Barcelona Process and Assistance to Palestinian Society

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David Cairns: It seems to me that three major themes emerge from the documents, but I shall put them in an order slightly different from that chosen by my hon. Friend the Member for Birmingham, Northfield (Richard Burden). First, there are the lessons for the European Union about the management of its external aid programmes, particularly in difficult regions. It is inevitable that aid is often given as a result of natural disaster or on-going war. We are not likely to give aid to an area that is beautiful, well governed and well run, and where all lines of communications are open. We are debating an extreme example, but it is important that lessons are learned from the process.

I was going to focus on that subject, and as this is a European scrutiny Committee, I assumed that that would be the majority topic of discussion. However, you have been extremely generous in allowing the debate to range much wider than the Committee's remit would normally allow, Mr. Amess—even Zimbabwe has been mentioned. A precedent has been set, and I am happy to follow suit and address some of my remarks to the general political context.

There are lessons for the EU. My hon. Friend may correct me on this, but I believe that Boutros Boutros-Ghali's first step on becoming UN Secretary-General was to establish the ''lessons learned unit'', whose sole

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task within the UN edifice was to collate the lessons learned from various UN initiatives and exercises and diffuse them through the rest of the organisation. I do not know whether the EU has such a unit, but will my right hon. Friend the Minister for Europe tell us whether the EU is permeated by a ''lessons learned'' mentality? Is there a genuine willingness to find out where measures have gone wrong and, as the hon. Member for Caernarfon (Hywel Williams) suggested, to consider Christian Aid programmes in the region, and best practice? Are such steps being taken?

I welcome the suggestion that was made both by my right hon. Friend and by the Conservative Front-Bench spokesman—that Britain is one of the foremost countries in the EU in arguing for the more rigorous application of the relevant rules, and for lessons to be learned. I also welcome his suggestion that progress has been made since the period to which the documents relate.

I want to say a few words about the general context. Hon. Members have said that we should bear in mind the fact that there is fault on both sides, but I hope that they will forgive me for saying that they then went on to major heavily on the faults of just one side. I do not want to gainsay the idea that there are faults on both sides, but I shall consider the other side of the equation for a moment. I have no brief for Ariel Sharon or his Government; indeed, I was much happier when there were Labour Administrations, because genuine progress was made with the peace process then. I am therefore no fan of Mr. Sharon or his modus operandi.

It is, however, critical that we ask why Israeli citizens support Ariel Sharon, when only a couple of years ago they were willing to take historic steps and make historic compromises for peace, and to embrace the Oslo accords, the Wye River agreement and what, by any stretch of the imagination, were historic compromises at Camp David in the dying days of the Clinton Administration. They support him not because they do not want peace or because they have suddenly become bad people, but because they are terrified that their very existence—this is not simply a matter of their security as they go about their business—is under threat every day. My right hon. Friend the Minister for Europe mentioned that terror and fear in an earlier reply, and we would do well to bear it in mind. I agree with my hon. Friend the Member for Luton, North that the majority of Israeli citizens would much rather be in a different situation and embrace a peaceful solution. If they have rejected such a solution, it is not out of badness or malice, but out of terror. We should bear that in mind when we consider where responsibility for the situation lies.

My hon. Friend the Member for Birmingham, Northfield was right to establish the broader context, but I want to consider some specific points. It is not Israel's fault that there was mismanagement and incompetence as regards the European Gaza hospital or the Palestinian Housing Council, or that there was incompetence and corruption over the location of the Palestinian Legislative Council. Those projects are the

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responsibility of the Palestinian Authority. My hon. Friend asked whether there was a lack of capability on the part of the authority, but then shrugged his shoulders and moved on. However, the authority administers European taxpayers' money, and we must examine its capability before we give it any more. I do not say that we should close off aid, but as part of our on-going commitment, we must analyse the authority's ability to manage projects.

Paragraph 4.20 of the seventh report of the Scrutiny Committee states:

    ''The decision by the Commission to provide assistance to the Palestine Housing Council . . . is described by the Court as an ambitious step for which the Commission deserves credit. It then points out deficiencies in the management of the project, both by the PHC and the Commission. At one point they were not on speaking terms.''

That reads more like a description of an Edwardian marriage than of a contractual agreement and a relationship between a funding body and an organisation in receipt of its funds. How on earth did the European Commission, which provided funds, allowed itself to be frozen out and not spoken to by the Palestinian Housing Council, which administered the funds, ostensibly to provide housing for its own people?

Then there is the saga of the European Gaza hospital. I am delighted that the hospital is now open, 10 years after its inception. An audit of that process might give ample opportunity for a full debate on that subject alone. We should also remember the Palestinian Legislative Council. It agreed with the Commission to fund the construction of its building in Ramallah, only for the Commission to discover much later that it had entered into a second agreement to construct another building elsewhere.

According to the report, those funds have now been ''decommitted''—but how much of that money was spent on finding a site, planning the architecture and carrying out site surveys? Such matters are not cheap, especially when we are talking about something akin to a Government. When the funds were committed, did the Palestinian Authority know that there were already plans to build something elsewhere? If so, that is serious. None of that mismanagement, incompetence and corruption can be laid at the feet of Israel.

The report repeatedly refers to a period when there was a much greater sense of harmony in the region, without the interfada or the current unrest. Instead, there was great hope and optimism when there was a Labour Government, and a much greater sense of dialogue between the parties. However, there was still mismanagement of funds and incompetence. Again, it cannot be said that the fault lies with the daily intransigence of the Sharon Government. Many of the problems detailed in the documents refer to a time before Sharon, when relations between the Israeli Government and the Palestinian Authority were better.

I agree with my hon. Friend the Member for Birmingham, Northfield that if we are to continue with the process, we have to be tough on Israel. However, we also have to be tough on the Palestinian Authority.

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We must ensure that money committed by the United Kingdom and the European Union is spent on the projects for which it is earmarked, and that there is no incompetence or corruption. In this country, even if we pay builders and they do not deliver the goods or provide value for money, we can be reasonably certain that our money is not being spent on arms or shipments of explosives. Are we certain that money given by the EU for certain projects, on which we know that it was not spent, has not been filtered away to continue the armed struggle?

Mr. Hopkins: I am unhappy about the tone of what my hon. Friend says. Corruption has to be condemned wherever it is found, and one has to attach conditions to aid to ensure that it does not happen. However, I know for a fact that there is corruption in many other major established countries that receive aid from the EU and elsewhere. Is he saying that corruption in Palestine is worse than in those other countries? I suspect that it is rather better, judging by some earlier comments.

David Cairns: We are considering a report from the Court of Auditors on the way in which those funds were handled in Palestine. That is the basis of my comment. I do not, therefore, feel qualified to comment until I have seen reports into the way in which EU funds are handled. My hon. Friend has been a member of this Committee for far longer than I have. He may, therefore, be able to tell me about other Court of Auditors reports into EU funding elsewhere. I am happy to accept the basic thrust of his argument that there is corruption elsewhere.

Such corruption should not be tolerated, whether it occurs in Palestine or anywhere else. It is important that the Palestinian Authority is properly funded and has its own council, a working parliament, hospitals and good houses. However, how sure are we that all the money given for such projects was actually spent on them and did not end up being spent, as the hon. Member for Rutland and Melton suggested, on the means of continuing an armed struggle, which was not the intention of the EU?

Richard Burden: I agree that corruption needs to be rooted out wherever it exists, whether in the Palestinian Authority or anywhere else. I would like to take my hon. Friend back to one of his points. Because the reports mainly refer to the situation before the intifada started, Israeli policies of border closure and so on could not have had a big impact.

The Court of Auditors report was published on 16 October 2000, less than a month after the start of the intifada. Paragraphs 16, 17 and 18 on page 12 of that report talk about the negative impact that Israeli policies, such as requiring permits to travel, were already having on Palestinians living in the Gaza Strip at that time and before. As tensions increased, Israel adopted the policy of sealing the West Bank and the Gaza Strip, which has had a considerable negative impact on the Palestinian economy by increasing unemployment, hindering trade, increasing costs and slowing down the implementation of development projects.

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I hope that my hon. Friend will agree with me that, although things have got a lot worse under Sharon, such policies did not start under him. Many were being implemented when the rest of us were saying, ''Isn't it wonderful that there's a peace process.'' At the same time, Palestinians were living in abject conditions. There may just be a link between our failure to recognise that and the start of the intifada.

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