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Value Added Tax

13. Mr. Gerrard: To ask the Deputy Prime Minister when he last met the Chancellor of the Exchequer to discuss the co-ordination and presentation of Government policies relating to VAT.[11125]

The Deputy Prime Minister: Labour Members have not recovered from my last reply. I shall try another one.

I keep in regular touch with my right hon. and learned Friend to consider how the Government can further the success of their economic and fiscal policies.

Mr. Gerrard: Will the Deputy Prime Minister confirm from his discussions with the Chancellor that the Chancellor has several times clearly stated his view that the VAT tax base is too narrow and specifically mentioned food, children's clothing and newspapers as candidates for the extension of VAT? Precisely which of those is being considered for VAT?

The Deputy Prime Minister: The Chancellor has made his position absolutely clear, despite Labour attacks suggesting that he proposes to extend VAT to food. Both my right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor of the Exchequer have said that that is simply not the case. Nothing is more indicative of the scurrilous nature of Labour's coming election campaign than the preposterous posters with which it is adorning the countryside. It is extraordinary that Labour should ask us to answer questions about taxation. Why cannot it answer questions about any of its own taxation proposals?

OVERSEAS DEVELOPMENT

Cyprus

23. Mr. Nigel Evans: To ask the Secretary of State for Foreign and Commonwealth Affairs how much assistance was given to Cyprus in 1996.[11138]

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Dr. Liam Fox): Bilateral assistance to Cyprus totalled £473,000 in 1995-96. Assistance from the European Union was £450,000 in 1994, of which the UK share was some 16 per cent. Those are the latest years for which figures are available.

Mr. Evans: Does my hon. Friend think it is regrettable that tensions on the island seem to be increasing? Not only were there tragic deaths last year on the green line, but it has been announced that Cyprus intends to buy the S300 military system from Russia. At the same time, the authorities in the north have said that they will retaliate

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with more army personnel in the north. Does he agree that negotiation is the only way to resolve the problems and hostilities on the island, particularly in view of Cyprus's European Union application? Does he further agree that the real losers will be both sides if we allow military tensions to increase any further on this beautiful island?

Dr. Fox: The missile deal is extremely unwelcome. It dangerously raises the stakes in an already tense area. Equally, the Turkish threats are unacceptable. All parties must look for ways to reduce tension, not add to it, and I am sure that that view is shared by all hon. Members.

Mr. Faulds: Would the hon. Gentleman agree that perhaps the more relevant question would be how much assistance has been given to the Turkish Republic of Northern Cyprus, which the Greek regime has prevented from happening? But would he also agree that the provocations on the green line, the UN separating border, have been by the Greek Cypriots because no other forces apart from the UN are supposed to enter that area?

Dr. Fox: The Government do not recognise the Turkish Republic of Northern Cyprus--only Turkey does. There can be no change in our policy of maintaining balanced contacts with both communities. My right hon. and learned Friend the Foreign Secretary deserves praise for his recent initiative in trying to take forward peace in Cyprus. Only by a negotiated settlement and equal movement on both sides can peace be achieved.

Mr. John Marshall: Does my hon. Friend agree that the greatest assistance that can be given to Cyprus is for the island to be reunited so that the refugees can return to their homes?

Dr. Fox: We are looking at the 10 points that my right hon. and learned Friend the Foreign Secretary made in taking the peace process forward. If we are to achieve a settlement, both Governments must reduce the tension. The No.1 move needed at the moment is for both sides to get away from the dangerous rhetoric of recent weeks and to start to reduce, not increase, the tension. We should like to see fewer arms on both sides in Cyprus than there are at present.

Rwanda

24. Mr. Spearing: To ask the Secretary of State for Foreign and Commonwealth Affairs what further assessment he has made of the effects of conditions attached to aid from (a) the World bank and (b) other sources on the causes of the civil war in Rwanda.[11139]

Dr. Liam Fox: The causes of the crisis in Rwanda are complex and go back many generations. However, the report, "Joint Evaluation of Emergency Assistance to Rwanda", did not conclude that previous development assistance was a primary cause of the crisis in Rwanda.

Mr. Spearing: Does the Minister agree that the five-volume report, which the Minister of State has placed in the Library, makes it clear that there were many factors in the crisis? Is it not true that an over-emphasis on competition, particularly among people of similar ethnic background and in certain regions of a country,

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increases the risk of armed conflict? Has not history shown that that is true? Would not it be good if in future the World bank, the International Monetary Fund and national Governments paid attention to that fact when drawing up loan conditions?

Dr. Fox: It is certainly true that the report's historical analysis attaches some blame to ethnic policies during the colonial period, although the United Kingdom was not primarily involved in that area. Our aid to Rwanda is of a humanitarian nature, and we should remember that people in Rwanda--regardless of which ethnic group they belong to--may be starving. Our primary objective in Rwanda is to deal with its humanitarian needs.

Mr. Foulkes: Does the Minister recall that, last week, the Foreign Secretary admitted that the United Nations' arms embargo is not enforceable in our dependencies, which is why Mil-Tec of the Isle of Man was able to supply more than £3 million of arms to the perpetrators of genocide in Rwanda? Will the Minister assure us that no other such violations are occurring, and attempt to close the loophole so that seedy companies in those island boltholes cannot undermine all our humanitarian efforts?

Dr. Fox: I might have expected that the hon. Gentleman, rather than concentrating on the £175 million bilateral humanitarian aid that the United Kingdom has given since 1994, would try to find the single negative aspect in Britain's involvement in the Rwanda crisis. Customs and Excise is currently considering whether there is a case for more prosecutions, and I am therefore unable to answer his specific question. Should further details emerge, I will write to him. Instead of the pathetic sniping we have just heard, it would be nice if, for once, the Opposition were to praise the United Kingdom for the help it has provided in the Great Lakes crisis, and to praise our non-governmental organisations and those who put their lives at risk.

Mr. Jacques Arnold: Is it not the case that the countries of Africa and elsewhere that have complied with programmes suggested by the World bank made very great progress, whereas countries such as Rwanda, which are involved in political expression and racial politics, have not lived up to the standards of the new Africa and new developing countries?

Dr. Fox: I should have thought that it was self-evident that the political situation in Rwanda is holding back any economic development. There has been much economic movement in neighbouring countries such as Tanzania or Uganda, in which there has been some political co-operation--which, sadly, we have not seen in some of the other countries of the Great Lakes region. I hope that the Governments in the region will co-operate to provide a stable political environment in which economic development can occur in Rwanda. Clearly there must be a regional solution; we cannot impose one from outside, through financial institutions or by other means.

Tanzania

26. Mr. Win Griffiths: To ask the Secretary of State for Foreign and Commonwealth Affairs what additional

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assistance has been provided in the last year to help Tanzania cope with the influx of refugees from Rwanda and Burundi.[11141]

Dr. Liam Fox: Britain has committed £3 million bilaterally since January 1996 to help Tanzania to cope. We are ready to do more.

Mr. Griffiths: I thank the Minister for that response, and I am very pleased that the Government's emergency aid to Tanzania has been increasing. However, will he stop for a moment, ponder the wider picture and try to imagine what would happen if, for example, half a million people suddenly moved into the south-west of England, Wales or the highlands of Scotland and started to live off the land, on which they were dependent for all their requirements? A radical transformation in economic and financial policy is occurring in Tanzania. In such circumstances, why have the Government halved their general aid programme to that country in the past five years? Will they now admit that they should be doing more to help the Hutu refugees return to their own country?

Dr. Fox: I returned last week from a trip to Tanzania. I discussed the refugee problem with the Tanzanian Government, whom the House should congratulate on the efficient and sensitive way in which they have dealt with the Rwandan refugees, given the size and the nature of the problem. We have already provided substantial aid and we are willing to do more. The problem that the Tanzanian Government identified was not a matter of need as such, but of access to many refugee groups. The Government are constantly looking at that problem. We have an open dialogue with Tanzania and if the Tanzanian Government ask for specific help, we shall certainly consider it.

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