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Palestinian Authority

10. Dr. Nick Palmer (Broxtowe): What steps he is taking to support the Palestinian Authority in developing a sound economy. [69429]

The Minister of State, Foreign and Commonwealth Office (Mr. Derek Fatchett): We actively support the Palestinian economy through an extensive programme of bilateral aid and our contribution to EC aid programmes. We announced last November that we shall provide over £50 million in bilateral aid during the next three years. That aid will not only help to develop health and infrastructure facilities and support refugees, but provide technical support for training economic experts for the technical assistance unit of the Palestinian Authority. That brings our total bilateral aid since the signature of the Oslo accords to £122 million.

Dr. Palmer: Does my right hon. Friend agree that the success of the Palestinian Authority in providing what is perceived to be clean and successful government is very much in the interests of all the countries in the area? Will he urge all those concerned, including the United States, to facilitate the access of Palestinian goods to world markets as a contribution to that success?

Mr. Fatchett: My hon. Friend raises two points. First, it is important, as he rightly says, that the Palestinian Authority is transparent and accountable, and it is important for donor countries that there is clear accountability in the use of aid. Secondly, the best way forward for the Palestinian economy is to be able to trade with the rest of the world, and we should like such opportunities to open up for the Palestinians.

Mr. Michael Fabricant (Lichfield): I welcome that answer, but is the Minister aware that, since the authority's formation, Palestinians' annual income per capita has fallen from $1,700 a few years ago to $1,400? Is he aware that that is partly due to the corruption in the Palestinian Authority? Is he aware that, among all the squalor in the area, some 100 families are building large villas, almost palaces? What can the Government do to ensure that corruption is stamped out and that aid from the United Kingdom and the European Union gets to the people that we are trying to help?

Mr. Fatchett: It is crucial that there is transparency in the use of UK and European Commission aid, and we

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shall continue to argue for that. Since the Oslo accords, the living standards of the average Palestinian have declined. We need to address the crucial questions in the middle east relating to the peace process and we have to give Palestinians the belief that peace will bring prosperity. I hope that the Government of Israel and the Palestinian Authority recognise the commitments that they have made under the Wye River accords and that they honour them and implement them in full.

Dr. Phyllis Starkey (Milton Keynes, South-West): May I take up my right hon. Friend's previous answer and ask him what pressure the Government are putting on the Israeli Government to implement the Wye River accords and not to put them on hold until after the general election? Those accords were made with the state, not with whichever party happens to be in government.

Mr. Fatchett: My hon. Friend is absolutely correct--the agreement was made on behalf of the state of Israel. There is no opt-out clause stating that the agreement should be put on hold while a general election takes place. It is our strong belief that the commitments made by both parties under the Wye River accords should be implemented in full and we call on the Palestinians and the Israelis to do just that.

EU (Veto)

11. Mr. Howard Flight (Arundel and South Downs): What recent discussions he has held with his European counterparts on the continuation of the national veto. [69430]

The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): The veto has not figured in recent discussions held by my right hon. Friend the Foreign Secretary or by me. A decision will be taken at the European Council in Cologne in June on when and how to discuss institutional reform in preparation for enlargement. No proposals are on the table.

Mr. Flight: Is it the Government's policy to resist absolutely to give an inch--or perhaps I should say a centimetre--in terms of our veto power? Can the Minister confirm that the Government are opposed to any attempts under the Amsterdam treaty to use the power of the courts, especially in the area of tax harmonisation and the common European withholding tax, to get around the powers of our veto to block such measures?

Ms Quin: Taxation is one of the matters on which, as the hon. Gentleman knows, we believe that unanimity should remain. There are other matters too, which we have listed, such as treaty changes, defence and immigration. However, the hon. Gentleman's concern about the matter sits ill with the Conservative Government's record on both the Maastricht treaty and the Single European Act, whereby, as he knows, majority voting was extended dramatically.

Mr. Bill Rammell (Harlow): Does my right hon. Friend agree that, although the veto is the ultimate preserver of the national interest, threatening to use it at the start of any discussions with our European partners in intergovernmental negotiations actually serves to

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undermine the British national interest? If any demonstration of that were wanted, we need only look back to the beef crisis, when the Conservative party in government threatened our European partners with everything bar nuking them and got absolutely nowhere--but, within 18 months, the Labour Government got the ban lifted.

Ms Quin: My hon. Friend makes a good point. Certainly, on issues such as tax harmonisation, on which we obviously have several allies, it is absurd to start from the presumption that we are in an isolated position.

Mr. John Wilkinson (Ruislip-Northwood): In an earlier answer, the Foreign Secretary was very dismissive of the hon. Member for Leicester, South (Mr. Marshall) for implying that we might be less than firm in defence of the British rebate. Can the right hon. Lady reiterate, without any equivocation whatever, that, if the British rebate were to be reduced, Her Majesty's Government would forthwith issue a veto on that proposal?

Ms Quin: I am always delighted to repeat guarantees given by my right hon. Friend the Foreign Secretary.


13. Mr. Bob Blizzard (Waveney): If he will make a statement on his policy relating to Brazil following the recent economic turbulence there. [69434]

The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): Brazil remains by far our largest market in Latin America and we are committed to strengthening our trade and investment links with that country.

The Government support the Brazilian programme of fiscal adjustment agreed with the International Monetary Fund and welcome the Brazilian Government's commitment to continue with the reform process.

Mr. Blizzard: I thank my hon. Friend. Will he press the Brazilian Government to ensure that, in their stabilisation process, poorer and more vulnerable people are given as much protection as possible? More generally, does not the economic crisis in Brazil underline the importance of the work of my right hon. Friend the Chancellor of the Exchequer in creating new international arrangements to assist world financial stability--in contrast to the previous Government, who saw no further than boom and bust?

Mr. Lloyd: On the second point, of course my hon. Friend is right; he has a particular interest in Brazil. The record of the previous Government was poor in terms of not only Brazil but the whole international financial system. Not only have the present Government given considerable support--some $2.25 billion--to the Brazilian economy directly, but the Government, and the Chancellor of the Exchequer in particular, have been concerned to ensure, through the G7 and elsewhere, that the global financial system works to move to greater stability, greater transparency, the introduction of codes of conduct, and practical co-operation between regulators: practical efforts to ensure that this financial crisis can be brought to a speedy end.

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On the issue of protecting the poorest people in Brazil, we shall argue, both in our direct relations with Brazil and in our consultations with the IMF, that the most vulnerable must be protected.

EU (Political Integration)

14. Mr. Tim Loughton (East Worthing and Shoreham): What discussions he has had with his German counterpart about the prospects for political integration within the EU. [69435]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I maintain close contact with Joschka Fischer. Last month in Brussels, I expressed our support for the priorities that he has set for the German presidency: employment, Agenda 2000 and enlargement. The German presidency has not made any proposals for integration part of its agenda, and nor have we.

Mr. Loughton: What did the German Foreign Minister mean when he told the European Parliament last month that political union must be our lodestar from now on? More important, what did he tell the Foreign Secretary he meant by that statement?

Mr. Cook: The German Foreign Minister set out for the European Parliament a broad visionary statement which was a characteristic expression of the German vision of Europe. It happens not to be one that we share; nor have we shared that vision over many years. Our position is closer to that expressed by President Chirac last week, when he called not for a united states of Europe but for a united Europe of states. That statement shows clearly that we have many friends in trying to fashion a Europe in which we work together when we have common interests, but preserve our national identities and ensure that there is decentralisation wherever possible.

Mr. Peter L. Pike (Burnley): As my right hon. Friend said, is it not a fact that the German Government have exactly the same priorities as the British Government within the European Union: jobs, securing European enlargement and making Europe work positively? That is better than an obsession with the silly things, which the Conservative party continues to pursue.

Mr. Cook: My hon. Friend is absolutely right: we share fully the priorities of the German presidency. We think that Germany is absolutely right in putting jobs at the top of the agenda. We intend to work with Germany in making practical progress on the things that really matter to our people. That is--to coin a phrase--the British way.

Dr. Julian Lewis (New Forest, East): Surely the Foreign Secretary cannot pick and mix the bits that he likes and the bits that he does not like from the German Foreign Minister's comments. Is it not a fact that the German Foreign Minister--a man elected to that position on less than 7 per cent. of the popular vote achieved by his party under proportional representation--has said time and again that he envisages the European Union serving the purpose of political union? Why does the Foreign Secretary not disown that statement if he does not believe it?

Mr. Cook: Whenever the German Foreign Minister makes a specific proposal with which we disagree or

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which we believe will not be in the British interest, we will oppose it. However, I rather doubt whether it would assist my relations with Germany if I were to suggest to the German Foreign Minister that he lacks a popular mandate.

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