Select Committee on Liaison Minutes of Evidence

Examination of Witness (Questions 160-179)


3 JULY 2008

  Q160  Sir Patrick Cormack: Thank God it is not!

  Mr Brown: I think you will find in relation to these issues, both succession and other related issues, that the support for change has got to be wider than the United Kingdom Parliament for change to actually happen. The Queen is not simply the Queen of the United Kingdom, she is queen of many of the Commonwealth countries. I think any changes would have to be discussed at a far wider level than simply the United Kingdom Parliament before you could get agreement.

  Sir Patrick Cormack: Thank you very much for that, Prime Minister. Could I now bring in Edward Leigh, who I know would like to ask a particular question?

  Q161  Mr Leigh: I want to ask a couple of supplementaries arising from what Mr Vaz and Sir Patrick asked you. Mr Vaz asked you if any inducements had been given to the Democratic Ulster Unionists, and you quite correctly enumerated their personal experience of terrorism, but I want to ask you a direct question: there were absolutely no discussions about anything with the DUP except the merits or otherwise of the 42-day legislation? You just have to give a yes or no answer.

  Mr Brown: Yes, and there was a great deal of discussion, including about the security issues.

  Q162  Mr Leigh: There was no discussion about any other issue apart from the 42 days? You have to say yes or no.

  Mr Brown: We were discussing the 42 days.

  Q163  Mr Leigh: Only, you were only discussing the 42 days?

  Mr Brown: We were producing security information. That is absolutely right. We were discussing the issue on its merits, and I think you do a great disservice to many members of this House of Commons if you suggest otherwise.

  Q164  Mr Leigh: I just wanted to get that absolutely clear. Thank you. In relation to what Sir Patrick was asking you about the powers of Parliament, obviously there are shifting sands in the economy and we do not know how long you are going to be there. What do you want to leave as your legacy in terms of constitutional renewal and the powers of Parliament? Do you think that the powers of this Parliament are relatively weak compared to the Executive? Here you are surrounded by chairmen of select committees. Do you think that you would like to move gradually to a system where, for instance, the Defence Committee have the same sort of powers eventually as the Armed Services Committee and Congress? I know it is a long step, but what are your views on this?

  Mr Brown: I want a new set-up in Britain where we strengthen the role of the individual citizen through the power that Parliament has to represent their interests, and I feel that by changing the royal prerogative and by making many of the other changes that we are talking about, including a bill of rights and responsibilities and a statement of values, we move our country more thoroughly into the modern world. Removing all these areas where the royal prerogative has been exercised in the past is only the first stage, the discussion of the bill of rights and responsibilities is a further stage, and I have always left open the question that this could lead to a discussion in our country of a written constitution at some stage.

  Q165  Mr Leigh: I was specifically asking you about the powers of the select committees. Obviously our audit system is very good in this country. The scrutiny of the Budget is weaker, we know that. You have been Chancellor of the Exchequer for ten years. The Finance Committee has very little time to discuss these amendments. Do you think we could learn from other jurisdictions about how we could create a more powerful budget committee that actually could look at spending plans, with your experience as Prime Minister?

  Mr Brown: I think traditionally in Britain, partly because of what happened with the Budget in the early years of the twentieth century when the Budget was rejected by the House of Lords, the Government's ability to get its budget through has been seen as a very major issue about the credibility of the Government itself. So the Budget in Britain has been seen quite differently from budgets in many other countries. I think the House of Commons itself could do more, and members could do more, if they wish to scrutinise both the expenditure and the finance measures of government, and I do not think there is anything preventing the House of Commons taking a bigger interest in these matters. You are Chairman of the Public Accounts Committee. We have here the Chairman of the Treasury Select Committee. I have always thought that it is possible for more investigations to be done, for more information to be provided, and I have tried to make that possible when I was Chancellor and will try to make that possible in future, but the more information that is out there in the open the better.

  Sir Patrick Cormack: Sir Alan has one more question to ask you.

  Q166  Sir Alan Beith: How can a constitutional renewal bill meet the ambitions which you have quite rightly set for it, despite all the useful things in it, if it does not address the centralisation of power, fixed-term parliaments, the electoral system, all of those issues, which would, if altered, change the real balance between the Executive and the Legislature?

  Mr Brown: I think it depends what you think is absolutely crucial to the future of our constitution. Surely what is crucial to the future of our constitution is that the individual citizen feels more empowered, and we are bringing forward proposals in the next few weeks with a local government reform that will give the individual citizen far more power to petition, far more power to question, far more powers of recall in relation to many of the issues that affect their lives, and then the second issue is the powers of Parliament itself. I do not think the powers of the House of Commons in particular start and end with whether there is a fixed-term parliament or whether there is electoral reform. These are two of the issues, but these are not the major issues. I think the changes we are making about the declaration of war, the dissolution of Parliament, the recall of Parliament, the ratification of international treaties are very important issues.

  Q167  Sir Patrick Cormack: Prime Minister, we do know all that. We are moving to the end of this session. I would like to ask you one final question on the constitution. There was a little bit of argy-bargy between you and the former leader or the Labour Party in Scotland over whether there should or should not be a referendum and whether it should be brought on or put off. Where do you stand on that?

  Mr Brown: In terms of that, there was no wish on the part of the Scottish Parliament at that time to bring forward a bill for a referendum.

  Q168  Sir Patrick Cormack: Where do you stand?

  Mr Brown: We have set up the Carman Commission. I do not know if you know the details of that. Professor Carman is chairing the Commission.

  Q169  Sir Patrick Cormack: I am sure he is, but where do you stand?

  Mr Brown: Hold on. It involves all the major parties. They are looking at the outcome of the devolution arrangements over these past few years in Scotland. They will make a report. If they make far-reaching proposals, we will then have to look at them in the context of what support you have for the public do so, but I think we should wait until we see the Carman Report.

  Q170  Sir Patrick Cormack: So you are not prepared to give an opinion at the moment.

  Mr Brown: I think you have got to wait see whether the Carman Report recommends major changes, which in the original Scottish Parliament was voted through by a referendum of the Scottish people that was organised by the United Kingdom Parliament, but let us wait and see what the Carman proposals suggest.

  Sir Patrick Cormack: Thank you very much.

  Chairman: We now move to the second theme, global economic issues. Malcolm Bruce.

  Q171  Malcolm Bruce: Thank you very much, Chairman. Prime Minister, the Treasury published a document a couple of weeks ago on commodity prices and their implications. There is one bald statement that says, "High commodity prices negatively affect the popularity of governments", which is something you have experienced. Prime Minister, you are rather fond of lists. Can I put some lists to you? Forty years ago the population of the world was three billion. It is currently 6.7 billion and it is predicted to be 9.1 billion by 2050. The World Bank says that we will need to increase grain production by 50 per cent by 2030 and the International Energy Association says we need to increase oil production by 30.5 billion barrels a day (that is 15 North Seas) by 2030. In those circumstances, first of all, is there anything we should be doing to try and level off the world population, or do we just have to accept it as a given? Do you not think, in this situation, that there is a real possibility that in a generation the world could actually run out of oil and food to meet the needs and aspirations of the population of the world?

  Mr Brown: Let us put this in context. You are absolutely right about the population rises, but in the last ten years we have had two of the great benefits of globalisation, which have been cheap consumer prices for goods like electronics and clothes, and we have had low interest rates as a result of the low inflation that has come out of low manufacturing prices from China and elsewhere. We are now seeing the two difficulties. That is the massive restructuring that is taking place in the world economy, a shift of power to Asia is obviously happening and there is pressure on resources. Some people have called it resource nationalism. There is pressure on food, pressure on oil, pressure on commodities, and I think we have got to deal with these as global problems that now require global solutions, and although we can do a great deal in the United Kingdom, and other countries can do so, to deal with the costs of energy or to deal with the problem of food shortages, in the end these are global problems that require global action. If you take, first of all, food, it is pretty clear to me that there is a food shortage, the worst for 30 years; it is pretty clear also that we will need to increase food production. One of the great tragedies of our time is that Africa is a net importer of food when it could actually be a net producer, or exporter, of food. At this time the worst thing we could do is to cut the support to developing countries, preventing them from developing their agricultural systems, and we will have to make progress on the removal of the food subsidies in what is a very protected market.

  Q172  Malcolm Bruce: I was going to say, Prime Minister, your document, the Treasury's document, seems to me to say that just by applying international co-operation and market forces will bring supply and demand into balance and that is fine. Do you not accept it is an underlying pressure that cannot ultimately be delivered on an ever rising scale unless we find other ways to deal with it?

  Mr Brown: I think that is absolutely true. When I talk about oil—you mentioned the IEA's proposals about oil—I think it is reducing our dependence on oil that makes the environmental imperative about climate change come together with an economic imperative, which is that we must reduce the world's dependence on this one fuel, or oil and gas if we put them both together. In Britain's case we will soon be 80 per cent dependent for gas imports on other countries, and that is not a situation we want to be in. It is ultimately a decision about, first of all, nuclear power, secondly about renewables and how we can expand renewables and, thirdly, about greater energy efficiency, and the agenda, which is an economic as well as environmental agenda, for the world is now very clear indeed. We have a once in a generation opportunity to reduce our dependence on oil and we will have to take big strategic decisions, and these include decisions that other countries as well as us, because we have made these decisions about nuclear energy, have got to make decisions about the stimulation of renewables. We will soon become the world's biggest off-shore wind producers, as a result of the decisions that we made in the North Sea, and we will have to make decisions about energy efficiency, and that is about cars and it is about the efficiency of the use of energy in households. These are three major changes that arise from what we see both round the world and the rising oil price itself.

  Q173  Malcolm Bruce: We had a once-in-a-generation opportunity to get out of oil dependency in the 1970s and we did not do it.

  Mr Brown: We did reduce our dependence on oil, but not sufficiently, and there are signs in America and in Europe that the usage of oil will be reduced, but we are dealing with a massive expansion in demand for oil from China, from India and from Asia. China has got about 37 million cars at the moment. Every year another 10 billion, or so, cars are being bought for Chinese roads. They are building 100 airports at the moment, they are building 1,000 cities, so the demand for oil from them and from the oil producers, because a very substantial amount of the oil that is being produced at the moment is being consumed with subsidies in either China or India or in the oil-producing countries, and it is one of the most protected markets and it has got to be opened up.

  Q174  Malcolm Bruce: Can I move you on to food. One of the reasons why food prices are rising is the rising living standards of, for example, the Chinese and the Indians. They are actually having a better diet.

  Mr Brown: Which is itself a good thing.

  Q175  Malcolm Bruce: That is a good thing, but Bob Zoellick, the President of the World Bank, has stated that the increase in food prices has put between 73 and 105 million people back into poverty this year, wiping out all of the aid and development that the world has delivered over the last seven years. Is not the reality that the rising living standards of the Chinese and the Indians is actually increasing poverty in other parts of the world?

  Mr Brown: That is why I would go to the G8 with a proposal that we increase the support for agricultural production in developing countries, that all the G8 and other countries are prepared to help the Africans particularly but other countries invest in increasing both the production and the productivity of their agriculture where, of course, the ability to use fertilizers and other means by which productivity is improved has been limited. In other words, we need another new green revolution in the developing countries to enable them to produce what they will need for the future, but that will cost money and I think it is important to recognise that this will be the wrong time to cut aid to developing countries, even though we are in difficult circumstances ourselves, and so are the other industrialised countries, because of the rise in oil and food prices. It would be in the short-term and long-term a huge mistake to cut that aid.

  Malcolm Bruce: You know I would agree with you on that, Prime Minister.

  Q176  Michael Connarty: Welcome, Prime Minister. Can I turn to international organisations, which I know you have been very involved in trying to direct and encourage over the last period? Specifically for the EU, I wonder, not philosophically but in reality, in terms of action, what the UK expect the European Union to do. It does appear to me, it has been said that the people in the developed world complain when food prices rise but that people in the poor parts of the world starve. We seem to have in the EU a greedy, selfish club in the reactions that have come recently to the limited efforts made by the trade commissioner to reorganise the arrangements worldwide. There is criticism from aid organisations about the limited changes to the CAP arrangements, but what we have had is a reaction from the EU of selfishness. Can we really look for anything from the EU other than protectionism, this new economic patriotism, it is called, in the face of what are internationally devastating changes to food prices?

  Mr Brown: I am happy to join you in criticism of the Common Agricultural Policy, which we along with some other countries want to change fundamentally, but I do not think you should fail to recognise that the European Union is the world's leader in development aid, not selfish, but the leader in development aid, that we are the leader in climate change reform, pressing the rest of the world to take the action that is necessary for a sustainable environment.

  Q177  Michael Connarty: In the last year?

  Mr Brown: In the last year, and the European Union is also leading in seeking a trade deal. The problems of the trade deal are not those created by the European Union, which is prepared to reduce its tariffs, but we must persuade the other continents to take the action which is commensurate with it, and so at the moment we need to get a deal with the Brazilians and with the South American and Latin American group of countries about the aid that they give to the manufacturing industry. We need to cement what are the proposals from the Americans about reducing agricultural subsidies and, of course, we need to be sure that we are helping the developing countries, because it is a development round that we are proposing for trade. I have said we are a few minutes before midnight. If we cannot get a trade deal in the next few weeks, I think it may elude us for many, many months if not longer and it may, indeed, be a trade deal that, if we cannot get, suggests that these multilateral trade deals are not going to be easy at all to get in the future. So there is a great responsibility on the shoulders of the G8 when it meets next week. There are then the ministerial talks that are taking place on 21 July organised by the world trade negotiation of Pascal Lamy, and I think we have got to show, in a world that is becoming increasingly protectionist, as you rightly say, that we are capable of standing up to that and showing that the world is, on a multilateral basis, capable of reaching an agreement on trade.

  Q178  Michael Connarty: Unfortunately, my understanding and perception of the EU over the last ten years is that we have failed to do that, we have failed to get the CAP properly reformed and possibly abolished, and it is very difficult to go elsewhere and say, "You should bring down your trade barriers", when in fact we have clearly done a deal that leaves them in place within the EU?

  Mr Brown: Can I say on that, very briefly, that the European Union is offering to reduce its tariffs very substantially indeed, and I think that the European Union has shown itself willing to agree a trade deal and we must get that trade deal over the next few weeks.

  Q179  Michael Connarty: And for doing so you get attacked by the French President.

  Mr Brown: I think it is important to recognise that the EU negotiating position is one that the whole European Union has supported.

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