Examination of Witnesses (Questions 200-209)|
BOATENG MP, CLIVE
WEDNESDAY 5 DECEMBER 2001
200. I am going to open up some questions on
the Tobin tax, which, as people will know, is a tax on currency
transactions. And, as you will know yourself, this possible tax
has actually got considerable support in the House of Commons,
in particular in response to Harry Barnes's Early Day Motion,
and also supported by several major unions, and, indeed, some
non-governmental organisations, some of whom actually are here
today. Now you actually replied to my most recent letter to the
Chancellor, as you said, as the Minister responsible, and you
gave me some news of the agreements reached at the ECOFIN meeting
in Lie"ge on 22 September this year, where European Finance
Ministers agreed that further work was necessary to examine the
economic implications and practical issues raised by such a proposed
tax. And in your letter, you said that this was actually part
of a wider study by the European Commission into the challenges
posed by globalisation. So my first question is, when do you expect
the study to be completed, and the follow-up to that is, how is
the United Kingdom's decision affected or limited by the results
of this, and, in other words, can we do a UDI on this?
(Mr Boateng) No, we cannot do a UDI, because the whole
basis of the tax, the successful operation of the tax, is dependent
on others being prepared to operate it, and, therefore, it is
actually important to arrive at an international consensus on
it; the work stream launched at ECOFIN on 22 September, which
we supported, will help on that. I do not think the Commission
have yet given us any timetable. We are obviously enthusiastic
about the study. There are also studies being conducted by the
OECD and the United Nations; they, too, are important, if we are
to address successfully some of the technical complexities that
are thrown up by the tax. So we have agreed the need for further
work. Also, within the Treasury, we seek to keep in touch with
the academic, and indeed wider, NGO, debate in this country and
overseas, and if the studies generate the practical suggestion
as to how to overcome the problems associated with implementing
the tax, well, that is something that we will obviously need to
consider very seriously.
201. Right; so sort of pressing you slightly
further on that one, is it fair to say that the Treasury position
at the moment is, `okay, there are some practical difficulties
that need to be looked into and ironed out,' but, given the fact
that they are, you are not opposed, in principle, to the idea
of an international tax, in fact, you are in favour of it, given
what I said before?
(Mr Boateng) We are not opposed to the Tobin tax in
principle, we are not convinced that the tax will be particularly
effective in stabilising international capital flows, but we are
attracted by the revenue-raising possibilities presented by the
tax and are committed to exploring the full range of options for
increasing the amount of financing available for development purposes.
And, indeed, the Chancellor, most recently, in his speech in New
York, called for the international community and national governments
to substantially increase their Development Assistance budgets,
and called for a new International Development trust fund, and
now, arguably, that trust fund, were the technical issues in relation
to Tobin to be successfully overcome, could be the recipients
of a Tobin tax. But the Chancellor's commitment to this is not
dependent on us overcoming the technical obstacles to an effective
tax of this sort, he wants to see a fund set up in any event.
202. Right; well I shall certainly take that
as tacit encouragement to continue the campaign. You have mentioned
the Official Development Assistance, and I would like to press
you further on that. It is predicted to rise from a figure of
0.26 per cent in 1997 to a stunning increase of 0.33 per cent
by the year 2003-04; but it is hardly a mind-breaking increase,
is it, really? And why is it so far short of the given OECD target
of 0.7 per cent; is this target obtainable, is it realistic, if
not, why not, and, if so, when do you hope to achieve it?
(Mr Boateng) It is certainly realistic, it is certainly
attainable, and, given our present levels of spending in this
area, we are entitled to have a degree of optimism that it will
be reached. The Chancellor has made it absolutely clear that we
have got to find ways of increasing financing for poorer countries;
it is important to see what we have done, which is a marked improvement
on what went before, I think everybody would agree, in the context
of our commitment to debt relief and to our overall policy, in
relation to International Development. So no room for complacency,
but some real steps forward made.
203. Just finally, could I ask whether you agree
yourself with the following statement. There has been a recent
review by the OECD of foreign aid performance, and it concludes,
and this is what I would like to ask you whether you agree with
or not: "It might well be argued that if more donors had
met the ODA target then the mass poverty and humanitarian emergencies,
which persist in many parts of the developing world today, might
have been largely avoided." Do you think that is a fair assessment?
(Mr Boateng) I think it is precisely the sort of assessment
that one would expect from the OECD. I think it is very helpful.
I think it is a goad to us to do better, and I think we should
also be very clear that we have a number of important partners
in the international community, amongst the developed world, who
would do well to emulate our own example since 1997 in this area.
204. I will be very brief, I am quite aware
of the time and that we are drawing to a close. Just a brief comment
about the Spending Review and the environmental guidance to Departments
to produce a Sustainable Development report. Rather than us going
into a lot of detailed questions, could you just give us a quick
brief about, when Departments produce these reports, how we will
publicise them to these Committees and how you will review them
within the Treasury?
(Mr Boateng) We will not be publishing the Sustainable
Development reports, we are publishing the guidance, but the reports
themselves are internal documents, they will be closely associated
with Departments' bids for resources, and we do not think it would
be right, quite frankly, to publish them. However, we have published
the guidance, and the Committee was very keen that we should do
205. But rather late?
(Mr Boateng) We have also developed a procedure which
will involve my meeting with Green Ministers, with Secretaries
of State, to indicate to them very clearly the importance of their
ensuring that their bids reflect the guidelines; also making clear
to them our commitment to ensure that integrating Sustainable
Development into the Spending Review is a commitment that we take
very seriously. And when they meet with the Chief Secretary, in
the course of the PSX meetings, they can expect the Sustainable
Development implications of their bids to be part of the subject
matter of those meetings. That is a very clear steer to departmental
colleagues that we mean business.
206. And will there be sanctions if they do
not meet the guidelines?
(Mr Boateng) My experience as a spending Minister
is, and you will know this, Chairman, only too well, one wants
one's bids to be successful, and one couches one's bids in a term
that is likely to make them successful. And if the clear steer
from the Chief Secretary is that you had better take Sustainable
Development seriously, and the Financial Secretary is going to
be meeting you in advance in order to make sure that you understand
the guidelines and their purport, then you are likely to take
that pretty seriously.
Sue Doughty: Thank you very much indeed.
207. Minister, you obviously intend to be tough
with other Departments, as regards Sustainable Development, but
you appear to have no strategy internally, inside the Treasury,
for raising awareness of Sustainable Development as an issue amongst
your own staff. The only training on Sustainable Development is
as part of the reception training for new recruits.
(Mr Boateng) We have gone a bit further than that
since that information was provided to the Committee. Shortly
after I became Green Minister for the Treasury, I spoke at the
Sustainable Development Forum for the Chancellor's Department,
made it clear to them that Ministers would be expecting the Department
to ensure that it took Sustainable Development seriously, and
I think that message is getting through. And certainly I was quite
pleased to see, in terms of the approach that we have taken, for
instance, to water, at GOGGS,
that we are on target to have reduced our water use, I think,
by more than a half. I have got the figures here. We have got
currently an annual water bill of £40,000, the expected bill
after participation in the Watermark Project is £14,000;
so that is a significant saving of £26,000. In terms of the
use of the Government estate and the Sustainable Development Framework
there, in the Greening Government outlines, we have achieved an
`excellence' rating; and in terms of the refurbishment of the
west end of GOGGs, again, there is a requirement on our private
sector partners there to use their best endeavours to maintain
and to obtain maximum credits from the Building Research Establishment
environmental assessment methodology. So I think you are absolutely
right, if I may say so, to point out the need for us to tackle
the issue seriously and to be leading by example, and I hope,
when we are judged on these matters, as we surely will be, in
due course, we are found to be doing that.
208. I am not sure I understand why the Sustainable
Development reports will not be published?
(Mr Boateng) Because it would compromise, we believe,
the integrity of the process in which Departments must feel able
to put their bids in, in a way that ensures that they are judged
on their outcomes rather than their inputs.
209. Would you consider the National Audit Office
might have a role in looking at the auditing process?
(Mr Boateng) I would be very, very reluctant to give
any commitment to alter the current arrangements in relation to
the Spending Review, it is something which, as you know, is a
very, very closely guarded process, both by the Treasury and by
the spending Departments.
Chairman: Minister, thank you very much indeed.
That was a very rewarding session.
1 Government Offices Great George Street Back