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10 Apr 2003 : Column 448—continued
Clare Short: I agree very much with my right hon. Friend and I am grateful for his remarks. Of course, the transition period will comprise Geneva convention obligations to keep things running; the UN humanitarian system running increasingly, and subsequently, I hope; consultations with local communities; and a process to bring the interim Administration into being. I hope that all that will run together very soon. Building bridges and connections, and getting co-operation from neighbouring countries are also important, and work on that has been going on. Tension has always existed between Turkey and the Kurdish area of Iraq, but things have gone well up to now, and we must keep that going. Turkey had sealed the border and getting humanitarian supplies through was a problem, but they are coming through now and being distributed in the north. I agree with my right hon. Friend's point, we are working on it, and there is similar progress in relation to humanitarian supplies coming in from Iran. All of us need to unite to give the people of Iraq a better future and to work together for the middle east peace process.
Mr. Chris Mullin (Sunderland, South): May I welcome my right hon. Friend's assurance that resources will not be diverted to Iraq from other areas of the world that face very serious problems? Does she think that our allies and international institutions will take the same view? Is there not a danger that events in Iraq, serious as they are, will distract attention from, for example, the catastrophic situation in the Congo or the looming famine in Ethiopia and Eritrea, where millions of lives are at stake?
Clare Short: My hon. Friend is right that that is always a danger. When humanitarian catastrophes occur, those that command media attention tend to get priority. The people affected by the non-media-attended crises are equally important, however, and they must be properly cared for. The World Food Programme's appeals are bigger than they have ever been in its history. The WFP is worried that, even if it gets the
money, its systems, capacity, logistics and the people responsible for moving masses of food around the world will be under strain. My Department has wonderful draw-down arrangements with logisticians, engineers and health workers, as my hon. Friend knows, and we have put those at the service of the World Food Programme. There is no doubt that international systems will be very strained, in terms not just of money but of the capacity to move and attend to all the emergencies in the world. We must work hard to make sure that that is done.
Mr. Andrew Miller (Ellesmere Port and Neston): Despite the differences between nations about the strategy for dealing with Saddam Hussein, the whole House will welcome the contributions made to the UN fund by the EU, particularly by France and Germany. Will my right hon. Friend convey to her opposite numbers in France and Germany how much we welcome that contribution, and will she urge other EU partners similarly to look at their responsibilities, as the EU has an important role to play in this important reconstruction programme?
Clare Short: Yes, indeed. The Netherlands has also contributed individually, as well as through the EU. I will be having a working dinner in Washington, in the margins of the World Bank meeting, with a number of Development Ministers, including my colleagues from France and Germany, to achieve the purpose to which my hon. Friend refers.
Mr. Andrew Love (Edmonton): My right hon. Friend mentioned in her statement the need to reach agreement to reschedule and restructure Iraq's huge debts and reparation claims. Two weeks ago, I was at the UN, and I was staggered to discover that those could amount to up to a third of the income of the country. Does my right hon. Friend accept that not only rescheduling but, in some cases, cancellation of some of those reparations
payments should be treated as a matter of urgency if that country is to get back on its feet, restructure and rebuild its economy?
Clare Short: My hon. Friend is absolutely right. The level of debt and claimed reparation payments is so great that they could lock a naturally wealthy economy into an inability to recover: shades of Germany after the first world war. It is very important that we get this right. Paris Club and London Club arrangements exist for rescheduling and writing down debt. It is a UN matter in relation to compensation, but the matter needs attention; otherwise, a corset will be placed around the economy and it would never recover.
Mr. Neil Gerrard (Walthamstow): I welcome what my right hon. Friend said about the duties of occupying powers to make sure that humanitarian aid arrives and civil administration is rebuilt. Am I correct in believing, however, that it would not be legitimate for an occupying power to enter into long-term contractual arrangements with private companies that would be binding on a future legitimate Iraqi Administration? Is there any truth in the reports that we are hearing that, for example, a particular American company is already being given a long-term contract to run the port of Umm Qasr?
Clare Short: My hon. Friend's understanding of the law is basically right. In relation to much of the publicity about USAID, the development agency, and contracts with American firms to spend the money available for the first phase of the humanitarian duties under the Geneva convention of the US armed forces, they have been talked about in such a way that they sound like permanent contracts. That would not be legally possible, and most reputable companies would not accept such contracts, because they would know that that was not legally possible. It is possible to have contracts—the port has to be kept running—but the long-term future of the port will be a matter for the Iraqi interim authority when it comes into being. It is important to get the World Bank and the IMF involved to bring standards of transparency and to ensure the proper letting of contracts, and to advise the interim authority in that regard.
Points of Order
3.7 pm
Mr. William Cash (Stone): On a point of order, Madam Deputy Speaker. Before the war with Iraq, I raised on a point of order with Mr. Speaker the question of the basis on which Ministers can exercise their discretion to publish the legal advice that they have received. That question led to the Prime Minister issuing the legal advice, in summary form, that the Attorney-General had given on the legality of the war against Iraq. A similar situation seems to be developing in respect of some of the answers that we have received today about the post-reconstruction governmental situation in Iraq. On the basis of the precedent that has been established, would it be possible for the Secretary of State for International Development to supply the advice to the House as the Prime Minister did with regard to the legality of the war against Iraq?
Madam Deputy Speaker (Sylvia Heal): That is entirely at the discretion of the Minister concerned.
Michael Fabricant (Lichfield): On a point of order, Madam Deputy Speaker. As you know, we now have less than three hours for this debate, and I do not wish to detain the House with this point of order. It strikes me as surprising, however, that the Speaker has not used the powers that he could have used to restrict the time available for Back-Bench speeches, as I understand that more than a dozen people would like to participate in this debate. Can you give us an insight into why that decision was made, and at least recommend how long Back-Bench speeches should last?
Madam Deputy Speaker: The House, it seems, sometimes wants it both ways. It wants statements from Ministers during the present crisis, and it also wants the opportunity to have this important debate. I think that Members are probably mature enough to impose their own limit on speeches today.
Orders of the DayWAYS AND MEANS
Order read for resuming adjourned debate on Question [9 April].
AMENDMENT OF THE LAW
Motion made, and Question proposed,
- (1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for any relief, other than a relief that—
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description—[Mr. Gordon Brown.]
Budget Resolutions and Economic Situation
3.9 pm
Mr. David Willetts (Havant): I begin by declaring the interests that appear in my entry in the Register of Members' Interests.
Yesterday's Budget was overshadowed by events in Iraq, and I am sure that all hon. Members recognise that the drama of what happened in Baghdad rather overwhelmed whatever was happening in the Chamber. The collapse of an entire regime is inevitably more dramatic than what is simply the collapse of a set of economic forecasts. But even without those events thousands of miles away, yesterday's Budget statement was strangely lacking in vigour and anything that would have compelled our attention. The reason for the strange absence from the Budget statement of interest or drama was that the two crucial strategic decisions that will shape the remaining months or years of the Chancellor's occupancy of his office were both avoided in his statement yesterday, and neither of them can be delayed for much longer.
The first evasion, of course, was on the euro. The Chancellor is in a very odd position. His defence of the declining performance of the UK economy is that at least we are doing better than the continental economies. As always, things are relative; it is not really that we are doing well, but they are doing even worse. The right hon. Gentleman cannot deliver a Budget in April saying that we are doing so much better than they are, and then turn round a few minutes, days or weeks later and say that he wants to tie our monetary and fiscal policies inextricably to the very economies whose performance he has been denouncing. As a result of that central confusion between the alibi that he presented to the House yesterday and any argument for entering the euro in the future, he has carefully avoided saying anything about the biggest single decision facing him as Chancellor.
However, there was a second evasion in yesterday's Budget statement, concerning what will happen to the Chancellor's fiscal plans in the medium term. He has public spending as a proportion of national income throughout the whole period covered by the Budget, gradually growing from 36.5 to 38.5 per cent. of gross domestic product, reaching a higher level as a percentage of GDP than we have seen for more than 20 years. What we need to know is how the Chancellor will finance that steady increase in public expenditure not just in real terms, but as a proportion of our national output.
One option, of course, is more borrowing, and the Chancellor is going to borrow more. He shows his future borrowing running at more than £20 billion as far as the eye can see. As well as more borrowing, there is more taxation, and the table on page 260 of the Red Book is devastating because it shows tax revenues rising as a percentage of GDP from now until kingdom come, going upwards, well above 38 per cent. of GDP. So what the right hon. Gentleman's Budget shows is that he will have higher spending, higher borrowing and higher taxing. That is not the prospectus on which the Government were elected in 1997; it is not the prospectus on which they were elected in 2001; but it is the prospectus buried in the tables in the Red Book.
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