House of Commons Hansard Debates for 2 Jul 1990

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Ozone Layer (London Conference)

3.32 pm

The Secretary of State for the Environment (Mr. Chris Patten) : With permission, Mr. Speaker, I should like to make a statement about the outcome of the second meeting of the parties to the Montreal protocol on substances that damage the ozone layer, which the United Kingdom hosted and chaired in London last week under the auspices of the United Nations Environmental Programme and which was opened by the Prime Minister.

I am delighted to say that the agreement reached at the meeting marks a major step forward in the global effort to deal with the ozone problem. The parties agreed that chlorofluorocarbons should be phased out by 2000, with intermediate cuts of 50 per cent. compared with 1986 levels by 1995, and 85 per cent. by 1997. We also agreed that halons should be phased out by 2000, except for agreed essential uses, with an intermediate cut of 50 per cent. by 1995.

Those two agreements represent a substantial tightening of the controls in the protocol. Before the London meeting the only requirements were a return to 1986 production and consumption levels by 1989-90 for CFCs and 1992 for halons, and a 50 per cent. cut for CFCs by 1998-99. Controls on two other ozone-depleting

chemicals--carbon tetrachloride and methyl chloroform--were also agreed. Use of carbon tetrachloride will be phased out completely by 2000, with an intermediate cut of 85 per cent. by 1995. Use of methyl chloroform will be reduced to 30 per cent. of current levels by 1995 and 70 per cent. by 2000, and it will be phased out completely by 2005. Neither of those chemicals was controlled under the protocol previously.

Despite that tightening, several countries, including ourselves, would like to have gone further and faster. In particular, a number of countries argued that we should ban CFCs by 1997. We think that this would be a wholly acceptable target provided that there was an exemption for essential medical uses--for example, medical aerosols. We shall be pressing the European Commission to bring forward an amending regulation to provide for this within the Community as soon as possible. We shall be returning to this issue on a global basis in 1992--the parties agreed that there should be a review of the CFC controls then, with the aim of accelerating the phase-out schedule. We also reached agreement on a financial mechanism under which developed countries will meet the incremental costs that developing countries incur in complying with the protocol, and on the technology transfer that will be necessary to enable developing countries to do so. Governments cannot simply guarantee that technology will be transferred, because they do not own the technology. But provision was included in the protocol so that if a developing country feels that insufficient financial support or transfer of technology threatens its ability to comply with the protocol's provisions it will be able to discuss this issue with the other parties to find a solution.

The outcome of the London meeting is a unique achievement in environmental diplomacy. Never before has the international community reached agreement on this sort of package. It brings together tight controls on chemicals which have previously played a vital role in our economic development, financial support for developing

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countries, and a commitment to helping those countries adopt and adapt to the new technology that has to be employed in making and using substitute chemicals.

The fact that nearly 60 countries from the developed and developing world succeeded in reaching agreement on this issue, and that the Indian and Chinese delegations both said that they would recommend to their Governments that they join the protocol, marks a new phase in international co-operation on major environmental issues. I believe that, having reached agreement on the ozone problem, we can now move on and try to reach agreement on the other more difficult environmental problems that we face, such as global warming.

Mr. Bryan Gould (Dagenham) : The agreement reached last week was an important and welcome step towards the long-term protection of the ozone layer. To the extent that the Secretary of State, as chair of the conference, made his contribution to that outcome, he deserves our congratulations, and the Opposition are glad to offer them. It is particularly welcome that China and India have been brought within the Montreal protocol. I am also pleased that the principle of a fund and financial help to the third world has been established. Does the Secretary of State agree that the agreement, welcome though it is, does not of itself save the ozone layer? Does he accept Dr. Joe Farman's view that the ozone layer will still suffer a further 20 per cent. destruction by the year 2000? Does he agree with the United Nations working group that every 1 per cent. loss of ozone leads to a 3 per cent. increase in skin cancers and a further 100,000 people going blind?

What is the Secretary of State's estimate of the volume of ozone-depleting gases that will be released between now and the year 2000? Does he agree with the Greenpeace estimate that it will represent half as much again as the total amount already released in the whole of recorded history up to the present?

Is the Secretary of State satisfied that enough help has been offered to the third world, particularly in relation to technology transfer? Will he say more about how the fact that that technology is largely privately owned is to becircumvented? While the British Government's offer of£9 million to the fund is welcome, that must surely be seen in perspective. Is not it the case that it represents just one fifth of the amount that the Department of Energy is currently spending on consultants' fees in the run- up to electricity privatisation?

While the Secretary of State clearly did well in his role as chair of the conference--[ Hon. Members :-- "Chairman."] I am replying, and I shall choose my language. While the Secretary of State did well in his role as chair, will he acknowledge that the position of the British Government left something to be desired? I refer especially to the mystery of why we are unable to add our signature to the declaration which commits 14 other countries, including all the other members of the European Community, to phasing out these gases by 1997. Is it really true, as his hon. Friend the Minister of State maintains, that we were simply not asked to sign? If it is true that we were excluded in such a way, is not it a rather wounding insight into our image as a country which is always expected to drag its heels and to act on the side of delay?

What are the special medical uses that prevent us from agreeing to a 1997 phase-out, and how are other countries, which have agreed 1997, managing in that respect? How

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will we ensure that we meet the deadline? Will building foam containing CFCs, for example, be banned? If so, when? Will the chosen instruments be prohibition, or a price mechanism, as recommended by the Pearce report? What support will be given to the recycling of CFCs and what safe methods of disposal will be adopted?

Does the Secretary of State acknowledge that green consumerism has been an extremely valuable ally in reducing the use of CFCs, but that Government intervention is now required? I assure him that he will have the Labour party's support for any measures that are put in place now.

Mr. Patten : I thank the hon. Gentleman, parenthetically, for his kind parenthetical observations.

It will probably take the next half century to save the ozone layer. Under the previous protocol, it was estimated that chlorine loading in the atmosphere would rise from today's level of 3.5 parts per billion to about 5.9 parts per billion by the year 2040. Under the terms of the new, tighter protocol we are talking about an increase which will peak at just over present levels in 1997, and will then fall towards the year 2040. Levels should fall to about three parts per billion by the year 2040 and continue to fall thereafter. We may be able to achieve a better result, but that will obviously depend on whether we can encourage others to tighten up regulations and targets in the way we would like. Those estimates are on the pessimistic side.

Nevertheless, we expect substantial improvement in chlorine loading, which will fall back to the levels that existed before the hole in the ozone layer above the Antarctic was discovered. We expect a substantial improvement, but it will take quite a long time. The hon. Gentleman asked whether we were providing enough help. Our contribution to the interim fund for the next three years is based on the United Nations formula. No one at the conference did not welcome the contribution that we were proposing. I have no doubt that after the interim fund ends we shall be considering a further longer-term fund, which will provide financial assistance. We also want to ensure technology transfer as far as we can, but that tends to be a curious portmanteau expression used to describe things which are tradeable. Under the existing aid programmes, technology transfer is encouraged : licensing agreements, technical co-operation and training programmes, and the purchase of patents are all funded by aid.

The hon. Gentleman was wrong in his remark about the United Kingdom Government's position compared with that of the rest of the European Community. Four member states of the Community signed the statement to which the hon. Gentleman referred, not 11. Among those countries that did not sign and do not have their names on the statement to which the hon. Gentleman referred are France, Italy and the Republic of Ireland, which at the moment holds the presidency of the Community. We have no differences with the rest of the Community about wishing to phase out CFCs by 1997.

I suspect that one reason why we were not approached to sign the statement was that I was chairing the conference and trying to provide as broad an agreement as possible. Other member states may have concluded that it would be wrong to press Britain to take a partisan position

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during the conference. Let there be no doubt that we are committed to phasing out CFCs by 1997, except for special medical uses. The hon. Gentleman asked to what sort of medical uses I referred. I mentioned medical aerosols in my statement. If the hon. Gentleman knows anybody who suffers from asthma, he will rapidly find examples of medical aerosols.

I could refer to other issues involving toxicity testing and, alas, the fact that no alternative has yet been found for halons for use in aircraft, in manned computer centres or for putting out fires. There is also difficulty in producing enough of an adequate substance for use in refrigerators. However, I will not go into those matters in detail.

The hon. Gentleman is right to say that the Government need to encourage greater recycling. I was delighted when my hon. Friend the Minister for the Environment and Countryside opened the plant that Imperial Chemical Industries has started for that purpose. The hon. Gentleman is also right to say that green consumerism has helped a great deal. I hope that the green labelling scheme, which we are pressing in the European Community, will help in that and other areas.We look to European Community regulations to help the Government to achieve tougher and tighter targets. I shall be asking the next presidency of the European Community Environment Council to take urgent and early steps on that issue.

Sir Peter Emergy (Honiton) : Will my right hon. Friend accept the congratulations of the House on his chairmanship of the conference? I thank him for his reference to asthmatics, because, being one myself, I am aware that the issue is of great importance to them. Is not it true that one of the greatest problems of chlorine in the atmosphere arises in European nations that we used to describe as being behind the iron curtain? Will my right hon. Friend ensure that the EEC considers giving assistance with the financial problems faced by those nations in dealing with the industrial problem, which is both great and severe?

Mr. Patten : I was extremely pleased that a number of central and eastern European countries were represented at the meeting in London last week--for example, Hungary, Poland and Czechoslovakia. The European Community needs to give as much assistance as possible to countries in central and eastern Europe to enable them to cope with their environmental problems, and that includes the depletion of the ozone layer.

Mr. Peter Shore (Bethnal Green and Stepney) : I, too, congratulate the Secretary of State on making such welcome progress in phasing out CFCs and, in particular, on bringing China and India into the agreement. He would be the first to recognise that the crucial element in their agreement is that there should be an adequate transfer of technology. It is on that point that I feel that the position is not yet as clear or as definite as the House would wish. What discussions has the right hon. Gentleman had with companies such as ICI--there are few CFC producers in the United Kingdom--to obtain their agreement to the necessary transfer of technology, either through establishing subsidiaries in the case of India, or through licensing agreements in other cases?

Mr. Patten : The right hon. Gentleman is right, and I thank him for what he said about the difficulties of

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ensuring adequate top technology transfer. One important element in the agreement is that it brings together the issues of compliance and of technology transfer in a way that is acceptable not only to developed countries but--and it is slightly more to the point in this context--to developing countries. The Government have had a number of discussions with ICI, just as Governments of other countries have had discussions with their chemical producers. With reasonable good will on the part both of the firms concerned and of developing countries, it should be possible to get round some of the difficulties that the right hon. Gentleman identified.

For example, as part of our aid programme--it was part of an aid agreement that I signed with India last year--we have already done an extremely good study on the costs to India of CFC substitution and ways in which we should set about helping it to meet those costs and deal with the necessary technology. It involves a number of elements, not least how early the Indians can take action, and how much they can do to promote recycling. I have no doubt that companies such as ICI are keen to discuss with Governments such as the Government of India how they can transfer technology in a way that does not discourage them from investment in substitution.

Mr. Anthony Nelson (Chichester) : I join in welcoming my right hon. Friend's statement and the personal commitment that preceded his chairmanship of this important conference in London. I also welcome the fact that both India and China have been brought in, and the opening that he announced for even more rapid progress over the next decade or so.

My right hon. Friend has already acknowledged that the consumer movement played a large part in paving the way to the conference. What advice, apart from the labelling scheme, would he give to consumers, recognising that the responsibility for reducing the use of ozone-depleting chemicals rests not just with Government but with household consumers and buyers?

Mr. Patten : I am grateful for what my hon. Friend has said. It is important to pay tribute as well to the work of the United Nations Environmental Programme in general and to Dr. Tolba, the executive director, in particular. He did an admirable job in moving along the discussion in the past few months and in getting us to the situation in which we could reach agreement last week.

Consumers have helped, through the pressure that they have brought to bear, to ensure the more rapid phasing out of aerosol sprays. I hope that consumers will turn their attention to recycling, for example, of CFCs in refrigerators. They can ensure that, when they replace their refrigerator, if possible, their retailer takes back their old regrigerator and has the CFCs contained in it adequately recycled through one of the schemes.

Mr. Simon Hughes (Southwark and Bermondsey) : The international agreement and the level of it are welcome. It is appropriate that there has been a unique agreement, given the uniquely severe and urgent problem. However, the Secretary of State has failed to achieve his targets, as set out in his press release of 14 June, in which he said that the objective was to achieve the most rapid possible cuts in and consumption and the most demanding timetable for reduction of CFCs. We should have set an example. We

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should have said that we were committed to a 1997 phase out at worst, or even one in 1995, and even allowing for the exemption on medical aerosols.

Given that many of us feel, like Joe Farman, who discovered the ozone hole above the Antarctic, that the results of the conference were very disappointing, will the Secretary of State look again at the Government's policy of blocking in the Commons the Bill promoted by my noble Friend Lady Robson that got through the other House? Will they introduce in this House in the next Session of Parliament a Bill that commits us to the most urgent possible target for the elimination of CFCs?

Mr. Patten : I hope that we shall be committed, with agreement on the European Community regulation, to phasing out by 1997, with the qualification that I mentioned earlier. I do not think that the hon. Gentleman, while properly stressing the urgency of this issue, should overlook some of the real problems in providing substitution, one of which is adequate toxicity testing. It is simply not good enough, for example, to tell people in electronic engineering who are using solvents that they should use alternatives that have not yet been properly tested. That would not be reasonable. There are other problems, to which I have already referred, relating to halons, and the medical arguments. These are not being paraded as excuses for inaction, but are being pointed to as reasons why we cannot go even faster. Anybody in his right mind would want to get rid of CFCs tomorrow.

Sir Antony Buck (Colchester, North) : Is my right hon. Friend aware that it is gratifying that he is receiving accolades from Members on both sides of the House for what has been achieved? Will he say a word or two about the methods of monitoring and enforcement of what has been agreed?

Mr. Patten : Of course. Monitoring and regulation are extremely important parts of the protocol. A special committee will be set up under the terms of the protocol, comprising some of the countries that agreed to it, which will be responsible for monitoring compliance with the protocol. In addition, we shall have our own reporting procedures within the European Community to make sure that we achieve the targets. My hon. and learned Friend is entirely right in noting that one of the major considerations in all environmental diplomacy will be making absolutely certain that, having signed agreements, people keep them. I suspect that that will become an even greater problem when we start discussing other greenhouse gases.

Mr. Alan W. Williams (Carmarthen) : I join in congratulating the Minister on the further progress that has been made in the new agreement. Will he answer the question asked by my hon. Friend the Member for Dagenham (Mr. Gould) about the comments of Dr. Joe Farman that, even under the new arrangements, ozone depletion will continue and the ozone layer around the northern hemisphere over Britain and the United States will decrease by 20 per cent. by the year 2000? When we talk about phasing out CFCs by the year 2000, are we not in a similar position to a smoker who smokes 100 cigarettes a day and is told to give up because he risks getting cancer? Should not there be much greater urgency

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internationally towards phasing out by 1995 or 1997? Frankly, if we had any sense, we would stop using those products virtually straight away.

Mr. Patten : Although metaphors are valuable in political debate, the hon. Gentleman's chosen metaphor is not wholly accurate. Speaking as a former smoker, I found it possible to go from smoking 30 cigarettes a day to zero overnight, encouraged by the existence of two ulcers. CFCs are rather a different issue.

Although it would be nice to stop any use tomorrow, that is not possible, but we have introduced new and much tougher targets. I hope that when we review those targets in 1992 we shall be able to toughen the ones that we agreed last week still further. I pointed out earlier that the new agreement would mean that chlorine loading in the atmosphere would peak by 1997 and start to fall thereafter. Under the previous protocol we were talking about chlorine loading increasing from 3.5 to 5.9 parts per billion by the year 2040. However, even if we were to stop using CFCs now, we should be talking about the problem for some time in future because of the concentration of chlorine in the atmosphere. It will take quite some time to deal with that extremely important and difficult problem.

Mr. Andrew Mitchell (Gedling) : I congratulate my right hon. Friend on the excellent agreement, and, in particular, on the attachment of China and India to it. At a more mundane level, will he bear in mind the importance of continuing to encourage local authorities such as Gedling to look for ways of setting up a system of reclaiming domestic fridges and large industrial freezer units which contain damaging gases which would otherwise be released into the atmosphere?

Mr. Patten : I very much agree with my hon. Friend. Local authorities which have taken the action to which my hon. Friend has referred are to be warmly congratulated. I hope that many more will follow their example, and, as I said earlier, that retailers will do all that they can to promote recycling.

Mr. Andrew F. Bennett (Denton and Reddish) : Will the Minister tell us exactly when we will get the Government system of green labelling? If the EEC is still dragging its feet, could not we ensure that all ozone- damaging products are clearly labelled as such when they are sold in Britain and when they are exported so that consumers can move rather faster than the Government and other international groups?

Mr. Patten : I think, not least because of the creation of the single market, that there is a strong argument for a Europewide scheme of green labelling. We have been pressing for that, and I should like to see one agreed and, if possible, established by the end of next year. If we do not make such progress on a Community level, we shall have to introduce our own scheme for this country. It would be better if we had a scheme that applied across the Community.

Mr. Simon Burns (Chelmsford) : Does my right hon. Friend accept that one of his achievements has been in harnessing the international community to produce an agreement that is more far reaching than many people thought could be achieved? He has confounded and

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wrong-footed the professional moaners who carp about things being too little, too late. Notwithstanding the monitoring and reporting systems in the agreement, are there any more precise safeguards to ensure that countries cannot backslide on keeping to the agreed deadlines?

Mr. Patten : The protocol provides adequate safeguards on backsliding. As I said to the right hon. Member for Bethnal Green and Stepney (Mr. Shore), it will be possible for countries that believe that they are not receiving adequate help with technology transfer through the financial mechanism to take the issue back to the other parties under the protocol, which is reasonable.

In the next few years, environmental diplomacy will raise issues of the greatest sensitivity to individual countries. It will draw attention to the different judgments that countries make about these matters and the problems that they face. We shall achieve the agreements that we need only if we start diplomacy without grandstanding or slagging one another off. These issues must be handled with humility on all sides.

Mr. Jeremy Corbyn (Islington, North) : May I take the Minister back to the reply that he gave my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) on the important question of technology transfers? To many, it appears that there is a dangerous loophole in the agreement, because the technology is held by a few multinational companies. Developing countries which understandably wish to promote the development of refrigerator-making industries and so on will have to pay much for that technology, unless they apply to an as yet unquantified fund held by the Commission or the convention. Will the Minister assure us that there wil be no delay in ensuring a rapid transfer of technology, for example, to allow the Indian Government to promote the building of a new refrigerator plant, which is now planned, using non-CFC material rather than the obviously dangerous CFCs? If this loophole continues, many of the achievements in getting people together will be weakened, if not destroyed altogether.

Mr. Patten : The fund is not unquantifiable. We have agreed on a figure for the interim three-year-old period of $240 million, including resources for India and China. Subsequent commitments to the fund may need to be much more substantial, depending on the progress that we make and on the precise costs of CFC substitution. As I said earlier, the expression "technology transfer" tends to be used rather loosely, ignoring the fact that when talking about technology transfer one is talking about items which are tradeable, which are sold between one company and others or between one country and others. I suppose that that is a rather confusing concept for some Opposition Members--I do not mean to be offensive--who would argue that the multinationals should be nationalised ; socialism is still on one country's agenda. It should be possible, with a modicum of good will, to overcome the problems identified by the hon. Gentleman through licensing agreements and joint ventures. There are plenty of examples of those agreements being funded within our existing aid programmes ; I concluded one or two in a more benign past. Several hon. Members rose--

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Mr. Speaker : Order. I have an obligation to protect the business. There is to be a debate on a Select Committee report on aid to eastern Europe. Some of those hon. Members who are rising seek to take part in it, so I shall allow two more questions from each side of the House. We must then move on. Undoubtedly we shall return to this subject.

Mr. Kenneth Hind (Lancashire, West) : My right hon. Friend referred to the fund and will be aware of the comments by the Indian Government about the shortage of funds. He has presided over a major achievement. Will he comment on the size of the fund that will result from his achievements at the conference and on the adequacy of the fund for countries such as India if they are to be able to meet their requirements under the protocol?

Mr. Patten : As I said, the size of the interim fund is about $240 million over three years, but we expect further contributions to a fund after that. Under an aid agreement with India which I signed last year, we have promoted a study of the costs of CFC substitution in India. The distinguished Indian Minister, Mrs. Gandhi, who made a substantial and distinctive contribution to our discussions last week, referred in some press interviews to a cost of $340 million for CFC substitution programmes in India. That is the highest figure suggested by Touche Ross, which suggested in its report that, with earlier action and more recycling it might be possible for the Indians to cope with the CFC substitution problems for $120 million. I guess that somewhere between those figures there is a realistic amount which the Indians will need to comply with the protocol. What delighted me almost more than anything else was the fact that India and China reckoned, at the end of a fortnight's argument and discussion, that they could bring themselves to agree to the terms of the protocol.

Mr. Gavin Strang (Edinburgh, East) : I acknowledge the contributions by the Prime Minister and the Secretary of State to this historic international agreement on a major environmental issue. I put it to the right hon. Gentleman that the effect of the implementation of the protocol by India and China will be crucial. To many Opposition Members, the right hon. Gentleman's remarks about the transfer of the technology of the production process to these developing countries could have been more robust. Surely we will not allow the multinational companies to drag their feet. The sums of money that will be given to India and China in the short term are relatively small. I hope that the right hon. Gentleman agrees that it would not be acceptable to us if they used that money to buy CFC substitute products from advanced economies.

Mr. Patten : It is worth noting that the substitutes for CFCs were not discovered by politicians and will not be marketed by Ministers who sign agreements. They were discovered and will be marketed by the same multinational companies that are still some of the villains in the Opposition's arguments. I do not see the companies concerned in that light. ICI has behaved with commendable public spiritedness. Like the rest of us, these companies want CFC substitutes to be used to ensure that we can enjoy the benefits of economic and social progress without depleting the stratospheric ozone.

Mr. D. N. Campbell-Savours (Workington) : What measures are in the protocol to deal with the destruction of exhausted air-conditioning and refrigeration equipment

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in China, India and the countries throughout the far east which have very hot climates? What will happen to the equipment that must be destroyed? Will those measures be funded?

Mr. Patten : As I said, the study on India, which we helped to fund, referred to the considerable progress that could be made by the encouragement of precisely the sort of recycling to which the hon. Gentleman referred. One of the first steps that we must take with all developing countries is to agree on a realistic programme for both CFC substitution and recycling. The potential impact that those countries' economic development could have on the problem if we do not assist them makes one realise how important it is to give them all the help that we possibly can.

Mr. Ian Bruce (Dorset, South) : Will my right hon. Friend confirm that CFCs are used so widely because of their non-toxic and non-flammable properties? Will he confirm that, while protecting the ozone layer, the Government will make absolutely sure that they protect factory workers and other citizens against possible less safe substitutes?

Mr. Patten : My hon. Friend is quite right. The importance of taking precautions is relevant to CFC substitution, as it is to other matters. The damage that was done inadvertently by the invention, manufacture and use of CFCs, which were initially regarded as a great scientific breakthrough, should make us particularly cautious in respect of the testing that is required for CFC substitutes. That is why I stressed toxicity testing.

EUROPEAN COMMUNITY DOCUMENTS

Ordered,

That European Community Document No. 10139/89 relating to municipal waste water treatment be referred to a Standing Committee on European Community Documents.-- [Mr. Patnick.]

STATUTORY INSTRUMENTS, &c.

Mr. Speaker : With the leave of the House, I will put together the Questions on the two motions relating to statutory instruments. Ordered,

That the Rent Book (Forms of Notice) (Amendment) Regulations 1990 (S.I., 1990, No. 1067) be referred to a Standing Committee on Statutory Instruments, &c.

That the Rent Officers (Additional Functions) (No. 2) Order 1990 (S.I., 1990, No. 1068) be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Patnick.]

Mr. Corbyn : On a point of order, Mr. Speaker. We all realise the pressure of business, but we have just had an important statement on an issue that affects the future of the planet. Only two more hon. Members wished to ask questions--

Mr. Speaker : Order. I know. It would be very tempting to call all those hon. Members who rise on questions and statements.

Mr. Corbyn : But it was only two.

Mr. Speaker : Many other hon. Members wish to take part in today's debate. Even if I could impose a 10-minute limit on speeches, I should not be able to call all those who wish to participate. The House must accept that it is only fair to give hon. Members who wish to take part in the main debate the opportunity to do so.

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Two Opposition Front-Bench spokesmen will be making speeches, and if they set a good example to the rest of the House I may be able to call a good many--though perhaps not all--of those hon. Members who wish to participate. Again, I ask for brief speeches.

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ESTIMATES DAY

[1 st Allotted Day,

2 nd Part--]

ESTIMATES 1990-91

Foreign and Commonwealth Office

Eastern Europe

[Relevant documents : Third Report from the Foreign Affairs Committee of Session 1989-90 on FCO/ODA Expenditure 1990-91 (House of Commons Paper No. 233).

European Community Documents Nos. 9090/89 on Aid to Poland and Hungary and 10788/89 and 4542/90 on medium term financial assistance for Hungary.]

Class II, Vote 2

Motion made, and Question proposed,

That a further sum, not exceeding £74,290,000 be granted to Her Majesty out of the Consolidated Fund to defray charges that will come in the course of payment during the year ending on 31st March 1991 for expenditure by the Foreign and Commonwealth Office on grants and subscriptions etc to certain international organisations, certain grants in aid, special payments and assistance, scholarships, Military aid and sundry other grants and services.-- [Mr. Waldegrave.]

4.13 pm

Mr. David Howell (Guildford) : The Select Committee on Foreign Affairs is grateful to the House for giving us this opportunity to discuss the Committee's third report on Foreign and Commonwealth Office and Overseas Development Administration expenditure, and to focus particularly on matters relating to assistance to eastern Europe. The sections of the report dealing with the know-how fund and support for eastern European economic development will be the main focus of attention. It is worth pointing out, however, that the other issues raised in the report relate directly to what is happening in eastern Europe and to the whole range of other issues of concern to the House, including environmental pollution, which we have just discussed.

Paragraph 7 of our report examines the problems of Foreign and Commonwealth Office staffing, which have arisen because of the need to establish stronger posts and a greater effort in the new democracies of eastern Europe. Some changes in the dispositions and staffing policies of the Foreign Office have already been announced and it is clear that further changes will be needed if we are to meet those pressures.

In paragraph 9 of the report, we return to the subject of visa policy--a perennial problem and a frequent cause of complaint to those who visit eastern Europe, where the granting of visas to the United Kingdom is still too slow and there are too many unacceptable delays. We look forward to a time when the visa arrangements for eastern European countries are abolished. That would have to be achieved on a Europewide basis and I know that Ministers have been examining that possibility.

We considered the role of the BBC's World Service both generally and in relation to its role in the liberalisation processes in eastern Europe. The general view of the House would be that the World Service has performed wonders and that it has played an excellent role in assisting the process of democracy to emerge in eastern Europe and in establishing the work, role and reputation

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of this country. I hope that all hon. Members will support me when I say that we hope that the financial problems facing the World Service in trying to catch up with inflation--admittedly, that is a problem we all face--can be satisfactorily resolved so that the highly worthwhile efforts and the very valuable return per pound spent through adequate support for the World Service are fully recognised in future.

The Select Committee considered the Wooding review into how we can encourage east European and Soviet studies in British universities. We expressed some disappointment and unease about the fact that, despite certain undertakings by Ministers, the full commitment to implement the review has not happened and there seems to be a certain amount of buck- passing who should find the funds to push the matter forward to ensure that we have adequate Soviet and eastern European studies in our universities. Above all, the Select Committee considered the work of the British Council and, in particular, its work in setting up offices in eastern Europe and encouraging English language teaching to ensure that English becomes the second language of eastern Europe.

The know-how funds are part of a much bigger jigsaw. The G24 advanced industrialised countries have already pledged about $13 billion in loans and credits to eastern Europe. That includes $2 billion for Poland and Hungary from Japan, $300 million from the United States and an enormous programme of activities, and support from the European Community to which we contribute directly. All that is embraced in the so-called PHARE--the Poland-Hungary assistance for the reconstruction of economies--system of support for eastern Europe. That is a wide-ranging and fast-developing set of programmes ranging from food aid in the short term to meet immediate emergencies in eastern Europe to vocational training, massive projects for cleaning up the environment--which are certainly needed in eastern Europe-- raising loans for infrastructure, opening markets in western Europe for eastern European goods and a host of other developments. In addition, there is the European Bank for Reconstruction and Development which is to be located in London.

Mr. Dennis Skinner (Bolsover) : The right hon. Gentleman has been talking for a few minutes and I had thought that with the passage of time some of his friends from the Select Committee might turn up to listen to him, especially as Mr. Speaker said earlier that quite a number of hon. Members wished to take part in this debate. I do not think that I am mistaken in saying that only one other member of the Select Committee is present to listen to the right hon. Member for Guildford (Mr. Howell). I wish to address my remarks through the right hon. Gentleman to the Chair. It is a bit odd that in this great debate for the general good and so forth, when we want to talk about the ozone layer there is only one other member of the Select Committee present to listen to the right hon. Member for Guildford. That says a lot about this whole panjangle.

Mr. Speaker : Order. The question was addressed to me. The object of these debates is to give hon. Members who are not members of Select Committees and other hon. Members who are not fortunate enough to visit these places an opportunity to express their views. Of course, the Treasury and Civil Service Select Committee has also recently returned from eastern Europe.

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Mr. Howell : In the first two minutes of my speech I deliberately mentioned environmental pollution, two or three times, in the hope that the hon. Member for Bolsover (Mr. Skinner), whose views are greatly valued by the House--he is an expert on environmental matters and sought to intervene earlier--would be able to catch your eye, Mr. Speaker, and to develop his views at length. Hon. Members hope to hear from him on these issues because his views are relevant to eastern Europe and assistance to it.

All the programmes of assistance pale into insignificance when compared with the gigantic capital needs of eastern European countries. We are talking not about millions or billions of pounds, but about hundreds of billions of pounds, which will be needed to develop and improve the structures of eastern Europe. Those programmes will have to be financed, at least in part, from the resources of eastern European countries. Incidentally, it is encouraging to note that the East Germans already show signs of saving rather than spending their new-found deutschmarks. Other eastern European countries will need to do the same, but they will require large capital resources, which will put a huge strain on the capital systems of the west. If one is a little gloomy, therefore, one can expect rather high interest rates some way into the 1990s as capital is diverted to eastern Europe as the sums involved are absolutely huge.

In thinking about our assistance, we have been focusing on Poland, Hungary and Czechoslovakia, but a far greater problem stands behind them--that of the Soviet Union and what, if anything, can be done to meet the large and rapidly growing needs of that struggling, sinking and disintegrating society and economy. The needs are bottomless. There is an understandable view that the Soviet Union will have to stew for the time being, until it works out its new political order and gets some means of receiving and making use of assistance from the west which many people fear that it does not have at the moment. I agree with those who say that simply throwing enormous sums of money at the Soviet Union in new loans and grants at this stage would probably be a complete waste and cause only temporary easement before the whole economy continued its downward path to penury.

Mr. Kenneth Hind (Lanchashire, West) : Does my right hon. Friend agree that, once the Soviet Union has shown the democratic direction in which it wishes to go, one of the beginnings of help could be the extension of the know-how fund to the Soviet Union, whereby we would use our initiative and managment know-how to encourage the development of private industry and private initiative, which would help to fight the shortage of consumer goods which patently exists within the Soviet Union at present.

Mr. Howell : My hon. Friend is absolutely right--once the Soviet Union shows the beginnings. The first beginning must be some currency and financial reform. In a sense, the Soviet Union needs a major currency union with the rest of the world--that would put it in a position to receive effective assistance from the west--through the creation of a hard rouble, just as East Germany has had a currency union with West Germany and received a hard currency so that it can attract investment and begin to develop. The only hope for the Soviet Union is the development of a hard currency, which would require vast international

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effort and support. That subject is now being considered and ruminated on and possibly mobilised in the International Monetary Fund, the world bank and other circles.

Mr. Nicholas Budgen (Wolverhampton, South-West) : Is my right hon. Friend really saying that it would be possible to lock all the great currencies in the world into some fixed mechanism?

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