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18 July 2006 : Column 52WH—continued

I should make it clear that academies are entirely and wholly funded by the DFES, and therefore their VAT costs should be met. The problem occurs when the use of academies’ facilities flips over into business use; then, rules apply that the rest of the economy has to work with, too, and we need to be careful about the boundaries. That is the point that I want to explore, so that there is no longer the detrimental effect that my hon. Friend, and the hon. Member for North Southwark and Bermondsey, clearly identified today. That detrimental effect could undermine future community use, and that
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would not be acceptable. If my hon. Friend is happy to leave the discussions until September, I will move them forward as quickly as I can.

Simon Hughes: I am happy to give the Paymaster General any other information. Will she add to her considerations the issue of those charitable bodies that are semi-educational, including youth clubs such as the Salmon youth centre? They have the same sorts of Treasury and VAT issues. I am happy to write to her to make sure that she is fully briefed about them, too.

Dawn Primarolo: No, I shall not add that to my considerations. The Treasury has undertaken two reviews into that difficult subject since 1997, one of which I conducted. Charities were given lots of concessions on the direct tax side—gift aid to name but one—because of the difficulties surrounding VAT business use and charitable use. Opening up our discussion into a wider debate about all charities will prevent us from finding a solution to the problem before us. The hon. Gentleman can certainly write to me, but I will not lump that subject with the subject of academies. I will address the question of academies with my hon. Friend the Member for Regent's Park and Kensington, North, after my officials have had the meeting. I apologise to the hon. Gentleman, but I will not move on that point.

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12.59 pm

Mr. John Randall (Uxbridge) (Con): I am grateful to Mr. Speaker for allowing me to raise this important subject. I believe that today, in Vienna, the seventh round of talks on the future status of Kosovo is taking place. I do not intend to undertake an historical resumé, but my speech makes it clear that although we must move forward, we are wise when dealing with Kosovo or anywhere else to take lessons from the past and to remember that some issues run deep in the psyche of the nations involved and have done so for a long time.

I have taken up the subject of the Balkans because of my studies at university, but despite that, over the years in this place, I and others who have raised the matter have been regarded as apologists for certain regimes—in particular, the Milosevic regime. Before I entered this place, I was a member of a voluntary group in my constituency trying to ensure press freedom in what was then Yugoslavia, and I actively opposed many policies during that period.

The subject is far too important for us to engage in polemic. Whenever Serbia is mentioned, the stumbling block is compliance with the requirements of the International Criminal Court in The Hague. General Mladic would be top of the list—Radovan Karadzic is regarded as being not necessarily within the confines of Serbia. Every time I meet visiting politicians from the region, I say that I wish the situation could be resolved. Many—not all but most—of the visiting politicians and Serbs share that view. The Minister, because of his previous incarnation as Secretary of State for Defence, probably knows better than a mere Back Bencher such as myself whether there is anything that our country or NATO can do to help. It is a stumbling block, but we must get round it because it is so important, particularly in relation to the status of Kosovo.

We can always argue about whether mistakes were made, but what happened in 1999 happened and there is a de facto independent state within what is now Serbia and was previously Yugoslavia. Kosovo is a virtual protectorate, but whether it is run by the United Nations, NATO or the European Union, it cannot continue like that. The situation must be resolved. I am pleased that efforts to resolve its status have moved on in earnest in the past year. The Minister recently answered some questions from my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), and I was encouraged by much of what I read. I do not envy the Minister or anybody involved in that area, because there are no easy answers. The negotiating skills of all those involved will be tested.

The general aim seems to be to sort out the situation by the end of the year. Although that may be necessary and worth while, we must be careful not to rush into a quick and—apparently—easy answer. As we know from elsewhere in the world, if we get the answer wrong, it will come back to bite us and the region.

Serbia is an important country; it is fundamental to the whole Balkan region. It is important that we bring the Serbian nation back into mainstream European politics. I was delighted that last week the British Government invited Bosnian and Serbian delegates to come over together as part of a plan for European
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integration. We would all be pleased to go down that road, although it is a little way off. Some aspects of European integration are not as easy as they might seem on paper; although we might wish for them, they cannot be realised that easily.

The problem that worries me about the future status of Kosovo is the message that we might send out. If Kosovo were to become an independent country, there would be a question about its viability. Before all the problems, few people had heard of Kosovo. I have travelled around it, and although I do not know its equivalent size, it is not much bigger than a large English county. It is landlocked and poor, and I doubt that it could be a viable state. Recently, Montenegro became independent, and in the greater scheme of things, if there were a wider Balkan organisation, there might be some means of Kosovo becoming independent, too. Currently, however, an independent Kosovo would have to align itself with one or two other countries. An obvious country would be Albania—I doubt that Kosovan Albanians would be particularly delighted to work closely with Belgrade, however much we might wish it.

The British Government’s position was, and officially still is, that Kosovo is a part of the country that was Yugoslavia, became Serbia and Montenegro, and is now Serbia. To change its status as proposed might set a difficult precedent for other regions of the world, and I would be interested to know how the Minister feels about the message it would send to other small regions where movements are trying to gain independence from the larger part of their country. Even in Serbia there are potential problems. I do not know what consideration has been given to the future status of Vojvodina, to the north, and whether granting independent status to Kosovo-Metohija might mean that more people in Vojvodina want to go down the same path. Historical differences exist, but thankfully, there has been no conflict, recent or otherwise, in that area.

Another problem is how we in the west, the contact group, or whomever, are to instil confidence in the minority peoples. In Kosovo, there are not only Serbs, but a variety of minority peoples, and no ethnic group lives within fixed borders. That is true throughout the Balkans. There is a mixture. You are probably aware, Mr. Hood, that the French for fruit salad is “macédoine”, meaning Macedonia, because it is a mixture of different things. That is what makes the problems so difficult to resolve.

As most now realise, Kosovo runs deep in the heart of Serbian statehood and nationhood for historical reasons. Monuments going back to the middle ages testify to that integral part of its cultural and spiritual life. Unfortunately, a large number of them have been destroyed in recent years. Some have been protected by troops, but there are so many that it is probably impossible to protect any but the most important. There is real worry. The monuments are not just buildings—they mean a lot to the Serbs and, by the same token, for the Kosovan-Albanian population they stand for something else. I hope that we can get the message across that the monuments are part of their culture too.

However, that will be difficult. In Britain, we have got used over many centuries to waves of immigration, and
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by and large we have a pretty sound view on such things. As I have said in other debates, years ago I remember being almost physically attacked—certainly verbally attacked—just for speaking Serbian. I then realised that it was no good my showing off that I could speak the language; it was better for me to revert to English, which was safer all round. That reflects the nature of what has happened in the region over the centuries.

We need to give confidence, and the form of words will be crucial. Although, as I said, there may well ultimately be a European solution, I think that that, unfortunately, is decades away. What we do in the meantime is important. As the Minister knows—sadly, we all know it—such problems keep flaring up. We have only to look at the middle east today to see how, every so often, perceived or perhaps real, rights, wrongs and injustices are allowed to flare up in the hands of extremists, who want neither peace nor stability but have their own agenda. I worry that if we do not get the resolution right, it may seem that we have sorted it for the time being, but a generation or two down the line, that poor, unfortunate area of the Balkans will become the centre of strife in our own continent.

The most important thing is not flags and symbols, but getting people together to give them confidence. I end by telling the Minister that if in our own small way there is anything that I or the other members of the all-party group on Serbia and Montenegro can do to help work something out, we will be happy to do what we can.

1.14 pm

The Minister for Europe (Mr. Geoffrey Hoon): I congratulate the hon. Member for Uxbridge (Mr. Randall) on securing this debate at an important stage of the Kosovo status process. I shall respond directly to his offer of help; given his knowledge and experience of that part of the world, in which he takes a keen personal interest, I shall ascertain whether there are any opportunities to enlist him in our efforts. It is in the UK’s strategic interest to work to ensure that the key part of Europe that we are discussing continues to leave the tragic events of the 1990s behind and moves ahead to a stable, prosperous, democratic European future.

I shall set the context for this debate by providing a brief update on the UN-led status process. Last week, UN special envoy for Kosovo and former Finnish President, Martti Ahtisaari, whom I saw very recently, briefed the UN Security Council on progress so far on technical-level talks on status-neutral issues such as decentralisation and the protection of religious sites. Those talks are continuing; indeed, negotiations on the protection of religious and cultural heritage sites are taking place in Vienna today.

Martti Ahtisaari also signalled his intention to move in parallel to the important next phase: direct, high-level talks on status. That stage will continue over the summer, and he plans to brief a ministerial meeting of the contact group in the margins of the UN General Assembly in New York in September. We expect him to work with the parties and the contact group to draw up and agree proposals for a settlement, and to present his recommendations to the Security Council in the autumn.

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President Ahtisaari was appointed by the UN Secretary-General, and his appointment was endorsed by the Security Council. The Government support him and his team fully, and stand ready to assist in our national capacity, as well as through the contact group, the Security Council, the European Union and NATO.

The hon. Gentleman asked about the Government’s thinking on the status process’s possible outcomes. It is for Martti Ahtisaari to make his recommendations, and as I said, he will have our full support. Our hope is that the issues can be resolved through a negotiated agreement. However, if in the UN special envoy’s view, an agreed settlement is not possible, the international community must be prepared to draw the necessary conclusions and face up to its responsibilities.

The contact group has set out conditions for the negotiating process and the outcome in a set of guiding principles, endorsed by the Security Council, and in a ministerial statement following a meeting in London in January. The texts make clear that Kosovo cannot return to the situation of before 1999; that it cannot be partitioned; that it cannot join in union with any, or part of any, other country; and that the settlement must be acceptable to the people of Kosovo.

The conditions also stipulate that every effort should be made to conclude the process by the end of 2006, and that, having started, it cannot be blocked. There seems little to be gained by extending the process because one or both parties refuse to engage constructively, but there is a considerable risk of instability and unrest if the negotiations become bogged down or appear to be open-ended. In the interests of Kosovo, of neighbouring countries and of the region as a whole, it is important that the status process conclude as soon as possible, and in a way that achieves a sustainable, democratic, multi-ethnic Kosovo.

It is not for me to prejudge where the current negotiations might end up or what will be the recommendations of the UN special envoy. However, it is fair to say that there is growing international recognition that one option
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is likely to involve some form of independence—qualified by a robust international civilian and military presence, and with cast-iron guarantees protecting the rights and security of the Kosovo-Serbs and other minorities. Such an outcome would be consistent with the guiding principles and ministerial statement agreed by the contact group.

It is perfectly understandable why the Kosovo-Serbs feel insecure in this period of uncertainty and transition. Belgrade should seek to ease that insecurity and encourage the Kosovo-Serbs to take practical advantage of the new arrangements designed to improve their lives as an integral part of Kosovo society.

No one in the international community wants to damage the interests of Serbia. Indeed, for the first time in its long and difficult history, Serbia is being offered the prosperity and security that would come from membership, ultimately, of the European Union and NATO. Serbia should look to the future, to accept that regional stability requires a settlement acceptable to the people of Kosovo and that events since 1989 have created political realities and shaped public attitudes in Kosovo.

For its own sake, and that of the Serbian community in Kosovo, Belgrade needs to think through its current approach. Although not strictly relevant to the Kosovo debate, that also applies to Belgrade’s attitude to co-operating with the International War Crimes Tribunal in The Hague.

Nobody pretends that there is a perfect solution. Dispassionate analysis of the options is needed to identify and define the one that stands the best chance of delivering the outcome that we want for Kosovo and Serbia: stability, democracy, prosperity, multi-ethnicity, and with sights firmly set on a future in the European family. That is why we remain fully supportive of the UN process, led by UN special envoy Martti Ahtisaari.

1.19 pm

Sitting suspended.

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Worklessness and Poverty (West Ham)

1.25 pm

Lyn Brown (West Ham) (Lab): I want to deal with three things that affect poverty and income in my constituency: the minimum wage, the campaign for a living wage for Londoners and the poverty trap, which contributes to continuing high levels of worklessness, limits the aspirations and economic advancement of those on low wages in London and holds back reductions in child poverty and health inequalities. Finally, I want to suggest for consideration things that could be done to improve the lot of those living in my constituency on low incomes.

Despite the popular image of London as a roaring economic success—the London of city bonuses and champagne charlies that holds a place in the national imagination—there is also a London of real economic deprivation and hardship in which many struggle to survive. Those people are the workless and the hundreds of thousands of workers who service London’s economic success: the cleaners, caterers and porters, to name a few. Their stories are shaming, and the facts are stark.

If we exclude pensioner households in 2003-04, one half of the people in income-deprived households had someone in employment in their homes; in other words, one half of the problem of poverty among non-pensioners is now about poverty in work. The UK is the fourth biggest economy in the world, and London is at the core of its wealth, yet 41 per cent. of the children in London are growing up in poverty. London is way ahead of the region with the second most deprivation. In the west Midlands, 32 per cent. of the children are affected by poverty.

Poverty costs us as a country and as a society, yet it was almost impossible to get official recognition of the existence of poverty among British citizens, particularly working British citizens, before this Government came to power. We have moved on since then with the introduction of the minimum wage and a system of tax credits, but we need to go further.

I pay tribute to the living wage unit, which has led some ground-breaking work at the Greater London authority. It has been aided by technical support from the family budget unit, which is a charity that undertakes comparative living standards and living costs analyses. It defines a low-cost but acceptable standard of living as one that achieves an adequate level of warmth and shelter, a healthy, palatable diet, social integration and avoidance of chronic stress for earners and their dependents. It uses a shopping basket technique to arrive at an across-the-board average for meeting the standard. The figure for Londoners after benefits and tax credits are taken into account is about £6.15 an hour.

The figure is an average. As many people fall below it, the unit increases it by 15 per cent. to £7.05 to come up with the difference between a poverty threshold wage and a living wage. To give a reality check, the families in such households do not smoke or drink, and do not have a car.

The family budget unit’s original estimates were based on living costs in York. For London, costs have been calculated to be 31 per cent. higher than those in
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York for a couple—one working full-time and one working part-time—with two children, 35 per cent. higher for a working single parent, and 28 per cent. higher for a single person. Those are staggering figures.

It is in private rents that there is such a huge gulf between costs faced by Londoners, who cannot afford to buy and cannot get into social housing, and the rest of the country. Private rented, two-bedroom flats subject to housing benefits claims in 2004-05 averaged £165 a week in London, £77 in the north-west and £92 in the south-west, and that is what we need to focus on.

My constituents raise the issue with me constantly. Unless they live in the public sector and have a relatively low rent they find it so difficult to work. We must acknowledge the difficulty in establishing national minimum levels of disposable income while these inequalities in housing costs exist; £7.05 is a living wage for a low-cost but acceptable standard of living, assuming that all benefits and credits are received, so how does the national minimum wage compare? The answer is not very well; it has been catching up fast, but progress now appears to be at risk. Between September 2005 and October 2006, the minimum wage will have risen from £4.85 to £5.25, an increase of 8 per cent. However, in the Low Pay Commission's report this year, Adair Turner writes that

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