, we have to continue to urge the Turkish Government to address those areas of concern.

Before accession, Turkey, like all prospective members, must fulfil its contractual obligations, specifically by opening its ports to Cypriot shipping under the Ankara agreement protocol. EU Foreign Ministers have been clear that failure here will affect the overall pace of negotiations. But it makes sense for Turkey to move ahead on technical chapters of the negotiations while it works towards meeting the political conditionality. All those factors, as my noble friend Lord Dubs said, have to be weighed in the balance as we move forward.

A number of noble Lords spoke of the recent events in Turkey surrounding the election processes and the unhelpful—as the noble Lord, Lord Grenfell, specifically reminded us—intervention of the military. My noble friend Lord Dubs and the noble Lord, Lord Renton of Mount Harry, also mentioned the issues of political Islam and the difficulties in maintaining a secular state, as those pressures are expressed. The capacity to create and sustain a secular state with a people who are overwhelmingly Muslim is one of the things that, if we can get it right, will add specific political and historical value to Turkish accession.

As to Mr Sarkozy, I am aware that his comments have been received with dismay in Turkey. He has made no secret of his opposition to its membership of the EU, and his position hardened during the recent campaign. He has spoken of launching an early debate in Europe to reconsider Turkey's accession negotiations. He has raised alternatives, such as privileged partnership and so on. We will have to have that argument. The reality is that the door is currently open to Turkey, Croatia and other countries in the western Balkans, and those countries have to show that they are ready to walk through that door and are capable of doing so. The process that I have just described is precisely what the noble Lord, Lord Renton, was calling for. It is a point at which careful thought about how to carry this forward is essential. I do not entirely think that, as the noble Lord, Lord Roper, suggested, in several years' time, but within the decade, there may be another French president. There may or may not be, but there will not be another French people. Those arguments will have to be held, as the noble Lord recognises. As he suggested, in doing so, we must have a dialogue with other Europeans.

The crucial point is that staying on this path, focused on the objective of EU membership, will keep the Turkish Government committed to reform. That was true of Poland and Romania, and I believe it will be true of Turkey and Croatia. Like the noble Lords, Lord Roper and Lord Grenfell, I think issues have been thrown up by the accession of Cyprus and the way that Turkey now deals with these things, but I suspect that the resolution of borders in advance teaches a lesson for the future. On balance, the progress on the 10 accession countries was probably the greater gain.

Croatia is undertaking a series of political, economic and judicial reforms to meet accession standards. They are a fitting tribute to former Prime Minister Racan, who died last week, who paved the way for Croatia's eventual accession to the EU. I agree with the committee's assertion that Croatia should be able to accede as soon as it meets the necessary standards. The prospect of enlargement has set Croatia on the right path and while there is some way to go, it encapsulates the aspirations of its western Balkan neighbours.

I agree with the points made in the committee's report about not fixing dates. The noble Lord, Lord Borrie, came to the same conclusion for slightly different reasons, but I agree with the point, which is still right. I agree with the committee that a credible EU perspective for the western Balkans is vital, not least given the challenges those countries face. As the noble Lord, Lord Ashdown, noted, enlargement is the glue which keeps those countries from falling off the path of reform. That is why it is important to keep reaffirming the Thessaloniki commitment at the European Council in 2003 that,

"the future of the Western Balkans is within the European Union.'

The committee is also correct to note that giving these countries candidate status would present the EU with new challenges; it certainly will. The EU needs to provide financial and technical assistance to help the western Balkans meet the Copenhagen criteria. The EU's instrument for pre-accession funding provides that support. Between 2007 and 2013, just over half the €11 billion budget will be allocated to the western Balkans. That does not mean that those countries should immediately be given candidate status. There is a clear pre-accession process, the one which Croatia has followed, which is, in essence, a graduated process which demands step-by-step progress on, for example, co-operation with The Hague tribunal and on minority rights.

As a nation, we remain a strong supporter of EU and NATO integration for Macedonia, a point raised by the noble Lord, Lord Roper. We were pleased that the December 2005 European Council granted Macedonia candidate status. We want to see Macedonia in the EU, but the speed at which it can move towards EU membership will ultimately depend on the pace that it can sustain in its reform efforts. We should encourage it, and it is important that it does not take its foot off the gas.

I shall turn briefly to the European neighbourhood policy. As to the wider neighbourhood, I agree with the report's conclusion that the EU needs an effective policy to work with countries that do not at this stage have a prospect of EU membership. The European neighbourhood policy provides a framework to engage with southern and eastern neighbours on social, political and economic reform. I agree with the committee's view that the ENP should not be viewed as an alternative to the prospect of membership for the EU's eastern neighbours, such as the Ukraine and Moldova. I say to my noble friend Lord Dubs that in the case of Moldova, the 2007 enlargement prospects have brought the EU to the border of the Black Sea region. Moldova is one of the countries that benefits from special support under the European neighbourhood policy and will receive €13 billion over the financial prospective to 2013. That investment is already producing results. There is much better support for economic and political reform, including twinning and the secondment of civil servants from the UK and other member states to help in the process. However, there is scope for the ENP to offer better incentives to partner countries, and I thank noble Lords on the committee for all the suggestions they have made. Work is going forward with EU partners to develop ideas for stronger incentives for partner countries to reform.

I agree that the prospect of EU membership can and should remain a lever for reform across Europe. There is no sense in drawing up new dividing lines; Europe has long resisted any attempt to define itself in strict geographical, cultural or religious terms, and I think that that flexibility gives it strength. Our focus should be to build a strong, democratic, stable neighbourhood, rather than to determine at this stage the final frontiers of the EU.

I cannot accept the allegation of the noble Lord, Lord Stevens of Ludgate, that there is a secret plan to import a mini-constitution by stealth. We live in a very transparent world, and what is going on is pretty visible to everybody. Many people have questioned the impact of the enlargement on EU institutions; the spring European Council showed that an EU with 27 member states can function and deliver on the issues that matter to ordinary people: energy, climate change, security and better regulation. The EU is not in a crisis. However, there are some institutional questions that need to be addressed quickly. Existing treaty commitments require us to look again at the size of the Commission now that Bulgaria and Romania have joined the EU. The point made by the noble Lord, Lord Borrie, about the number of commissioners must be resolved because there is an obligation to do that as soon as we can. We are in discussion with the German presidency and other EU partners and will consider all proposals that meet the interests of the United Kingdom and help to deliver a more effective EU. This will be an issue for discussion by all EU partners in June. I shall not add to the comments the Prime Minister made on 16 April about the idea of a conventional amending treaty because I have addressed the House on that question in the recent past.

The committee said that debates on the institutional structure of the EU should not put a pause on enlargement, and it is right. Candidates will be judged on their merits; to do otherwise will send negative signals, as noble Lords said. For that reason, I fully endorse the committee's conclusion on the importance of honouring our clear commitments to Turkey, Croatia and the other western Balkan countries.

Challenges remain and the enlargement process is not perfect, but each successive round has led to improvements. It remains the EU's most effective soft power lever to reform. The noble Lord, Lord Howell of Guildford, said that we need a good co-operative Europe as we face the difficulties and challenges—economic and others—from the rest of the world. Indeed, he will be right in his prediction that we will need as much unity and consistency as possible as a weight in international negotiations and processes.

As the committee notes, the process of enlargement has been an integral part of the EU's development over the past 50 years. As history has shown, managed properly, it offers us all many more opportunities than risks. It does not remove our obligation to be careful or to explain more to the public about the achievements. That is a difficulty in a country where Euro-sceptic media, for example, generally have nothing good to say about Europe.

Not all the political methods that we have for engaging in the debate seem to have the same sort of effect. There may be things that could be said, and said more effectively. The EU could certainly use a more approachable lexicon in everything that it says. As somebody who tries to study these things closely, on occasion I find it extremely difficult to follow. More important, the powerful history of creating peace as the unifying theme of modern Europe may be the key. We should not underestimate it when we try to get people of all generations to understand the steps that have been taken.

This evening's debate has been about a vision for Europe—a growing area of prosperity and democracy, and decency, too. That is absolutely true. It is a work in progress; it is serious work and work worth doing.

My Lords, this has been a satisfying debate and I sincerely thank every one of the noble Lords who has participated in it. It is a great privilege to bring before the House a report that stimulates this kind of interest. If the numbers were a little sparse this evening, the quality of the debate was as high as ever. I thank the Minister for his thoughtful response and I thank the two Front Benches for their comprehensive comments.

I have one quick comment on what was said about Turkey. The noble Lord, Lord Howell of Guildford, echoed the noble Lord, Lord Roper, when he asked what the European Union would look like in 10 years' time. It is an excellent question, but we also have to ask what Turkey will look like in 10 years' time. Yes, it will probably have between 85 million and 90 million people, but it is a mistake to conclude that it is somehow then going to dominate the agenda in the European Union. No single country, however large it is, can dominate the agenda unless it builds a coalition to do so. That is true of Germany, it is true of Poland and it will be true of Turkey, if Turkey comes in.

Let us not forget that Turkey has a young, hard-working, dynamic and increasingly well educated population. I am glad that the noble Lord, Lord Stevens of Ludgate, spoke up for them. Clearly, they will bring huge benefits to the European Union if Turkey becomes a member because they are the kind of people who can make a real contribution.

Lastly on Turkey, we do not need any scare stories about thousands and thousands of Turkish workers beating on the doors here. That is not realistic. If Turkey comes in, there will almost certainly be temporary restrictions and probably quite a long transition period. It may well be around 2025 before every Turk who wants to come in will be able to. I am sure that there will be long transition periods; I may be wrong, but that is my gut feeling. We should not entertain scare stories, which some people would like to put about, about invasions of foreign workers.

Finally, as many noble Lords have pointed out, there will only be one more accession in this decade, which we hope will be Croatia. It may be well into the middle of the following decade, or getting close to it, before we see any more. In effect, this is a kind of pause. Those who said that that pause should not be formally declared are quite right. As one noble Lord said, it is easy to declare a pause but extremely hard to know when to end it. Let us not forget that it has to be ended by unanimity. We could be caught in a trap.

Enlargement remains on the agenda. The fact that there is only one more accession to come in this decade does not mean that it is off the agenda. I implore noble Lords to keep it on the agenda here, too. It needs to be watched carefully, with all the attention that it deserves. It is a huge issue, even though the next accession may be some way off. We also have to watch how the new members do and learn the lessons from the latest enlargements. It is still early days and we cannot draw all the firm conclusions that we would like to on the basis of what has happened since 2004. On that basis, I commend the report to your Lordships and thank noble Lords once again for their participation.

On Question, Motion agreed to.

House adjourned at 8.35 pm.