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Baroness Symons of Vernham Dean: My Lords, the diplomatic effort of the Foreign Office has grown. There

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are now more Foreign Office posts--222--than there have ever been. I believe that the point that the noble Lord has raised is covered by the way in which we are pursuing the organisational issues. I wish I could say that the organisation of the Foreign Office was perfect, particularly as I have ministerial responsibility for it. I do not believe that it is anywhere near perfect as yet. More work is required to be done to ensure that we get closer to our goals.

Local Authority Expenditure: Capping

3 p.m.

Lord Evans of Parkside asked Her Majesty's Government:

    Whether they have any plans to end the policy of capping local authority expenditure.

Baroness Farrington of Ribbleton: My Lords, yes. We are committed to ending as soon as possible crude and universal capping while retaining reserve powers to control excessive council tax increases.

Lord Evans of Parkside: My Lords, I am grateful to my noble friend for that reply. Does she acknowledge that if we are to hand back responsibility to local government, as the Prime Minister wrote in the Guardian last Monday, we must start by ending the capping of local authority expenditure? Does she accept that if councillors were given responsibility for fixing their own authority's council tax, coupled with annual council elections, the quality of candidates offering themselves for election would start to improve and councillors would become more accountable to their electorate? Finally, does she agree that if it is true that local government is the lifeblood of our democracy--I refer again to the Prime Minister's article--then it is the Labour Government's duty to rebuild and protect local government and not to seek to cripple it as the Tories did over 18 years?

Baroness Farrington of Ribbleton: My Lords, I should perhaps declare an interest as someone who was a councillor from 1973 until May this year. I agree with my noble friend that local democracy is the essential foundation of true democracy in any country. By working in co-operation with the Local Government Association and the appropriate associations for Scotland and Wales, we can end crude and universal capping when we have also put in place our policies; for example, best value and local performance plans.

Viscount St. Davids: My Lords, as the Government have so wisely chosen to remain within the national budget, as laid down by their predecessor, do they include local authority expenditure within that commitment?

Baroness Farrington of Ribbleton: My Lords, local government expenditure has to be seen within the Government's overall policy, which is to remain within public expenditure plans but to adhere faithfully to our

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commitment to priority services such as education. There is therefore no conflict. The £835 million of extra education money going to local government, backed by the appropriate level of grant, is within the expenditure plans because the money will be taken from the reserve fund, something to which we committed ourselves before the election.

Lord Mackay of Ardbrecknish: My Lords, is the noble Baroness saying that the Government are going to remove from the statute book the powers to rate cap? I should be interested if she can clarify her Answer. If that is the case, will she kindly tell her colleagues at the Scottish Office who say in the White Paper on devolution that the new Scottish parliament will have powers to control local authority current expenditure through capping?

Baroness Farrington of Ribbleton: My Lords, the answer to the noble Lord's first question is yes. The Government will launch a White Paper next spring setting out their proposals for change. With regard to public expenditure and local government in Scotland, different rules apply with regard to Scotland at the moment. That issue will be dealt with during the devolution debate.

Lord Stoddart of Swindon: My Lords, is my noble friend aware that many people, certainly on this side of the House, will be delighted to hear that it is the Government's intention to remove rate capping? At the same time, will the Government ensure that the powers which were removed from local authorities are returned to them, including the power to raise money for local schemes which benefit people in those localities? Will we get away from the situation where local authorities fund only 15 per cent. of their expenditure from local funds, making them mere tools of central government?

Baroness Farrington of Ribbleton: My Lords, my noble friend is right. It is important that all our policies for local government are seen in the context of freeing it to take up initiatives; for example, through the renewed emphasis on public/private sector partnerships at local level. We, too, are delighted that even at this early stage within our commitment not to exceed the previous government's public expenditure plans, £159 million has been given to health authorities. Where health authorities and local authorities deem that that should be spent on care in the community, it will not be affected by current capping limits.

Bangladesh: Bihari Refugees

3.5 p.m.

Lord McNally asked Her Majesty's Government:

    What discussions have taken place in the last three months between British Ministers and Ministers from Pakistan and Bangladesh about British assistance to help solve the problem of the Bihari refugees in Bangladesh.

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Baroness Symons of Vernham Dean: My Lords, there have been no such discussions between British Ministers and Ministers from Pakistan or Bangladesh. But Her Majesty's Government have provided assistance to the Bihari community, including a contribution of £600,000 joint funding scheme grant to the international NGO concern for primary education and £160,000 to support maternal and child health, family planning, nutrition and STD prevention services for Biharis in Dhaka.

Lord McNally: My Lords, as the Minister is aware, we are about to have a long, broad-brush debate on overseas aid policy. Does she agree that part of an effective aid policy looks also at smaller problems that are curable? Surely the Bihari case comes into that category: 250,000 people who have been in refugee camps for a quarter of a century, where proper leadership could get some back to Pakistan and some assimilated into the Bangladeshi community. The fact that the Secretary of State for International Development went to Bangladesh and did not visit the Bihari camps was an opportunity missed; the fact that she did not raise this issue with Bangladeshi Ministers when she was there was a missed opportunity; the fact that the Prime Minister, when he had the prime ministers of Pakistan and Bangladesh at the Commonwealth conference, did not raise the issue was again a missed opportunity. Surely aid policy should deal with real problems as well as high-minded documents.

Baroness Symons of Vernham Dean: My Lords, the noble Lord touched upon two issues. One is a political issue. It is a difficult issue relating to the Biharis, who are originally from India rather than Pakistan. They moved to East Pakistan on the partition of India in 1947. They expressed a wish to remain in the state of Pakistan when Bangladesh separated from West Pakistan, perhaps because they are mainly Urdu speakers. There is also, as the noble Lord said, the aid question. I believe that my right honourable friend has already written to him about her trip to Bangladesh. There was considerable pressure on her time, and it was her first visit to Bangladesh. She was anxious to see development activities outside Dhaka as well as to meet as many people as possible concerned with development issues. The Secretary of State for International Development is happy for DfID's office in Dhaka to consider projects which will help reduce poverty among the Biharis as well as the people of Bangladesh more generally. I hope that that goes some way towards reassuring the noble Lord.

Lord Moynihan: My Lords, does the Minister accept that the policies of my noble friend Lady Chalker of Wallasey with regard to poverty reduction and human resource development contributed greatly to the warm relations that exist between the UK and Bangladesh? How did the Secretary of State for International Development successfully build on those relations

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during her visit to Bangladesh in September? What new initiatives beneficial to the Biharis will result from that visit?

Baroness Symons of Vernham Dean: My Lords, I am sure that noble Lords will recall that when we last discussed this issue I was fulsome in my praise of the efforts of the noble Baroness, Lady Chalker, in that part of the world. I have no hesitation in being so again on this occasion. I have already made it clear that my right honourable friend has said that she will take suggestions from NGOs from noble Lords and from wherever else they may come, about ways in which poverty in Bangladesh can continue to be alleviated. It is worth noting that Bangladesh is the recipient of £45 million of aid each year, which makes it the second largest recipient of UK aid.

Lord Avebury: My Lords, does the Minister recall that the late Lord Ennals spent a great deal of time in trying to secure agreement on this issue between Pakistan and Bangladesh? At one point, he received an offer of £25 million from the Saudi Arabians to resettle some or all of the Bihari community in Pakistan. Does the Minister know whether that offer remains extant and the extent to which the problem between Bangladesh and Pakistan is one of money, which might be helped if the Islamic world made a bigger contribution than was offered by Saudi Arabia?

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