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The Earl of Caithness: My Lords, I thank the Minister for what he has said. As your Lordships will know, the matter was not debated by the democratic other place when it was due to consider our amendments. It was simply voted on and that was the end of the matter, so his statement is very helpful and good to have on record.

I am disappointed that the Government have seen fit not to accept Amendment No. 19. I was grateful for what the Minister said about the new research project. Will that project take into account the work already done by the RICS in preparation for the Bill and for which I argued at all the previous stages, particularly at Third Reading?

I was pleased that the Minister seems to have shifted his position considerably on downward transition. He now seems to have a greater understanding of the detrimental effect that downward transition has had on businesses and of the persecution they feel by not receiving the full relief to which they are entitled. That in itself is a major step forward, but I should like to press the Minister more on his views on how quickly the Government think that they will be able to end downward transition. Having completed the review for 2005–10, does he think that downward transition will be needed again in 2010–15?

Perhaps I may remind your Lordships that downward transition is a method by which businesses that are entitled to relief from rates do not receive it. The money is withheld from them. They are the small and medium-sized enterprises that are in most need of that relief.

On Amendments Nos. 20 and 20A to 20F, I am grateful to the Minister for the movement in his position and the influence that he has had. He has often stood up before your Lordships and said, "Well, I am just speaking on behalf of the Government. I have to report back". We all know that he has a great deal more clout than that and I am grateful that he has listened to the arguments and used his undoubted influence to persuade his fellow Ministers to change their mind. That is one of the jobs of a Lords Minister and I am grateful to him.

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I am not at all surprised that the drafting has been changed. That is also one of the jobs of the Government. It is our job to agree on the principle and leave the government draftsman to get the amendment right. So a big thank you to the Minister for accepting Amendment No. 20.

Baroness Maddock: My Lords, I have supported the noble Earl, Lord Caithness, on this issue throughout the passage of the Bill. Like him, I welcome what the Minister has said to us today. It will be helpful particularly to small businesses. As the noble Earl said, the Minister clearly has some influence in his department and has managed to persuade colleagues that perhaps there was a better way, although without securing any more money. He was obviously unable to persuade the Treasury to allocate any more money. It will be beneficial particularly for small businesses. We must always remember that all our big businesses were once small businesses. They are the seed corn of our economy. It is right that the Minister changed his mind and was able to persuade others to change theirs on the way the Bill is enacted. We look forward to seeing what emerges.

Noble Lords may like to know that the relevant section of the Bill contained incredibly complicated formulas. I do not pretend to understand them. Fortunately, the principles were explained and the Minister has accepted our arguments. We are content with the current position and look forward to what follows.

4.45 p.m.

Lord Rooker: My Lords, I seek no personal credit for the change in position. It is due to my right honourable friend Nick Raynsford and the Deputy Prime Minister. They are the listening Ministers. We are the listening Government. However, when I go back to my colleagues later today, I shall tell them not to listen to your Lordships' House regarding the first vote that we had. I make that absolutely clear. If I do return with any amendments tomorrow, it will be because I have not been listened to.

With all due respect to the noble Earl—and I appreciate the positive contributions that he has made throughout our debates on this part of the Bill—I did utter one sentence:

    "We will not rule out any possibilities at this stage".

I cannot say anything. I have explained the research project, which will soon start. It is September now and it will start in January. It will happen very quickly next year and we will no doubt report back as appropriate. The research will not take place behind closed doors. Business and the professions will be involved and we will try to take a positive view of what conclusions are reached and table a package of amendments. Therefore, I hope that we can dispense with our discussion in a spirit of co-operation, which has been sadly lacking in the first part of our deliberations.

On Question, Motion agreed to.

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20page 32, line 39, leave out subsection (10) and insert—
"( ) In making regulations under this section the Secretary of State shall have regard to the object of securing (so far as practicable) that the aggregate amount payable to him and all billing authorities by way of non-domestic rates as regards a relevant period is the same as the aggregate amount which would be so payable apart from the regulations.
(10A) For the purposes of subsection (10) above, the Secretary of State shall estimate the difference between—
(a) the aggregate amount which would apart from the regulations, all billing authorities by way of non-domestic rates as regards a relevant period, and
(b) the aggregate amount which will be payable having regard to rules prescribed under subsection (4) above,
and any shortfall in aggregate amount shall be recovered by applying a surcharge of the non-domestic rating multiplier for each relevant financial year."

The Commons agree to this Amendment, with the following Amendments—

20ALine 5, leave out "relevant period is" and insert "particular relevant period is, after disregarding any adjustments made to take account of amounts being payable at times other than those at which they would have been payable apart from the regulations,"
20BLine 7, leave out from beginning to end of the Lords Amendment.

The Commons have made the following consequential Amendments to the Bill—

20Cpage 32, line 46, after "amounts" insert "and adjustments"
20Dpage 33, line 1, leave out "for a particular financial year" and insert "and adjustments for a particular relevant period"
20Epage 33, line 3, leave out "later financial year which" and insert "financial year which begins after the coming into force of the amending regulations and"
20FPage 33, line 5, leave out "differ from his estimate of those amounts" and insert "and adjustments differ from his estimate of those amounts and adjustments"

Lord Rooker: My Lords, I beg to move that this House do agree with the Commons in their Amendments Nos. 20A and 20B, as amendments to Lords Amendment No.20, and Amendments Nos. 20C to 20F.

Moved, That the House do agree with the Commons in their Amendments Nos. 20A and 20B, as amendments to Lords Amendment No. 20, and Amendments Nos. 20C to 20F.—(Lord Rooker.)

On Question, Motion agreed to.

Bill returned to the Commons with an amendment.

Business of the House: State

Opening of Parliament

4.47 p.m.

Lord Grocott: My Lords, before the Statement of my noble friend, perhaps I may confirm what has been widespread knowledge throughout the House for some time about the date of the State Opening this

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year. Downing Street announced this afternoon that the State Opening of Parliament this year will take place on Wednesday 26th November.

Lord Cope of Berkeley: My Lords, I am sure that your Lordships will be grateful to the noble Lord for confirming the rumours that have been circulating for a little while. It is a late State Opening in historical terms, but an early announcement, which is welcome. However, it leaves the Government with a tight timescale. We still have nine government Bills before the House, although two are at the ping-pong stage—we were just discussing one of them. Two have not yet reached Committee. Therefore, there is a lot of work to get through. If the Government are to achieve the State Opening by the date stated, they will need to be responsive to your Lordships' House in considering the issues, as indeed they sometimes are. The noble Lord, Lord Rooker, described the Government as a listening Government and they certainly need to be.

Lord Grocott: My Lords, I can do no better. I never try to outdo my noble friend Lord Rooker in the language department. I simply confirm what he said and what the noble Lord, Lord Cope, requested.

WTO Ministerial Conference

4.49 p.m.

The Secretary of State for International Development (Baroness Amos): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:

    "With permission, Mr Speaker, I should like to make a Statement about the Fifth World Trade Organisation Ministerial Conference in Cancun, from 10th–14th September, which I attended together with my right honourable friends the Secretary of State for the Environment, Food and Rural Affairs, the Secretary of State for International Development and the Minister for Trade, Investment and Foreign Affairs. Commissioners Lamy and Fischler negotiated on behalf of the EU.

    "The UK delegation included my honourable friend the Member for Putney, representing the Select Committee on International Development, as well as representatives of the CBI, the TUC, the Consumers' Association and the UK Trade Network. I warmly welcome their participation and thank them for their work.

    "The conference was attended by delegates from all 146 members of the World Trade Organisation, accompanied by many thousands of parliamentarians and civil society organisations as observers. On the opening day, we welcomed the accession of Cambodia and Nepal.

    "The British delegation worked hard to help secure an outcome that would meet the needs of developing countries. Ministerial colleagues and I

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    met a large number of representatives from those countries, and we ensured that their views were reflected when we met with the US, EU colleagues and others.

    "The conference was the WTO's opportunity to restore momentum to the Doha development round that was launched with such high hopes in November 2001. It is with great regret that I must report that we were unable to reach an agreement. Talks broke down on the final day.

    "Before the talks ended, however, Commissioner Lamy, on behalf of the European Union, offered to abandon completely negotiations on two of the so-called 'Singapore issues'—investment and competition. That position was fully supported by the British Government.

    "Many other WTO members also signalled a willingness to be flexible on various issues. With more time, I believe it would have been possible to reach agreement. Failure to agree at Cancun is a serious setback for the Doha round. But it is not the end of the round for the WTO itself.

    "In anticipation of Cancun, we had already reached agreement—overdue but none the less welcome—on access to medicines for developing countries. That agreement stands. It must now be built on, particularly through the global funds to fight AIDS, TB and malaria. "And in June, the Agriculture Council of the EU agreed significant reforms of the common agricultural policy—reforms that will mean substantial cuts in the trade distorting support and export subsidies which we give to our own farmers and which do so much damage to the farmers of the developing world. The EU has also already offered in principle to phase out export subsidies on products of particular interest to developing countries. The agreement on CAP reform was not conditional upon agreement at Cancun.

    "We saw at Cancun the formation of the G21 and other strengthened developing country groupings. I wholeheartedly welcome the emergence of this stronger voice for poorer nations. Indeed, this Government have led the way in helping developing countries to build their negotiating capacity. We have given 110 million to trade-related capacity building and technical assistance since 1998, and an additional 50 million was announced last week by my right honourable friend the Secretary of State for International Development.

    "Furthermore, at Cancun itself, we made real progress in discussions on agricultural and other vital issues. There is no doubt that we were closer to agreement at the end of the Cancun conference than we were at the beginning. "We now need to lift our sights once more to the prize that is on offer, particularly for developing countries, if we can get the round back on track. The Cancun conference agreed a new deadline of 15th December to try to resolve the issues that we could not sort out at Cancun. We in the United Kingdom

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    will engage fully to try to make this a reality. I have already spoken to the Director-General of the WTO, Dr Supachai, about how we in the UK can drive this forward.

    "The final ministerial statement urged that renewed discussions be based on the concessions delegates offered at Cancun and not on their earlier positions. In the case of the EU, this means we should accept that, despite our continuing commitment to encourage and facilitate direct investment in developing countries, WTO agreements on investment and competition are off the EU's agenda.

    "The IMF and the World Bank also announced in Cancun a new initiative to help developing countries to overcome problems in adjusting to a more liberal trading environment. I warmly welcome this. The UK Government will make a substantial input to the design and implementation of that initiative.

    "In the wake of Cancun, I am afraid it is inevitable that more emphasis will be put on regional and bilateral trade agreements. Although these could help to promote South/South as well as North/South trade, they risk excluding many poorer countries and leaving others isolated in negotiations with far larger countries. We continue to believe that the multilateral system should be the cornerstone of world trade rules.

    "All WTO members now need to reflect on the lessons to be learned from Cancun and to find ways of improving processes. We also have to find ways of addressing the issues of substance that prevented agreement at Cancun. We shall be discussing how best to make progress on all those issues with our EU partners, the European Commission and others, taking into account particularly the views of developing countries.

    "The UK Government are determined to do all they can to help to deliver a development round in line with the promises we made at Doha. All countries stand to gain, but the poorest stand to gain the most. That is why we support the round and why we will continue to work for its success".

My Lords, that concludes the Statement.

4.54 p.m.

Baroness Rawlings: My Lords, I thank the noble Baroness, Lady Amos, for repeating the Statement on what the press have referred to as the "farce and failure" of the Cancun trade talks.

The walkout of the G21 is a stark contrast to the excitement and genuine hope which characterised the beginning of the Doha trade round in November 2001. It is sad that the atmosphere of scepticism surrounding the talks, following the lack of progress, numerous missed opportunities and collapsed deadlines running up to September, culminated in the breakdown last Sunday night.

That major setback in negotiations postponed the implementation of the Doha Development Agenda. It may not be the "end of the round", as the Secretary of

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State said, but it makes the January 2005 deadline defunct. The collapse will damage business confidence. A fear already expressed by officials in Geneva is that momentum will move away from a multilateral agreement on trade to bilateral agreements and projects, such as the US's Free Trade Area of the Americas, thus sapping what little energy is left for Doha. Can the Secretary of State please outline what Her Majesty's Government are planning to do to try to rectify this impasse on trade and explain what will be our "substantial input", which she mentioned, into the joint IMF and World Bank initiative?

With elections due next year in India, the US and France—three key members of the WTO—it is vital that we restart talks as soon as possible. The current situation means that everyone is losing out. All countries—developed and developing—need to be prepared to compromise more. We recognise that the two Singapore issues—investment and competition—were the flashpoint at the conference. We cannot let that hide our own intransigence over agriculture. That continues to be one of the major stumbling blocks to progress so far.

The US and the EU have failed adequately to reform their agricultural regimes. The European Union CAP reforms made in August, although in the right direction, were less impressive than Her Majesty's Government would have us believe, and they fall far short of the radical changes needed to improve the lot of poor countries. We accept that farmers need support, but not subsidies that distort trade.

One major criticism of the negotiations is that the rich members are over-represented, leaving poor countries little voice. In May, Conservative Members in another place made suggestions for an advocacy fund, which developing countries could use to provide themselves with quality legal and economic advice on trade issues. Developed countries would contribute to the fund, thus keeping the cost to individual countries to a minimum, while at the same time ensuring that poorer countries had the means to select the advocates they needed to negotiate on their behalf. Her Majesty's Government have said that they are committed to,

    "an agreement that works for developing countries".

The advocacy fund is surely one example of a programme that would benefit poorer countries.

Last week, DfID announced a 50 million allocation to help to integrate trade into their plans to reduce poverty. While that 50 million is an obvious reflection of our proposal for an advocacy fund, it falls far short of any trade capacity-building initiative.

The failure of Cancun has damaged the credibility of the WTO, but can the Secretary of State reassure your Lordships that Her Majesty's Government will do all they can to support this organisation while also pressing for the recommendations that the WTO should become,

    "more transparent and facilitate full participation by developing countries"?

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The WTO is arguably more democratic than some other international organisations. It is one of the few international organisations in which poorer countries form a majority, and it proceeds via consensus rather than voting.

The breakdown of trade talks also raises other problems. Recent trade disputes put on hold under the "peace clause" negotiated during the Uruguay round will expire on 31st December 2003. If the Doha round remains stalled, big exporters such as Brazil may resort to litigation. Can the Secretary of State inform the House what plans there are to extend the deadline and how Her Majesty's Government plan to address the consequences of its expiry? There is also the issue of several simmering disputes between the EU and the US, which could boil up again, for example the foreign sales corporation tax.

In sum, let us not lose sight of the importance of these issues. The World Bank estimates that eliminating all barriers to trade would generate between 250 and 520 billion dollars extra in global income. Up to half of that would go to developing countries. That could lift over 144 million people out of poverty by 2015. The time for rhetoric and missed opportunities is over. We must be prepared to be bold and make the first move in restoring the political impetus into these critical issues relating to multilateral trade.

5.1 p.m.

Baroness Northover: My Lords, I, too, thank the Secretary of State for repeating the Statement made today in the other place. On these Benches we share the deep disappointment that the talks ended in failure. Despite the anti-capitalist celebrations, the real losers in this are the poorest countries. Indeed, there is now a real danger of trade conflict and bilateral agreements, which are likely to benefit stronger rather than weaker countries.

As we have heard, there are some positive developments from Cancun. The new grouping there of developing countries is very welcome. However, is the Minister concerned that many of those in the G21 were stronger developing nations, such as China and India? Might the poorest countries again be squeezed out?

Comments afterwards seemed almost to blame the Mexican chairman of the last session. Patricia Hewitt and Caroline Spelman of the Conservative Party, both speaking on the "Today" programme on Monday morning, seemed very taken aback. Mrs Hewitt stated that there was a deal to be done and that they had been close to achieving that. She reiterated in the other place today that a deal might have been achieved with another six to eight hours of talks.

Does the Minister agree that we need to look wider for the reasons for failure and that perhaps it should not have been such a surprise? Every deadline set in the Doha round has been missed. Did the fact that the agreement in the EU on farm subsidies was not reached until June, long past its deadline, play a part? Above all, can she comment on why the so-called

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Singapore issues were introduced; issues which the developing countries were simply not prepared to discuss while agricultural subsidies had not been settled? Surely, the developing countries made it very plain before Cancun that no new issue should be added to what was already a difficult enough agenda. What part did the UK Government play either in allowing that or in seeking to prevent it? Having raised them, why were these issues not withdrawn from the agenda at an earlier stage? However, I welcome the Government's commitment that they should not be reintroduced in December.

When discussing the EU proposals back in June, the Minister stated that those were an opening position for Cancun and that she expected the EU to concede more. Does she not think that that was a risky position for the British Government to be in, relying on a developing world to put pressure on our EU partners? Was British influence over our French and German partners on these matters weakened as a result of differences over Iraq? Has that moved us to the periphery of influence in Europe?

Yet did our position on Iraq give us any influence at all over the US negotiators, especially, for example, over their position on their cotton industry? Is she concerned that the US negotiator has now said that the US will be encouraged to look at bilateral rather than multilateral deals? I note that the Wall Street Journal has urged the US Government down that line.

We have to move forward and I welcome the commitment that the Government made to get the talks back on track. Can the Minister tell the House more about the meeting in December and the part that our Ministers, as opposed to our officials, may play in that? It seems as if there has been a seismic shift of power within the WTO. Whatever their flaws, it has to be through international institutions such as the WTO that progress is to be made if weaker countries are not to lose out to stronger ones. I therefore welcome the Government's commitment to that, even though we failed to get our negotiating group to present acceptable proposals to this conference.

5.6 pm.

Baroness Amos: My Lords, I thank the noble Baronesses, Lady Rawlings and Lady Northover, for their comments. I shall try to address the comments and questions raised. The noble Baroness, Lady Rawlings, asked about the January 2005 deadline. It is very difficult to believe that we shall now meet that deadline. As the noble Baroness, Lady Northover, stated, we have missed just about every deadline in this round. Looking back, previous trade rounds took much longer than anticipated. This was a very ambitious round. We want that which was unanimously agreed at Doha to be achieved because of the impact it will have on the poorest countries in the world and we are ready to fight to secure that.

The noble Baroness, Lady Northover, asked what would happen at the December meeting. The communique states that there will be a meeting at

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official level. We shall push to ensure that the political elements are clear in terms of what we want to achieve. Given our failure to achieve that in Cancun when we had Ministers present representing the majority of countries in the WTO, it is difficult to speculate now where we will be in December. It is still early days.

The noble Baroness, Lady Rawlings, asked what we are planning to do next. The talks broke down only on Sunday. My right honourable friend returned yesterday from Cancun, although I returned earlier. We are currently in discussions on how best to take forward this process. The IMF/World Bank initiative is one of the options we are considering in terms of influencing the way forward. The initiative will consider issues such as preference erosion, the loss of revenue to developing countries due to tariff reduction, financial assistance, and looking at trade issues as part of a development programme, linking in to the priorities of developing countries.

When in Cancun I spoke to the trade Minister for Malawi and was struck when he said that because of an IMF monitored programme, Malawi was forced to open its markets too quickly. That resulted in an excess of cheap imports and it cannot access developed country markets. One of the things we want to do is to ensure that the IMF/World Bank initiative is sequenced and takes on board the very difficult decisions that developing countries have to make with respect to opening up their markets.

The advocacy fund was raised by the noble Baroness, Lady Rawlings, and has been raised many times in the other place. It would be enormously helpful if the noble Baroness, Lady Rawlings, and her honourable friend in the other place, Caroline Spelman, were to look at what we have done. Since 1998 we have put some 110 million into a range of initiatives to help developing countries. I announced an additional 50 million last week.

The noble Baroness, in talking about an advocacy fund, talked about the importance of developing countries having access to legal opinion. We have given 1.25 million to the Advisory Centre on WTO Law. It is an independent Geneva-based centre, which assists developing and least developed countries by providing free or low-cost legal support to members pursuing cases in the dispute/settlement mechanism. We funded the South Centre. We funded a Trade and Investment Access Facility. We have given 7.5 million for the Africa Trade and Poverty Programme. Far from us following the opposition, the opposition is following us.

The noble Baroness, Lady Rawlings, asked about the WTO becoming more transparent and facilitating discussion. In conversations with developing country Ministers, I was very struck by the fact that they all felt the process was more transparent and open, but they remained cynical about that process leading to the outcomes they would wish to see. The next stage needs to be developing countries having a stronger voice and the opportunity to contribute, but with that robust process of dialogue and discussion leading to an outcome that actually takes on board the needs of developing countries.

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I agree with the noble Baroness, Lady Northover, that the real losers are the poorest nations. There were differences between developing countries. The noble Baroness referred to China and India and whether the poorest would feel squeezed out. There was the beginning of that kind of feeling at Cancun. Indeed, different developing countries formed different groups. So one had the G21 focusing very much on agriculture and another group, which were the poorer developing countries, with a little bit of overlap, looking at special and differential treatment and the special safeguard mechanism. They were particularly concerned about impacts on the poorest countries.

I agree with the noble Baroness that there is a range of reasons for the failure of these talks. It is not just one thing; the situation is complex and complicated. It is a pity that—although we were closer to agreement when we finished than when we started—many countries spent the first two days re-rehearsing arguments they had already put in the run-up to Cancun. So we needed slightly more time at the end of the process.

On the Singapore issues, in 1998 the European Union was considering what new agreements might help the benefits of trade to spread more widely within developing country economies. So there was a negotiating mandate to propose agreements on investment and competition. Noble Lords will know that the Government's position, which was stated publicly by myself and by my right honourable friend Patricia Hewitt, is that these issues were not a priority for the British Government. However, clearly we were negotiating as part of the European Union. We worked to persuade our colleagues on the best kind of negotiating tactics to use. But, at the end of the day, we agreed a negotiating mandate as part of the European Union and we stuck by that mandate.

I think that I have addressed all the issues and questions raised.

5.13 p.m.

Lord Waddington: My Lords, can the Secretary of State help: is it correct, as reported in the press, that great resentment was expressed by representatives of developing countries at the failure to reform the CAP, which they rightly said ruins Third World farmers through the subsidised dumping of farm produce? Is it correct that the promised reform will do little to change the problem that now exists, which was one factor that led to the breakdown of this meeting?

Should not the Government be impressing on European colleagues the vast importance of sorting out this problem, which is far more important than the construction of a new European constitution? Can the Minister tell us what these promised changes to CAP will amount to? What evidence is there to suggest that they will meet the concerns of Third World countries and stop this subsidised dumping of farm produce, which is ruining their own farmers?

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