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GATS Initiative

4. Mr. Colin Challen (Morley and Rothwell): What assessment she has made of the impact the general agreement on trade in services initiative will have on public services. [76420]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt) : Public services are excluded from the scope of the GATS, provided they are not supplied on a commercial or competitive basis. The Government have made it clear that we have no intention of making commitments under GATS that would call into question our ability to continue providing public services such as health and education.

Mr. Challen : Despite that, a lot of people fear that the liberalisation of trade in services will lead to the liberalisation of trade in public services. For example, only 10 days ago the principal of the university of Strathclyde said:

Does my right hon. Friend know of the examples of Leeds and Bradford, where the education authorities are run by private companies? Will she strengthen her unequivocal commitment to preventing the liberalisation of trade in public services and commit herself to publishing the full responses to all the requests for liberalisation during her consultation?

Ms Hewitt: My hon. Friend makes an important point. Unfortunately there has been a great deal of misleading information, particularly from some of the non-governmental organisations about the impact of GATS. Let me make it quite clear to the House again that GATS cannot force this or any other Government to privatise public services. We have already published an extensive consultation document which is on the DTI website about requests that have been made to the United Kingdom under GATS. That document is currently out to consultation. Of course we shall publish

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responses to the consultation, if the respondents are happy with that and our own decisions in the light of that consultation.

Mr. Jonathan Djanogly (Huntingdon): Is not the whole point that under GATS the west should be able to sell its services to developing countries in return for which the developing countries want the abolition of production subsidies, particularly for foods, in the UK and Europe? Is it not the case, therefore, that the Prime Minister's failure to secure the ending of production subsidies in Brussels means that everyone will lose out and that Doha has been delayed?

Ms Hewitt: The hon. Gentleman is absolutely wrong. Had he listened to what my right hon. Friend the Prime Minister said in his statement on Monday, he would understand that at the summit over the weekend, we succeeded first in ensuring that after 2006 there will be a reduction in real terms in the total amount of subsidies going out through the common agricultural policy. Secondly, and even more importantly, the mid-term review of the common agricultural policy remains on track and remains a matter for the Agriculture Council subject to qualified majority voting. In other words, no country has a veto on it. We are absolutely clear that reform of the common agricultural policy is essential, not only for Europe's farmers and consumers, but above all for the people of the developing countries, and we will continue pressing in the Agriculture Council for radical reform of the CAP.

5. Lawrie Quinn (Scarborough and Whitby): Whether Governments will be required to privatise companies under the GATS initiative; and if she will make a statement. [76421]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): As I have just explained, the GATS cannot force any Government to privatise services. The requests submitted to other World Trade Organisation member countries by the European Union make clear that the EU is not seeking the dismantling of public services, nor the privatisation of state-owned companies in developing countries. Where other Governments decide in their own interests to open services to private sector supply, we are asking in those negotiations for non-discriminatory access to those markets.

Lawrie Quinn: I thank my right hon. Friend and welcome her response. In the light of the recent summit in Johannesburg on sustainable development and the recent experience of liberalisation of markets in Russia and Asia, should not the so-called developing world be allowed to develop through partnership and a more sustainable approach? Above all, British companies should offer a helping hand to enable those countries to fulfil their opportunities in the trade round and their opportunities for future prosperity.

Ms Hewitt: I entirely agree with my hon. Friend. As we saw in the Asian crisis, if developing countries open some of their markets—for instance in financial services—too quickly without having adequate regulation in place, that can have most unfortunate

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consequences. However, provided that the sequencing is right and, where appropriate, there is proper regulation by the domestic Governments, I have no doubt at all that increased foreign investment and trade is the best way out of poverty for developing countries. That is why we are so strongly committed to the Doha developing countries round and why my right hon. Friend the Secretary of State for International Development has led the way by committed #30 million to helping developing countries participate fully in those negotiations.


6. Mr. David Crausby (Bolton, North-East): What steps she is taking to improve firework safety. [76422]

The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): On 15 October I announced a package of measures to address the problems caused by fireworks. The measures are designed to cut down on the problems of noise and nuisance as well as to reduce accidents.

Mr. Crausby : I thank my hon. Friend for that reply. Does she agree that the menace caused by fireworks increases year on year, and will she consider legislation, not voluntary codes, to restrict severely the retail sale of fireworks, which causes so much distress, particularly to the elderly?

Miss Johnson: It was, and is, because I recognised the problems caused in communities by the illegal use of fireworks on the streets, often by teenagers, that I announced this package of measures. We need to see how effective the measures are in reducing problems. We are making air bombs illegal, introducing fixed-penalty notices, tackling the co-ordination of intelligence and encouraging councils to take steps. Many people thoroughly enjoy fireworks each year, and we need to strike the right balance to be effective.

David Burnside (South Antrim): Will the Minister take account of the fireworks directive that the Northern Ireland Office introduced in the spring and evaluate its impact before taking any measures on the mainland? The directive imposed a #30 application fee for private firework displays; that has almost wiped out the use of private fireworks, yet the use of illegal fireworks in Northern Ireland has massively increased. Will the Minister please consider the evidence of getting involved, with good intentions, in measures that have a counterproductive impact, as has happened in Northern Ireland?

Miss Johnson: I am grateful to the hon. Gentleman for his remarks. Of course, we always stay in contact with colleagues elsewhere in government to share their experience. We will indeed watch the situation in Northern Ireland with interest.

David Wright (Telford): Will my hon. Friend consider regulating to shift the sale of fireworks to mail order?

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That would have the benefits of removing fireworks from shops and ensuring that only people with credit or debit cards could purchase them.

Miss Johnson: I do not entirely share my hon. Friend's enthusiasm for that method of purchasing fireworks, because I believe that that may be a cause of some of the difficulties. Although it is true that unregulated sales of fireworks to teenagers through unregulated outlets is often the problem, I am not sure that the remedy that my hon. Friend suggests would help. I would prefer that we clamp down on the use of fireworks in the streets and on the routes by which young people acquire them illegally. It is illegal to sell a firework to anyone under 18.

Credit Cards

7. Mr. James Plaskitt (Warwick and Leamington): What assessment she has made of the effectiveness of consumer and competition legislation in respect of credit cards. [76423]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): Our legislation offers many safeguards. However, we are examining the present financial limits on credit card transactions, the number of exemptions, the activities of loan sharks, the advertising regulations and a number of other areas of concern. The consultation period lasts for another month and we welcome the contribution of all hon. Members.

Mr. Plaskitt : I am pleased to have my hon. Friend's reassurance on that matter. Does he share my concern about the misleading information issued by credit card companies? We looked at this in the Treasury Committee and found disturbing evidence. It is possible, for example, to have three different credit cards, all on the same annual percentage rate, borrow the same amount of money on each for the same length of time, yet the credit payment varies by up to 38 per cent. Is it time to look again at consumer and competition legislation and see if we can strengthen it to force the credit card companies to reveal the true cost of credit, whether it is used for the purchase of fireworks or anything else?

Nigel Griffiths: I read my hon. Friend's trenchant questioning on 1 May in the Treasury Committee, when he went into this matter in some detail. I am concerned that credit card providers are interpreting the regulations in different ways and that that is not helping credit card users. We want to be able to compare what is on offer and allow consumers to choose the best product for them. We will consult on this and on other changes in advertising requirements shortly.

Mr. Richard Allan (Sheffield, Hallam): Does the Minister accept that, although the United Kingdom credit card market is highly competitive, there are valid concerns about the level of security in a system that, unlike those used in other countries, does not require the use of a personal identification number or other form of identification at the point of sale? Does he believe that credit card security can be left entirely to the market

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when the very fact of that competition may discourage credit card companies from imposing new, more onerous security requirements; or are the Government taking active steps to improve security, as credit cards increasingly become part of our daily lives?

Nigel Griffiths: Obviously, with billions of credit card transactions in Britain, the rest of Europe and the world, security is a very important issue for consumers, the credit companies themselves and the retailers, so I concur with the hon. Gentleman. We take the issue very seriously.

Mr. Peter Pike (Burnley): But at a time when we have low inflation and a low interest rate nationally, does my hon. Friend believe that, instead of being bombarded with good, attractive short-term introductory offers through the post, at every motorway service station and every shop, those people who use credit cards should be given lower long-term interest rates and a fairer deal?

Nigel Griffiths: My hon. Friend makes a powerful point. The Treasury Committee highlighted those concerns and was particularly critical of the practice of inducing people to take out new credit cards at what appear to be artificially low rates of interest and then ratcheting up those rates. I am reliably informed that the present examples that credit card suppliers use for their own comparisons of APR are not based on the actual usage of cards; they are not the best tools for making comparisons, and I understand that the Office of Fair Trading is examining a number of those matters at the moment.

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