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One thing I did not draw upon was the grossly inadequate resources provided for all the Members of this House in the conduct of their business. When the Northern Ireland Assembly was brought into being, we ensured that all parties, on a per capita basis, had funding for staff for research purposes. If there is to be proper consideration of our work-policy work holding government to account and legislation-then the undoubtedly greater talents of your Lordships' House have to be conveyed properly in the House and indeed beyond the House. It is not necessarily the case that money should be provided to groups, but resources of personnel need to be provided. Therefore, on the question of whether it is money or whether staff are employed and allocated to groups, there are various ways in which to achieve the same purpose. But the purpose must be to provide Members of your Lordships' House with the opportunity of doing their work.

It is sometimes thought that it is purely a matter of policy research and producing amendments for Bills, but it is not. It is necessary for the groups to organise themselves in an orderly and proper fashion and to

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keep each other advised and informed of what is going on. But there is another purpose that has increasingly become important. At both ends of this building, we have been concerned about our relationship with the wider community, with non-governmental organisations and charitable bodies, with special interest groups and campaigns of various kinds, as well as with individual citizens of our country. One way in which your Lordships' House has become particularly successful is that these groups have found your Lordships accessible. Very often, they have been brought together with members of different groups in your Lordships' House by the very researchers paid for by Cranborne money. That has been the case not just with Liberal Democrats but with Cross-Benchers and members of other parties in your Lordships' House.

As long as we have the adequate resources in all the parties-it is not a question of the Government and the Opposition in this regard-as in Northern Ireland, where money is allocated to parties whether in or out of government, on a per capita basis, that will enable us, as it has in the past, to engage properly with those charities, NGOs, interest groups, professionals and ordinary citizens who want to convey their message to Parliament. One great satisfaction that the community has found with your Lordships' House in recent years has been with its accessibility and openness on a non-partisan and non-constituency basis to these important issues.

I support what has been said in the appeal to my noble friend the Leader of the House, that he gives consideration to this question. Of course, it is especially sensitive at a time of economic difficulty, when we are asking for cutbacks in all sorts of circumstances-that is absolutely the case. But at least at this time we might consider what kind of mechanism and formula might be possible so that at a time when it was more affordable we would be in a position to provide for your Lordships' House the kind of resources necessary not only for our internal functioning and operation but for our relationship with the rest of the community.

Lord Dholakia: My Lords, I ask for clarity in this resolution. Will the Leader of the House confirm that this resolution applies for the duration of this coalition Government? Now that there is the arrangement with the fixed-term Parliament, would he not consider it necessary to have a sunset clause for the termination of the arrangement?

Lord Strathclyde: My Lords, I am very grateful to all noble Lords who have spoken, especially to the noble Baroness, Lady Boothroyd. I am certainly one who would never want to cut across what she says. I am glad that what she said was said with her customary elegance and force. There was also an element of logic behind it. I shall try to deal with all the points that the noble Baroness raised-no mean feat.

I do not share the view of one of my predecessors, Lord Williams of Mostyn, that it was an act of great generosity. I have always taken the view that parties that are in opposition or on the Cross Benches should receive support from the taxpayer so as to fulfil their

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functions. The noble Baroness said that it was a disproportionate way in which to do things. Her main point, I think, was that there was an unfairness between how the main party in opposition and the Cross Benches were dealt with.

This lies at the heart of how I think the House views the different roles of the Opposition and the Cross Benches. I was in opposition for a long time, so I know perhaps more than anyone else that the Opposition have a difficult task to do. In an unpaid, part-time House, they need to provide a substantial number of Peers to act as shadow Ministers and they do not have the benefit of the Civil Service to provide them with the papers and amendments that are required for the Opposition to function. As I have said many times, it is important that there should be a strong Opposition. That is why a substantial amount of support is provided to the party of opposition in this House, which is now the Labour Party. I do not think that anyone would believe that the nearly £500,000 given by the taxpayer to the Labour Party is overgenerous. It is probably about right and it allows the Opposition to do the work that they are asked to do.

Those conditions do not apply to the Cross Benches. The Cross-Benchers-I say this with the greatest respect-do not have a Front Bench or a central office. They are not involved in the formulation of policy. They do not need to negotiate with their colleagues in another place, because they do not have any colleagues in another place. As the noble Baroness pointed out-and I cannot disagree-the Cross-Benchers come together as a loose alliance for administrative purposes, but they are all individuals, with individual views of how things should be done. It may be that there is not quite enough money to help the Convenor to do her job. I do not wish to be in the least bit flippant about this and I pay the greatest tribute to the work that the Convenor of the Cross Benches does on behalf of her whole flock-indeed, I pay tribute to her predecessors, too. It is faintly shocking that, 10 years ago, the Cross Benches received nothing at all. The amount was reviewed only two years ago and was increased by 48 per cent-a substantial increase-to £61,000. The current amount is, I think, £63,000. I know that that was from a relatively low base, but I am always happy to receive representations from the Cross Benches and from the Convenor about whether that figure should be increased.

My noble friend Lord Alderdice raised an entirely different question, which was about the funding of political parties when they are in government. I am not enormously attracted to that idea. The purpose of Cranborne money, which is the subject of the Motion, was to support the parties of opposition. There is now only one party of opposition. Naturally, consideration was given as to whether the one party of opposition should receive all the Cranborne money, but wise counsel prevailed on both sides of the House. We took the view that, as the Liberal Democrats had joined us in coalition government, both we and they should give up that money. There is a good reason for that. We now have the resources of the Civil Service at our disposal to create policy and to do all the administrative work. We recognise that the civil servants do an excellent job.

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Other Parliaments and Assemblies have created different traditions, particularly those that have almost inbuilt coalitions. I have no idea how long this coalition will last, although I hope that it will last for a long time. That leads me to the question raised by my noble friend Lord Dholakia. He rightly said that, if a second party of opposition should re-emerge, the whole situation should be reconsidered and the position reviewed. I cannot conceive of circumstances in which such a review would not be done in a most positive light, with Cranborne money reapplying to a second party of opposition.

Although the Motion on the Order Paper is slightly opaque, I think that it has now been clearly explained, not least by the noble Baroness, and I hope that we can now agree it.

Viscount Tenby: My Lords, the remark of the much lamented late Lord Williams of Mostyn has twice been referred to today. For the record, he made that remark in response to a rather carping comment from me; I was speaking for the Convenor on that day. It was ironic, and there was a twinkle in his eye when he said it.

Motion agreed.

Latin America


12.15 pm

Moved By Viscount Montgomery of Alamein

Viscount Montgomery of Alamein: My Lords, we now turn to more interesting and international affairs. My thanks are due to the Convenor, my noble friend Lady D'Souza, for allocating me time for this debate. It is four years since our previous debate on Latin America and a great deal has happened since then.

Although retired from all business activity for 10 years, I remain a vice-president of Canning House, the Latin American focal point in London. I am glad that two of my fellow vice-presidents-the noble Lord, Lord Garel-Jones, and the noble Baroness, Lady Hooper-will speak. The president of Canning House, the noble Lord, Lord Brennan, is unfortunately away, so we will miss him.

We welcome today the maiden speech of the noble Lord, Lord Liddle. He comes from a think tank background, and will add a great deal to our deliberations. I hope that I can recruit him to the Latin American cause, which needs a lot more members whenever we can get them. Whether we will agree entirely on the method of achieving this is another matter.

It is just over 55 years since I first went to live and work in Latin America, and I have been continuously involved, in a variety of capacities, ever since-especially after I returned to live here in 1962. During this time, there have been huge changes and I will highlight a

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few. Fortunately, with the number of speakers we have today, we should be able to cover most aspects in the time allocated.

Latin America is a vast geographical area, growing in importance, with the mainland stretching from the US border with Mexico to Cape Horn. It contains over 500 million people, spread across 20 republics. Brazil, the largest country-slightly bigger than the USA-has 200 million people alone. It plays a leading role, which is an added responsibility. Brazil, Mexico and Argentina are all G20 member states. The GDP of Brazil is greater than that of India. The combined GDP of Mexico and Argentina equals that of India. The combined GDP of Latin America is equal to China. Given that China and India have populations in excess of 1 billion, one can see that individual purchasing power-GDP per capita-is much greater in Latin America, making its countries significant markets to which we should pay attention.

In April last year, President Obama made a powerful speech at the Summit of the Americas in Trinidad. He engendered a great deal of enthusiasm and there was much optimism that the US would start to take its southern neighbours seriously after many years of neglect. The continent was expecting some rapprochement with Cuba, and President Chavez of Venezuela even shook President Obama's hand warmly. Sadly, nothing happened subsequently.

The same malaise has been the norm in this country. Sadly, the Labour Government never took Latin America seriously. They closed embassies, downgraded others, and the region ceased to be a priority area while we slavishly followed the US into eastern wars. I like to think-indeed, hope-that the new coalition will turn over a new leaf and take a different line; in other words, they might like to turn the Foreign Office back into the policy-making department that it once was. That would be valuable, instead of having policy decided in No. 10 Downing Street.

I turn now to a few ideas by way of encouragement. In the debate four years ago, I suggested that UKTI should be closed and the promotion of trade overseas done by commercial officers in British embassies, who would be involved in what was happening on the ground and therefore able to offer practical advice to businessmen. Unfortunately, this proposal fell on stony ground. In parallel, DfID, which has a ring-fenced budget, could be transferred back under the Foreign Office. It would be much better able to identify technical assistance projects overseas from on the ground, and stop spending funds through international organisations, which is extremely wasteful. This is very important in these hard-pressed times. Indeed, one wonders whether-with such a huge national debt-charity should not begin at home. Under current rules, most Latin American countries are middle-income countries and not aid recipients. However, there is a case for aid in certain countries, where microfinance would be highly productive in starting new small businesses in an extremely entrepreneurial environment. I appreciate that the suggestion I have just made is highly controversial. It fell on stony ground four years ago. It is now even more worth while, hence my recycling of it today.

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I turn now to Latin America itself. When I first went there to live, it was mainly run by military Governments, with central planning, multiple exchange rates, import restrictions and inflation. Gradually, nearly all the countries returned to democracy, with market economics, huge investments and rapid development. Sadly, poverty, which is prevalent in the region, has not yet been eradicated and is still a major challenge. However, perhaps the most significant development of recent years has been the development of what is known as ALBA-the Alianza Bolivariana para los Pueblos de Nuestra América, which translates as the Bolivarian Alliance for the Peoples of our America. This is the brainchild of President Chavez of Venezuela. It originally had two member states, namely Cuba and Venezuela, and was based on an exchange of Venezuelan oil for medical staff and teachers from Cuba. Subsequently, Bolivia joined, followed by Nicaragua and Ecuador. Some smaller Caribbean states also joined.

Essentially, the aim of ALBA was an alternative to the US-led free trade area of the Americas known as LAFTA. Oddly, the Venezuelan wealth which is dispensed and accounts for the country's dominance of ALBA is almost entirely derived from oil exports to the USA. This form of authoritarian socialism-which is how I loosely describe it-involves the nationalisation of companies, the loss of independent media, manipulation of the constitution to provide continuous re-election of the President and the intimidation of opponents. Argentina is not a member of ALBA, but the Kirchner husband and wife team-who seem to alternate in power-follow the same precepts and policies as Chavez. Like it or not, ALBA is a reality. We need to understand it in this country, come to terms with it and work out how we can relate sensibly to it and do business there.

Fortunately, there are plenty of bright spots to compensate for the rather gloomy picture that I have painted. We have a strong relationship with Brazil, where President Lula will stand down in October after a most successful presidency, which included an important visit to Britain. As and when the UN is reorganised, surely Brazil should be one of the permanent members of the Security Council. I wonder when this will happen. Chile is a great success story, as is Peru. Colombia has just elected a new President in a huge turnout, with a massive majority in the second round. President Santos is no stranger to this country, where he lived for many years. I am sure our relations with Colombia will continue to prosper.

Mexico, the second most important Latin American country, is in a strong economic situation, but has major security problems due to infighting by the warring drug cartels. Central America is also extremely interesting as it is developing an integration process called Sistema de la Integración Centroamericana, or SICA for short, with a rotating presidency every six months. Currently, this is Panama, which will be succeeded by Belize on 1 July. In this country we have an all-party group which reflects this arrangement, which is very satisfactory.

I would like to go on, but wish to make one last general point. This year, 2010, is the bicentenary of the start of the independence movement in Latin America in 1810, in which Britain played a major role. Both Simón Bolívar in the north and San Martín in

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the south derived their philosophical ideas from the French revolution and their political support from Britain. With the exception of Portuguese-speaking Brazil, which did not become a republic until the late 1880s, all countries in Latin America are holding commemorative celebrations at various times, as are the Latin American embassies in London and the various bilateral Anglo societies.

The dream of Bolívar was of one great united Spanish-speaking region. It remains a dream and is, indeed, the aspiration of President Chavez of Venezuela. However, I contend that it will never be achieved through the imposition of authoritarian socialism. It may come eventually when all the Americas, north and south, unite in a common cause freely given. It also remains my dream, but I doubt that it will happen in my lifetime although it is a very worthwhile aspiration.

In my short speech I have tried to touch on a few aspects of this huge and fascinating subject-rather controversially, I fear, but that is the norm given my position in this House. I am happy to stand corrected by others who have different views. I will listen with very great interest to all that follows. I beg to move.

12.27 pm

Lord Garel-Jones: My Lords, I begin by paying tribute to the noble Viscount, Lord Montgomery, not just for initiating this debate but for his life-long promotion of Latin America in your Lordships' House. He is, as they would say over there, "un amigo leal y constante".

All of a sudden Latin America is in fashion. In my day job in the City, I am frequently approached by leaders of industry with the question, "Do you think we ought to be looking at Latin America?". The answer is yes, and it is hardly surprising if you look at what is going on down there. I wish to give a few snapshots. Peru's economy is expanding by more than 6 per cent and foreign direct investment will double in the next five years. It has investment-grade status. Colombia's GDP is expected to grow by 5 per cent in the next four years. It has never defaulted on a sovereign obligation and should recover investment-grade status any time soon. Chile has investment-grade status, no public debt to speak of, is a member of OECD and has a level of economic, political and social development which rivals that of most European countries. Growth is projected at around 4.5 per cent. Brazil is predicted to be the sixth largest economy in the world by 2015 and is the guardian of one of the largest reserves of natural resources in the world. Growth is predicted at around 8 per cent. Mexico is a member of the G20, is the eleventh largest economy in the world, a member of OECD and has a growth rate of 4.2 per cent. Even in these times of unprecedented difficulty, Argentina is tackling its debt overhang with the firm intention of returning to the international markets at the earliest opportunity. It has a growth rate of 5.5 to 6 per cent. I pick out just one of a whole host of smaller countries, Uruguay, with projected growth of 5.1 per cent this year. It is a small country but about as serious and proper a place as you could hope to find along with other smaller states such as Panama, which has

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investment-grade status, Costa Rica, which may become the first carbon-free country in the world, the Dominican Republic and others.

That economic success, as the noble Viscount pointed out, has been accompanied by democratic consolidation. In Brazil, the transfer from President Cardoso to President Lula has been exemplary and the upcoming elections will be hard fought, but with one certain winner-the democratic process. In Chile, the deservedly popular left-of-centre President Bachelet handed over to the centre-right President Piñera. It was a real sea change after 20 years of centre-left government. In Uruguay, there was no such ideological shift, but impeccable behaviour by both candidates. As the noble Viscount pointed out, this very weekend Colombia, a country that has been challenged by criminal terrorists for more than 30 years, has upheld its position as the most longstanding democracy in Latin America. There were two interesting and intelligent candidates; there was a proper campaign, a proper process and a President-elect Santos who is eager to build on President Uribe's record.

Noble Lords might think that people such as myself would be deeply satisfied. Well, not quite. Why, I ask myself, does this great continent with a gross domestic product, as the noble Viscount pointed out, that is almost twice that of India and only a tad short of China's, remain no more than a bit player in world affairs? Is there some congenital deficiency? By no means. If one steps outside the political world, in almost every other field of human endeavour, we are talking about first division players.

In literature, there are Octavio Paz, Neruda, Vargas Llosa, García Márquez and Borges. The only surprising thing is that only three of them have a Nobel prize. In art there are Botero, Diego Rivera and Oscar Niemeyer. In music, there is what is known as El Sistema in Venezuela, which is perhaps the most exciting classical music experiment in the world, embracing every town and village in the republic and showcased by the Orquesta Sinfónica Simón Bolivar, led by Gustavo Dudamel. The recent appointment of Sonia Sotomayor to the US Supreme Court is just the latest example of citizens of Latin American origin occupying the highest positions in the public, industrial and intellectual life of the United States. We are talking first division here.

So what is wrong? Why is Latin America no more than a bit player? Latin American countries are prisoners of the 19th-century Westphalian model of the nation state-as we all are, up to a point. Here in Europe, after the loss of 60 million lives in two world wars, we have begun to move on from that model. But it is difficult. How does one identify those areas where the pooling of sovereignty with others is the most effective way of advancing our interests and values without losing that all-important and underlying sense of belonging and social cohesion that the nation state provides? It is no easy task.

In Europe, we are moving in that direction. I will not dwell on our successes or many failures. Suffice it to say that Latin America has yet to embark seriously on that journey. For all the Mercosurs, the Andean pacts, the ALBAs, the ALCAs, the CAFTAs, the FTAAs, the bilateral free-trade agreements, and Brazil's

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membership of the BRICS, the continent remains a collection of 19th-century Westphalian states competing macho-like against one another. It would be impertinent of us here in Europe to lecture Latin America on how to go about its business. There are a number of senior prestigious former presidents- Bachelet, Lacalle, and Zedillo, who are soon to be joined by Lula and and President Uribe. My hope is that they might come together to start the process of really bringing this continent together, because we need them.

In another place, I was sometimes described by political foes as the "Member for Madrid Central". It was a badge that I wore with some pride. Spain and Portugal have led the effort to put Latin America on to the European agenda. However, as the noble Viscount pointed out, we British have a history there, too. The British Legions fought with distinction in the battles of Boyacá Carabobo, Pichincha and Ayacucho-earning for the British the title of "saviours of my country" from Bolivar. It was here in London that Bolivar, along with Miranda and others, planned the struggle for independence.

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