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27 Feb 2008 : Column 274WH—continued

Those comments were copied to the Deputy Minister of Home Affairs, Captain John Chiligati, who took no action.

In June 2006, Stewart Middleton found it necessary to write to the Minister for Planning, Economics and Empowerment following the imprisonment, on trumped up charges, of one of his staff. He wrote:

an employee—

More was to follow. On 9 October 2006, freelance writer Linda Garner recorded:

The article states that three months after that imprisonment, the republic had still not produced prosecution statements and no charges had been laid.

In August 2006, following my representations to the Foreign and Commonwealth Office on these matters, in which I called for a suspension of aid to Tanzania, Lord Triesman of Tottenham, the relevant Minister, replied:

I will return to the “extreme poverty” issue later. Lord Triesman had the grace to acknowledge:

He added that

I am not sure that Lord Triesman would have written the same letter after the hour-long meeting that Sarah Hermitage and I subsequently held with him and his officials or after receiving the personal letter, dated 20 March 2007, sent to him by Stewart Middleton’s Tanzanian farm manager, technical manager and field operations manager, which stated:

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On 1 November 2007, I wrote again to the Tanzanian high commissioner, Mwanaidi Maajar to inform her of my disappointment at the lack of progress towards a peaceful resolution of the case and of my intention, if necessary, to seek this debate. The letter was copied to our Foreign Secretary and on 2 December the Minister of State, Lord Malloch-Brown, replied on his behalf:

The “it” presumably relates to what another UK Minister had described in a parliamentary written answer on 25 July 2007 as

At that time, the Department for International Development revealed that it had already given £345 million in “budget support”, with a further £105 million disbursed in July 2007 in support for 2007-08.

On 15 January 2008, Sarah Hermitage wrote to me:

On 26 January, she e-mailed:

Following further threats of ambush and violence, Sarah wrote on 29 January:

By that time, our high commissioner, Philip Parham, had persuaded the Chief Justice of Tanzania to meet Stewart Middleton personally. It was too late. On 7 February, I received a message from Stewart and Sarah via a friend saying that they were fleeing to avoid further arrest. And then:

They have now fled the country.

It would be convenient for those sitting in comfortable ministerial chairs in the Foreign and Commonwealth Office to be able to claim, in the interests of diplomacy and covering their own backsides, that this is an isolated case. It is not.

Biwater is a water and sanitation company that operates and manages successful projects worldwide. Anyone who knows anything about developing countries—you do, Mr. Bercow, and I believe that I have a right to claim that I do, too—knows how important water and sanitation are to the development of a nation and the promotion of good health, so it is reasonable to suggest that the Biwater projects are important.

In February 2003, a local joint venture company, City Water, was set up by a Biwater subsidiary in Tanzania. It was awarded a 10-year lease contract to manage the water and sewerage contract for the Dar es Salaam area, providing technical and commercial services for a $143.5 million donor-funded investment programme designed to transform water and sewerage services for the people of Dar es Salaam.

In the run-up to 1 June 2005, City Water’s assets were seized and on 1 June three Biwater executives of City Water were summarily deported by the Government of Tanzania. At the time, Edward Lowassa was the Minister responsible as Minister for Water and Livestock Development. He subsequently became Prime Minister of Tanzania and was then forced into resignation following another corruption scandal relating to an energy deal.

The British Government are pouring millions of pounds of aid into Tanzania and they continue to maintain the pretence that the money is helping the poor. It would seem that the people described by Lord Triesman as “living in extreme poverty” are benefiting little from our aid programme while corrupt Ministers and business men are doing very nicely out of it.

Members do not need to take only my word. I leave the final say to “Joe” who, writing in January this year, adopted an alias to protect friends and associates still working in Tanzania. Joe, who has lost

as a result of corruption in Tanzania, says:

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That is the programme into which we appear to have pumped £450 million. Joe says:

In an article in Mwananchi, the Swahili version of The Citizen newspaper, under the heading, “British MP calls for suspension of aid to Tanzania”, the writer says:

When the “ill treatment” of Robert Mugabe is prayed in aid of a cause I hope we might agree that we have hit rock bottom.

I do not think that the Minister can any longer defend either the promotion of private investment of funds in Tanzania or, under the present regime, the continuation of our aid programme to that country. I rest my case.

11.20 am

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Meg Munn): I apologise to you, Mr. Bercow, and to the hon. Member for North Thanet (Mr. Gale) for the quality of my voice, but I hope that it will get me through my response.

I congratulate the hon. Gentleman on securing this debate. His constituents have suffered a grievous experience from investing in Tanzania. We are all aware that the topic is of particular importance to him, and he set out his case clearly. I shall talk first about the general situation in Tanzania, before coming to the specifics of his case.

Tanzania remains one of the poorest countries in Africa. More than 12 million people live below the national poverty line from a total population of about 38 million. Maternal mortality and chronic malnutrition remain stubbornly high, HIV/AIDS remains a major cause of premature death, and life expectancy is 48 years. With UK assistance, Tanzania is trying to tackle poverty, and over the past few years has made significant progress in some areas—for example, by increasing primary school enrolment from less than 60 per cent. to 97 per cent., and by reducing child mortality by a third, largely by making major progress in the fight against measles and malaria.

In many other respects, Tanzania is a good performer. The country remains politically, socially and macro-economically stable, and both domestic revenue and aid have increased significantly over the past five years. Donors recognise Tanzania's achievements in improving economic growth and infrastructure. The Tanzanian Government have made budget management more transparent, increased tax collection, and continued programmes to reform public service and public financial management.

The hon. Gentleman referred to the Department for International Development, which is closely involved in that work in the form of the business environment
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support in Tanzania programme and the Financial Sector Deepening Trust, which it has supported to the tune of £10 million over the past five years. That is in addition to support of more than £50 million for core public sector reforms in Tanzania over the past five years, which strengthen accountability and the state’s capacity to deliver services to the poorest people. That is why the British Government are committed to continue to help the Tanzanian Government to reduce poverty. Aid flows are a significant part of the economy and equivalent to more than 40 per cent. of the Tanzanian Government’s total spending.

As with all aid programmes, we regularly review our development partnership with Tanzania. The most important criteria must be whether our aid will help to reduce poverty, and to improve the lives of some of the poorest people in the world. However, when reviewing our aid programme, we take several factors into account, one of which is the quality of governance. Unfortunately, as the hon. Gentleman outlined, corruption remains a major issue in Tanzania, as in many other countries. Several cases of grand corruption are being investigated by the Tanzanian authorities, and the hon. Gentleman referred to the Bank of Tanzania. The recent special audit confirmed that more than $100 million was improperly paid from an account operated by the country's central bank. The initial steps taken by President Kikwete are highly commendable, and show that the Government are committed to fighting such cases when they are uncovered. The bank's former governor has been sacked, and a criminal investigation has been ordered to help to recover the money. The Tanzanian Government have made a commitment to produce an action plan, to take forward the recommendations of the special audit, and to strengthen wider public financial management measures.

Budget support donors, including the UK, have delayed confirmation of their aid for the 2008-09 financial year, pending more information from the Government about the way in which the Tanzanian authorities intend to respond to the recommendations of the special audit to strengthen measures to address corruption, and to improve public financial management.

Earlier this month the Tanzanian Prime Minister resigned because of another case of poor governance, as the hon. Gentleman outlined. That resignation led to a Cabinet reshuffle. That suggests that, although corruption remains, perpetrators of corruption or other malfeasance, even at the highest levels, are being held to account for their actions. Those steps towards improved governance should help to rebuild the confidence of budget support donors. Improved governance, and within that an improved judiciary service, is needed in Tanzania to help promote and protect the interests of foreign and local investment, which is desperately needed to help Tanzania lift itself out of poverty. Cases such as Silverdale farm are proof that Tanzania still has a long way to go.

Turning to the specific case of Silverdale farm, I share the hon. Gentleman's deep concern about the events that have unfolded there during the past three years or so. Stewart Middleton and Sarah Hermitage invested in the farm in good faith, and they have suffered from serious harassment in various ways. Since their initial investment in 2004, they and their staff, as the hon. Gentleman rightly emphasised, have been forced to defend themselves against many criminal and civil
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lawsuits. Mr. Middleton has been arrested, as have the couple’s staff. Several lawsuits remain outstanding, and have been for long periods.

The British high commission and particularly successive high commissioners, Dr. Andrew Pocock and Philip Parham, have been and remain actively engaged with the case. They have provided a lot of support to Mr. Middleton and Miss Hermitage, and have intervened many times and lobbied the Tanzanian Government on the couple’s behalf. That engagement has helped to bring the situation back from the brink on several occasions. British Ministers have also raised the case at the highest levels, most recently when Lord Malloch-Brown raised it with President Kikwete earlier this month during the African Union summit. As a result of those interventions, there are signs of potentially helpful movement from senior members of the Tanzanian Government. The Chief Justice is actively engaged, and has offered to mediate between the two parties in the hope of bringing the case to a just conclusion.

The Silverdale farm case is an example of why it is difficult to invest in Tanzania. It demonstrates the constraints on both the capacity and the integrity of the legal sector, which the Tanzanian authorities recognise and are trying to rectify. We will continue to be engaged on that case, with the aim of bringing it to a satisfactory conclusion. As I made clear, the British Government recognise that there are serious issues for foreign investors in Tanzania. We will continue to work with the Tanzanian Government to address those problems, with the ultimate aim of creating a positive business environment open to investment. The Government believe that that is the right way forward and will enable Tanzania to achieve its potential. We should continue to work towards realising that.

11.28 am

Sitting suspended until half-past Two o’clock.

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