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House of Commons

Wednesday 10 January 2001

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked--


1. Mrs. Linda Gilroy (Plymouth, Sutton): What progress has been made with respect to the country plan for Montserrat. [143195]

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): The country policy plan for Montserrat has led to the development of economic activity, housing, health, education and other facilities in the north of the island for the 4,500 Montserratians now living there. All the key facilities for normal life are now in place. The volcano, however, continues to pose a threat to the south of the island.

Mrs. Gilroy: I thank my hon. Friend for that response. He may know that one of the 40 places named after the Plymouth that I represent is--or rather, sadly, was--in Montserrat and that therefore some of my constituents tend to take a rather keen interest in its affairs. Would he therefore put a little more flesh on the bones of his answer? It sounded fairly positive, but could he give some examples of current projects?

Mr. Foulkes: I am the right Minister to put flesh on bones. My hon. Friend rightly reminds us that nearly two thirds of the island was destroyed, including the capital of Plymouth and most of the infrastructure. I am glad to say that fuel, electricity and water supplies have been secured and enhanced; that new health, education and Government facilities have been built and existing facilities upgraded; that transport infrastructure has been improved by the building of new roads; that we have upgraded the heliport; and that we have provided a new jetty and funding for nearly 1,000 houses. That is a tremendous effort for the people of Montserrat, and rightly so.

Mr. John Bercow (Buckingham): Given that Montserrat was listed as a tax haven by the Organisation for Economic Co-operation and Development, what representations on that point has the hon. Gentleman made, or alternatively what assistance does his Department envisage providing for the territory, bearing in mind that if its financial services

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sector is damaged or destroyed, the country is much more likely to be prey to the commission of serious crime, including drug trafficking?

Mr. Foulkes: Montserrat was developing as an offshore tax haven prior to the eruption of the volcano. Since then, it has of course been difficult, if not impossible, for the Montserratians to envisage that. They are keen to develop, but we have reservations. We want to ensure secure and proper arrangements for supervision. We discussed that recently at the Consultative Council of the Overseas Territories when the Chief Ministers were here, and we shall continue to do so. We are of course aware that were any overseas territory to lose any resources as a result of the pressure that the hon. Gentleman describes, our Department would need to make available additional resources.

Everything But Arms Initiative

2. Mr. Peter Luff (Mid-Worcestershire): What recent representations she has received from sugar-producing countries about the everything but arms initiative; and if she will make a statement. [143196]

The Secretary of State for International Development (Clare Short): Since October 2000, the Government have received more than 1,000 representations from UK sugar interests, and just six from sugar producing countries about the European Union proposal to provide duty-free trade access to the 48 least developed countries. In reply, we have made clear the importance of improved access to the EU market for the world's poorest countries, which comprise just 0.4 per cent. of world trade. There is also a need for the UK sugar industry to be prepared to adjust to forthcoming reforms of the CAP. We have also reassured the middle-income sugar producing countries that the least developed countries are not in a position to export large amounts of sugar in the short term. Generous assistance is available from the EU and others to support adjustment to more open markets to which these countries are already committed.

Mr. Luff: I am genuinely grateful to the Secretary of State for that answer, but is she aware of the continuing alarm in African, Caribbean and Pacific countries and the British sugar producing industry, and of the apparent considerable internal dissent in the European Commission, about the precise impact of the proposals? Exactly what impact studies are the Government conducting, what contribution is her Department making to those studies, and when will the results be published?

Clare Short: I am aware of all the discussion and of the vested interests at work. I hope that the whole House agrees that the poorest countries in the world--in which the very poorest people live--which are currently responsible for only 0.4 per cent. of world trade, should be given better trade access so that they can grow their economies and improve the lives of their people. I know that there is worry among sugar producers in Britain and that there has been some worry in ACP countries. We have done our own analysis, and more is being conducted by the European Union. I am confident that they need not be so worried. The poorest countries do not have the

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capacity rapidly to build up their production and exports. Some of the adjustment that needs to be made is among our sugar producers and ACP countries anyway.

Mr. Lawrie Quinn (Scarborough and Whitby): I am sure that my right hon. Friend is aware that although many sugar beet producers in north Yorkshire, particularly in my constituency, are concerned about their future, they support the end objective. One concern that they have expressed to me in consultation is that they cannot envisage the time scale of the initiative. Is she able at this stage to spell out when it will be fully implemented?

Clare Short: The current proposal from Pascal Lamy, the Trade Commissioner, is a three-year phase-in period, but the matter has not been finalised and longer phase-in periods have been discussed. Common agricultural policy reform must come because of the peace clause in the Uruguay round, which requires the World Trade Organisation to examine protectionism for agricultural production. The existing common agricultural policy would bankrupt an enlarged European Union, so reform is coming. Sugar producers must face up to the fact that it is unsustainable to have a guaranteed high price that is above international market prices. They need help to adjust, and I think that their friends will do that. They cannot go on under the present regime, because at some point it will collapse underneath them.

Mr. Bowen Wells (Hertford and Stortford): How exactly will the Secretary of State fulfil her promise to the traditional producers of sugar cane and sugar beet that they will not suffer as a result of this initiative? I agree with her that the world's poorest countries deserve the trade support that the European Community is proposing, but none the less there should not be a beggar thy neighbour policy that makes countries such as Guyana, which is a highly indebted poor country and very vulnerable, more impoverished than it is, and possibly push it into the category of the most poor and least developed countries.

Clare Short: I am surprised that the hon. Gentleman should refer to a beggar thy neighbour policy in relation to improving trade access for the very poorest people and countries in the world, given that there may anyway be an adjustment cost to middle-income Caribbean countries. This principle is extremely important, and we must all stand by the policy of enlarging trade access for the poorest countries so that their economies can grow.

Under the Cotonou agreement, which replaced the Lome accord, there should be duty free access for all products from least developed countries by 2005, so this change is coming. The Caribbean and its banana industry need help to adjust to the opening of trade, not reassurance that an old, dying industry will be protected when the prices of its products are massively higher than world market prices and are in breach of WTO rules and so will increasingly be challenged. The Caribbean needs help to adjust, and we are doing that, but its friends should encourage it to adjust and not to carry on thinking that it can be protected by existing arrangements.

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Poverty Reduction

3. Dr. Nick Palmer (Broxtowe): What assessment she has made of progress in focusing development aid on the reduction of poverty. [143197]

The Secretary of State for International Development (Clare Short): We set out in our 1997 White Paper our aim to persuade the international development system to focus its efforts on achieving the international development targets. Those include halving the proportion of people living in extreme poverty by 2015, universal primary education and improved health care for all. We now have unprecedented agreement between the International Monetary Fund, the World Bank, the United Nations system, the Organisation for Economic Co-operation and Development, G7 and others that meeting the targets should be the focus of our joint efforts.

On current trends the halving poverty target is likely to be met because of major progress in Asia, but most African countries are not yet on target. Progress in being made on health and education, but greater effort is needed. The Chancellor and I are hosting a conference in London next month to encourage all countries and development agencies to increase their efforts to ensure that today's poor children are not the parents of larger numbers living in extreme poverty in the next generation.

Dr. Palmer: My right hon. Friend's priorities will be welcomed in all sane parts of the House. Unfortunately, the European Union's priority in this area is increasingly focused on the Mediterranean and Balkan countries. The proportion of multilateral European Union aid is down to 41 per cent. for the most impoverished countries, and will probably sink further if nothing is done. Will my right hon. Friend press our European Union partners to give real priority to poverty reduction at the coming meeting on this issue in Stockholm?

Clare Short: I agree strongly with my hon. Friend. As he knows, we are seriously concerned. It is disgraceful that, for a considerable number of years, an ever lower proportion of EU development assistance has gone to the poorest countries, the effectiveness of which leaves much to be desired. We have been working hard on the reform agenda and there are now strong commitments to reform. [Interruption.] We should not turn away from the Mediterranean and the Balkans, but middle-income countries need different forms of assistance from very poor countries. They do not need big resource transfers, but help with reforms to ensure that they run their Governments better. I agree, and I hope that the House agrees, that the EU, which has promised to reform, must do so. [Interruption.] Our aim is that 70 per cent. of its assistance should be focused on poor countries by 2006.

Mr. Speaker: Order. I appeal to hon. Members, particularly Government Members, not to conduct private conversations. They are not appreciated.

Mr. Nigel Jones (Cheltenham): Will the Secretary of State join me in congratulating the people of Ghana and its new President, John Kufuor, on the successful, democratic and peaceful change of Government which they have just achieved? Is she planning any early meetings with the new Government to consider what her

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Department can do to help reduce poverty in Ghana, and does she have any view on whether Ghana might be successful if the new Government decide to apply for debt relief under the HIPC initiative?

Clare Short: I agree very much with the hon. Gentleman. Ghana's achievement in its democratic transition is fantastically important. President Rawlings ended up changing to democracy, but came to power through a military coup. For Ghana to go through that and have a proper, peaceful and democratic election is an important achievement for the Government. I have plans to visit Ghana, probably towards the end of February. There has been economic reform in Ghana and it has done well, but it slipped a bit before the election, so we need to help it to get back on track and get its economy growing to improve the lives of its people.

Ghana is a HIPC country and has considerable debt. The previous Government decided not to apply for debt relief. I am sad to say that it was under pressure from some donors. It will be possible for the new Government to go for debt relief, and that would help Ghana to get back on an economic reform agenda. It is for Ghana to decide. It was Ghana that decided previously not to go for such relief, but it is entitled to do so if it wishes.

Mr. Andrew Miller (Ellesmere Port and Neston): Has my right hon. Friend had any discussions with Aung San Suu Kyi on providing development aid should there be a return to democracy in Burma? Can my right hon. Friend throw any light on the story that the World Service ran early this morning that there have been discussions with the regime and Aung San Suu Kyi in that country?

Clare Short: I have not had the pleasure of meeting Aung San Suu Kyi, but if Burma turns to democracy the world will help it. We would be delighted to do so and massive support would be available to help build a new democratic and economically successful country.

I heard the reports, not on the World Service but on the BBC this morning. Some talks have been brokered by the United Nations and the World Bank. At this moment, I do not have enough information to be optimistic, but if we can be optimistic, if there is reform in Burma, that will bring relief to many long-suffering people--as I hope there will be.

Mrs. Cheryl Gillan (Chesham and Amersham): The right hon. Lady and I agree that to make progress in reducing poverty we need, among other things, to eliminate corruption. Why then, two years after signing the OECD's convention on bribery--making it an offence to bribe officials abroad--have we still no legislation implementing it? We have had the rhetoric. Last April, in a parliamentary answer, a Minister from the Department of Trade and Industry promised legislation as soon as possible, and the Home Office has said that it is looking to bring in legislation at the earliest opportunity. But now the UK is attracting fierce international criticism. The head of the OECD's anti-corruption unit said:

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Clare Short: I find it astonishing that the Opposition seem to think that is was year zero when they lost the general election. We inherited advice that had been the position of the previous Government, that--[Interruption.] Perhaps the hon. Lady would listen. It was the view of the Conservative Government, and our initial advice--attention, please--that the existing UK law complied with the OECD convention. That was false, false, false, as usual. It was a bit like "Where's the trains?"--we know why they are missing. Again, it is the fault of the previous Government.

We set up a working party which determined that the advice from the previous Government was completely wrong, as with so much else that they did. We are now committed to legislation, and it will be introduced as soon as a decent Government publish a Queen's Speech, which happily will not be a Government of whom the hon. Lady will be a member.

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