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5.58 pm
Colin Burgon (Elmet) (Lab):
In his opening speech, the Secretary of State said that eliminating global poverty was one of the greatest challenges facing the world, and nobody could possibly argue with that. We should look not just at the principles to which people say they are committed, including the eradication of poverty, which no one in the House would oppose, but at how they are carried out in practice. That is the true
test of any institution or organisation. In this country we view Europe either as a utopia which represents the most perfect mechanism ever constructed by man or woman, or as an empire of evil. Of course it is neither, but those are the themes that run through the debate. We should try to avoid such thinking.
We should look at how the philosophy and the principles of the European Union as they relate to aid and trade are implemented. At its root, Europe’s approach to trade and aid is incoherent. The treaty states that it aims to improve the coherence of wider EU policies with development objectives and poverty eradication. Who can argue with that? However, in the articles on trade policy, the treaty’s apparent favouring of a liberalisation approach over other objectives risks enshrining incoherence at the heart of the treaty. We must examine that.
My view of the current trend in the EU is probably not the majority view in the House, but we should encourage minority viewpoints at all times. I would argue that the EU Commission is perhaps—the Minister may wish to disagree—the most powerful neo-liberal force in the various world trade organisations which do much to shape the world and the lives of its people. In the most recent world trade talks, it adopted key demands made by corporate pressure groups such as the European Services Forum to force open services markets in poorer countries to multinational companies.
Despite massive opposition from developing countries, the EC and the ESF got almost everything they wanted into the services text of the Hong Kong World Trade Organisation ministerial decision, which increased pressure on poor countries to open up their markets for basic services such as water, health care and education. Previous episodes of liberalisation in these sectors restricted poor people’s access to those essentials.
The world is dotted with examples of that. It was the EU Trade Commissioner Peter Mandelson, our former comrade, who said:
“We want to liberalise trade and grow markets in which to sell European goods and services. Multilateral negotiations”—
“offer the biggest prize in achieving this.”
So EU trade policy makers generally share with the massive number of corporate lobbyists who hang about in Brussels the belief that promoting business interests by opening up markets in developing countries will automatically generate economic growth and reduce poverty. Accordingly, Governments actively encourage the corporate sector to help formulate trade policies. As one senior Brussels-based business lobbyist says:
“There is a broad political consensus. We share a common interest.”
The assumption that trade liberalisation will automatically lead to economic growth and cut poverty in developing countries has become the received wisdom. It was openly stated by our good friend, Trade Commissioner Mandelson, most recently in an article in The Observer on Sunday 2 February. That argument is advanced despite little convincing empirical evidence that trade liberalisation is associated with subsequent economic growth, and strong evidence that it can have extremely destructive impacts on poorer economies and the lives of poor people there.
A report from the Commission for Africa, which was set up by Tony Blair, concluded:
“Forcing poor countries to liberalise through trade agreements is the wrong approach to achieving growth and poverty reduction in Africa and elsewhere.”
The economists Adam Smith and David Ricardo, the godfathers of free trade theory, were also against rapid trade liberalisation. After a quarter of a century of experimenting with trade liberalisation, poor countries remain locked in a poverty trap, and rich countries continue to push developing countries to liberalise trade through global institutions such as the WTO. The EU plays a key role in that process.
The Lisbon treaty makes international trade an exclusive competence of the EU and includes foreign direct trade in a common commercial policy. It reduces the power of the member states over trade. Article 188 of the new treaty retains a special committee of officials from EU member states which is currently known as the article 133 committee. The House will be pleased to hear that I shall not elaborate on that, as I covered it extensively in a previous debate.
Economic partnership agreements are the instruments through which the neo-liberal policy of Commissioner Mandelson is pursued. To his credit, the Under-Secretary of State for International Development, my hon. Friend the Member for Harrow, West (Mr. Thomas), has expressed reservations about the effect of economic policy agreements. A briefing from the Trade Justice Movement explains what those agreements mean, and it is worth putting that on the record. I shall highlight three elements.
First, EPAs require countries to liberalise tariffs on the vast majority of products, with exclusions only in exceptional cases. That would open up markets in African, Caribbean and Pacific countries to the EU’s subsidised agricultural products and more competitive manufactured products, undermining the livelihoods of smallholder farmers and the promotion of value-added production. Secondly, EPAs introduce new regulations on services, competition and Government procurement that would make it extremely difficult for ACP countries to support local companies, create new jobs and grow their economies. Thirdly, EPAs introduce stricter rules on intellectual property that would make it more difficult to access and afford educational materials on the internet.
Mr. Cash: I find myself in agreement with much of the hon. Gentleman’s argument. I agreed up to a point with the hon. Member for City of York (Hugh Bayley), but what the hon. Member for Elmet (Colin Burgon) is saying about economic partnership agreements is right and reflects the views of 19th century reformers who were anxious to achieve a balance between free trade and the proper care of the people who would be affected—hence, the corn laws. He may be interested to know that his constituency is the area where my family came from, and that Samuel Smiles and John Bright, both of whom would have strongly approved of what he said, were advocates of the policy that he promotes.
Colin Burgon:
I shall probably have a midnight visit from the Whips, now that I have secured the hon. Gentleman’s support. On a serious note, I welcome the
many contributions that he makes. The subject of our debate is important and he makes some significant points.
What are the effects of EPAs? I shall give three examples. Studies for Kenya’s Ministry of Trade, the International Monetary Fund and the EC indicate that under a proposed EPA, Kenya could lose up to 65 per cent. of its industry, 12 per cent. of its Government revenue and millions of rural livelihoods. As a further example from another country, Traidcraft reported that Jamaica’s dairy market liberalisation decimated small farmers, left local milk production with barely one tenth of the market in Jamaica and led to the EU supplying two thirds of the island’s milk powder.
Tony Baldry: What does the treaty of Lisbon have to do with EPAs?
Colin Burgon: The treaty effectively adopts a neo-liberal approach to its relationships with other countries; that is what it has to do with them.
I pray in aid Christian Aid, which has talked about the liberalisation of the tomato trade in Senegal, although that may be a subject of small importance to us. It showed that local prices halved while imports of EU paste increased twentyfold. We must be clear. As many fair trade organisations have pointed out, we must understand that the Lisbon treaty increases the powers of the unelected Trade Commissioner. I do not have a great deal of faith in that post as it is currently filled—nor, probably, will I have faith in it as it will be filled in future. Given the absence of any transparency or accountability in the EU’s trade decisions, hopes that the European Parliament will be able to challenge that increased power are effectively a pipe dream.
To come back to my central point, a few other hon. Members and I believe that the whole way in which the neo-liberal agenda relates to poorer countries must be challenged, because it involves a pernicious and harmful set of policies that will harm not only working people in Europe, but those in poorer countries across the world. Commissioner Mandelson’s global statements on Europe and on how he wishes to fashion it in future are bad news for us and certainly for the millions of our constituents who are so committed to fair trade policies, which EU policies—as currently designated and given where they are heading—will overturn.
6.11 pm
Tony Baldry (Banbury) (Con): There is no real debate or division in the House about the fact that 27 member states working together on international development will often be much more effective than 27 individual countries pursuing their own policies. Very often, however, the frustration with European development policy is that it has not delivered on its promises. That frustration was well summarised by the right hon. Member for Birmingham, Ladywood (Clare Short), when she was Secretary of State for International Development. She labelled the European Commission
“the worst development agency in the world”,
“If we could drive forward a really coherent committed development agenda throughout the Commission it could be a fantastically powerful force for good”.
Today we are debating the treaty of Lisbon. The contribution by the hon. Member for Elmet (Colin Burgon) summarised why we have all been cheated in this debate. We have not had a public referendum or a proper public discussion. This is it: today is it as far as international development in respect of the treaty of Lisbon is concerned. He talked a lot about EPAs, although as far as I am aware they are not particularly mentioned in the treaty. As he acknowledged, he mentioned them because he opposes the whole thrust of EU trade policy. I am not sure whether he has caught on to Tony Blair’s third way, but that is a matter for him and the Labour party—it is a problem for the Labour Chief Whip, not for us. We all have our crosses to bear.
The hon. Gentleman’s position demonstrates that it would have been much better if we had had a proper national public debate on the treaty. Large numbers of people involved in development-related NGOs would like to have got involved in that. We have heard BOND prayed in aid so often because, I suspect, the Foreign Secretary sought to enlist all those development NGOs as supporters of the treaty and they, not unreasonably, resented that. They wrote and made that clear. ActionAid said that
“it would be premature to conclude that the Treaty is going to deliver the changes needed to improve European development policy”.
“reservations on the Treaty’s discussion of trade, and particularly on the proposed extension of the Commission’s competency to cover services, investment and intellectual property”.
Save the Children expressed concerns about the
“omission of the principle of independence in the chapter on humanitarian aid, and the proposal to create a European Voluntary Humanitarian Aid Corps”,
and Oxfam said that there were a number of caveats and concerns about the treaty that it and other development NGOs had raised.
Today, we have had no real opportunity to probe those concerns; a single sitting of a Select Committee provides more opportunity to probe people’s concerns. This debate is a set-piece bit of theatre, in which many of the contributions, interesting though they have been, have not been about the treaty but about European co-operation and international development as a whole.
I should like to focus on four issues that the Government sought to lobby against and oppose during the negotiations. The first is that the treaty allows EU aid to become subsumed within the EU’s external action policy. Significant and important development values could become diluted and taken over by the foreign policy agenda. I was fortunate enough to be a junior Foreign Office Minister when the Overseas Development Administration was part of the Foreign Office. I was Baroness Chalker’s spokesman in this House, so I have lived through a time when international development was subsumed within foreign policy. I have to tell the Secretary of State that foreign policy prevailed; it will prevail even more, I suspect, as the European Union moves increasingly towards a common position on foreign policy.
Clearly, the Government were uncomfortable about that and they opposed it in the Lisbon negotiations. However, today we have heard little account of why and why Ministers were satisfied with the outcome. I bet a penny to a pound that in the next few years there will be times when UK Secretaries of State for International Development will be frustrated that international development policy is being subsumed by the external action plan—effectively, the foreign policy—of the European Union.
Kelvin Hopkins (Luton, North) (Lab): What the hon. Gentleman has mentioned will get even worse than it is now. Is it not the case that European international development policy is geared towards the better-off Francophone states on the fringes of the Mediterranean, rather than towards sub-Saharan African or other very poor countries? Will that situation not get worse?
Tony Baldry: The hon. Gentleman takes me neatly to the second of my four points. Everyone who has spoken has rightly said that the treaty refers to pro-poor policies; actually, it would be staggering if it did not. However, the treaty has an inherent contradiction, in that it removes reference to “the most disadvantaged”. As it happens, a very substantial proportion of EU development aid goes to middle-income countries, many in what is euphemistically known as the Maghreb. That is not a development policy, but a policy through which countries such as Spain, Greece and others—understandably, within their own terms of reference—try to improve the situation in middle-income countries such as Egypt, Morocco and others in north Africa in the hope that that will prevent more migrants from coming from those countries to mainland Europe. That policy is not one of development. I suggest that the removal of the reference to “the most disadvantaged” will mean that more money will be given to middle-income countries. As my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) said, the Under-Secretary of State for International Development, the hon. Member for Harrow, West (Mr. Thomas), made exactly that point in an effective speech a couple of years ago—far too much money is being given to middle-income countries. So why were the Government content about that phrase being removed?
The treaty provides for the creation of a voluntary humanitarian aid corps. That, too, was opposed by the Government in negotiations. It is the sort of thing that sounds like a good idea, but when one gets down to the practicalities—how it is to be funded, how it is to be supervised, where it is to go, and in what circumstances it will operate—it is clear that it will be a distraction from the work of some already very professional NGOs or will give Governments who should be committing resources for humanitarian intervention an excuse to say, “Well, we will just fund the voluntary humanitarian aid corps.” Whatever the position, we know that the Government opposed that during the negotiations, and no explanation has been given today as to why that was the case and why Ministers are now happy to sign up to a voluntary humanitarian aid corps.
The treaty provides for an extension of qualified majority voting to urgent macro financial and humanitarian aid, which removes the UK’s veto on
these matters. Again, the Government opposed that in negotiations. There must have been some good reason why they opposed what is clearly a reasonably technical provision. People at UKRep, DFID and the Foreign Office must have felt that there had been occasions in the past when they would have been in difficulties if the provision had prevailed and they could foresee situations in future when they would be in similar difficulties. Why on earth was that not discussed or explained to the House?
We have had no explanation on any of the issues where the Government sought to oppose the treaty of Lisbon in the negotiations in which the right hon. Member for Neath (Mr. Hain) and others were involved. Ministers have not come to the Dispatch Box to say, for example, “We opposed the voluntary humanitarian aid corps in negotiations on the treaty but we got the following assurances, undertakings and promises, so we now feel that we can sign up.” What we got from the Secretary of State today was a thoughtful, elegant “motherhood and apple pie” speech about why international development is good for us. We all know that international development is good for us—we are not here to debate that but to debate how the treaty of Lisbon affects our relationship with the European Union as regards international development. However, we have not had that debate.
Mr. Cash: I agree with much of what my hon. Friend says, but I invite him to consider another point. The debate is not only about our relationship with the European Union but our own domestic law. The object of the exercise is that the Lisbon treaty, by virtue of the Bill, will be implemented into UK law. In many respects, what we are discussing is now to be termed an exclusive competence, which means that we will be excluded from legislating in that field. I am sure that he understands that.
Tony Baldry: Yes, I do. However, all treaties, whether the Single European Act, Maastricht or Amsterdam, have had a similar effect on the provisions that they have dealt with, and that is why it is important to have a sensible debate about the exact provisions and how they apply.
The other thing that we have not had a proper debate about is what the treaty does to improve the efficiency of EU aid. The hon. Member for City of York (Hugh Bayley) mentioned two International Development Committee reports, one of which was done when I chaired the Committee and the other during this Parliament, which raised considerable questions about the efficiency of EU aid. The fact that EU aid is not always completely efficient is not a reason for not having it, but we need to know how the treaty will make its delivery more efficient. I do not think, in all fairness, that we have heard from the Treasury Bench a single instance of where it is believed that the provisions of the treaty of Lisbon will make the delivery of international development through the EU more effective and efficient or give better value for money.
This has been a total non-debate, and the whole process merely adds to the general democratic deficit. I say that as an ardent pro-European, as everyone in the
House knows. I campaign for Britain in Europe, and I will continue to do so. However, the way in which we have conducted this whole process leads to huge numbers of people—our constituents—feeling that they have been cheated out of a proper public debate. We have not had a debate on the ramifications of the treaty of Lisbon as it relates to international development, and that is very sad. This has been a fraud of a debate, and for that reason I will join my hon. Friends in the Lobby in support of their amendment.
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