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Hilary Benn: Oil production is important to Iraq's economic future, as my hon. Friend knows. At the moment, oil revenue is used to support the process of reconstruction. The money goes into the development fund for Iraq and pays the salaries of teachers, doctors, police officers and others, many of whom receive higher salaries now than they did under the Saddam regime. One thing that needs to be done to improve oil production further is to ensure the continuity of the electricity supply to the pumping systems and refineries. That is why the sharp increase in electricity production over the past month and a half is so important. Iraq is also in a period of lower demand because of the colder weather. Further investment to increase production capacity to the target of 6,000 MW next year is important. In addition, we need to build up the security of the installations, infrastructure and pipelines. People are still trying to blow them up simply because they want to undermine oil production and the generation of revenue to support reconstruction. We need to do both those things.
As far as grants are concerned, if we give the right support now, which is why the Madrid donor conference was so important, get the politics right and deal with the security problem, Iraq's wealth, the astonishing capacity of its people—it is a highly educated population—and its proud culture and history will enable the country to take off. The House should remember that, 30 years ago, gross domestic product per head in Iraq was the same as that of Portugal, which demonstrates how much the Iraqi people suffered under Saddam.
Mr. Paul Marsden (Shrewsbury and Atcham): I appreciate the genuine sincerity of the Secretary of State's commitment to rebuild Iraq, but seven months after the supposed end of the war he admitted in a written reply to me on 22 October that there were still shortages of antisera, anti-cancer and local anaesthetic drugs in Iraqi hospitals. Will he urgently review the situation with a view to ensuring that full medical supplies get through to the Iraqi people?
Hilary Benn: I gladly undertake to do that. I discussed the problem with four of the UK staff seconded from the Department of Health who were working at CPA south in Basra. They told me that the solution is to get the distribution system right and for hospitals to anticipate when they are about to run short of drugs so that they place orders sufficiently in advance of that happening, so it is partly about systems. The Red Cross played an important role in that and its national Iraqi staff will continue to do that work.
I shall look into the specific cases that the hon. Gentleman raised. Part of our funding has been used to support improved drug distribution. The Iraqi hospital system is recovering from the nightmare that it has been through. Iraqi doctors, nurses and other staff have worked hard to keep the system going. The hospitals
now function and we must support them to ensure that they have the drugs that they need to provide the best service for their patients.
Mrs. Helen Liddell (Airdrie and Shotts): My right hon. Friend gave a welcome and balanced analysis of the situation, which I found greatly reassuring. People have inevitably concentrated on the public sector expertise available in Iraq, but there is considerable expertise in the private sector in the UK, not least among Iraqis who were exiled during Saddam Hussein's regime. What mechanisms exist to use that expertise? Is it realistic to use it now given the security situation in Iraq?
Hilary Benn: My right hon. Friend raises an important point about the long-term future of Iraq's economy, which was highly regulated with many state-owned enterprises. The real engine of reconstruction will be economic development, as is the case in many countries. It is important to make use of the resources and skills to which she refers. That process will take time. Economic reform must have regard to the circumstances that people are in now, including the unemployment level. One benefit of the reconstruction work, including the work funded by the UK, is to let contracts to Iraqi companies and to provide jobs for Iraqi workers. That helps to deal with the problem. In the long term, however, decisions need to be taken on the future structure of the Iraqi economy. It is my clear view that they should be taken by the governing council because they are so important for the country's future.
Mr. Archie Norman (Tunbridge Wells): While I in no way want to belittle the progress that has been made in rebuilding Iraq's infrastructure, is the right hon. Gentleman aware of the continuing decrepit state of the banking system? The Foreign Office still says that there is no way of getting cash to British citizens in Iraq, let alone foreign nationals or Iraqis, with the consequence that people like Mrs. Jones in my constituency cannot get money to her relatives. More serious than that, perhaps, is how hard it is for businesses to get funds to invest in Iraq and Iraqi businesses. The Foreign Office cannot offer advice on when the situation will change. Can the Secretary of State enlighten us?
Hilary Benn: I cannot, but I undertake to look into that problem and to get back to the hon. Gentleman. Many changes have taken place, including the successful currency transformation, which took up much time and effort. However, I understand the concern that he expresses on behalf of those who want to pass funds on to people in Iraq.
David Winnick (Walsall, North): As one who fully supported freeing Iraq from Saddam's tyranny—that tyranny should be borne in mind by next week's demonstrators—I none the less have the feeling that not enough is being done to explain the objectives of the occupying forces to the Iraqi people. That plays into the hands of the terrorists and criminals. The mass media should be used far more in Iraq to explain what is
intended because there is much misunderstanding, to say the least, in Iraq over what is to be done over the next few years.
Hilary Benn: My hon. Friend raises an important point. Having spoken about the satellite dishes that I saw on many Baghdad roofs, I suspect that they are pointed principally at al-Jazeera and al-Arabiya—
Mr. Chris Bryant (Rhondda): And BBC Parliament.
Hilary Benn: One would like to think that BBC Parliament was popular viewing in Baghdad and Basra. We live in hope.
My hon. Friend the Member for Walsall, North (David Winnick) made an important point. It is the responsibility of the Iraqi governing council to explain the part that it plays in ensuring that the political process gives the Iraqi people the chance to take decisions on their future. I am sure he is right that more needs to be done on that front, in the same way as more needs to be done in the UK to give a more balanced picture of what is happening in Iraq today.
Hywel Williams (Caernarfon): The Secretary of State will be aware of the dissolution yesterday of KADEK, the Kurdistan Freedom and Democracy Congress. That took place to facilitate the setting up of a new organisation that would be more democratic and decentralised, and untainted by the past. Does the Secretary of State welcome that positive move to allow Kurdish people to discuss matters with the dominant nation states in the area, and will he share with the House his thoughts on the value of greater decentralisation in Iraq and greater self-determination for the Kurdish people in the country's reconstruction?
Hilary Benn: I certainly welcome the opportunities for greater political diversity, discussion and free debate that are opening up in Iraq as a result of the disappearance of Saddam's regime. As for the hon. Gentleman's point about the way in which the country should be structured and run in future, my view is that that is a decision for the Iraqi people, which is why the constitutional process is such an important part of reaching a decision on the issue that he raised.
Chris McCafferty (Calder Valley): I am grateful to my right hon. Friend for confirming that food supplies will continue after the oil-for-food programme finishes at the end of the month. However, will he also confirm the existence of an unpublished Bremer directive to end the public distribution system by June 2004? What is the Government's position on maintaining the public distribution system, which is clearly important for Iraqi welfare?
Hilary Benn: My hon. Friend has drawn attention to an issue that needs to be addressed. The fact that 60 per cent. of the Iraqi people were dependent on the food distribution system for their staple diet is an indication of the state of despair in which the country found itself. The fact that the public distribution system has continued to work effectively is important in providing stability while other reconstruction work takes place. Over time, however, the system will have to change, and
discussions are taking place on the right form of system, the pace at which changes occur, and the way in which the system will eventually work. The most important thing in the course of those discussions is to ensure that there is no disruption in the availability of food. We shall apply that test to any decisions that are made.
Mr. Crispin Blunt (Reigate): I am sure that the Secretary of State has read Simon Jenkins's article in The Times today which, if accurate, shows that his statement that there is a healthy debate about the political and constitutional process contains, unusually for him, more spin than substance. If the rest of Mr. Jenkins's analysis is correct, the fact is that there has been a catastrophic failure of British influence with the Americans in the past 15 months. The Foreign Secretary's statement today that he has not even been consulted on Mr. Bremer's talks with the Administration simply demonstrates that, with the Pentagon taking the lead rather than the State Department, and with the dismantling of the Iraqi army, some fundamental decisions have been made from which British influence was wholly absent. We are now in a position of having responsibility without power. Will the Secretary of State and the rest of the Government do their best to address the situation at which we have now arrived?
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