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Mr. Smith: I was asked whether I had given the matter further consideration. That was the question to which I answered no.

It is important for there to be effective collaboration between the respective bodies that are responsible for public audit. There is, in fact, a public audit forum. When my hon. Friend has a chance to read the proposals, he will see what steps are being taken to continue that work. I did not want to set hares running, and I do not want to do so now, by suggesting that such an amalgamation is on the agenda.

Mr. David Rendel (Newbury): I am grateful to the Chief Secretary for his response and for his kind words about my small part in the Sharman steering committee. I welcome the Government's response, particularly because almost all the recommendations of the Public Accounts Committee have been adopted—better late than never.

There are two outstanding matters. First, the Chief Secretary said that all non-departmental public bodies that currently exist and are not audited by the NAO will be audited by it when their contracts come up for renewal. Can he assure us that, at least under his Government when he still has responsibility, any new NDPBs that come into existence will be audited by the NAO?

Secondly, the BBC is undoubtedly the one real weakness in the Government's response. People throughout the country pay tax of over £100 a year towards Government funding for the BBC. That is a huge sum and needs to come under parliamentary scrutiny. The important point about what the Chief Secretary said about editorial independence is that the NAO is Parliament's auditor, not the Government's auditor. We would all be worried about editorial independence if the auditor were to report directly to the Government. If it reports to Parliament, it reports to all the people of this country. Surely in those circumstances, there should not be a problem about editorial independence.

Mr. Smith: I thank the hon. Gentleman for his contribution to the Sharman steering committee. Any future NDPBs that are set up will be audited by the

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Comptroller and Auditor General. Should any of those be companies, amendments to legislation will ensure that he can audit companies—that is our clear intention.

I have already dealt with the BBC. I take the opportunity to underline that the BBC is fully and properly audited. What is more, the Comptroller and Auditor General already has the opportunity to access the funding department in following the application of the licence fee.

Mr. Richard Bacon (South Norfolk): The Chief Secretary said that he had already dealt with the BBC. Many hon. Members on both sides of the House may beg to differ. Concern and disappointment have been expressed from both sides about the fact that the Government have excluded the BBC from the remit of the NAO. The Chief Secretary's justification appears to be that it would be a "grave error" if even the impression were created that the BBC's editorial independence could be compromised. As the hon. Member for Newbury (Mr. Rendel) pointed out, it is hard to see how that could be the case when the NAO is itself independent of Government. Does the Chief Secretary recognise that he has not advanced a sufficient argument, and that he will therefore need to start to explain why anyone should begin to think that the independence of the BBC should be compromised by the fact that it was audited by the NAO?

Mr. Smith: The BBC has a special status, set down in its charter. As I said, there would have to be very careful thought before even the impression of any infringement of editorial independence were given. While I have absolute confidence in the independence and impartiality of the Comptroller and Auditor General and the National Audit Office, one does not need a great imagination to see how some of the issues that may arise may become the subject of quite heated political speculation and debate that could give the impression of editorial independence being put at risk.

Mr. William Cash (Stone): Does the Minister accept, with respect to the BBC, that in the public interest it is essential that full accountability be achieved? The answers that he has given have so far been, if not evasive, then somewhat lacking in clarity. Would he be good enough to ensure that he writes to me and indeed to the Chairman of the Public Accounts Committee to explain the reasoning behind the arguments that he has advanced? Many licence payers regard the amount of money that they have to pay as warranting proper analysis. Furthermore, it is a matter of great public importance. Can he give any other example of a chartered body that has the right to charge a licence fee and manages to avoid the full accountability that he seems to be avoiding at the moment with respect to the BBC?

Mr. Smith: The hon. Gentleman is one of those hon. Members with a special interest in this matter, and he asks whether I will write to him about it. Later on, I shall be the second Minister to make an appearance before the Public Accounts Committee. I am sure that there will be an opportunity to discuss these matters further. My answers will, of course, be on the record.

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Points of Order

4.15 pm

Mike Gapes (Ilford, South): On a point of order, Mr. Speaker. I seek your advice. At the end of last week, I—and, I presume, all other Members of Parliament—received a letter from the police federations of Scotland, England, Wales and Northern Ireland about the meetings being held today. The letter said that the meeting with London Members of Parliament would be held at 4.30 this afternoon at the QEII centre. However, at Prime Minister's Question Time, the hon. Member for Uxbridge (Mr. Randall) alleged that Labour Members were not prepared to meet members of the Metropolitan police. I have checked with my office, and have found that we received an e-mail at 12.12 today to change the arrangements for some regional meetings. However, the e-mail listed no changes to the time and place of the London meeting. How can I place on the record a correction to the allegation made about Labour MPs?

Mr. Speaker: The hon. Gentleman has made not a bad job of putting that on the record.

Mr. Tam Dalyell (Linlithgow): On a point of order, Mr. Speaker. I do not have chapter and verse details of the Scotland Act 1998 in front of me, but some of us endured many hours listening to Mr. Donald Dewar and Mr. Henry McLeish telling us how much consultation there would be between Edinburgh and London. My question to my right hon. Friend the Chief Secretary was very careful. I did not ask him to ask my hon. Friend the Paymaster General and my right hon. Friend the Financial Secretary to the Treasury to do anything, let alone to meddle. My question was different: I asked what conclusions and lessons could be drawn from a situation in which the giddy costs involved were escalating. Local authorities are becoming more and more skint because those costs come out of their finite budgets.

Given that I asked that lessons be learned, and not that Ministers should do something, am I not entitled to ask that they at least take an interest in what has happened?

Mr. Speaker: The hon. Gentleman knows that I am not responsible for the Minister's reply.

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Foreign Exchange Transactions Tax Commission

4.17 pm

Mr. Richard Allan (Sheffield, Hallam): I beg to move,

I was pleased to learn during the statement that a special purpose vehicle was part of the private finance initiative, and not a type of four-wheel drive vehicle, as I had thought.

I shall begin by describing as straightforwardly as I can the benefits of a foreign exchange transactions tax, and then set out why I think that that would be very timely. The tax is commonly known as the Tobin tax, following proposals made in 1972 by the Nobel prize winning economist James Tobin, who promoted the idea of a small tax on foreign exchange transactions. He believed that the tax would help promote free trade, by assuring countries that they could open their markets without exposing themselves to disruptive movements of "hot money". Tobin did not, however, see that as an extreme move against free trade. In promoting this Bill, I am anxious that his original aim should not be forgotten.

The aim of a Tobin tax is to provide a useful tool for stabilising currencies and much needed funds for international development to help free trade work fairly. It would be complex to establish the tax as, to be effective, it would require new means of international co-operation. That is why I propose that a commission be established in the first instance, to analyse the challenges of implementing such a novel tax regime. However, the current state of the financial markets means that a decision in principle by the UK would be highly significant in developing the proposals.

At present, 84 per cent. of all foreign exchange transactions occur in just nine countries, of which the UK is one. An indication of willingness on the part of those nine countries to introduce the tax would take us most of the way to finding a workable solution. Our Chancellor of the Exchequer has shown himself open to the idea. In a speech to the Federal Reserve in New York, he declared his willingness to examine the practicalities of "innovative ways" to finance development, including currency taxes. In addition, our Prime Minister argued in his speech to the Labour Party conference that

I assure them that there would be widespread support in Parliament and among the general public if they really can place the UK at the forefront of international negotiations on the Tobin tax.

In Parliament, 88 MPs have so far signed an early-day motion tabled by the hon. Member for North-East Derbyshire (Mr. Barnes) on this subject. Outside Parliament, organisations such as War on Want, Oxfam, Christian Aid, Save the Children and Unison have signed up to the Tobin tax declaration, along with 38 others.

The tax would produce a win-win situation for the world's poor, so who would lose? More than $1 trillion changes hands every day on global foreign exchange markets. More than 80 per cent. of that trading is of a

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speculative nature—buying and selling money for profit's sake. Although such currency gambling has enabled some banks and investors to make multi-million dollar profits, it is not part of any genuine trade or investment. Instead, these volatile movements of capital destabilise entire economies, causing serious financial crises such as we have seen in south-east Asia, Latin America—most recently Argentina—and Russia, disproportionately affecting the most vulnerable in those societies.

On some estimates, more than 10 million people lost their jobs in the first few months of the east Asian crisis in 1997-98. Millions more were caught up in the aftermath, pushed into poverty and debt, while Governments had to divert resources from social programmes into propping up their currencies. The ripples from these crises are felt around the world, giving us all a direct interest in resolving them in addition to our natural concern for the people of the affected countries.

The Tobin tax, while helping to stabilise currency, would also generate funds that could be put towards international development programmes. A minimal tax of, say, 0.1 per cent. on currency transactions would not hold back productive business transactions for trade and investment but would hit speculative transactions. War on Want, which leads a campaign for the tax, estimates that taxing at that low rate could raise between $50 billion and $300 billion a year. That would more than cover the estimated cost by the United Nations development programme of $40 billion a year to eliminate the most extreme forms of poverty and to provide access to sanitation and basic education in all developing countries.

I hope that the House will accept that such taxes merit further investigation by a commission, and that it would be very timely to do so for the following reasons. First, there is to be a major United Nations summit in Monterey, Mexico, next week on financing for development. The need for substantial increases in aid for developing countries has been recognised, but we are still a long way from finding the solutions.

I commend the Chancellor of the Exchequer for his launch yesterday of a £10 million education fund for deprived nations, but that is against a background of the UK's continued failure to deliver the United Nations pledge to raise aid levels to 0.7 per cent. of gross national product. Any receipts from new taxes such as the Tobin tax should be in addition to the United Nations aid target and not seen as a substitute for it. I urge the Chancellor at the United Nations summit to commit the UK to reaching the 0.7 per cent. target and exploring additional new funding methods.

Secondly, there is a growing movement in this country and internationally to introduce a Tobin tax. That has come together with a series of events today on what has been termed Tobin tax day. They include an expert seminar this afternoon, followed by a deputation to the Treasury to present a declaration ahead of the UN summit.

This evening, Parliament will host a movie premiere as a new advertisement for the Tobin tax is shown in Portcullis House. If the music of Radiohead and the voice of Ewan McGregor are not enough to attract hon. Members to that event, they may be drawn by the knowledge that the advertisement has been deemed "banned". That follows a judgment that its content is too political for broadcast on television. However, the full uncensored version is available on the Tobin tax website, where no such restrictions apply, at

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On the international scene, a Bill to accept a foreign exchange transactions tax is today being passed by the Belgian Parliament. Belgium will join the French Parliament, which passed a law in November committing France to the introduction of the tax when other European Union countries have signed up to it, and the Canadian Parliament, which passed a motion in 1999 calling on its Government to promote the tax internationally.

Thirdly, it is important to consider the international context, as we live in times of international insecurity. Much of our time is taken up with talk of conflict and in such a climate it is more important than ever to explore positive measures to enhance security through development rather than ever-increasing armament. I was brought up at a time when cold war rhetoric kept me living in permanent fear of nuclear annihilation. I do not want to see a new generation growing up in a state of permanent war, fearful that the anger of the dispossessed and desperate may break out into violence at any time.

I was impressed by a speech made recently by US Congressman Dennis Kucinich, in which he set out an alternative vision. He said:

We should not underestimate the harm that fear causes, especially to our young people, and we should be more determined than ever to demonstrate our willingness to find peaceful solutions to international instability wherever possible.

Sadly, the introduction of my Bill has been made more topical by the death of James Tobin earlier this week. I quote a remark that struck me from one of his obituaries:

I feel very much in step with James Tobin's thinking. This Bill is not an anti-globalisation measure. There are widely contrasting views of globalisation at present. One view would have it as a force of neo-imperialism that will create a world in which the power of the strong to exploit the weak is entrenched so that the rich get richer and the poor ever poorer.

Another view is that globalisation is a progressive force, leading to a world in which all people can exchange goods, services and culture on an equal basis, free from unnecessary and harmful barriers. That is where we should be putting our political energies. We should introduce measures to ensure that free trade really is fair trade; that development is sustainable and of benefit to ordinary people; and that markets work for mankind rather than mankind working for the markets.

The Tobin tax would be a small but valuable part of that body of work. I urge the House to support the creation of a commission to take that work forward.

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