Examination of Witness (Questions 240-259)|
3 JULY 2008
Q240 John McFall: Exactly. What is
happening, Prime Minister, is that UK passengers will save significant
amounts of tax by using non-UK hubs, such as breaking long-haul
flights from the UK in Amsterdam. For example, if I were flying
from Glasgow to Mumbai through London, I would have to pay three
times and it would cost me £60, but, if I chose to go via
Amsterdam, I would pay once and it would cost £10. Now, that
does not make sense at all in terms of a green taxation. Further,
commercial delivery companies, like FedEx and DHL, they will be
paying the new tax on freight-only flights in contrast to the
exemption from the existing APD. What that will mean, Chancellor[sic],
sorry, Prime Minister
Mr Brown: I think this is a question
for the Chancellor!
Q241 John McFall:is that they
will have the opportunity to go to Amsterdam, pay nothing and
take their goods then by road further cluttering up the roads,
so something really needs to be done about this policy.
Mr Brown: Well, I think part of
the measures maybe are for consultation and no doubt the Chancellor
will listen to your representations on that matter. I do not think
anybody would deny, however, that the decision of a previous government
and our Government, that air passenger duty has to be paid and
it has got to be paid fairly, is the right decision if we are
going to assess the cost to climate change of air travel, and
I know there are many representations about that, but I think
the duty that is levied generally is the right duty.
Q242 John McFall: But there is a
big international issue here because I am informed that the US
Embassy has formally notified the UK Government of its significant
policy and legal concerns that the UK Government could possibly
be breaching the 1944 Chicago Convention.
Mr Brown: Well, these are matters
that will have to be looked at. I have not seen this particular
John McFall: Thank you, Prime Minister.
Q243 Mr Sheerman: This summer, there
are a lot of vulnerable and fearful people out there in our country
who can blame the situation they are in on what even The Financial
Times can suggest is an incompetent, reckless and downright
greedy banking system in our country. What they see is that the
position they are in is down to these people that have served
them badly. What do you think about that sort of view?
Mr Brown: I think the off-balance-sheet
activities of some banks that have caused many of the problems
that we have got and the write-offs that are now taking place
is something that should never have happened. We need a regulatory
system that can pick up more information when firms are using
off-balance-sheet methods for financing some of their activities,
and the unfortunate thing is that we are talking about probably
£400-800 billion of monies, mainly in America, that have
been off balance sheet and are now being brought on balance sheet
and causing a huge amount of difficulty, so there are reforms
to the financial system that are necessary. One is that the transparency
of balance sheets so that these off-balance-sheet activities cannot
be recorded in the way that they were before and they have got
to be on balance sheet. The credit rating agencies have got to
do a better job, and that is one of the issues that is before
us. I would say also that, where there are to be write-offs, they
should happen now because what we cannot have is a situation where,
months from now, people have not disclosed write-offs that they
know have got to take place now, and I think these measures have
got to be taken by the financial system. I think what is also
revealed is that you have national regulators that do not have
all the information about international companies that are operating
in many continents and you are going to have to have a better
system of global financial supervision. In many cases, we are
dealing with a situation where national supervisors have been
outgrown by global financial flows, so we need a better system
of supervision at a global level.
Q244 Mr Sheerman: But, Prime Minister,
these people are in a mess now and the banks that got them in
the mess in the first place are making it even worse because they
are not lending to anyone. They are not lending to small businesses,
they are not lending to people who want to get a home and they
are not lending to each other, so it is a crisis for them now
and they want something and they see you and your Government,
our Government, as the people that should do something about it.
Many of the experts say that, if you do not act soon, if our Government
does not act soon, the banking and financial crisis will deepen
this summer and we need urgent action. What urgent action are
we going to give them?
Mr Brown: Our aim is to keep the
economy moving forward. That is why the Bank of England injected
£50 billion into the markets only a few weeks ago, so action
has already been taken to improve the flow of money. That is why
we are taking action in the housing market itself and we have
announced that we will buy many unsold properties in the market
to enable the housing market to move forward, and we are looking
at other measures by which we can help mortgage finance so that,
in a situation in Britain where there is demand for housing, we
can actually find a way that the market and the financial markets
can satisfy that demand. We are aware also that consumers are
under pressure and that is why 22 million will get a tax cut,
that is why we have raised the Winter Allowance, that is why we
have got the low-income support for fuel bills and that is why
we are trying to move forward with other measures as well, so
we are doing things.
Q245 Mr Sheerman: I accept that.
I accept that there is some action going on, some really important
action going on, but many of my constituents will say, "Is
it enough?" Can I just press you on one thing which you brought
up earlier about the Leitch Report and how we do not need any
longer very many unskilled people in our economy. Is it not time
that we had a total moratorium on immigration into this country
that is unskilled? It is stoking up real problems. Whether they
come from the Indian Sub-Continent or whether they come from Albania
or Romania or anywhere else, unskilled people coming here without
the English language are going to be a real problem for the future
of our country, so is it not time we acted even more firmly than
Mr Brown: Well, as you know, we
have introduced the new points system and the points system means
that unskilled workers coming from countries outside the European
Union who are not needed by our economy will not be welcomed into
this country, so the points system deals with exactly the problem
that you have raised. Where there are skilled workers that can
contribute to the economy, we will, under the points system, allow
them in. Where they have no skills to offer, they will not be
allowed in. As far as Europe is concerned, we took special measures
for Romania and Bulgaria and we will continue to monitor that
Chairman: We now move to the final theme,
international flashpoints. Mike Gapes?
Q246 Mike Gapes: Prime Minister,
there has been a great deal of debate recently about what the
international community or individual countries can do where there
are problems, humanitarian problems or political problems, in
different parts of the world and in the words of the United Nations
General Assembly Resolution in 2005 "where national authorities
manifestly fail to protect their populations". We have some
specific questions about particular countries, but can I just
begin by asking you what you understand by the responsibility
Mr Brown: Well, the responsibility
to protect, as you know, is a principle adopted by the United
Nations in circumstances where there are humanitarian issues,
ethnic cleansing and where there is genocide and it is incumbent
on the international community to act. It has also got to take
into account that it is a just cause, that we operate on the right
intention, that it is a last resort, that any action is proportional
and that it must have reasonable prospects of achieving that goal.
I think the biggest problem we face actually is that we do not
have the means by which we can take the action that you would
want to see, so whether it was Rwanda or whether it was Darfur,
we do not have, beyond the number of peace-keepers and the humanitarian
aid that we can provide, the means at the moment by which the
international community can offer the help for stability and reconstruction
that you are talking about. I think we need the UN to be reformed
in such a way that, in addition to humanitarian help and the 100,000
peace-keepers there are, there is a civil society presence, that
you have police, you have judges, you have people that can offer
their skills to help reconstruct failed states in a way that would
mean that your humanitarian aid could lead to the satisfactory
restoration of civil order and a civil society in these countries.
Q247 Mike Gapes: But in the meantime
before we get that reform of the international institutions and
the strengthening of the United Nationsand many people
have been trying for many years to achieve thatwe have
to deal with the United Nations system as it is today. What do
you do if you are not able to get Security Council resolution
and the international community collectively to act? What can
we do in this country, what can the Europeans do in cases for
example like Burma where you were quoted in an interview to the
BBC World Service in May where you said: " ... we have to
get the agreement of the international community. And it has been
difficult to get all countries to agree to a common approach ...
" What do we do when we do not get that common approach?
Mr Brown: There are some cases,
as you know, where that has happened in Eastern Europe or in Africa
where unilaterally we will provide the support that we can. There
are some cases where we will act as the European Union to take
the action that is necessary. There are some cases where we will
act with other allies to make sure that we can do the right thing.
However, that is less preferable than getting agreement at the
United Nations. I suppose when you were talking about responsibility
to protect, we should reform the peace-keeping system so that
there are regional peace-keepers (for example the African Union
can do more) and we do need this post-conflict response facility
that is not good enough at the moment even when the will is there.
Q248 Mike Gapes: But there are people
internationally who are saying that we are never going to get
the Chinese or the Russians to agree in the Security Council so
we are not going to get the international legitimacy and therefore
there is an idea going aroundand Senator John McCain has
taken it upof a so-called "League of Democracies".
Does our Government have an attitude to that? What do you think
about that suggestion? Would it be helpful or would it actually
undermine the United Nations?
Mr Brown: I think the United Nations
should be reformed and I think we should try and get an agreement
about reform. I do believe that there is more will to make these
reforms than might be suggested by your question. The Security
Council itself in the end will have to be reformed to be more
representative. At the same time if we could agree on the purpose
of action by the United Nations before we talk about who is going
to do what under certain circumstances and which countries have
got the votes, I think we could get quite far. We did reform humanitarian
aid and we have done quite a lot about peace-keeping. There are
now 100,000 peace-keepers, as I say, which is a very substantial
number bigger than at any time I think in the history of the world.
However, you have got to go further on these reforms and I think
talking to Commonwealth countries, to China, to India, to the
Americans and the Europeans, there is the potential to reach agreement
on many of these reforms, and I think we should be pushing this
quite hard over the next year.
Q249 Mike Gapes: So you are not inclined
to go along with this idea of a League of Democracies?
Mr Brown: There are various meetings.
I think there is a Concert of Democracies at the moment. There
is an another group that meets together to look at what democracies
can do. Obviously the strongest form of government in the world
for the future is where there are democracies, but I think we
should try to reform the United Nations itself.
Q250 Mike Gapes: Rather than setting
up ad hoc alliances with the United States, the Australians, the
Canadians and the Europeans?
Mr Brown: I think there will always
be ad hoc alliances. Where you cannot reach agreement internationally
in the United Nations you will work with those countries where
you can do so, but it is far preferable to have a decision of
the international community and to give the United Nations both
the strength to act and the representative decision-making process
it should have.
Mike Gapes: Thank you. We will move now
to the situation in Iraq. James Arbuthnot?
Q251 Mr Arbuthnot: Prime Minister,
I will ask you some questions about Iraq and Afghanistan. Afghanistan
is much the harder issue to resolve but if I may start with Iraq,
may I ask when were you last in Basra?
Mr Brown: I was there a few months
ago and I really do not want to give details of my future plans.
Q252 Mr Arbuthnot: I would not ask
Mr Brown: But I have seen and
heard from visits that ministers have made about the most recent
situation in Basra, and I think it is true to say that after the
action by Prime Minister Maliki in taking his own troops into
the Basra area, there has been substantial progress in dealing
with the militias which have been operating in Basra. I think
the Defence Secretary described how it was possible for him to
walk in the streets of Basra in a way that did not happen before.
Really we have got these four tasks that we have got to do. Do
you want me to describe them or would you prefer to ask your other
Q253 Mr Arbuthnot: My impression
from being there last week was that Basra City has been utterly
transformed by the action that Prime Minister Maliki took in March.
When we were there last year the rocket and mortar attacks seemed
to be coming in every couple of hours or so and we were there
for five days last week without a single such rocket or mortar
attack and our convoy was stuck in a traffic jam because of the
prosperity of the country, and yet nobody seems to know about
it. Why do you think that is?
Mr Brown: Nobody seems to know
about the ---?
Q254 Mr Arbuthnot: Nobody seems to
know about the transformation of Basra.
Mr Brown: I have been talking
about it myself and I think others have been talking about it.
There are, as I say, four tasks that are important that we have
got to still undertake. One is we have got to train the Iraqi
forces and one of the problems that Prime Minister Maliki ran
into was that some of his forces were insufficiently trained,
and of course there had to be support given from the Americans
and from us at the time of his exercise, so we have started new
ways of helping the training of the Iraqi forces and the Iraqi
police. The second thing is we have got to build on this success
in Basra by having local government elections so we persuade people
to come out of the informal and sometimes violent ways that people
have chosen to conduct their activity in Basra into representative
government, so I hope there will be local government elections
soon. We have got to complete the transfer of the airport to civilian
use, and that is where many of our troops are at the moment, and
we have got to do what I think you are hinting at which is to
build some prosperity in Basra, giving people an economic and
social stake in the future of the area. We talk about "over-watch"
but these are the four tasks that moving from our combat role
to an over-watch role that we have got to undertake and complete.
Q255 Mr Arbuthnot: Can I ask about
that first task. The one thing we were told by the British troops
when we were there was that they were doing an absolutely essential
job in training the Iraqi troops and that the Iraqi troops in
turn were doing an essential job in mentoring the Iraqi police,
and that it would be quite wrong for our troops to be pulled out
prematurely from that job in order to fit into some political
numbers game dictated in this country. Would you agree with that?
Mr Brown: There is neither an
artificial timetable nor is there any political numbers game being
played. I have said all along that we will do what is necessary,
taking into account the views of military commanders on the ground,
and that we will complete the work of training the Iraqi forces.
We have changed the way that we train the Iraqi forces over recent
months, as you have probably discovered in your visit to Basra,
but the task still remains to be done. I think we have trained
up 30,000 but there is a lot more to do.
Q256 Mr Arbuthnot: The only minor
political sting I would put into this is that I hope we can have
no more predictions of 2,500 or stuff like that because it is
the capabilities that we need to put there rather than the numbers
that are important.
Mr Brown: I think it is right
to suggest the direction in which we want to go. We had 44,000
troops in Iraq at one stage; by the beginning of last year it
was 5,500; it is now 4,100. The direction of travel is clear but
I have always made it clear that the final decisions about the
actual movement and reconfiguration of troops will be based on
the situation we find and on the advice of military commanders
on the ground.
Q257 Mr Arbuthnot: Turning now to
Afghanistan, where tragically the deaths of our servicemen and
women have been very high recently, one of the key issues with
Afghanistan is their relations with Pakistan, which are not good,
frankly. Pakistan says it can only stop terrorists crossing the
border into Afghanistan if it is allowed to secure the border,
which neither country will agree. President Karzai has threatened
to take troops into Pakistan if need be. What can we do to reduce
the tensions there?
Mr Brown: We are working with
the American and the Pakistani Government as well as the Afghan
Government on these issues. It clear that this is a very difficult
area. You, like me, have studied this and will know that it is
one of the most difficult terrains in the world. I think we have
got to have the co-operation that is necessary with the Pakistan
Government. It would be better if there were better relations
between the Afghan Government and the Pakistani Government. We
have also got to move our troops in the right way to ensure that
we can protect them from the insurgents that are coming in from
Q258 Mr Arbuthnot: But all the while
the commitment of NATO seems a bit half-hearted. You have called
for greater burden-sharing and I think you are right on that.
The number of troops does seem to be creeping up but there is
a sense in Afghanistan that people there do not think we are there
for the long haul. How can we change that?
Mr Brown: I think people do know
that this is a long-term commitment. I was at the NATO summit
in Bucharest. We have got around 40 countries that are contributing
to this exercise. You are absolutely right to say that burden-sharing
is of the essence for the future. If, for example, the Dutch or
the Canadians, who have suffered quite large losses, as we have
suffered losses in recent months, did not feel that other countries
were contributing properly, then they themselves, as has been
said by the Canadians and the Dutch, would have to review their
position, so it is very important that there is burden-sharing.
The French, as you know, are bringing extra forces in. That will
allow American marines to move into the south. There is an attempt
to bring together many of the countries of Eastern Europe but
also the whole of Europe to contribute to both increased training
for police and the provision of equipment like helicopters. We
set up this Helicopter Trust Fund and it has had a number of countries
contributing to it. We now have offers from some of the Eastern
European countries to provide what is vitally needed equipment
for Afghanistan, so there is evidence of greater burden-sharing,
but I would be the first to say that more has got to be done.
As far as the Afghan people are concerned, our aim must be that
the Afghan army is strengthened in its ability to run its own
affairs and that the Afghan police are sufficiently strong that
they can, free of corruption, tackle many of the problems in the
country. I do think it is going to be important also to build
up local government as well as greater efficiency in national
government and the economic and social development programme there
if Afghans themselves are going to have a stake in the future.
Never forget this: the restoration of the Taliban to power would
affect us in Britain in our communities as much as it would affect
the Afghan people.
Q259 Mr Arbuthnot: I entirely agree
with that but what do you think about the prospects for reducing
the corruption that you have just referred to in Afghanistan?
What prospect is there of President Karzai achieving a major change
in that before the elections of next year and the year after?
Mr Brown: As you probably know,
we have been talking to President Karzai about giving him additional
support so that we have a civil service that allows decisions
that are made to be properly implemented, and he has asked for
and we are giving him advice on how to do this. The training of
a corrupt-free police force is being supervised by the Germans
who have brought additional trainers into Afghanistan for that.
I agree with you that these are problems that arise particularly
because we have got a heroin trade operating from Afghanistan,
and it is important that we increase the number of poppy-free
provinces, as has happened over the last few years, but obviously
not everything has yet been achieved; there is a huge amount still
to do. The battle against corruption is a better civil service,
better policing, better local government, action against heroin,
and these are the things that we are trying to undertake and complete.
Mike Gapes: Thank you, we will now move
to the Middle East. Phyllis Starkey?