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Mr. Andrew Turner (Isle of Wight): I congratulate the Leader of the House on the inclusion in his proposals of what might be called a Kagan clause. I also congratulate him on his desire to achieve fair representation of nations and regions in the upper House. Is he aware that, of the 267 persons elevated to the

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peerage since 1 May 1997, three come from the east midlands, five from the north-east, seven from Wales and seven from Northern Ireland? I shall not go on, except to say that 117 appointees come from London. Will the right hon. Gentleman ensure that, in making the new, balanced range of appointments, the Appointments Commission and the political parties are asked to correct that deplorable imbalance achieved by his right hon. Friend the Prime Minister?

Mr. Cook: I am not immediately persuaded that Lord Kagan was the name in most people's minds when I read that passage of my speech. On the hon. Gentleman's other point, it is our objective to try to achieve fairer representation by region and by nation in the United Kingdom. That will be a statutory requirement, and it will be binding not only on the Appointments Commission but on the parties.

Mr. Malcolm Savidge (Aberdeen, North): I warmly welcome the abolition of the absurd anachronism of hereditary peers. On the assumption that almost anything must be an improvement, may I welcome my right hon. Friend's statement, if only on the ground that the proposed bizarre hotchpotch might at least be a stage on the road to a democratically elected second Chamber with powers limited by statute?

Mr. Cook: I am grateful to my hon. Friend for his welcome, as far as it went. I agree that this represents progress. Parliamentary reform, in either Chamber, takes the form of evolution rather than revolution, and I encourage him to accept this as a step forward. If he wishes, during the consultation, to encourage us to go further, that is his prerogative.

Mr. Alistair Carmichael (Orkney and Shetland): I commend the Leader of the House for his proposal to reduce the number of bishops in the second Chamber from 26 to 16. May I suggest that his proposals would be greatly improved if that figure were to be reduced by a further 16? Surely, in the 21st century, we should have representation from all faiths and denominations or from none at all.

Mr. Cook: The hon. Gentleman and I both come from a country that went to war to get rid of bishops; I should place that interest on the table before I respond. The Wakeham Commission examined this point with considerable care and attention, and came to the conclusion that it was right that there should be representatives of faiths in the second Chamber, but that that should not rest solely with the 26 bishops. That is why it proposed a reduction in their numbers. It suggested that, for balance, a fixed number should be appointed from other faiths, and we have wrestled with that proposal for some time. However, it is impossible to reduce the many other faiths in Britain to a pro rata formula, which is why we shall invite the Appointments Commission to ensure that those faiths are properly represented and that, where appropriate, their leaders can be included on the Cross Benches.

Mr. Peter Pike (Burnley): May I congratulate my right hon. Friend on his announcement that hereditary peers, who sit in the House of Lords because of what their

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ancestors did—which, in many cases, was neither worthy nor creditable—are now to go? I hope that, during the consultation period, we consider two priorities: accountability and improved legislation. I know that my right hon. Friend is keen to see improved legislation, and the second Chamber should play a role in that. It should therefore be composed of people with the expertise to look at legislation constructively and positively so that, ultimately, Parliament produces a better form of legislation.

Mr. Cook: I have no idea whether what my ancestors were doing five centuries ago was creditable or otherwise, but I absolutely agree with my hon. Friend that that should not be the basis on which I or anybody else has a seat in Parliament. It should be on the basis of what we can contribute and represent.

I agree with my hon. Friend that, if we want intelligent legislation, particularly legislation that reflects the rapidly changing society and technology in the world outside, we need to give people who have an expertise that we do not necessarily have access to Parliament. Standing for election is an unusual activity, which will always be attractive only to a small minority of the population. It is right that there should be another route by which those who have something to offer but do not wish to stand for election can take part in debates and legislation.

Lady Hermon (North Down): I welcome the reform of the House of Lords. I am particularly pleased that it is not a fully elected second Chamber.

May I draw the right hon. Gentleman's attention to part of his statement:

As he knows, at the last general election five Sinn Fein members were returned from Northern Ireland. They have not represented their constituents in the House because they failed to take the Oath of Allegiance. What measures do the Government intend to take to persuade Sinn Fein members to take up their position within the House of Lords?

Mr. Cook: The hon. Lady will be aware that the White Paper provides that the threshold for membership of the House of Lords be varied in regions where parties stand only in those regions. That means that we shall not apply the percentage figure across the UK for parties that stand only in a part of the UK. That point is of importance to Scotland and Wales, as well as to Northern Ireland.

On the position of Sinn Fein, it is more a matter of whether Sinn Fein wishes to take part in this Chamber. I doubt whether we shall appoint Sinn Fein Members to the second Chamber until such time as they may wish to take part in this Chamber.

Tony Wright (Cannock Chase): May I welcome the Government's conversion to the principle of a mixed- membership second Chamber, which ensures that we have a Chamber that is neither a rival to, nor a replica of, this House and that we have enough election to secure legitimacy, but enough appointment to secure expertise and independence?

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In making its proposals, the Wakeham Commission was sensitive to the charge that any new House would be seen as a House of patronage, which is why its central and most radical recommendation was that all appointments should be made by an independent Appointments Commission. Why do the Government seem to have rejected that recommendation?

Mr. Cook: I agree that we must ensure that there is a channel through which people with expertise and independence of mind can take part in parliamentary debates. He is correct about what the royal commission recommended: that the independent Appointments Commission appoint not only Cross Benchers but party representatives. We have not accepted that argument for the simple and straightforward reason that we cannot conceive of a major political party submitting to a situation in which its representatives were chosen by people who were not members of that party, and I doubt whether the official Opposition would submit to it either.

I notice that Lord Wakeham himself seems to be resiling from that recommendation. In this week's The House Magazine, he is quoted as saying:

That is precisely what is before the House in this White Paper.

Mr. Tom Levitt (High Peak): I welcome the broad thrust of today's proposals, particularly those on measures to ensure the continued primacy of this Chamber. Will my right hon. Friend make it clear that the new second Chamber is to be a working Chamber, and that there should be at least a minimum level of attendance and participation, particularly for appointed Members, on which continued membership of the Chamber depends?

Mr. Cook: My hon. Friend makes a very important point. We shall seek to construct a second Chamber that will be a functioning second Chamber capable of providing added value to our debates on legislation and scrutiny of the Executive. It is important that those who take their place there maintain a reasonable attendance record. People will be chosen not only for what they have to offer but for their willingness to ensure that they do contribute to those debates.

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WTO Ministerial Conference

4.31 pm

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): With permission, Mr. Speaker, I should like to make a statement on the World Trade Organisation and the fourth ministerial conference that starts in Doha later this week.

Even before 11 September, a new world trade round was a high priority. Further expansion of world trade—free and fair world trade—offers the best opportunity to people in developing countries to escape from poverty. With the economies of Japan, the USA and Europe faltering, a new world trade round offered real benefits to the west as well. However, the atrocity of 11 September has made a new trade round even more important, both politically and economically.

In the past eight weeks, we have helped to create an extraordinary international consensus to fight terrorism and strengthen world security. We must, however, also fight terror with trade. As the US trade representative Bob Zoellick has said, we need a global alliance for openness and fairness that

By launching a new world trade round in Doha next week, we will show that the nations of the world are determined to strengthen their security by sharing prosperity. We will also inject fresh confidence into a world economy that was further hit by the atrocity on 11 September.

A new round will bring benefits at home and abroad. As the world's fifth largest trader, for the United Kingdom the potential benefits of further trade liberalisation are considerable. On a global level, if we could just halve trade protection in both developing and the developed countries, we would boost world income by about $400 billion a year. That would mean an increase in the wealth of developing countries of about $150 billion a year, which is about three times what they receive each year in development aid. The average income of every household in Britain would be boosted by almost £500 a year.

I shall be leading the United Kingdom delegation in Doha and will be joined by my right hon. Friends the Secretary of State for International Development and the Minister for the Environment and by my noble Friend the Minister for Trade and Investment. I am pleased to say that the United Kingdom delegation will once again include a representative each from business, the unions and other non-governmental organisations.

I should like briefly to outline our objectives at Doha. If this trade round is to be a success, we must put social justice and poverty reduction at its heart. That means the reduction and, where possible, the elimination of trade barriers, particularly those in developed countries that hamper exports from the developing world. It means agreeing rules that properly reflect WTO members' different levels of development and a sustained effort by the richer countries of the world to build the capacity of the developing countries to trade and to participate effectively in the WTO.

I am delighted that, earlier today, my right hon. Friend the Secretary of State for International Development announced a further increase in the United Kingdom's

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investment in capacity building in developing countries. Earlier this week, the Prime Minister wrote to the International Monetary Fund and the World Bank urging them to make a further joint commitment to help the least developed countries build their capacity to trade and to participate in the WTO.

The 49 poorest countries of the world account for almost 11 per cent. of the world's population, but less than 0.5 per cent. of the world's exports, and that tiny percentage has been decreasing. Those countries, which most need trade to raise them out of poverty, face significant trade barriers. That is why we in the European Union, through the everything but arms agreement, are giving the poorest countries in the world duty-free and quota-free access to our European markets for all their goods except arms. At Doha, my colleagues and I will be urging other WTO members to commit themselves to the same everything but arms objective—duty-free and quota-free access throughout the developed world for the least developed countries.

We must also ensure that people in the developing world get access to the medicines that they need. I know that that is a matter of concern to the whole House. Britain has already committed $200 million to the global fund to fight AIDS, tuberculosis and malaria, and since 1997 we have committed £1 billion to primary health care services in poor countries.

Developing countries believe, however, that the WTO's rules on intellectual property rights inhibit their access to essential medicines, particularly to deal with the devastating HIV/AIDS pandemic in southern Africa. It is important to ensure that intellectual property rights continue to provide an incentive for companies to keep on developing medicines, but I believe that by clarifying and properly using the flexibility provided within existing rules we can ensure that all Governments are able to act to protect the public during health crises.

Discussions on the form and content of the new round have entered their final stages. All parties have been spurred on to greater efforts to resolve their differences and reach agreement on the basis for launching a new round, but there are still some very tough issues that we shall have to tackle in the week that lies ahead. Let me refer briefly to the other elements in the new round that we view as a priority.

First, there is agriculture. We must make a real commitment to liberalisation, and linked to that is further major reform of the European common agricultural policy. Protectionism in all Organisation for Economic Co-operation and Development countries, including countries of the Cairns group that lead the cry against European subsidies, is estimated to cost developing countries some $20 billion a year.

Secondly, there is the environment. We strongly support European Union efforts to bring environmental issues into the negotiation. We want trade liberalisation to deliver environmental benefits, and we want to ensure that WTO rules do not undermine legitimate environmental policy; but we also want to ensure that environmental standards should not be used as a form of back-door protectionism. Multilateral rules on trade and on the environment can work in a mutually supportive way, but we need greater clarity about the interaction between them.

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Thirdly, we want to include negotiations on foreign direct investment and competition with a view to a simple, basic framework of rules based on transparency and non-discrimination. Those rules could give business a stable and predictable climate, and help developing countries to attract the foreign direct investment that they need.

Fourthly, there are services. We are the world's second largest exporter of services, so of course we want to open up markets in more service sectors; but let me make it clear that we have no intention of making any commitments that could call into question our ability to maintain public services provided through the national health service or the state education system.

Finally, there are labour standards. As we expand world trade, we must also promote higher labour standards around the world. The International Labour Organisation is the right place to set those labour standards, but we shall be seeking a broader dialogue between the ILO and other international organisations, including the WTO.

Labour Members believe that social justice and a successful economy go together. That is what we are building here in Britain, and that is what we must achieve internationally: opening markets and tackling world poverty. The WTO meeting this week is a huge opportunity for 142 nations to move forward together at a time of great uncertainty. The United Kingdom is in a unique position to contribute, as an active player at the heart of the European Union, a strong ally of the United States, and a vigorous supporter of the Commonwealth. In Doha, we will use that position to help secure an agenda for free and fair trade—to launch a trade round that benefits Britain, but above all benefits the poorest people of our world.

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