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understanding that we are all in this together, rather than the reassertion of the economic models that are being imposed upon us and upon other countries at present.For many people the problems that they face are summed up in an answer to a question put to a Sri Lankan Minister at a United Nations meeting. A journalist asked him why third-world countries went to the UN with monotonous regularity to complain about the same problems of debts, restructuring, aid, development and the environment. He answered that it was quite simple--it was because we all have the same Finance Minister, the International Monetary Fund.
I am delighted that we are having this debate today. I suspect that the House will have to return to this subject more often. If we do not, we shall be reneging on our responsibilities to consider the world globally and internationally, rather than in the selfish way in which the current economic doctrines of the IMF and the World bank insist that we consider it.
1.51 pm
Mr. Dennis Skinner (Bolsover) : I could not agree more with what my hon. Friend the Member for Islington, North (Mr. Corbyn) has said. He is very knowledgeable on this subject and he is right that we will have to return to it again.
As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said, it is remarkable that this is one of the rare occasions when there has been a debate on overseas aid. Most of the time such debates have been in Opposition time. Contrast that with the fact that only the other day, a full day's debate was devoted to destroying the environment in the middle east. That was what we were about when we discussed in an Adjournment debate the question of supporting American troops in the Gulf, under the guise of discussing the United Nations.
We all know what the score is. I find it remarkable that the Minister or any other hon. Member on the Tory Benches can consider the problem of aid to the Third world and the underdeveloped world, while on 15 January or thereafter they will take part in helping to destroy large areas of the middle east. They have even talked about the use of nuclear weapons. Now it is the practice to fight wars in the Third world. Since the second world war, most wars have been in underdeveloped countries. They say, "We have some new technology, equipment and munitions, let us try them out." They had eight years of practice in Iran and Iraq. The Government, along with the Americans, Russians, Germans, French and all the rest, used that eight- year war to test their new technology.
The Government have a cheek. "Goody Two-Shoes," the Minister, comes along today in her hunting jacket, and tells us that she feels sorry about the Third world and its problems, yet the Government are going to blast some of them off the face of the earth. It really does show the Government up.
Arms are being sold all the time. More is being spent on arms than is being spent to feed little kids in Ethiopia and the Sudan, with their little pot bellies and spindly legs. Every so often we see them on television and everyone is supposed to feel sorry. Here we have a Government who have had £100 billion in oil revenue--never before have we had such riches in this country--but they cannot find
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enough money to help the Third world, or an amount equivalent to that paid out by the Labour Government in 1979, although that was not enough.What do the Government do next? They say that they will give aid through the Common Market--the great wonderful Common Market that they talk so much about. What a joke. I remember what the Tories were saying in 1971--"Join the Common Market. We will have the Lome convention and we will feed the third world." What has happened since? They have piled up all the food. There are wine lakes and all sorts of other things--there was no wine lake when Lord Jenkins was around, because he supped it all. They have all this food, and what happens? They destroy it. They introduce schemes and say to farmers, "For God's sake, don't produce any food." They say that they will have a set-aside scheme, and they pay farmers £80 an acre to watch the grass grow.
Millions of people in Africa, central and south America and other parts of the world, including little babies, have to rely on Terry Wogan and one or two others on the BBC. The Government try to salve their conscience by setting up some little scheme that might help for the day. We are talking about 12 countries in the Common Market, some of the richest in the world. If they wanted, they could feed all those people without any problem.
This country has a greater responsibility than most. When I was a kid at school, people said, "All these pink pieces belong to Britain. We have India, Canada, Australia and all these countries in Africa." What was the game? The colonial masters of yesteryear, the Tories of their day, were ripping off those countries to take all their minerals, food and God knows what else. We have a bigger responsibility than even some of the other countries in the tinpot Common Market. The Lome convention did not deliver the goods. It could not do so because it dealt with capitalist nations. They are not in the business of helping anyone ; they are in the business of making profits. If they have too much food, someone says, "You are producing too much. We are not making profits. Get rid of it. Burn it." But Ministers tell us that they have a heart.
The Minister spoke about debts. As I said, this is a scandal. The impoverished countries want their debts written off, as my hon. Friends said, but in the past three years since the 1987 general election, the Government have written off debts for the top four clearing banks in Britain--National Westminster, Midland, Barclays and Lloyds--amounting to £3 billion. Why? The Government did so because those banks overreached themselves in the third world. The Government have allowed their tax liabilities to be written off, but that money should have gone to write off the debts of the impoverished third-world countries. The banks have made massive profits during the past 11 years under the Government.
The Minister talked about help from the International Monetary Fund and the World bank. What do we expect from them? Most of the time the IMF and the World bank say, "We will give you a few bob if you behave yourself." What does "Behave yourself" mean? In political terms, it means adopting privatisation measures--
Mr. Corbyn : Closing hospitals.
Mr. Skinner : --closing hospitals and accepting tobacco. That is what it is about. We are not likely to get anywhere in that regard.
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The Minister did not mention the Export Credits Guarantee Department because she was too embarrassed to do so. That insurance company stood the test of time until recently. What is more, its purpose was to enable third-world countries to buy goods on tick, sometimes writing off debts. That great insurance scheme was solvent under all previous Governments. What happened under this lot--the Government of entrepreneurs, the Cabinet full of business men and one woman, who reckon that they are smarter than anyone else and that they know the answers to all the economic problems? They have Chancellors of the Exchequer coming out of every pore. The Government get the ECGD bankrupt and then sell it off.It staggers me that the Government have the nerve to talk about giving money to the third world. My hon. Friend the hon. Member for Cynon Valley put the case in a nutshell : the amount of money going to the third world in overseas aid is almost half what it was. My right hon. Friend the Member for Swansea, West (Mr. Williams) said that much of that is linked with private enterprise. The third-world countries have to buy those goods or they will not receive the money.
Then the Minister mentioned parliamentary democracy. Apparently one of the things that we have which is valuable is our democratic system. We are told that we should go out to third-world countries and tell them to adopt the great system that we have here. Well, they would be happy on a Friday when only 10 Members of Parliament turn up for the debate. A lot of hon. Members on the Tory side are moonlighting in the City making money hand over fist. Five or six of them have about nine jobs apiece and 19 former Tory Cabinet Ministers have 59 directorships between them. Yet we tell third-world countries, "We want you to have parliamentary democracy on British lines." What a joke. We offer them the House of Lords rolled in. We have a wonderful tribal system. We tell them, "You have a tribal system in Africa. But we have one that is better." The Lords all get fetched up in fancy frocks and there are witch doctors and all the rest of it. They do not have to be elected. They are like tribal chiefs and they last for ever. If they are not lords, people can have a baronetcy and become a knight. What a joke. Yet the Government tell us that this is the mother of Parliaments and that we have to spread the system all over the world. Am I supposed to buy that?
Mrs. Chalker : This is not relevant to the debate.
Mr. Skinner : Everything that I am referring to is in response to what the Minister said in her opening speech. She talked about spreading this democracy.
Of course, the third world could have the royal family, too. Well I would be happy for it to have the royal family, but I am not too sure that the royals would want to go to the Third world. They might have to pay taxes if they went somewhere else.
Remarkably, the Minister gave advice on slum projects in India and Pakistan. What a cheek. The Government have developed cardboard city on a grand scale. There are thousands of homeless people in London littered round the streets and the stations. Yet the Minister comes here and says that she is telling the Indians and Pakistanis how to deal with the problem of slums. By God, the Indians and Pakistanis want some help with that problem, but the Government have a cheek to talk about solutions when
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they refuse to build public sector houses. Hardly any public sector houses have been built in the past few years with the result that all these people are without a roof over their heads.I shall come to my last point because other hon. Members want to speak. It is about the environment. I detect that this
entrepreneurial, market-forces Government are giving a nod and a wink to the third world and saying, "We have got problems with the ozone layer." The Government have just discovered that they cannot patch up the ozone layer with market forces. As I told the previous Prime Minister, that problem cannot be resolved with a man, a bike, a ladder and an enterprise allowance. It will have to be done by collective action.
What are the Government doing? We have caused the problems but they say to the third world, "For God's sake don't you cause that problem. We will tell you how not to create problems for the planet." What a cheek. All the industrialised nations, mainly in the northern, temperate zone have despoiled the planet and caused havoc. Now they have the cheek to go round the world pontificating and telling Third-world countries that they had better not do the same. The industrialised nations destroyed the rain forests and everything else to feed and look after people in this part of the world.
By and large the debate should have been headed "Hypocrisy by the Tory Government" because that is roughly what it was. My right hon. Friend the Member for Swansea, West referred to that earlier. The Government come here on a Friday and talk about giving peanuts to the people who are starving. Yet we are part of a group of nations including the Common Market, America, Japan and all the rest which, if it had the will and took collective action, could feed the people in Africa and all the other third-world countries. We could feed them 10 times over, but we would have to get rid of the capitalist system if we really wanted to do it well.
2.4 pm
Mr. Harry Cohen (Leyton) : I endorse the comments of the previous two contributors to our debate. My hon. Friend the Member for Bolsover (Mr. Skinner), in his inimitable way, pointed to the double standards and hypocrisy surrounding the debate. He could have mentioned the so-called sweeteners from British Aerospace to Rover. That £80 million--nearly £1 billion--could have been transferred directly to the aid budget where it would have been put to much better use. Tribute has already been paid to my hon. Friend the Member for Islington, North (Mr. Corbyn) for his work for the Kurds. He consistently argues about the enormity of the disaster which faces the world and needs to be addressed, and his arguments are often ignored. The truth is that the underdeveloped world will face even more misery than it does now.
The debt problem has not been resolved. Interest repayments mean that the poor pay for the rich. Those repayments amount to more than $15 billion a year, which means lives lost. That money could be spent on food and the economy. Those debts should be written off. France has written off large chunks of debt. We have not and it is a scandal.
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Mrs. Chalker : What about the £1 billion that has been written off ?
Mr. Cohen : The Minister will have a chance to reply.
The recession will make matters much worse. Already developing countries are desperately worried about eastern Europe which, rightly, will need aid to feed its people, preserve its environment and build up the various national economies. The underdeveloped countries are worried that that will take aid from them. 1992 will mean protection barriers around the rich western European countries. That, too, will adversely affect the underdeveloped world.
One of the lesser obscenities in the Gulf crisis is the United States asking Saudi Arabia, Germany, Japan and other countries for money to pay for the war effort it is promoting there. In the end third-world countries are the most impoverished by what is happening in the Gulf.
On top of that we have foolish restrictions. I shall mention just one. The American war in Vietnam and the sanctions which it has effectively imposed worldwide have impoverished Vietnam. Vietnam has now found oil, which could save it. There is natural gas on top of the oil. Because of the stupid boycott which America is enforcing throughout the world, Vietnam will have to burn off the natural gas to reach the oil. That is a scandal. The Minister has said that aid arrangements to Vietnam are under review. They have been under review for ages. In the words of the Prime Minister, the Minister should be "her own woman" and tell the United States to scrap the stupid boycott.
I have just come back from a trip to Bangladesh. This is a historic time for it with the political upheavals and struggle for democracy which are taking place and which, I hope, will succeed. I shall mention the aid issues, not the political ones. Dhaka university needs an aid project to help it to improve education. Experts told us that there had not been exams for seven years--that in a country which is trying to establish compulsory schooling and which needs middle managers. There have been some brutal assaults on students of Dhaka university--just like those in Tiananmen square, but on a smaller scale. We should provide aid now, so that educational opportunities are improved at the university, in an attempt to stop such brutality. That funding is also vital for improving the country's
infrastructure.
Aid should also be provided for the heritage of that country. The tribal people of the Chittagong hill tracts have suffered a mass migration as their way of life has been threatened. Worse is to come for those people, so we must preserve their culture.
We should establish business links with Bangladesh. The most important thing, however, is for the infrastructure to be improved so that there is proper sanitation--a comprehensive, modern sewerage system--and a plentiful supply of clean water. The profits from one day's arms trade could pay for clean water not just for Bangladesh, but everywhere. It is a scandal that that priority is slipping further down the agenda rather than remaining at the top. Primary health care and hospital development should be funded in Bangladesh as the capitalist system in that poor country cannot provide for it. At this stage there is no profit to be gained from initiating such developments. One of the saddest things has been the spread of Thatcher's privatisation ethos to Bangladesh. The state has sought to
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disengage itself from its responsibilities and that has contributed to Bangladesh's decline. At best, privatisation is an absolute irrelevance to Bangladesh as it is elsewhere.People in Bangladesh told me that the donor countries should monitor the provision of aid to ensure that there is no corruption. Rumours are rife about the misuse of funds, but I am sure that such corruption occurs in other countries. If donor countries provide such monitoring, however, the British Government, as a key donor, must take control and insist that there is no corruption and misuse of funds. They must take responsibility.
Aid must be linked to democratic development, especially in Bangladesh, where the army should be kept out of power. If that does not happen, aid should be stopped. We should seek to help that country's burgeoning democracy by offering to send observers from the Commonwealth, the European Parliament and the United Nations to ensure that its democracy can develop. The way forward for Bangladesh is through democracy and development.
2.12 pm
Mrs. Clwyd : With the leave of the House I shall speak again. One thing that this debate has proved has been hon. Members' anxiety to put their views on aid and development. We do not have enough opportunity to make our views known. Given that the Government do not have a heavy legislative programme for the new year, they should make prime time available--not an Adjournment debate--to debate this important issue. In the past year and a half the Government have not made available any time to debate it. All the time allocated has come from the Opposition because we give this subject its rightful priority.
My hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody), for Leeds, West (Mr. Battle), for Islington, North (Mr. Corbyn), for Bolsover (Mr. Skinner) and for Leyton (Mr. Cohen) and my right hon. Friend the Member for Swansea, West (Mr. Williams) spoke with great passion. However, the hon. Member for Hertford and Stortford (Mr. Wells) said that he detected a note of sourness in our speeches. Any sourness is due to the fact that we are angry because the Government have slashed aid to some of the poorest people in the world. In 1979, when Labour left office, Britain spent 0.51 per cent. of GNP on aid. We are angry because during the past 11 years under the Conservatives we have witnessed large cuts in aid. The Minister for Overseas Development has seen the level of aid drop to 0.32 per cent. of GNP. From being one of the most generous donors in Europe, we have become one of the most miserly, however the figures are presented, ranking 14th out of the 18 OECD countries. That is why Opposition Members feel strongly about it, and we are not afraid to say so.
The hon. Member for Hertford and Stortford talked in emollient terms about the need to increase aid. We appreciate his concern for the third world, but throughout the years of Conservative rule he has allowed aid levels to fall. He has had every opportunity to defeat the Government on aid issues. I cannot recall many occasions when he has voted with the Opposition in an endeavour to increase British aid. He uses many nice words when speaking about British aid. No doubt he has used many more in the past 11 years trying to persuade the Government to increase the proportion of our GNP
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devoted to overseas aid. None of that has had any effect, to the point where today the aid budget is stagnant, however the figures are presented.The Minister disagreed with some of the figures given by my hon. Friend the Member for Leeds, West. He was talking about the budget in real terms, not in the terms in which the Minister will no doubt reply to the debate. No wonder we are angry, for we recall the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), saying in 1983 that when economic circumstances permitted, we would move towards the UN target of 0.7 per cent. of GNP going to overseas aid.
Last year the Government said that we had a higher standard of living than we had ever known. The problem is not that we cannot afford to give the third world more aid but that the Government do not want to give more. Had the Government maintained Labour's commitment to the third world from 1979 onwards, the third world would be better off by £8 billion.
The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) spoke about the amounts spent on arms by the developing countries. Anyone who has been to Ethiopia must deplore the fact that 40 per cent. of its budget goes on military equipment.
Mr. Wells : The figure is 70 per cent.
Mrs. Clwyd : I hear the hon. Gentleman's intervention. If, like other Conservative Members who have spoken, he is serious about achieving the target of 0.7 per cent. of GNP, he should accept, with the hon. Member for Eltham (Mr. Bottomley), that the best way to get it is through a Labour Government.
All hon. Members, including Conservative Members, have talked about poverty in the third world. The Government cannot claim that the ODA targets the poorest people. After the Minister made that claim at the refugee conference, I asked her to set out the evidence on which it was based. She could say only that in India alone, £130 million went on poverty alleviation. But as she has revealed in countless written answers to me, India is the only country for which the ODA compiles statistics of aid devoted to poverty alleviation.
Many of my hon. Friends have spoken of the importance of tackling the debt problems of third-world countries. Developing countries cannot possibly grow their way out of the debt crisis as debt payments are made to the rich. Those sums totalled $52 billion last year. Debt repayments leave no money for investment in growth. As my hon. Friend the Member for Islington, North said, Labour Members have been pushing for United Kingdom banks to contribute to debt relief by a change in the tax law. Some Labour Members tabled an amendment to that effect to the previous Finance Bill. At present banks receive tax relief on the provisions they set aside against bad third -world debts. They invest the subsidy at a hefty profit, but have no obligation to pass on any of the tax relief as debt relief, which is ridiculous and ludicrous. Tax relief in 1988, the latest year for which figures are available, is estimated at £1.7 billion--more than the entire aid budget. If hon. Members are serious about doing something to resolve the problem, they should have voted for our amendment to the Finance Bill.
I am anxious to hear the Minister's reply to our questions. The Opposition have definite proposals--we would like a White Paper on development and an
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educational initiative from the Government. We want the Government to adopt the World bank's constructive proposals on tackling poverty and we would particularly like them to raise the aid budget to 0.7 per cent. of the gross national product. However, I doubt whether any of those steps will be taken under this Government.The Labour party's policy is clear : we intend to put the overseas aid portfolio in the Cabinet. That is why we were pushing so hard in our support for the Minister. We did so not because she is a woman but because she has considerable ability--none of us would take that away from her--and we want her and her portfolio to take their rightful place in the Cabinet, not merely to be an arm of the Foreign Office. If that were the case, as it will be under a Labour Government, overseas development will have its rightful place among the other Government Departments and we shall be able to argue much more vigorously for the needs of the third world than the Minister is able to do at present.
2.22 pm
Mrs. Chalker : With the leave of the House, Mr. Deputy Speaker, until about 40 minutes ago I was going to say that we were having an interesting and worthwhile debate, and I shall concentrate on what happened during the first four hours of the debate.
I noted that the hon. Member for Bolsover (Mr. Skinner) made a contribution from the Opposition Dispatch Box at the beginning of the debate. From his ranting and raving a few minutes ago, we might gather that that was a sign of how overseas policy will be put in future if the hon. Member for Cynon Valley (Mrs. Clwyd) does not get on top of the problem, which means controlling the hon. Member for Bolsover.
The approach of the hon. Member for Cynon Valley to the challenging task of development and aid was, as ever, highly partial. It is not just a matter of money, but persuading recipient Governments to implement the critically necessary reforms. Proper use of aid money is essential and it has to be used imaginatively. That means encouraging developing countries' Governments to break away from their bureaucratic, old socialist ideas if they are to succeed. I did not see much evidence that many of the Opposition speakers had been able to break away from those bureaucratic, old socialist ideas. As the excellent speech of my hon. Friend the Member for Hertford and Stortford (Mr. Wells) clearly implied, if developing countries are to overcome their poverty, they must be able to attract investment and get on with their own business through firm economic reforms. If they do not do so, they will not be able to succeed, despite the Government helping them to do so.
There have been a number of strange comments about net resource transfers. Net flows to Africa are substantially positive. In 1989 the inflows to sub- saharan Africa exceeded outflows by $14 billion. Those are not my figures, but figures from the Organisation for Economic Co-operation and Development. It is clear that the countries classified by the United Nations as the least developed are receiving more--$13 billion more--in new loans and grants than the interest and principal they
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repaid. This country has not only written off £1 billion of debts, but ensured that all our aid to the poorest countries is on grant terms.Our thinking has moved on a long way since 1975--not 1978--when the Labour Government produced their White Paper. We have a development strategy, clearly outlined in the Government's reply to the Foreign Affairs Select Committee's report on bilateral aid in 1987. That set out our view on how best to secure sustainable growth. It also set out our concern about poverty. I and my predecessor have reiterated those ideas in speech after speech in the past five years. The hon. Member for Cynon Valley suggested that our approach in the ODA to structural adjustment was out of tune with that of other donors. That is not true. It is a major achievement of the past five years that the thinking of the international community on adjustment issues has converged. The special programme of assistance to Africa shows how effectively those views have converged. I share the World bank president's view that efficient development must enable the poor to use their main asset--their labour. That is why we have supported price reforms that give peasant farmers the incentive to produce more, and why we argued for less protection so that countries plentiful in labour do not invest in capital-intensive socialist-style industries. It is also why we are financing slum improvement programmes with the help of local people who seek to help poor people to use their labour productively to generate greater income.
The hon. Members for Cynon Valley and for Leeds, West (Mr. Battle) claimed that my colleagues in charge of other Government Departments were not concerned about the effect of their policies on development issues. They could not be more wrong. I have already made it clear that we are fully aware that international trade liberalisation is crucial for the developing countries.
The hon. Member for Cynon Valley also spoke about tied aid. The proportion of tied aid to total United Kingdom bilateral aid, which includes CDC and local costs, both of which are untied, has been about 70 per cent. over the past four years. The DAC average, about which the hon. Lady seemed pleased, is only 51 per cent.
My hon. Friend the Member for Hertford and Stortford referred to the IMF and the World bank playing a leading role in negotiated reform programmes, which we support. We are prominent on those bodies' boards and we work hard to ensure that the reforms are properly and thoughtfully implemented. We know of the problems that some developing countries face because of debts to those organisations, but in general multilateral debt is only a small part of total developing country debt. For the poorer countries, for which multilateral debt is a problem, the IMF's enhanced structural adjustment facility provides the way forward. It is a £4.5 billion facility and it offers an interest rate of 0.5 per cent. As such it is one of the best ways of helping countries such as Guyana to get out of the difficulties that they have faced. The United Kingdom is the largest single contributor to the interest subsidy costs of the ESAF, but we are also seeking to help indebted countries by ensuring that all new World bank lending is on highly concessional terms. We must preserve the financial integrity of those institutions--that is in the interests of the whole developing world.
The House is well aware of our policy towards official debt. We have been generous ; we have forgiven £1 billion in the past. But I want to make one more point about the
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Trinidad terms, which my right hon. Friend the Prime Minister initiated when Chancellor. They would provide substantial debt relief for the poorest countries pursuing reform. I hope that we shall obtain the support of all the donor countries, including Japan, for the Trinidad terms initiative because it can do more than anything else to help those countries.The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) referred to the problems of private debt. He knows that we have supported the Brady plan, which allows IMF and World bank resources to be used directly for debt reduction in deals with private banks. Six countries have already benefited from that. My hon Friend the Member for Reigate (Mr. Gardiner) made an interesting speech. I welcome the fact that the private sector--the CDC or any of the other organisations--plays a large part in helping the Third world. In most developing countries farmers are the largest private sector element and we seek to help them with training, better seeds and better crops.
Good government has two dimensions, political and economic. We are making it quite clear to every recipient country what we expect in terms of human rights and good government. We are encouraging countries in which things have been wrong in the past to put them right. We welcome Zambia's decision to adopt multi-party political systems. My hon. Friends are right to say that Zambia has a long way to go with its economy, but it is critical for us to help Zambia to do the right thing. We do that by training its judges and policemen and by helping it to have the right sort of organisations. Not only will the people of Zambia learn from us, but the country will have a better outlook.
It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
HEALTH
Motion made, and Question proposed,
That Mr. Tom Clarke, Mr. James Couchman, Mr. Jerry Hayes, Mr. David Hinchliffe, Alice Mahon, Sir David Price, Mr. Andrew Rowe, Mr. Roger Sims, the Reverend Martin Smyth, Mr. Nicholas Winterton and Audery Wise be members of the Health Committee-- [Sir Marcus Fox, on behalf of the Committee of Selection.]
SOCIAL SECURITY
Motion made, and Question proposed.
That Mr. Andrew F. Bennett, Mr. John Browne, Mr. Jeremy Corbyn, Mr. Stephen Day, Mr. Frank Field, Mr. Clifford Forsythe, Mr. Robert G. Hughes (Harrow, West), Mr. Ian McCartney and Mr. Patrick Nicholls be members of the Social Security Committee.-- [Sir Marcus Fox, on behalf of the Committee of Selection.]
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The Borders (Rural Policy)
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Kirkhope.]
2.30 pm
Mr. Archy Kirkwood (Roxburgh and Berwickshire) : I invite the House to turn from the urgent need for action on overseas development to the need for action on rural issues in the United Kingdom and in particular in the Borders. I hope to illustrate the need for a more co-ordinated Government approach to rural development in the Borders, but the argument can be extended and a similar case made for other landward areas of Scotland furth of the highlands and islands. Some may argue that it could also be extended to the Highlands and Islands development board because the landward areas in the whole of Scotland require urgent examination from time to time. Since 1979 that task has not been addressed with sufficient urgency by the Government. The Borders covers an area of 1,820 sq m. It has a population of 102,000 and is therefore one of the most sparsely populated regions in Europe with an average of 122 people per sq km. Interestingly, that compares with the average figure for Scotland of 65, a United Kingdom average of 231 and a European Community average of 142 people per sq km. The dispersal of population affects every aspect of public policy. It affects transport in terms of access and cost, the provision of education, and especially the provision of adequate primary schools in rural areas. It has consequences for the cost of living, given the increased costs of transport and other factors. The rate of pay in manufacturing industries in the Borders is low. The dispersal of population also affects social work provision, planning development and housing. The provision of services in the area cannot ignore that spread of population and the difficulties of topography and geography.
Sir David Steel (Tweeddale, Ettrick and Lauderdale) : My hon. Friend's argument was given further weight by this week's report from Shelter, which campaigns for the homeless, saying that homelessness has risen faster in the rural areas of Scotland than in the urban areas because of the lack of rented housing.
Mr. Kirkwood : I am grateful to my right hon. Friend, who succinctly raises a matter that I intended to mention. It is worrying that problems which were previously considered urban are now being visited on people in rural areas. The Government will ignore that at their cost. Anyone who sets out to paint a fairly bleak picture of the Borders would not have to look far for evidence to suggest that things could get extremely bad.
Agriculture is currently facing a great deal of uncertainty. The Borders have less-favoured area status and receive special provision. The livestock sector in the Borders is suffering great uncertainty and has experienced substantial reductions in net farm incomes over the past 12 months. We are apprehensive about the hill farm review, which is due out in the next few weeks and may be able to do something about that problem. In the short term, the Government should increase support in the hill livestock compensatory allowance for the livestock industry so that it can see its way through to next year, never mind the years beyond. The arable sector is also waiting with bated breath to learn its fate at the hands of the GATT
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negotiations. That is a changing situation. The talks broke down last week and are to be resumed next year, but there is a widespread feeling that the Government were all too willing to sell the industry short. Despite the position taken by British Ministers, the EC Commissioner for agriculture, Mr. MacSharry, has bought some valuable extra time to ensure that a living can be made in the arable sector. It is not an exaggeration to say that if farmers cannot make a living in areas like the Borders, those areas cannot prosper, farming will suffer, and the whole rural economy in the landward areas of Scotland will be in danger of collapse. The importance of a sustainable agricultural sector in such areas cannot be overstated. If agriculture were to fail, the consequences would be great. The same can be said of the future of the fishing industry. The coastal communities that I represent on the eastern seaboard of Berwickshire are uncertain about their future. Towns like Eyemouth depend on the continuing prosperity of the catching sector of the inshore fleet and on the onshore processing industry. They ask me what future they are likely to have. Even now, the community is considering greater restraints on the fishing industry for 1991. The total allowable catches may be cut, the capacity of the fleet may be cut and the supplies of raw material to the fish processors will decrease so much that it will make it almost impossible for them to plan processing profitably unless they turn to fish imported from Canada, Iceland and elsewhere.The fishing and agriculture sectors are under much pressure and the textile industry is facing a testing time. The Minister will know that in the past few weeks, three factories in Hawick in my constituency have closed, with the loss of hundreds of jobs. The latest is the closure, announced yesterday, of Hawick Co, with the loss of 80 jobs. The textile industry is trying to cope with difficult circumstances, including climate changes, changes in fashion and style, increases in the price of raw materials, high interest rates and fluctuating exchange rates. It is waiting with bated breath to learn what agreement, if any, the GATT round will achieve in the transitional phasing-out of the multi-fibre arrangement, linkage of strengthened rules and disciplines within the new negotiating process in the GATT talks and the all-important access that it needs to third-country markets. In addition, the electronics industry is experiencing ever-greater pressure from overseas suppliers and is having to contend with high interest rates and fluctuating exchange rates.
The future does not look good in terms of the established, stable base and methods of producing wealth, creating employment and sustaining jobs in the Borders. A gloomy picture could be painted, but, while none of that is scaremongering and all of it is realistic, the future need not be grim. With a fair wind and sensitive support from central Government, working in co-ordination with the local authorities, the future of the Borders could be rosy. I do not want to denigrate the Government's provisions. They have put extra money into roads and electrifying the east-coast route, and into other departmental budgets in a helpful way. Unless there is a more co- ordinated approach to the way that the problems interface in a rural area as disparate as the Borders, the future will be more bleak than it need be.
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We must remember that since 1979 there has been a systematic withdrawal by central Government of a whole series of regional support measures. The start of the withdrawal of assisted area status began in 1979, and it was eventually phased out in August 1982. If that package of regional support existed today, the job creation capacity and potential of the Borders region would have been much greater. In support of that agreement, I quote evidence produced by the Industry Department for Scotland in a research paper published in July 1988. It concluded :"Had the package remained in effect, the study area would contain more enterprises better able to compete and provide more jobs than they are likely to do."
I subscribe strongly to that view.
The Borders region no longer has any sort of development status, and potentially serious consequences flow from that. We are no longer eligible for any assistance from the European regional development fund in Brussels. In April 1985 we lost priority status for the European social fund, so we are denied access to that potential source of assistance. We have no access to any structural fund, although I am aware that there are discussions about the criteria for that. We made an application the last time the list was published for the areas that were eligible, but the Borders region was not accepted for that initial list. We shall continue to argue that we should be on the list. Almost by definition, we do not have access to urban aid and the systems of support that are used to great effect in the central industrial belt of Scotland.
The main justification for removing assisted area status, which has left us with no assistance at all, appears to be based on the fact that the Borders region has relatively low unemployment. The Government must reconsider the criteria for determining which areas are suitable for assistance. There is an acute shortage of officially published statistics for rural areas. There is no accepted series of statistics and data that have any appreciation of rural factors and indicators. The latest example of that, which has caused much public discussion, is that the Department of Employment has been unable to tell us the average income in the Borders region. I understand that there are technical problems because the Department does not have a large enough base from which to draw the data. That means that the Borders region is the only mainland region that does not have access to figures showing the average net income figure. It leaves the Government in a difficult position when trying to judge whether the Borders region is eligible for the different sorts of assistance. The Government are relatively ignorant of rural problems, as are associated public bodies and agencies.
The SDA has done much valuable work in terms of environmental improvements and support services, but there have been great constraints on the economic instruments that it has been able to use in rural areas, particularly in the Borders. For example, the valuable scheme to sponsor the development of rural workshops, which provided conversion grants for rural properties so that they could be transformed into industrial premises, has been withdrawn. I emphasise the potential in the Borders for local enterprise companies, and I certainly wish them well. However, when Scottish Natural Heritage starts in April, it might be much more effective if Government and EEC funding were made available to it.
There is concern about incomes in the Borders, but I have already referred to that in passing and will not dwell on the point. My right hon. Friend the Member for
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Tweeddale, Ettrick and Lauderdale (Sir D. Steel) talked about housing, and I wanted to mention the increasing homelessness that we have been suffering recently. Access to transport is also a great problem, particularly for those living in the Borders region, and I cannot see it getting better.I say in a non-partisan way that the Government must confront the cost of fuel and, for environmental reasons, they must impose constraints on the extent to which people use petrol and diesel. That will create major problems for people living in disparate areas. Under a simple price mechanism, some people will have to pay through the nose. A solution that might suit Trafalgar square could be unacceptable in the Borders.
Does the Minister acknowledge that rural needs cannot be measured simply by unemployment rates, and will he take other indicators, such as income levels, into account in the future? Does he accept the need for a rural areas strategy, with proper co-ordination of all Government agencies? Does he accept that the programmes of publicly funded rural workshops and factories are essential if jobs are to be created? Does he acknowledge the vital importance of the social aspect of the economic work of the LECs and other agencies? Community facilities are just as important as economic measures in rural areas. Finally, does the Minister accept that local authorities and rural voluntary agencies have a continuing and vital role in providing a successful rural development programme in the Borders and elsewhere? 2.47 pm
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