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Column 460When one starts to look at what is going on there, one finds that British Gas, a privatised utility in this country, is well placed to lead a multi-billion pound contract to pipe Colombian natural gas throughout the capital--and making a great deal of money at the same time. When Amnesty International produced a very thorough report on human rights in Colombia, it met a strong riposte from both the Colombian Government and the right hon. Member for Watford (Mr. Garel-Jones), who was a junior Minister at the Foreign Office. David Bull, director of Amnesty International, wrote in The Guardian shortly after :
"The outrage of the Colombian authorities at our recent adverts in the British press is matched by our bewilderment. As head of the Colombian Administrative Security Department (DAS), Dr Fernando Brito must be aware that there is no such international court or forum to which he could "sue" Amnesty International"
that was after a threat to sue Amnesty International.
Mr. Bull went on to say that he would
"welcome the opportunity to have its evidence on human rights violations presented and tested before any independent body." The Amnesty International report, entitled "Colombia--The human rights movement under siege", catalogues the problems encountered by people who have stood up for human and social rights in the country. Trade unionists have been assassinated ; those who have stood up for the land rights of the landless have died as a result ; and the constitution grants impunity to many of those responsible for the abuses.
Summarising recent reports on the situation in Colombia, the Inter- congregational Commission of Justice and Peace quoted these words from Amnesty International's report :
"Successive Colombian governments have largely escaped international criticism because of a skilful mix of political initiatives, public relations campaigns and the support, in the international arena, of powerful allies for whom Colombia's strategic and economic significance is of far more importance than its human rights record".
The British Government say that they are keen to increase the amount of trade with and inward investment in Latin
America--interestingly, by a number of newly privatised utilities from this country--in order to make considerable profits. In Colombia, there is not just a battle between the drugs barons, but a battle against those who are standing up for human rights. Trade union leaders, social leaders, activists and others who want housing and schools for their children are being assassinated.
The British Government are also providing the military with logistical and intelligence support--as is the United States--in the guise of a war against drugs. Many in Colombia suspect that the intelligence system is being used to monitor the activities of those who are standing up for the social progress to which I have referred.
Several reasonable conclusions can be drawn from the current situation. The armed forces must act within the law, and the growth in the paramilitary forces must be not just checked but reduced ; there is a great deal of illegal paramilitary action. Links between the army and the paramilitaries are suspected, and it is thought that anti-terrorist legislation is frequently used to prevent people from taking part in social protests. There are few signs that those who are guilty of these appalling atrocities are being brought to book. I hope that the British Government will be prepared not only to recognise the existence of serious human rights violations in Colombia, but to support monitoring
Column 461exercises and human rights initiatives. I hope that their foreign policy initiative will stress human rights objectives rather than purely economic ones.
We are discussing a continent of wondrous diversity, beauty and potential. Many of its people live in terrible poverty, and much of its cultural heritage is under threat in numerous ways. We must view the world as a whole--its trading patterns, its ecology and its sustainability. I think that much of the treatment of the poorest people in South America is deplorable ; we ought to participate in the development of a foreign and trading policy that takes a very different attitude to the region and its problems.
What has happened in Mexico, and what is happening in Haiti and to the poorest people in Brazil and Colombia, will be replicated throughout the continent. Although we cannot solve all the problems from here, we can at least recognise them and not always be seen to be supporting the rich and powerful against the poor and landless. 2.8 am
Mr. Jacques Arnold (Gravesham) : I congratulate my hon. Friend the Member for Wycombe (Mr. Whitney), the distinguished chairman of the British -Latin American parliamentary group, on opening the seventh consecutive summer Adjournment debate on the important subject of this country's relations with Latin America. I welcome my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) to his last outing as Minister of State, Foreign and Commonwealth Office, responsible for relations with Latin America, and congratulate him on his appointment as Paymaster General.
This has been another good year for Latin America, and in particular for Britain's relations with it. A glittering array of Her Majesty's Ministers has travelled across Latin America, which is good for our relations ; it is also good for Ministers to absorb an appreciation of Latin America and take it into the heart of Government. It is a collection of countries with an educated elite that can match that of countries anywhere in the world. It is a continent with representative democracy now firmly re-established, except in the shameful cases of Cuba and Haiti, and it is a continent with growing economies. I hope that the Prime Minister will build on his recent visit to Colombia and to Brazil--the first such visit by a serving British Prime Minister--and I hope that he will build into his programme visits to other Latin American republics.
Only two weeks ago we welcomed President Wasmosy to the House and Celso Amorim, the Foreign Minister of Brazil is here now. In fact, only last Tuesday he witnessed from the Gallery the interesting spectacle of Prime Minister's Question Time. In London today we have also seen Ernesto Samper, the President-elect of Colombia. He spoke to us here, in the mother of Parliaments. This year, the Inter-Parliamentary Union has welcomed parliamentary delegations from Cuba and from Chile, with whom we have had interesting discussions. Last year I spoke at length about Brazil, which covers one third of the area of Latin America. It is the ninth largest economy in the world and has an annual gross domestic product of $500 billion, which is three times that of Mexico and twice that of Belgium. The economy of the state of Sa o Paulo in Brazil is one and a half times that of the entire Argentine republic. That puts that magnificent country into context.
Column 462Brazil is currently going through a major transformation through its economic stabilisation programme which was launched by the then Minister of Finance, Fernando Henrique Cardoso. It has already switched from the cruzeiro real currency, which only last April was depreciating at the mind-boggling rate of 42 per cent. per month, through the URV index to the new currency, the real, which was launched on 1 July. By the use of strong monetary control, high interest rates and supportive measures it has stopped inflation in its tracks. The new currency has appreciated gently against the United States dollar in the weeks since its introduction. None of that can do any harm to the election prospects of Senator Cardoso who has become a strong presidential candidate for the elections due on 3 October. Nevertheless, he has a herculean task to outstrip the front runner, Luis Inacio da Silva, well known as Lula, the leader of the Workers party, to whom the hon. Member for Islington, North (Mr. Corbyn) referred.
Brazil may be proud of its recent democratic record. It reverted from military dictatorship to democracy without bloodshed. It went through the disillusion and trauma of seeing its first renewed democratically elected president, Fernando Collor de Mello, driven from office accused of corruption. It has seen its interim and current president, Itamar Franco, weather a personal scandal. It has been through all that without breaching its constitutional procedure. That is a proud record and we in the House must await the new president who takes office at the beginning of 1995.
I should like to draw the House's attention to developments in Argentina. We must lift up our eyes above the hurt brought about by that tragic piece of fratricide, the south Atlantic conflict of 1982. Argentina is a country akin to sleeping beauty. It has been kissed by the prince of democracy and is emerging from a 50-year slumber. I ask the House to cast its mind back to the 1920s and 1930s. Argentina was then interlocked with the economies of the British empire. British companies ran the public utilities, the meat trade and the banking. The Argentines exported their agricultural produce to Britain and we, in turn, exported our industrialised products to Argentina. It was akin to one of the great dominions. However, it was our actual great dominions--Canada, Australia, New Zealand and South Africa-- which saw them as competitors and invoked imperial preference against them at the Ottawa imperial conference in 1932.
The shock of that event was like that experienced by a child rejected by his parent. It led to the 50-year trauma from which Argentina is only now emerging. It is ironic that Britain has also played a major part in that emergence by defeating the military dictatorship in the south Atlantic conflict. The 50-year trauma--mob Peronism followed by military dictatorship--had a devastating effect on Argentina, taking it from being the emerging power alongside Canada in the 1930s to the self-deprecating shadow of the early 1980s.
What a great humiliation that that potentially great country should have had the self-image of a third-world country. Not for nothing did Argentines joke bitterly that God had given Argentina its agriculture, its wine and its oil but that, to redress the balance for those riches, God had given it the Argentines themselves. It was a loss of confidence on a grand scale.
The earthquake of the Falklands conflict, the discrediting of the military and the restoration of
Column 463democracy did not complete the renaissance. President Alfonsin, the first democratically elected president, began the task, but it has been the unlikely figure of President Menem who has seen it through to fruition. Mr. Deputy Speaker, do you remember presidential candidate Menem--the Peronist candidate--with his byzantine appearance and bellicose utterances, especially those against the Falkland Islands ?
Who could have foreseen what that man would achieve ? He has transformed Argentina--inflation has fallen, the deficit is being reined in, the vast inefficient nationalised industries have been privatised, foreign investment and expertise have been brought in, and the British utility companies have reinvested. Certainly, Argentine industry, which is old- fashioned and inefficient, needs investment and renewal, and there are many opportunities for this country in that process.
The Foreign Minister, Guido di Tella, is a highly impressive gentleman of world class. He has launched his "charm offensive", which is helping the wounds of conflict to heal. The House should not forget that Argentina's wounds are still painful to the touch. I hope that there will be a steady building of bridges between the Falkland Islands and Argentina, and the recent Anglo-Argentine conference in Mendoza attended by some hon. Members and others will have done much to help that process.
My right hon. Friend the Foreign Secretary is right, however, to stress our dedication to self-determination and the fact that that dedication would lead us to defend the Falkland Islands should it be necessary. It is no kindness to Argentina to give it the impression that we would not back the democratic rights of the Falkland Islands should it be necessary to do so. That message should be clear. Incidentally, the same message should be sent to Guatemala in relation to Belize--this country and, I believe, the world community, would, through the United Nations, stand behind the independence and sovereignty of Belize.
Argentina has got rid of violence--the violence to the "disappeared", the violence of abductions and that of left-wing terrorists has gone. How tragic that, earlier this month, we witnessed the bomb explosion at the headquarters of the Argentine Jewish community, in which 22 people lost their lives and 140 were injured. Apparently, the perpetrators are believed to be an Iranian Hezbollah terror team. I am sure that the House will echo the message of sympathy and support that my right hon. Friend the Foreign Secretary sent to the Foreign Ministers of Argentina and Israel.
Argentina is again taking its rightful place in the world community. Its navy participated alongside ours in the campaign to liberate Kuwait, and its armed forces are shoulder to shoulder with ours on the green line in Cyprus. Argentine is again a valued trading and investment player and a major companion on the world stage, and we must give it our attention.
Recent months have seen the drama of the GATT agreement and the saga of the European Union agriculture and trading developments. The lesson to be learnt is that the United Kingdom and Latin America are natural allies. This country's fight for free and open trade marks us out as
Column 464the Latin American countries' natural ally in Europe. Our friendships go back to the days of Canning, and of their independence struggles. Our interests run in parallel.
We cannot ask the Latin American countries--or, indeed, other developing countries--to return to democracy and to have sound economies and free trade, and then put up barriers against them. They must earn their way in the world, and for that they need markets in which to sell their goods, to earn foreign exchange with which in turn to buy our goods.
For that reason I alert the House to the growing phenomenon of protectionism masquerading as allegations of social dumping. Allegations of exploitation involving child labour, slavery, prison labour or dangerous working conditions are made against developing countries, and those are used as a justification for trade barriers. Clearly the House is against the misuse of prison labour, which we see taking place in the communist republic of China. Equally, child labour, as seen in far too many Asiatic countries, is abhorrent. However, we should not allow the allegations to cloud our judgment. Those allegations come mainly from three sources. The first source is the extreme left, who blame all injustices on the international trading system ; the second is producer interests in the industrialised world, including the trade unions ; the third consists of the advocates of regional blocs, such as Sir James Goldsmith. Those are indeed strange bedfellows.
I believe that the greatest threat to our relations with Latin America would come from an introverted European Union, and the Latin American republics consequently looking inwards to a Mercosul and other sub-regional organisations, and then to an extended North American Free Trade Agreement. Such an extension of NAFTA would constitute a self-imposed subjection to a belated Monroe doctrine.
Mr. Corbyn : Does the hon. Gentleman not think that one of the many failings of the GATT deal is the fact that there is nothing in it about the rights of workers, or about protection against child labour ? If we are serious about opposing the use of penal labour or child labour anywhere, would it not be helpful if such provisions had been written on the face of the GATT treaty ?
Mr. Arnold : If such provisions were written in, they would hamstring many of the developing economies. It is all very well for us to parade our social consciences, but it is quite another thing if those countries cannot compete in the world. We must never forget that.
We must guard against the advocates of social dumping allegations, such as we have just heard from the hon. Member for Islington, North and also against the possibility of their winning their case in the new World Trade Organisation. Batteries of European Commission lawyers and experts are already descending on Geneva, using alleged cases of child labour, which they then take from the particular to the general, as an excuse for banning third world exports. The United States is also likely to behave in the same way.
That is a looming challenge that we must fight. Fortunately, we have an ally in Sir Leon Brittan as European Trade Commissioner. He has specifically opposed any action against social dumping when exporters have owed their advantage purely to low wages and social costs.
Column 465I shall make a few specific bids to my hon. Friend the Minister. I strongly support the call from our hon. Friend the Member for Wycombe, on behalf of the British Latin American parliamentary group, for a Government-sponsored conference in London on Latin America. That can only heighten the profile of that important part of the world. I also support the plea by my hon. Friend the Member for Wycombe for greater emphasis on the teaching of the Spanish language to our young people. Clearly, with a multiplicity of countries in Latin America and elsewhere speaking Spanish, the language is important, certainly by contrast with French and even more so by contrast with German. I also put in a plea for the Portuguese language and I ask that we ensure that the setting of a GCSE examination in this language is continued.
I ask that we thoroughly review the support that we give, through the British Council, to the network of the Cultura Inglesa in so many Latin American countries. Those institutions are doing sterling work in teaching the Queen's English and British culture to Latin American young people. That does much to strengthen the cultural ties between our country and Latin America.
I am grateful for the opportunity for this seventh debate on Latin America. It is vital and we are making great progress to rekindle the warm relationship between this country and Latin America.
The Minister of State, Foreign and Commonwealth Office (Mr. David Heathcoat-Amory) : I, too, am glad that my hon. Friend the Member foWycombe (Mr. Whitney) secured what is, by now, a traditional end of Session debate on Latin America. I am sad that this will be my last such debate before I transfer from the Foreign Office to a new job in the Treasury. However, I hope that it will not be the end of my relations with Latin America.
I have enormously enjoyed my work with Latin America over the past 14 months. It is a continent of immense dynamism, potential and diversity. I have been treated with great kindness by the ambassadors of the countries represented here and, indeed, by their Governments in many dealings with them, including when I have had to deal with some difficult and controversial matters.
In all cases, I have received courtesy and understanding, and I have always admired the professionalism with which those countries conduct their relations with us through their ambassadors and the staff in London.
There has been a lively traffic of visits in both directions over the past year. This week, to take an example, we have received here the President- elect of Colombia, Mr. Samper, and the Foreign Minister of Brazil, Mr. Amorim. Indeed, I dined with him shortly before this debate started. Both during that dinner and in the more formal parts of their visits, we carried forward our traditionally close relations with those two countries. Earlier this month, we welcomed President Wasmosy of Paraguay. There, too, we found a high degree of common accord.
It is worth noting that, in 1989, nine British Ministers visited Latin America. Last year, that figure had risen to 22 visits. We are not just continuing, but developing and enriching the ministerial relationship between our two continents.
Column 466I pay tribute here to the role of Canning house in this respect. It is always a privilege for me to address audiences there and to listen to questions, points and criticisms from audiences assembled by Canning house. I know that visitors always welcome the opportunity to make contact with British business men, academics and other politicians. As for the calls for a conference on Latin America, I should not tie the hands of my successor, but I hope that he will read this debate and the particular request made by my hon. Friends. Relations are also helped specifically by the interest taken in Latin American affairs by hon. Members. Those hon. Members who have spoken in this debate are known for their continuing interest in the issues. That fact impresses visitors who come here ; they like to know that hon. Members take not only an occasional but a continuing interest in developments in Latin America. They know well that that implies not only applause for the successes of the continent but scrutiny of its problems.
Human rights are not a taboo issue. Provided the discussion is informed and constructive, it enriches the international debate that human relations issues and allegations should be raised and discussed. In that context, I welcome the contribution from the hon. Member for Islington, North (Mr. Corbyn). We all respect the knowledge that he brings to bear on the subject, as well as his genuine concerns about human rights abuses, which we recognise still occur in at least some of the countries concerned.
My final point is that, if hon. Members are considering a visit to Latin America during the recess or at any other time, I hope that they will let the Foreign Office know, so that our post out there can help to make their visits a success. Although I am leaving the Department, I intend to visit Latin America in August and September to complete a little business and to have a holiday in the region, which is a legitimate pursuit. I hope that the last 14 months have at least earned me a little recreation in the area, as well as a little more work.
The matter of trade was raised several times in the debate.
Mr. Corbyn : Before the Minister leaves the subject of human rights, I raised some specific points relating to Colombia. I asked whether the British Government are prepared to support human rights initiatives and examine seriously the situation in Colombia, because one gets the impression, from the outside, so to speak, that the Foreign Office is more interested in inward investment in Colombia than it is in looking at the human rights problems which undoubtedly are growing in Colombia, not diminishing.
Mr. Heathcoat-Amory : I intend to come back to the issue of human rights later in my remarks. However, I can assure the hon. Gentleman that, when President Gaviria visited us last year, when I visited Colombia and, indeed, when President-elect Samper came here this week, human rights issues were raised ; our concerns were made clear to the Government of Colombia and those individuals. If I may, I shall respond later on what I consider to be a particularly important aspect of human rights in Latin America.
As for trade, hon. Members will be pleased to know that our exports to the region increased by some 27 per cent. to some £1.7 billion in 1993, and there is evidence that,
Column 467during the early months of this year, they increased by a further 17 per cent. Despite that, our market share remains disappointingly low, and we are working to correct that.
British industry and commerce are becoming more interested in the region. It is especially pleasing to see a number of British companies which were previously Government-owned domestic utilities, such as British Gas and the water companies, emerging on the world scene and winning contracts in Latin America in the face of stiff international competition. We and the Department of Trade and Industry are working jointly to promote trade. Eight export promoters for Latin America have been appointed by the British Overseas Trade Board and business men frequently accompany Ministers on visits to the continent.
Latin America has changed. The old development model and Government aims of closed economies, high tariffs, nationalised industries and import substitution have given way to an opening up of markets, a lowering of barriers and a welcome of investment. Most Latin American countries have embarked on privatisation programmes, many with help from British banks and institutions.
As my hon. Friend the Member for Wycombe said, those economic changes are often painful. It takes political courage to undertake a programme of reform to reduce budget deficits, control inflation, get on top of macro- economic problems, as well to restructure economies. Those changes are not easy, and the fact that, in almost all cases, countries have persisted and are now seeing the fruits of their endeavours demonstrates their political maturity.
It is not, of course, an even process--some countries' rate of change is faster than that of others--and there are exceptions to the general lowering of tariffs. My hon. Friend was right to draw attention to Scotch whisky, which faces discriminatory tariffs in a number of Latin American countries. We continually point that out. It is of almost overriding importance that our continent and the European Union maintain their world trading vocation. We must resist any temptation to live in a fortress Europe. We must be an outward-looking trading organisation, and we must develop links with Latin America generally and with the regional groupings within that continent.
My hon. Friend the Member for Gravesham also struck a correct note of caution about any attempt to use trade policy to try to force through social changes in poorer countries. That quickly becomes a form of protectionism, and it is a way of saying, "We're not going to trade with you, you are too poor." That is quite wrong and self-defeating.
Of course we are all repelled by the use of prison labour to undercut the market, and the use of child labour must be addressed through international mechanisms. When trade is used to effect such changes, it is an extremely blunt and clumsy instrument. As those countries recognise, such a policy can quickly become a form of disguised protectionism, which we will always resist.
Parallel political developments have occurred, and the establishment of civilian government is now almost universal in Latin America. If we take as a general test of democracy the three requirements of the rule of law, freedom of expression and representative institutions with
Column 468free elections, those countries are democratic. It is noticeable that when they suffer from internal governmental crises, as they have done, they have recently been resolved peacefully and
Some of those crises have been serious, and have involved the removal of presidents, but whereas, 20 years ago, that might have led to the military taking over, now they are coped with and resolved within those countries' constitutions. The old stereotype of Latin America suffering from frequent revolutions, military dictatorships and repression is out of date.
The need to improve the quality of democracy in those countries is widely acknowledged. Democracy does not consist solely of periodic elections. In many instances, it requires the strengthening of the state and its administrative systems. That is why, in some countries, we have aid programmes that fall under the general heading of good government. Human rights abuses are still too common, and there is frequently a need to strengthen the judical and law enforcement systems. We from the outside can often assist with that.
There is a similar point to be made about poverty. We on the Government Benches strongly believe that free trade, liberalisation and market economics provide the dynamic for economic growth and are indispensable. The statist model comprehensively failed. I believe that the economic changes are irreversible.
As for the distribution of wealth, overcoming problems of poverty and ensuring that as many people as possible participate in the market, these are properly matters for the individual countries. They all require a strengthening of the administrative and legal systems, so that all the peoples of the countries that we are discussing can live under governmental systems of probity, integrity and efficiency.
We know that Colombia is a violent country. The connection with drugs money is evident. All too often, the colossal profits made from drugs overwhelm the administrative, judical and law-enforcement systems in the country. These systems are too easily subverted by the flows of drugs money. The war on drugs is an important way of preventing the spread of poisonous drugs into the rest of the world, and of enabling the Government of Colombia to deliver good government in every sense of the term to their citizens.
Mr. Corbyn : I understand the Minister's comments about the drugs war, but I was talking about the growing number of political assassinations of trade union leaders, of social protest groups and of people demanding education, health services and land reform. It seems that foreign Governments all concern themselves with the drugs war and ignore the vicious civil war that is being waged. The number of trade union leaders and political activists who have been assassinated is frightening. Surely that is something that should concern us.
Mr. Heathcoat-Amory : The causes of violent deaths in Colombia are many and complex. Common crime is a factor. Far too many disputes are resolved violently. Far too many people own weapons and use them. There are guerrilla groups that refuse to come into the constitution to pursue their aims democratically. Drugs wars are financed by the profits to which I alluded. There are rogue elements in the security forces.
Column 469It is an aim of the Government of Colombia, and of the next president, to improve the judicial and law-enforcement agencies, the police and the army. It is the next president's aim to use his authority to improve those organisations' respect for human rights. That often means improving the pay of their employees, their discipline and their training, and ensuring that they are subject to the civilian authorities.
In Europe, we are used to human rights abuses being very much connected with the overbearing power of the state. Indeed, we have dealt with two ideologies in our continent--fascism and
communism--which represented states which in many respects were too powerful. There is a difference between that and what is common in Latin America, where it is often the very weakness of states and their failure to control rogue elements in the apparatus of government that lead to human rights abuses.
Mr. Jacques Arnold : My hon. Friend is right. The problem in Colombia is the vast scale of the country and its rugged terrain. Since independence, the Colombian Government have been unable to get their civil writ to apply throughout the country in the minutest detail. We must regard the issue from that perspective, not the extraordinary perspective from Islington High street.
Mr. Heathcoat-Amory : My hon. Friend gives a further illustration of the point that I was making.
May I take this opportunity to pay a personal and parting compliment to the officials and staff in the Department in which I have served for the past year ? They have served me with unfailing good humour, in good times and bad. The skill and dedication our diplomats and officials in the Foreign Office are an asset of which this country should be proud.
Mr. John Spellar (Warley, West) : It is unfortunate that we must have this debate, not because of the hour at which we are holding it but because many of us had hoped that, before the recess, the Minister would have made a clear statement about the changes that are so necessary in the Child Support Agency.
Given the clearly identified problems which so many constituents of hon. Members on both sides of the House face, it is intolerable that nothing will be done to resolve their real and pressing problems over the next three months. We hoped that Ministers would give some hope to the thousands of families affected, especially as many of them are heading deeply into debt and face horrendous problems as those debts and related problems, such as potential repossession, pile up. We should also recognise the varied nature of the problems and the way in which they are continuing. I understand from press reports on the Secretary of State's attendance at the Select Committee on Social Security that, in about a fifth of the cases being dealt with--an estimated 40,000 people--individuals are now in receipt of less than 70 per cent. of their income. We have been assured time after time in debates on the CSA in the Chamber that nobody was left with less than 70 per cent. of his or her income and that we were simply hearing scare stories, yet we find that a huge number of people are so affected.
We are not sure, however--I hope that the Minister can clarify the matter this evening--whether the standard assessment is bringing about that result or whether it is because of the clawing back of accumulated debt. Such debt is almost built into the system because of the delays in assessment. Even with a maximum of co-operation by the individuals concerned, that delay can run from 10 weeks to more than three or four months, so substantial debts are built up and the agency is trying to claw money back. Is that why so many people have been telling Members of Parliament over the past year that far more than 30 per cent. is being taken out of their money ? Or is it because the CSA is stepping up the deduction-at-source orders and taking money directly from individuals' salaries, irrespective of the effect that it is having on their ability to pay other debts ? As a result of deduction orders, some of my constituents cannot meet their mortgage repayments and face threatening letters from their building society about the future continuity of their mortgage. I hope that the Minister will shed some light on that tonight. It is true that we have achieved some clarification of the amount that has been collected, although, in the debate on 4 July 1994 and the Question Time before that, the figure moved around a little bit. I hope that we shall be given a clearer estimate of the amount that was collected by the CSA in the past year, although it seems as though that figure is well below target, and does not, up to now, bear especially favourable comparison with the operations of the Department of Social Security when it previously dealt with the application of recovery of maintenance. I hope that we shall obtain an idea of the figures that are involved, and also of the on-going costs--not only the set-up costs, but the running costs--of the agency.
We must welcome the fact that, in the debate on 4 July, the Secretary of State, even if belatedly, announced
Column 472changes to deal with the administrative back -up. We all recognise from correspondence with our constituents and with Members of Parliament that, until then, the problems were horrendous. The sheer period of delay was extremely unsatisfactory, and made it difficult to pursue cases and to follow them up. The nature of the replies has, until recently, been fairly deplorable.
We should acknowledge that there has been an improvement in the replies in the past couple of months. One has the feeling now that one is communicating with a human being at the other end of the letter, rather than a pre-programmed computer which spent the first two pages giving one the background history and philosophy of the Child Support Act 1991, and never used to discuss the details of the case that one had raised on behalf of one's constituent. That seems to have improved slightly, and the CSA now appears to be addressing itself to the specific problems, although I know that many of our constituents continue to receive letters that are both belated and relatively incomprehensible.
Even if the administrative problems are overcome, we must recognise that the scheme is fundamentally flawed. There is also the problem that the agency and the Department seem, from time to time, to kick the ball backwards and forwards between one another, especially when issues that relate not so much to administration as to policy are mentioned. They seem, collectively and individually, reluctant to accept the real-life problems that are being created, or, if they do, it is with gradual acquiescence and after a considerable period. Some movement has taken place, but it has taken an enormous amount of effort to obtain that movement, and many people's lives have been blighted in the meantime.
The underlying problems that confront the agency appear to stem from two factors. One factor is mentioned with monotonous regularity in debates on the subject--the influence of the Treasury, driven by the pressures resulting from the huge increase in the public sector borrowing requirement, and a desire to narrow that down.
No one would deny that the Treasury must have a legitimate interest in substantial sectors of public expenditure. The real question that arises is whether that interest has passed beyond that into obsession, and is being severely overdone to the detriment of individuals. In many cases, Ministers --not only the Parliamentary Under-Secretary of State, the hon. Member for Bury, North (Mr. Burt), but other Ministers--when speaking about the subject, have constantly asked how much all the changes would cost to the public sector borrowing requirement. Those are legitimate questions to ask, but, by emphasising that aspect as such an overriding priority, they demonstrate that, in effect, the CSA imposes a tax--a tax that falls on specific people, and has fallen with great rapidity, causing huge increases in the amounts that are being taken from those people. It is also clear that the initial proposals for the introduction of the CSA would have allowed longer lead times, a greater degree of flexibility and the potential for phasing in. But, under pressure from the Treasury, those proposals seem to have been put on one side, which has resulted in the enormous burdens that have been inflicted on individuals. Wiser counsel has perhaps been overcome by the pressure from the Treasury.
In the past, although not so much recently, there have also been quotations about changing the culture. They have been reminiscent of the cultural revolution phrases which
Column 473came from another angle in earlier days in the 1960s. People at that time found how difficult it was to institute cultural revolutions. While Governments may wish to bring about some changes in behaviour, they should be extremely careful about how they undertake them, the pace at which they try to implement such revolutions and the effect that they have on the individuals who get caught up in the resulting problems. Different parts of Government policy may be pulling in different directions in the cultural revolution and various strands in the Tory party may be trying to exert influence in different ways, but the victims are getting caught up in the battle.
Last year Members of Parliament found that huge increases in payments were being required. It was that factor that kicked off the main debates in the Chamber and in the country. People were particularly struck by the fact that, whereas changes in local authority taxation--which were fairly fresh in the mind then--had included provisions for transitional arrangements and financial provisions from the Government to ease the transition from one form of local authority taxation to another, there was no such remedy within the CSA legislation. The full force of the legislation fell directly on individuals--with catastrophic effect.
That was only part of the problem ; the other aspect that caused, and still is causing, enormous upset was the retrospective nature of the legislation. It was not as though the Government had not been warned. From time to time the reports of the Select Committee on Social Security have been quoted in debates on the CSA. In its second interim report of 30 April 1991, the Select Committee stated extremely clearly :
"one particular aspect of the Government's plans, the intention to make the new provisions retrospective, causes us considerable immediate concern. We have therefore agreed to this initial Report to make our views known in advance of the debates on the Bill in the House of Commons."
At the conclusion of the three-page document the Select Committee stated :
"We recommend that provision be made in the Child Support Bill to take account of divorce settlements that have involved a capital settlement clearly made in lieu of child maintenance."
Apart from the overall question of retrospective legislation, which excited Conservative Members when they were in Opposition and the Labour party was in power, the fact is that a considerable number of the difficulties could have been avoided had the Government taken the Select Committee's wise words, which it did not dream up out of the air. Those words were based on the experience of the established Australian Child Support Agency which, as has been said innumerable times in the Chamber, has been far more successful than our scheme and has caused less major national upset and debate. One reason is that the scheme was not implemented retrospectively.
Many families made what at the time seemed to be prudent arrangements. Indeed, they were often advised to do so by their lawyers. Whether or not the Minister has some objections to those arrangements because of the implications for the public purse, they were perfectly legal, legitimate and sensible at the time. Now, by a stroke of legislation, those arrangements have been turned upside down. I use that phrase advisedly because it is the phrase used by so many people who have come to my advice bureaux or been at meetings that I have addressed. They have said, "Our world has been turned upside down."
Those people have been prudent, have kept out of debt and have tried to adjust their affairs as they have moved
Column 474into a new family relationship. Suddenly, they find that all that is put at risk by the operations of the CSA. In many cases, people made settlements that involved transferring the house to one of the partners. Quite often, payments were also being made. Sometimes people took on the joint debts that had been incurred during the marriage. They did all that on the assumption that they would have to make fewer regular payments, but that has all been turned over and their financial arrangements turned upside down.
I accept that even dispensing with retrospection would leave some longer- term problems. For example, we clearly envisage that there would be far less likelihood of the transfer of the house and therefore the family being able to continue living in the family home--with the consequences of that on the security and welfare of the children. We also envisage that divorce settlements will be more bitterly and fiercely fought. We anticipate considerably more arguments not just about access to the children, but about who will be the parent with care because of the financial implications of that responsibility. There may be further political activity on that front. Even so, it would be at a far lower level than that we are experiencing at the moment.
We are very concerned about why the system is so inflexible. I have previously mentioned the way in which questions asked in this House, especially on policy issues, seem to be bounced backwards and forwards between the Ministers and at the Department. There is an acceptance of the system as it is rather than an examination of the problems that have been created, some of which cry out against common sense and should be resolved at a much earlier stage.
Given the changes that have taken place and the enormous range of human experience, it is inevitable that a series of anomalies will be thrown up. There must be a system to take account of those and to deal with them before people's lives are once again thrown into turmoil.
The Daily Telegraph today again raised the case of the grandparents who adopted their granddaughter to prevent her from being taken into care. I understand that the child is living with other members of the family and that her parents are still alive. However, because the grandparents took action to help the welfare of the child, the CSA is holding them liable for her support. I have a case in my constituency where a child is being looked after by the grandmother, who has chosen to direct the CSA to one of the parents even though both of them are working. That seems to be extremely inequitable.
There is also the constantly raised question about the income of second spouses or partners. Time and again, they are told that their income is not assessed to establish how much is owed. In that case, they query strongly why they are required to give their income. It does not matter how many times they are told that their income does not affect the sum owed, nobody out there believes it.
If, as the Minister may say, that is only done for their benefit, would it not be better to make the provision of the information voluntary and so avoid a huge amount of mistrust and ill feeling ? That would be a simple, straightforward measure which would help the Child Support Agency. There is no mechanism at present within the system for such a political decision. Matters are held in abeyance between the Department and the agency.
Considerable concern is also caused by the prospect of maintaining the spouse's new partner. Most hon. Members will have come across the problem caused by the break-up of a marriage, the circumstances of which do not concern