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House of Lords

Tuesday, 24th March 1998.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Norwich.


The Earl of Sandwich asked Her Majesty's Government:

    What is their aid policy towards Indonesia, given the growing economic and political uncertainty there.

Lord Whitty: My Lords, Indonesia is not one of the poorer countries which are the focus for this Government in seeking to eliminate poverty. Our aid programme will concentrate on developing partnerships to improve forest management, with increased emphasis on poor people, on assisting labour organisations and on supporting NGOs in East Timor. Indeed, the Department for International Development has today announced its first major funding of a development project in East Timor. We have urged the Indonesian Government to implement in full the reforms agreed under the IMF package so that financial instability is ended and its impact on Indonesia's poor is minimised.

The Earl of Sandwich: My Lords, I am grateful for the last part of the Minister's Answer. Is he aware that during the past two months price increases and inflation have risen by as much as 15 per cent. a month and that the poor are particularly affected by those increases? Do the Government intend to support the IMF's austerity measures, including more price increases? In order to compensate for that, do the Government have plans for Indonesia to return to a poverty-focused aid programme?

Lord Whitty: My Lords, our basic approach to the financial crisis in Indonesia is the same as that of the IMF. Indonesia needs to respond to the financial crisis and implement agreed reforms. They include ending uneconomic projects and monopolies which distort the economy and restructuring affected banks. Otherwise, the recent achievements in reducing the number of people living in poverty will be reversed. We believe that the IMF package, if properly implemented without favouritism, will maintain the progress which Indonesia was making prior to the current financial crisis. However, that requires an effort of will by the Indonesian Government.

Lord Marsh: My Lords, does the Minster agree that the biggest problem facing Indonesia is its government? There is a likelihood that increased aid will make the ruling political clique richer, but not do very much for the poor.

Lord Whitty: My Lords, there are serious problems about the way in which Indonesia is governed and about

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its economic management. The IMF package, supported by Her Majesty's Government and other major western governments, should provide a more stable outcome which will benefit all elements of Indonesian society. If that is not implemented, there is a serious problem of increased poverty, rather than the reverse, in Indonesia. We would address that issue in those circumstances, but at present the main responsibility rests with the Indonesian Government.

Baroness Williams of Crosby: My Lords, in view of the fact that poverty is driving more and more small Indonesian farmers into clearing more and more of the rain forest by burning it down, will the Minister tell the House whether within the Government's aid programme there is specific provision for encouraging substantial and sustained agriculture rather than the slash and burn which is today destroying huge areas of the Indonesian forests?

Lord Whitty: My Lords, yes, one of the first priorities I mentioned was improved forest management, including the area around the forests. In addition, Indonesia has experienced one of the worst environmental disasters in terms of the haze arising in that area following the disastrous forest fires which are not yet eliminated. The European Union is looking at ways in which it can help Indonesia to tackle similar environmental disasters. In developing the DfID's future forestry programme, we will seek changes in policy and management of forestry areas which presently oblige people to clear forest areas in such disastrous ways. Those changes will be part of our programme and the EU programme.

Lord Jenkins of Putney: My Lords, are the Government continuing to permit the sale of British arms to this corrupt dictatorship?

Lord Whitty: My Lords, the sale of arms to Indonesia and to other regimes was covered by the announcement of the Foreign Secretary in July. We did not think it legal or practical to end supplies under contracts already entered into. However, the new criteria, in line with our ethical foreign policy, will apply to all future applications for export licences to Indonesia.

Nazis' Victims: Restitution of Assets

2.40 p.m.

Lord Janner of Braunstone asked Her Majesty's Government:

    What progress they have made with regard to the restitution of assets to victims of Nazism in Britain.

Lord Haskel: My Lords, on 3rd April the Government will publish a joint report from the Department of Trade and Industry and the Foreign and Commonwealth Office on the history of the enemy property. The Government will announce their response at the same time.

Lord Janner of Braunstone: My Lords, I thank my noble friend for his Answer, especially for telling us that this important report will be published at last. Does he

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accept that the purpose of this operation is to seek, even at this late date, some measure of restitution and justice for victims of Nazism--Jewish and non-Jewish--including the heirs of people murdered by the Nazis, all of whom placed their assets in this country for safekeeping and many of whom have received nothing? Will the Minister assure the House that the Government will set in motion a swift and honourable response to the report in order to provide compensation and restitution, recognising not least that if they do not do so Britain's good name will be put in dire disrepute?

Lord Haskel: My Lords, when we debated the matter on 18th February I said that this is an honourable and decent Government which will act in an honourable and decent way. Nothing has happened since then to make me change my view. The Government's response to the research is a matter for the President of the Board of Trade and will be announced when the report is published on 3rd April.

Lord Lester of Herne Hill: My Lords, does the Minister recall that in that debate on 18th February, in responding to my suggestion that the United States were being more liberal in dealing with the assets of the victims of Nazism, he drew a comparison saying that by 1953 the United States had returned only 15 per cent. of assets applied for whereas the United Kingdom had refused only 13 per cent. of applications for compensation? Will the Minister confirm the accuracy of that statement?

Lord Haskel: My Lords, I thank the noble Lord, Lord Lester, for that question because it gives me the opportunity to correct a point of detail in the response that I gave. The noble Lord is quite right. In that debate I said that by 1953, the United States Administration had released money to only 15 per cent. of applicants. In fact, documents indicate that by 1953 assets returned to "persecutees"--their word, I assume, for victims of Nazism--amounted to some 15 per cent. of the total vested assets released. However, the documentation makes clear that that figure is at best a guess and should be treated with some caution.

Baroness Miller of Hendon: My Lords, does the Minister agree that no one, least of all Her Majesty's Government, should profit from any kind of criminal activity? In view of that and the fact that the Minister has full confidence in the honour of his Government, which I should not dream of questioning, can he not say at the very least that that money will not be transferred to the Treasury, because the owners deposited it for safekeeping in very tragic circumstances? At least the heirs, or people who could reasonably have been expected by the owners to have inherited those assets, should in fact do so. Is it not a fact that events of tragic proportions deserve compassionate responses which do not necessarily follow the rule book?

Lord Haskel: My Lords, I certainly agree with the noble Baroness that the matter deserves very

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sympathetic treatment. However, the problem is that there are no assets remaining. All the assets have been distributed. That is the crux of the problem. If there were assets remaining to be distributed, the Government would be trying to find the owners. But in fact all the assets have been distributed.

Baroness Park of Monmouth: My Lords, I wonder whether the Minister could enlighten my darkness. I should like to know how he manages to reconcile the action of the Government in encouraging the Nazi Gold Conference and creating a research paper but saying in the last debate that, when that research paper is published, they will be deciding not what to do but whether to do anything. In the light of what is owed to the people who thought they had safe haven here, does he find that credible, or is that after all either a research or a media exercise? I find it very difficult to understand.

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