Examination of witnesses (Questions 75
- 99)
TUESDAY 5 MAY 1998
RT HON
CLARE SHORT,
MP, MR
RICHARD TEUTEN
and MR JOHN
KERBY
Chairman
75. I am sorry to have kept you waiting,
Secretary of State, but as the responsible Secretary of State
for Montserrat we felt we had to pursue a number of our arguments
with Robin Cook because of course ultimately he is responsible
for the whole of Montserrat and its future. Thank you for your
patience. I wonder, perhaps for the benefit of the shorthand writers,
if you could identify for them your two assistants this morning.
(Clare Short) Yes, on my right is John Kerby who
heads up this region of the world. What is your title?
(Mr Kerby) Head of Western Hemisphere and Eastern
Europe Division, oddly enough.
(Clare Short) Which sounds a bit ridiculous but
there you go, it is not really.
76. Atlantic trade.
(Clare Short) And Richard Teuten who was recruited
to head up our Montserrat unit when we pulled everything back
to London in order to try and concentrate on making more efficient
the decision making. What is your title?
(Mr Teuten) Head of Montserrat Unit.
77. That is one of the questions which arises
out of what the Secretary of State for Foreign Affairs told us.
Robin Cook told us that the Dependent Territories Review proposed
a separate Overseas Territories Department both inside the Department
of International Development and inside the Foreign Office with
a Joint Liaison Committee. Is this not still a dangerous division
of political responsibility and financial resources and how could
it prevent a confusion of aims and responsibilities witnessed
in Montserrat?
(Clare Short) As you know, we inherited after
the election what I think we all agree was an incredibly inefficient
decision making structure with so many layers that it led to delay
and poor decisions. We have been stripping those out as the Committee
knows, because we have talked often, to get a much shorter and
therefore more efficient form of decision making. I am fairly
sure that there has been a big improvement in the organisation
within our own department. The Foreign Office undertook a similar
review because it has had all its Dependent Territories dispersed
regionally and therefore no expertise about Dependent Territories
because as they tend to be smaller places with particular problems
it made sense to bring some sort of expertise together. I was
quite keen, and I have probably said to the Committee in the past,
to bring all the decision making together. I was very conscious
of the temptation for everyone who is responsible for decisions
in a difficult situation to say "We need some more money"
and come to our budget, I think the Committee shared that concern
and always said: "It is all DfID's fault and the answer is
more money" and not take responsibility for the decisions
and the efficiency of administration that is immediately available.
So I was quite interested in handing over the budget and the responsibility
to the Foreign and Commonwealth Office. In fact it was me who
was pushing that kind of option. Of course it was of some consternation,
I think, to some of my officials, to be frank, but I was keen
on it. I went for a long time with that as the kind of ideal remedy,
thus uniting the responsibility, and clearly we would have had
to make a budget available, but then the responsibility for administration
and the spending of money would be all united and then you get
the responsibility about money because people responsible for
the day-to-day part are also responsible for the big spending
decisions rather than being able to pass the buck. However, the
conclusion was that the Foreign Office cannot do it without the
expertise of my officials obviously and they just do not have
people who know how to do those kind of things, and my officials
draw on other expertise within the Department and you cannot just
extract two that know everything about all issues related to development,
so reluctantly I came back to the arrangements we now have and
I am personally convinced that they are the best way forward.
What I am very keen to do now that the sense of
an absolute crisis and emergency and mess that needs to be resolved
is beginning to subside is get published the Sustainable Development
Plan and get the forward budget so that everyone on Montserrat,
all the decision-makers and all the people, know how much money
there is, what the options are, that if they choose option A,
it means they will not be able to afford something else rather
than this sort of sense that there is always another pot of money
and, therefore, difficult choices do not really have to be confronted.
Sorry that is a slightly long answer, but I did very much try
to find the kind of remedy that the Committee was hankering after
and in the end I came back to the arrangements we had as being,
I think, the best organisation of it.
78. You will
know that it has always been stated in the past that the Dependent
Territories or Overseas Territories have a first claim on the
DfID budget and that was always the answer that we were given.
Presumably now you are talking about setting up a separate budget
for the Overseas Territories and that will be the budget and they
cannot then claim further into the budget of your Department.
Is that correct?
(Clare Short) Well, I do not know if we are looking
at it so much as an overall as a budget for each of them, and
I am trying to project forward. For example, Pitcairn, which does
not have any budgetary aid at the moment, has a tiny population,
you know, the population left over from the mutiny on the Bounty,
all called Christian and Fletcher, I believe, and there are about
55 people and because they issued some stamps, they were self-sufficient,
but there is a risk that that ceases and I have been trying not
just to have an overall budget, but to project forward the needs
of each of the territories and to try and look ahead at what their
financial needs will be if we do not generate some more income.
So, just as we are through the whole of our programme looking
at country strategies and strategies for each of the multilateral
institutions that we engage with, we are trying with the Dependent
Territories to look ahead and then have a budget looking ahead,
but no one can ever prepare for the kind of emergencies like the
volcano on Montserrat. The best laid plans are thrown into chaos
by such a thing.
79. Yes, but presumably, should such a crisis
develop in any one of them, they would be able to be serviced
by the emergency department's budget, You have an emergency department
which I think is called EMAD, so they obviously would have access
to that, and there are some, as you say, who are in receipt of
budgetary assistance, and of course Montserrat is one and St Helena
is another and they are, I think, the only two, or at least that
is what the Secretary of State for Foreign Affairs said, that
are in receipt of budgetary aid, and that budgetary aid, if I
am not mistaken, is administered by the Barbados Development Commission
in the case of Montserrat. Is that right?
(Clare Short) No, I do not think so. It is in
the past that presumably those decisions were made from Barbados,
but we have been looking at the Government of Montserrat's recurrent
budget for this year which is about £10 million[10]
and 70 per cent of it is provided by DfID and of course it is
not only the budget, but there is also lots of major capital expenditure.
80. That is the development budget, is it
not?
(Clare Short) I think the distinction between
EMAD, which we have now renamed CHAD, Conflict and Humanitarian
Affairs Department, because we are putting more emphasis on conflict
prevention and resolution, as you know, so it is EMAD with those
enhanced responsibilities within it, is that it would continue
to have a more flexible budget and can spend much more rapidly
when we are facing an emergency. I think we saw with Montserrat
that over time that is not the best thing when there are two pockets
of money because that would lead to some sort of incoherence in
the decision-making, so I think when there is an immediate emergency,
it is right that the instant money can be made to flow very quickly
from that budget, but, wherever possible, we should then bring
it into a more organised, less emergency way of providing resources
in order to get better quality decision-making.
81. So now what is the current situation?
(Clare Short) Well, the current situation is that
all this decision-making is pulled together in the Montserrat
Unit in London, and decisions on budgets, decisions on big projects
are all centred there and the Unit is in constant communication
with Montserrat and Richard travels there frequently. I do not
know if you would like to add to that.
(Mr Teuten) Yes, just to confirm that budgetary
aid, emergency aid and development aid are all now handled by
the Montserrat Unit in London and the Aid Management Office in
Montserrat.
82. This Montserrat department has a parallel
department in the Foreign Office, has it, or is it combined between
the two?
(Clare Short) Is that in the process of being
constructed?
(Mr Kerby) Perhaps I could just explain that we
in DfID are in the rather transitional stage of setting up our
new arrangements for the Overseas Territories as a whole. For
Montserrat, we have, because of the events of the end of last
year with which you are familiar, put that first in terms of centralising
all our management of assistance to Montserrat in London in the
unit which Richard Teuten heads. Within a few months, we should
have expanded that to take on board all Overseas Territories which
are in receipt of assistance from the DfID budget, so, as I say,
we are in a transitional process between just doing it for Montserrat
and where we shall shortly be of having that for all the Overseas
Territories. The Foreign Office, as I understand it, are setting
up their own department to handle the Overseas Territories which
I believe is going to be in existence within the next two or three
months.
83. Do you have an official within the Foreign
Office with whom you discuss these matters?
(Mr Kerby) You have just been seeing, alongside
the Foreign Secretary, Peter Westmacott who is my opposite number
and Stephen Bradley, I think, was with him who is more or less
Richard Teuten's opposite number, so we are in touch with each
other all the time as well as the contact at ministerial level
which you may have heard about.
Dr Tonge
84. I am still terribly unhappy about this
arrangement, Secretary of State, that the Foreign Office should
be setting up a unit to administer the Dependent Territories and
that the funding for the Dependent Territories, emergency or otherwise,
should come out of our aid budget. I just wonder what you feel
about that in an ideal world.
(Clare Short) I think you have the logical point,
that it is a different need, a different set of responsibilities
than the rest of our aid and development responsibilities, which
is right and it is historical that it is the responsibility and
those words about the first call arise from history and our responsibility
for the Dependent Territories, but short of a new budget head
and the Treasury deciding to fund it separately and create a budget
and expertise, say, within the new unit in the Foreign Office,
then we have to make these arrangements work, and I am pretty
confident that they now are efficient and under control in a way
that they were not before.
85. Is there any chance at all that the
Treasury will take on the need for having a separately funded
unit for the Dependent Territories?
(Clare Short) Never say "never", but
do not hold your breath, I think.
Chairman
86. For example, Secretary of State, one
of the priorities of the Foreign Office in Montserrat, and indeed
the Governor approached me privately about it when we visited,
was actually to build a new prison while the volcano was blowing
up every three hours at the time and, quite rightly, I do not
think you thought it was a priority, but the Foreign Office did.
How would we resolve such a situation now?
(Clare Short) Well, of course the Foreign Office
is a big institution and again we are improving on these great
layers of decision-making, but it is true and I have said in evidence
to the Committee before that for quite a long time I was under
enormous pressure to build this prison and as people were leaving
the island and as there was a desperate need for basic health
care, improved education, to get people out of shelters, and I
think I said before it was like living in a Kafka novel and I
just had to keep saying, "No, I don't believe this is right",
and it was as though I was behaving in a peculiar way to resist
this suggestion and we came down to the compromise that strengthening
the remand centre which is now being done. I am certain that that
was right, but I took a lot of pressure. That is the nature of
bureaucracy, once they get something between their teeth and they
think a prison should be constructed, it goes on churning through
the system. I think it is a bureaucratic problem.
87. How much money was spent on Montserrat
in 1996-97 and in 1997-98 and how did these outturns compare with
departmental plans?
(Clare Short) We have a piece of paper on figures
which I would like to circulate[11].
88. Thank you, yes.
(Clare Short) Richard, would you like to take
the Committee through those figures?
89. Perhaps when Mr Teuten answers he could
tell us from which parts of the DfID budget the money comes from?
(Clare Short) It is laid out, you will see.
90. Shall we delay this until we have them
in front of us, Secretary of State?
(Clare Short) Can I say one other thing on the
papers. A rather useful summary note was prepared for my briefing
and I did suggest it be circulated to you. I think it was rather
late for that reason.
91. We got it circulated around the Committee
this morning. We did not receive it so we could study it over
the weekend.
(Clare Short) I am sorry about that but the reason
was it was prepared for me and I thought you should have it[12].
92. Thank you very much.
(Clare Short) I think we should equally make it
available on the island. I am very keen all the information we
gather is made available as widely as possible. There is a summary
note of the scientist's advice, just one side, the latest on the
danger of the volcano, saying although it is quiet it could blow
up again and people in the centre must not think there is not
a serious danger, which I would also like to circulate to you
and indeed also circulate on the island[13].
93. One of the questions which comes out
of that report of what the current volcanic activity is is how
far can the centre of the island be regarded as reasonably safe
at the present time? I think people are still going back to that
part of the island. That is the part of the island around Woodlands
and Belham River.
(Clare Short) Indeed. Obviously, as you know,
there is some high quality housing there and when the volcano
is quiet people are very reluctant to relocate. Of course then
there are some forces which have an interest in reassuring people
and minimising the risk. I am very, very keen that everyone on
the island understands the risk. The new assessment from the scientists
says: "It is premature to conclude that the eruption is in
decline after only a few weeks of repose. ... internal pressures
in the volcano may still be high. The dome remains very unstable
... Many dome eruptions on other volcanoes show periods of repose
alternating with periods of heightened activity." No-one
can predict if there is an eruption where it might flow but I
remember that people died before and there is still an unpredictability
and a danger. Anyone who is staying in the centre must know that
the scientific advice is it is dangerous, there could be unpredictable
eruptions. I am desperately keen that everybody understands that
and we do not get any more injuries or, even worse, deaths.
94. I think the Committee should know the
Secretary of State needs to leave at 11.15 so we have to be very
economical with our time. I think perhaps we will go straight
to these figures if Mr Teuten would like to take us through them.
(Mr Teuten) Could I start by saying that the figures
for 1997-98 are preliminary figures and will be subject to some
amendment to take account of expenditures incurred in Montserrat
which we are currently bringing to book. The final figures will
be made available in a couple of weeks' time during my next trip
and will be provided in much more detail as well. There are three
categories. The first category is expenditure on assets which
are no longer in existence because of volcanic activity and therefore
were not included in the figures given to the Select Committee
in October in DfID's response to the crisis.
95. That is (a) is it?
(Mr Teuten) Yes, that is (a), what we call pre-volcano
commitments. A large part of that was the Glendan Hospital.
(Clare Short) So we are still paying for it but
it has gone.
(Mr Teuten) We are no longer making any payments
on that. The second category is expenditure on the island made
up of budgetary aid and emergency and development aid. When we
provide these more detailed figures we will provide a breakdown
between emergency aid and development aid. The third category,
and this is the one where there is likely to be the largest amount
of change, is the relocation grant for people in the region and
for air fares for people coming to the UK.
Chairman: Thank you,
I think that is very clear. I am very grateful for that explanation,
that is very clear indeed. £58.218 million.
Dr Tonge
96. It has got thousands at the top, it
is millions.
(Mr Teuten) Yes, there should be a dot rather
than a comma.
Chairman
97. That is actual expenditure, is it, not
commitments?
(Mr Teuten) Yes.
98. Right, now we know from which parts
of the budgets they come. How much will DfID spend on the whole
of the Overseas Territories and on Montserrat in particular in
1998-99?
(Mr Kerby) I have not got the detailed figure
here to be honest. I could give you an estimate. What we are talking
about there would be St Helena, Anguilla, Turks and Caicos Island,
British Virgin Islands, the Caribbean Regional allocation. It
would be of the order of 20 million plus Montserrat.
(Clare Short) That gives you a broad ballpark
figure and we could give you an accurate figure[14].
99. Could you, I would be very grateful.
When you are doing that I wonder whether you could give us a comparative
figure in real terms for expenditure on Dependent Territories
before the eruption because we would like to see how much the
eruption affected it?
(Mr Kerby) That would just be comparing the Montserrat
figures.
Chairman: It will
come out of the exercise.
10 Note by witness: The Government of Montserrat's
recurrent budget for this year is £14 million. Back
11
See Evidence p. 34. Back
12
See Evidence pp. 17-21. Back
13
See Evidence pp. 33-34. Back
14
See Evidence pp. 34-35. Back
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