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Democratic Republic of Congo

3.04 pm

Lord Avebury asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, my right honourable friend the Foreign Secretary visited the Democratic Republic of Congo over the weekend. During this visit, he called for a strengthening of MONUC, the UN force, in North Kivu province. We are discussing with the UN and the countries that contribute troops to MONUC options for increasing its effectiveness. We are also carefully following events in Ituri province, including the launch of the Popular Front for Justice in the Congo.

Lord Avebury: My Lords, as MONUC is facing military attacks not only in the vicinity of Goma but on three other fronts, does it make sense to denude the MONUC forces of assistance in those other three

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provinces by transferring troops into Goma? Would it not be preferable to accept the proposal by the French presidency of an emergency force of 1,500 troops supplied by the European Union? Will the Government ask for a full meeting of the Security Council to mandate an increase in the MONUC forces, perhaps up to a level of 24,000 as originally envisaged by Kofi Annan, and to bring together the parties from the Nairobi accord and the Goma agreement with the support of the African Union?

Lord Malloch-Brown: My Lords, I think that MONUC troops deployed elsewhere in the country will provide by far the quickest solution to the immediate, short-term need to reinforce MONUC in North Kivu. In the longer term, the Department of Peacekeeping Operations at the UN will report to the Security Council later this month on what it considers to be the right size of force for the increasingly complex task that it faces. We will obviously seek an early debate on that because, if there is a need for MONUC enhancement, we want to address it as quickly as possible. As we have made clear, at this stage neither we nor the French think that a European force is the immediate solution, but prudence requires that we continue to look at the possibility of deploying such a force, should it become necessary.

Lord Clinton-Davis: My Lords, have there been discussions between the members of NATO about this issue? It is better to be prepared in advance rather than to react suddenly.

Lord Malloch-Brown: My Lords, in fact, there have now been some 21 missions of the European defence forces, which, rather than a NATO force, are more normally used for these kinds of activities. On Thursday, there was a meeting of the relevant committee in Brussels, and a two-day working session is now under way to plan and agree a contingency arrangement, should such a force be necessary.

Lord Hannay of Chiswick: My Lords, does the Minister not agree that the present situation in the eastern region of the DRC is a clear-cut case of the international community’s responsibility to protect the civilian population, given that the DRC is not able to do so itself and that the sensitive problem of consent does not arise? Does he not also agree that recent events have shown the need for a large peacekeeping mission such as MONUC to have either its own rapid reaction capability or a multinational back-up force to deal with emergencies such as have now arisen?

Lord Malloch-Brown: My Lords, the noble Lord is doubly right in that the issue of consent does not apply, not least because the President of Congo himself has appealed for help, calling for a supplementation of the international forces there. Again, we have to remind ourselves that MONUC is the largest UN force anywhere in the world. It is currently overstretched, but first we need to look at ways in which we can enhance and strengthen it. The noble Lord’s suggestion of giving it additional standby capability is very sensible.

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Baroness Tonge: My Lords, does the Minister agree that, even if the present situation is dealt with and contained, the root causes of this problem have to be dealt with? One of those root causes is the huge mineral wealth to be found in east Congo, which everyone—especially Rwanda and allegedly Uganda—wants. Can he say what progress is being made with the G8-sponsored regulatory system for the extraction and export of these resources, which would ensure more revenue for the Congo and peace and stability in the region?

Lord Malloch-Brown: My Lords, one of the three pillars of DfID’s development strategy in the Congo relates to transparency and honesty of resource extraction policies following that G8 commitment. More broadly, with a pattern of divided, tribalised, power-grabbing politics, the area has been a sandpit that has attracted every rogue natural resource operator in the world. However, the solution is better government to manage the mineral wealth better.

Lord Howell of Guildford: My Lords, will the Minister share with me this opportunity to salute the courage of the aid workers and truck drivers who are being asked to drive into dangerous rebel territory, obviously at considerable risk, however successful or otherwise the UN is at protecting them? They seem to be the unsung heroes of such situations. The Minister said that our troop contribution is being considered. Will he indicate what size of contingent the UK will contribute, if it goes ahead, and from where would we draw those troops?

Lord Malloch-Brown: My Lords, on the first point, I think that we all share the noble Lord’s respect and gratitude for international and NGO humanitarian workers who, in recent years, have given their lives in even greater numbers than UN peacekeepers in conditions of this kind. On his second point, he will forgive me if I am not drawn too far down the road of a hypothetical deployment. I repeat that we very much hope that there will be a strengthened MONUC and a political solution to this problem. A UK deployment as part of a European force is something that we are holding in reserve. An EU brigade, which is more than 1,500 people, is on standby for such purposes and the UK would be one of the contributors.

Lord Avebury: My Lords, is one of the reasons why Laurent Nkunda refused to lay down his arms the failure to disarm the Hutu genocidalist FDLR? Will the Minister try to ensure that that ingredient is fed into any political solution by the Security Council and that there is an acceleration of FDLR disarmament and demobilisation?

Lord Malloch-Brown: My Lords, the noble Lord puts his finger on what we think is the core problem: the continuation of a Hutu militia—many of whose members were directly involved in the genocide of 1994—in the Congo as a military force, jeopardising the security of Rwanda. There can be no solution to the Tutsi militia of General Nkunda without addressing,

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first and foremost, the issue of the Hutu militia. There is a plan for doing so, but there has been a lack of political will, particularly in the Congo, to achieve that agreed demobilisation and reintegration of this group.

Police Appeals Tribunals Rules 2008

Police (Performance) Regulations 2008

Police (Conduct) Regulations 2008

Immigration and Nationality (Fees) (Amendment No. 3) Regulations 2008

International Criminal Court (Remand Time) Order 2008

3.12 pm

Lord Brett: My Lords, I beg to move the five Motions in my name on the Order Paper.

Moved, That the draft rules, regulations and order laid before the House on 6 October be approved. 27th report from the Joint Committee on Statutory Instruments.Considered in Grand Committee on 29 October.—(Lord Brett.)

On Question, Motions agreed to.

Wool Textile Industry (Export Promotion Levy) (Revocation) Order 2008

The Lord President of the Council (Baroness Royall of Blaisdon): My Lords, I beg to move the Motion standing on the Order Paper in the name of my noble friend Lady Vadera.

Moved, That the draft order laid before the House on 6 October be approved. 27th report from the Joint Committee on Statutory Instruments.Considered in Grand Committee on 29 October.—(Baroness Royall of Blaisdon.)

On Question, Motion agreed to.

Rail Vehicle Accessibility Exemption Orders (Parliamentary Procedures) Regulations 2008

Rail Vehicle Accessibility (London Underground Victoria Line 09TS Vehicles) Exemption Order 2008

Air Navigation (Environmental Standards for Non-EASA Aircraft) Order 2008

Lord Davies of Oldham: My Lords, on behalf of my noble friend Lord Adonis, I beg to move the three Motions standing on the Order Paper.

Moved, That the draft regulations and orders laid before the House on 6 and 9 October be approved. 27th and 28th reports from the Joint Committee on Statutory Instruments, 31st report from the Merits Committee.Considered in Grand Committee on 29 October.—(Lord Davies of Oldham.)

On Question, Motions agreed to.

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Planning Bill

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1

Schedule 1Clauses 2 to 36Schedule 2Clauses 37 to 111Schedule 3Clauses 112 to 117Schedule 4Clause 118 Schedule 5Clauses 119 to 150Schedule 6Clauses 151 to 182Schedule 7Clauses 183 to 187Schedule 8Clauses 188 and 189Schedule 9Clauses 190 and 191Schedule 10Clause 192Schedule 11Clauses 193 to 228Schedule 12Clauses 229 and 230Schedule 13Clauses 231 to 234.—(Baroness Andrews.)

On Question, Motion agreed to.


Lord Bassam of Brighton: My Lords, there are 47 Members on the list of speakers for this important debate. If Back-Bench contributions are kept to seven minutes, we should be able to rise at around the target time of 10 pm.


3.15 pm

The Financial Services Secretary to the Treasury (Lord Myners) rose to move, That this House takes note of the current economic situation.

The noble Lord said: My Lords, we are living in extremely challenging times for the global economy and financial architecture. I welcome this debate as an opportunity for this House to have an open, constructive discussion on the issues that face us. The twin global shocks of the credit crunch and the surge in energy and food prices have hit every country in the world, including here in the UK. As we are all aware, families have been hit by a big hike in world oil and food prices, while companies have seen associated rises in their costs. At the same time, as we have seen so vividly, the

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global credit crunch, which affected America, has now spread across the world affecting businesses and households, especially home owners. Many of the recent events in the banking system were unimaginable less than a year ago. Few predicted that by now the five largest Wall Street investment banks would have merged, sought government help or collapsed.

Before considering the effects of the developments we have seen unfold over the recent past and what the Government are doing in response, it is useful to clarify the many forces that came together over the past 15 years to set the stage for these unprecedented events. First, we saw increasingly integrated global financial markets, with enormous amounts of capital flowing across borders every day. Secondly, improved policy frameworks played a major role in delivering low inflation and low interest rates across the developed world. Thirdly, the massive build-up of emerging markets’ foreign exchange reserves, invested mainly in US assets, pulled long-term interest rates down to historic lows.

As returns on conventional investments were low and borrowing was cheap, financial institutions searched for higher yields. Complex products were devised to repackage securities into new investment opportunities. Advances in technology and processes made possible the repackaging and global distribution of these securities, and banks borrowed heavily from global capital markets to fund their investments and leverage up returns.

Investors were overpaying for risky assets, obtaining inadequate returns for the risks involved. In other words, a global credit bubble had formed with a belief that repackaged assets could be worth more than the sum of their parts. As American sub-prime mortgages defaulted—around one in five is currently behind on its payments—that belief was shown to be false. In a highly leveraged, interconnected and complex financial system, shocks like these are profoundly felt and quickly transmitted across countries. That is how, last summer, we had a catalyst: the trouble in the American sub-prime mortgage market. Last week, the Bank of England’s Financial Stability Report estimated sub-prime and related losses at almost $3 trillion. Since the global financial system was so highly leveraged, this shock is having a profound effect. Having paid too much for the assets, financial institutions are now having to revalue them, booking losses in the process, with consequent damage to their capital and, importantly, to confidence in and among banks.

The Government are taking decisive action to deal with these challenges and have repeatedly made clear that they will do whatever is necessary to maintain financial stability.

Later this month, world leaders and Finance Ministers will meet in Washington to discuss these global economic problems. These global shocks are unprecedented in their scope, scale and confluence, and we fully recognise that they are affecting the daily lives of families and businesses. As the IMF stated last month:

“The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s”.

It also noted:

“The major advanced economies are already in or close to recession”.

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Why does the global environment have such an important influence on Britain? Britain is a trading nation. Openness is one of our great strengths, providing new opportunities for growth and jobs, so shocks in global markets affect us all at home. We trade around a third of our output as exports and imports with the rest of the world, receive over £100 billion of inward investment a year and over £200 billion of investment in bonds, stocks and shares from abroad.

Millions of people and millions of jobs are influenced by our overseas links, and the UK is home to a significant number of the world’s best companies. Our financial services industry—the industry at the centre of the turmoil we have witnessed—is of course a world leader, and very important to our economy.

Although the world economy is clearly experiencing huge challenges at present, we should not lose sight of the fact that openness and globalisation, and being a key part of the global economy, has increased our national prosperity significantly. Openness will remain the approach of the Government, making the most of the opportunities available to the UK in the global economy. Indeed, it is imperative that the global problems we face are addressed by comprehensive global solutions.

Let me say a few words regarding the present economic environment, which noble Lords know is very difficult. No Government can prevent a downturn in the face of the unprecedented shocks we and others are facing. It is going to be challenging. We have already seen output decline by 0.5 per cent in the third quarter of 2008. As my right honourable friends the Prime Minister and the Chancellor have made clear, it looks as though our economy—like all other major economies around the world—is moving into recession.

The latest economic data show very clearly the task we are facing. The preliminary estimate of GDP growth recorded the first quarter of negative GDP growth for the third quarter of this year since the second quarter of 1992 and the weakest since the final quarter of 1990. Data suggest that individuals are reining in spending on discretionary and big-ticket items as disposable incomes have been squeezed by high energy prices, alongside growing uncertainties arising from the global financial situation. Consistent with consumers acting more cautiously in this challenging environment, retail sales fell in September.

Forecasters have continued to revise down their projections. Last week, the esteemed National Institute of Economic and Social Research predicted that UK growth next year will be minus 0.9 per cent, compared with its forecast only this summer of plus 1.4 per cent—a true indication of the shock of global developments on the UK economy. The Treasury will update its own forecasts in the Pre-Budget Report as usual.

Underlining the global nature of these problems, we have seen a similar pattern in other G7 economies. GDP in the euro area fell in the second quarter by 0.2 per cent—falling a quarter earlier than in the UK. Confidence in the euro area fell back sharply in data reported last week to its lowest for over a decade. In the US, unemployment has risen significantly and just last week we saw it reported that GDP growth declined in the third quarter. Indeed, over the recent past, GDP

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has declined in Germany, France, the US, Italy, Canada, Japan and now the UK, so the whole G7 has seen declining output. But we should also recognise that the nature of this downturn is fundamentally different from the past. In the late 1980s, UK GDP growth was allowed to rise to more than 6 per cent, which was well above the economy’s growth potential.

As a result, inflation rose into double digits and interest rates, in an effort to control rampant domestic inflation, followed suit. As a result of these domestic policy mistakes, the economy entered recession in 1990 and unemployment rose to more than 3 million for the second time in only 10 years. Today, things are very different, so the policy conclusions we draw from these experiences are likely to be different too.

We should make no mistake: this Government are fully aware of the difficulties and problems faced by the most vulnerable. That is why we have taken decisive action to help the economy as a whole and those most vulnerable to the effects of this global slowdown. The Government are determined to help families and businesses affected by the global economic difficulties. We will do whatever we can to support those who need it most.

Let me outline the action which the Government have taken. Their priority is financial stability and this focus has been critical for small businesses and families. Financial stability means small businesses having access to credit and home owners having access to mortgages. Supporting the banking system in this way is essential, not only for financial institutions, but also for the businesses and individuals who rely on them.

Our action to stabilise the banking system is also vital for hard-working families. A sound banking system is an essential part of the everyday lives of every family in the country and an essential precondition for the long-term health of the economy. Because today’s problems are global, the solutions will also be global and will require global co-operation.

Today, Governments all over the world are using approaches that until recently could not have been considered. It is right that the conduct of policy should evolve. Just as markets change, so should policy. On 8 October, after consultation with the Bank of England and the Financial Services Authority, the Government announced specific and comprehensive measures to ensure stability in the financial system, and to protect the depositors and businesses which rely on the system.

This comprehensive programme addresses three vital issues. First, it addresses the provision of sufficient short-term liquidity by increasing the amounts available to the Bank of England to lend through the special liquidity scheme. Secondly, new capital will be made available for UK banks and building societies so that they can deal with the current events in global financial markets while continuing their role of lending to individuals and businesses, thus supporting the economy. Thirdly, it will ensure that banks are willing to lend to each other with confidence—which will free up inter-bank lending—by offering an innovative, temporary government guarantee for eligible new debt issued by banks.

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