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G8 Ministerial Meeting

3. Mr. Tobias Ellwood (Bournemouth, East) (Con): If he will make a statement on his proposed post-Gleneagles agenda to be presented at the meeting of G8 Ministers next month in Moscow; and what discussions he has had with G8 partners on this. [45615]

9. Judy Mallaber (Amber Valley) (Lab): If he will make a statement on his priorities for progress towards relieving international poverty and debt relief at the forthcoming international Finance Ministers meeting. [45621]

The Chancellor of the Exchequer (Mr. Gordon Brown): Our priorities for the G8 are to extend debt relief to further numbers of the poorest countries; to ensure that aid promises that have been made are delivered in free universal education and universal health care; to set up a $20 billion fund for the environment in the poorest countries; to build on the innovative $4 billion international finance facility with new advanced market mechanisms for the purchase of life-saving drugs; and the advance of the launch tomorrow of the global plan to stop tuberculosis, which even now kills 2 million people a year. The Secretary of State for International Development will announce this morning £41.7 million from Britain for anti-TB drugs for India.

Mr. Ellwood: The Chancellor mentioned poorer countries. I think that the House will welcome many of the initiatives that resulted from the Gleneagles summit, but at the next summit in Moscow will the Chancellor take the opportunity to speak to his French and German counterparts and establish whether we can review the common agricultural policy? It is hurting those poorer countries, and hurting farmers in particular.

Mr. Brown: The answer is yes. The hon. Gentleman may know that only a few weeks ago the Treasury, together with the Department for Environment, Food and Rural Affairs, published our proposals for the reform of agriculture policy, to be implemented over the next 10 years. We will submit them to the review of agriculture policy that is taking place.

I have already expressed my belief that a trade deal in the world will require movement from America and Europe on agriculture policy. I hope that there is unanimous support for the proposals in the House.
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Judy Mallaber : Pupils from 21 Amber Valley schools filled Christmas boxes for children in Mozambique who were affected by HIV/AIDS and poverty. I have also engaged in talks in many schools about the 100 million children who are not being given an education. How can my right hon. Friend convince my young constituents that Finance Ministers talking about debt relief will have a concrete effect in meeting our millennium goals, getting children into school and tackling the AIDS epidemic in Africa?

Mr. Brown: I visited Mozambique, and I think that the children in my hon. Friend's local schools should be congratulated on what they have done. Only 6,000 people in Mozambique are being helped with retroviral drugs for HIV/AIDS, when 600,000 are suffering from the disease. Until we can provide more money, either through the global fund to fight AIDS, tuberculosis and malaria or through other measures, many people will not be able to obtain the treatment that they need.

Debt relief does help, however. I believe that £6 billion of Mozambique's debt has been written off as a result of the decisions that we made last year. Mozambique is one of the biggest beneficiaries from the £170 billion of debt that is to be written off as a result of the cumulative effect of all the decisions—and so it should be, because it is an economy that is trying to grow. It is eradicating corruption, taking action to improve the functioning of its economic policy, and deliberately putting more money into education and health. When I am in Davos tomorrow, I will meet the President of Mozambique, and will be able to tell him that we shall do more in the next few years to support the global fund.

Sir Nicholas Winterton (Macclesfield) (Con): Two days ago, I had the honour of meeting the recently appointed Bangladesh high commissioner here in London. He is immensely grateful for the aid and assistance that this country gives his country, which is one of the poorest in the world, but he was very disappointed by the outcome of the meeting in Hong Kong, and particularly by the lack of progress in the introduction of genuine fair trade by Europe. What can the Chancellor do to persuade Europe, and all the countries of Europe, to support a policy of genuine free trade so that countries such as Bangladesh can trade their way out of poverty?

Mr. Brown: I know that the hon. Gentleman has taken an interest in such issues, especially those associated with countries that have been part of the British Commonwealth or the British empire in the past. I think that the proposals from India and Brazil to break the deadlock in the trade negotiations should be taken seriously. I believe that a further meeting of major players will take place in Davos this week. I hope that we shall see further progress over the next few weeks, because the longer it takes us to reach a trade settlement the more not just our country and others that are part of   the advanced industrial economies, but—most of all—the poorest countries in the world, particularly
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those in Africa and Asia, will lose out. I hope that during the next few weeks we shall see a further attempt to restore the momentum.

Mr. John McFall (West Dunbartonshire) (Lab/Co-op): The Treasury Committee's report on the 2005 pre-Budget report, published this week, welcomed the doubling of aid to Africa, as well as the 100 per cent. multilateral debt write-off for the 38 highly indebted poor countries, but the documents issued at Gleneagles contained 212 separate commitments. Given that the G8 has no independent secretariat, will the Chancellor ensure that there are adequate mechanisms to monitor the commitments, so that we can deliver to those poor countries on the ground?

Mr. Brown: I am grateful to my right hon. Friend, who has taken a big interest in those matters over the years and has visited Africa on many occasions. The G8 Finance Ministers are meeting in Moscow in the middle of February, and I have asked that it be put on the agenda how we follow through the commitments made at Gleneagles. We will discuss education, debt relief, the health programmes and the follow-through from the commitments made on aid. I can assure him that we will do so.

I know that many people involved in the G8 summit, and some of the celebrities in particular, are following this through. Today, Bono is making proposals for enhancing the global fund, and I shall be meeting him tomorrow to discuss them. I know that another member of the Gleneagles delegation, Bob Geldof, is now on missionary work in relation to the Conservative party.

UK Economy (Competitiveness)

4. John Bercow (Buckingham) (Con): What factors he takes into account in assessing the competitiveness of the UK economy. [45616]

The Chief Secretary to the Treasury (Mr. Des Browne): We assess economic performance over the economic cycle using a range of measures, including gross domestic product and productivity growth, labour market performance and economic stability. The fact that the UK is the only G7 economy to have avoided any quarters of contraction in output since 2001 shows that the UK is highly competitive in today's increasingly global economy.

John Bercow: I am grateful to the right hon. Gentleman for that lamentably complacent reply. Given that skills shortages are endemic, productivity growth is at record lows, the regulatory burden upon business is more onerous than ever and this country has slumped from fourth to 13thin the international competitiveness league table since the Government took office, why does he not now accept that the Government and the Chancellor are wrong and that respected commentators—from the CBI to the Institute of Directors and from the British Chambers of Commerce to the London School of Economics—are right to criticise him?

Mr. Browne: I am disappointed that the hon. Gentleman thinks my answer is complacent.

John Bercow: Lamentably.
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Mr. Browne: "Complacent" will be quite sufficient to support my disappointment. I took care to answer specifically the hon. Gentleman's question. He asked what factors are taken into account in assessing competitiveness and I answered the question. It did not seem to me that, in a factual question, there was room even for his extravagant expressions of regret.

The hon. Gentleman has expressed judgment on whether the steps that the Government have taken were appropriate, and he will recollect that he was one of the    most vociferous and consistent critics of the Government's decision in the early days to give the Bank of England independence. He may well, like most of his colleagues on the Conservative Benches, have changed his view on that, and now has to accept the judgment made by the Government. He nods to indicate that he has.

The hon. Gentleman will know, from his experience and knowledge of this area, that the most important thing in relation to competitiveness and productivity for the UK is macro-economic stability. Indeed, the shadow Chancellor effectively said that in the speech that he made on Monday, when he said that he would not sacrifice the stability that we in government have won for this country for any other purpose, even tax cuts. I suggest to the hon. Gentleman that a significant number of factors are involved on which there may be differing views, but stability has been achieved.

Mr. Jim Cunningham (Coventry, South) (Lab): Does my right hon. Friend recall that under the previous Government, some of the major companies in this country refused to or could not take on apprentices?

Mr. Browne: Of course I remember that, and my constituents remember it even more painfully because they lived through those times, when they saw their young people being deskilled, effectively and substantially, by that. I celebrate the fact that, across the UK, there are now 300,000 apprentices in training.

Mr. Richard Spring (West Suffolk) (Con): What role does the Chief Secretary think the collapse in our world competitiveness has played in the fact that we have the worst trade imbalance in our history?

Mr. Browne: There has not been a collapse in the competitiveness of the UK. In fact, only this week an independent survey indicated that the UK is the No. 1 place in the world for inward investment. That is the view that other businesses take of the competitiveness environment and productivity of this country. As my right hon. Friend the Chancellor has already told the House, productivity has grown in every year of our stewardship of the economy. The hon. Gentleman's party could not say the same.

Rob Marris (Wolverhampton, South-West) (Lab): As my right hon. Friend says, one of the measures of competitiveness is productivity. There are different ways to measure productivity, one of which is average output per worker per hour. Another, and a major measure for our economy, is the average output per person of working age per year and the Government have a wonderful record in that regard because of high
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employment. Will my right hon. Friend assure me that we will continue with our policy of high employment because work is the best way out of poverty?

Mr. Browne: My hon. Friend is entirely correct. The challenge for the Government is to increase productivity year on year while increasing the number of people in work. We have achieved that to such an extent that there has been a record increase in the number of people in employment. I must remind Opposition Members that that contrasts with the record levels of unemployment when they were in charge of the economy.

John Hemming (Birmingham, Yardley) (LD): Is the Chief Secretary aware of the substantial damage done to competitiveness by relative gas prices in the UK vis-à-vis the continent? Prices in the forward market are around 40p a therm on the continent, while they are about twice that in the UK. What are the Government going to do about the incompetent way in which they have handled the gas market?

Mr. Browne: I do not accept that the Government have been incompetent in our handling of the gas market. I am not immediately able to confirm the particular statistics that the hon. Gentleman quoted, but I will accept them from him. Recently, however, my right hon. Friend the Secretary of State for Trade and Industry explained from the Dispatch Box exactly what we were doing to ensure that industry in this country is properly served in energy, despite the fact that we live in a globalised economy in which energy prices have increased significantly.

Mr. Lindsay Hoyle (Chorley) (Lab): Drag factors on competitiveness are over-burdensome regulation and the gold-plating of EU regulation. I know that the Government are working hard to reduce regulation, but could we set higher targets to ease the burden on small companies?

Mr. Browne: My hon. Friend will be aware that in the pre-Budget report my right hon. Friend the Chancellor announced a review of this very phenomenon—the gold-plating of EU regulation. The Government believe, as does my hon. Friend, that inefficient and over-burdensome regulation can impose a significant cost on business and we have introduced, and are seeing through, radical and thorough-going reforms to business regulation across the Government.

Mrs. Theresa Villiers (Chipping Barnet) (Con): Does the Chief Secretary accept that in a globalised economy, it is vital for our competitiveness that our tax system be as simple, efficient and user-friendly as possible? If so, is he concerned that the World Economic Forum now ranks the UK as low as 67th in the world for tax efficiency; that the length of Tolley's standard textbook on tax has doubled since Labour took power since 1997; and that only this week Mike Brewer, of the Institute for Fiscal Studies, said that the Chancellor had

as a country with

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Mr. Browne: First, I welcome the hon. Lady to her position and congratulate her on her promotion. I look forward to working with her. I ask her to pass on my appreciation to her predecessor for the good working relationship that we had.

Mr. Gordon Brown: Her eight predecessors.

Mr. Browne: My right hon. Friend reminds me that the hon. Lady has eight predecessors.

Mr. George Osborne (Tatton) (Con): How many Chief Secretaries has the Chancellor had?

Mr. Browne: I am not sure, but I think four.

Unfortunately, the hon. Lady is wrong in her analysis of the tax situation in the UK. Since we came to power, we have cut corporation tax, income tax and small business tax and introduced research and development credits, to such an extent that many international studies consistently show the UK to be an attractive place to do business, with a relatively low tax burden. In fact, the latest OECD figures show that the UK tax burden is well below the average for the EU 15 and the EU 25 countries.

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