HC Deb 18 May 1993 vol 225 cc205-11

As amended (in the Standing Committee), considered.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Lennox-Boyd.]

6.52 pm
Mr. Allan Rogers (Rhondda)

I should like to reiterate Opposition support for the Bill, which is designed to provide compensation for those unfortunate people affected by Saddam Hussein's brutal invasion of Kuwait. We hope that the Government and the United Nations Compensation Commission will give priority to dealing with the claims as speedily as possible.

The hon. Member for Southampton, Test (Mr. Hill) has been assiduously pursuing for a long time the claim of one of his constituents, Mrs. Major. I congratulate him on that. Can the Minister tell us when that case is likely to be given some priority in the compensation process?

In Committee, fundamental questions were raised. Although the Minister answered each point, a number of his replies were inadequate, perhaps because the relevant facts were not available. Perhaps the Minister can now provide us with up-to-date information on the major outstanding issues.

I expressed concern in Committee about the funding of the claims. United Nations resolution 687 called for a percentage of Iraq's oil revenue to be held back and paid into a fund from which people entitled to compensation would receive their money. As I understand it, however, no money at all has been paid into the fund, other than $21 million sequestrated by the American Government from funds that were already in the United States of America.

What new measures do the Government and the United Nations propose to introduce to enforce United Nations resolution 687 in respect of oil sales by Iraq which are in direct conflict to it? The terms of the resolution lay down that all sales of oil ought to be through, or supervised by, the United Nations, so that 30 per cent. of the revenue will go towards compensation. The issue of oil sales by Iraq was raised in Committee, and the Minister stated that there was some evidence at that time that Iraq was illegally and improperly subverting the resolution by selling oil, either directly or through other parties. Can the Minister elaborate briefly on that?

Unless some action is taken, I fear that the constituent of the hon. Member for Test is unlikely to receive any money. The Minister mentioned in Committee that $21 million had been sequestrated by American officials from Iraqi assets. Is it possible for us to do some sequestration? Certainly, when it came to the funds of the miners' union during the miners' strike, the Government were able to introduce legislation very rapidly to sequestrate the miners' assets; perhaps they could show the same assiduousness in sequestrating the assets of Saddam Hussein. The Government probably regard the miners of Great Britain as a much greater danger than Saddam Hussein. Will the Minister tell us whether we, or any other country involved in this problem, intend to take the same action as the United States?

The significance of those questions is obvious because unless adequate steps are taken to ensure the proper funding of the United Nations Compensation Commission, any debate that we have here or elsewhere on the mechanics of dealing with individual claims or claims from businesses and companies will be academic. The claimants include businesses that lost out when they were taken over in Kuwait and businesses that believe that they lost potential work when Saddam Hussein invaded.

I understand from the statistics given in Committee that, of the 3,000 United Kingdom claims—2,000 from individuals and 1,000 from companies—about 1,000 only have been processed by the United Nations Compensation Commission. I wonder whether the Minister can clarify why just one third of those claims have been forwarded by the Government.

Under the Bill, as drafted, the process for compensation was fairly slow but the Bill, as amended, now adds another dimension to the compensation process, because a claim must go through the Government to the United Nations Compensation Commission. If the process becomes even slower, it will be an awful long time before people get the money to which they are entitled.

Can the Minister provide a breakdown of the number of United Kingdom claims that are now being actively considered by the commission? That information would enable us to determine whether the Minister's strong commitment in Committee—to the effect that, if compensation were paid out, it should be paid to individuals first and then to companies and businesses—had been upheld. I understand that the United Nations resolution encapsulates that principle, but the only way in which it can be properly implemented is by monitoring the process properly. Are those expedited categories being monitored now?

The Opposition welcome the aims of the Bill, but it is important that UN resolution 687 is enforced, otherwise the structure of the UN Compensation Commission and the reason behind the Bill will be undermined. We are anxious to ensure that the commission continues to operate on the criteria it was set up to serve, namely, to compensate all those affected—physically, mentally and financially—by the brutal aggression pursued by Iraq and Saddam Hussein in the invasion of Kuwait.

7 pm

Mr. James Hill (Southampton, Test)

The case I wish to raise has been going on for some time, and I will describe the background. An ex-sergeant in the Royal Engineers and his wife and daughter went to Iraq and stayed in Baghdad. He worked for a civil engineering firm named W. S. Atkins. When he wanted to leave, Saddam Hussein said that the would let only the wife and daughter go. The man was kept prisoner and, shortly afterwards, died of a heart attack.

Mrs. Major, the lady in question, suddenly found that, from having a very adequate income, she had none at all. The authorities foreclosed on her home in the United Kingdom. The family had a retirement home in Spain in which she intended to live, but the authorities foreclosed on that, too. The civil engineering firm acted in a very honourable way and helped as much as it could, but at the end of the day, the family was left penniless.

I have with me a letter from the Foreign and Commonwealth Office dated 27 August 1992. Although it made clear that the Department was processing the claim—I accept that it was helpful, and I thank the Minister for his help in the matter—it said in the last paragraph: Every possible pressure is being maintained by the United Nations Security Council, to ensure that Saddam Hussein fulfils all the international obligations he has brought upon himself". We have reached the stage where the family has received every possible help from the Soldiers', Sailors' and Airmen's Families Association and is now living in penury. That is not a good reward for a British citizen who went out to work for an engineering company. I get the impression that without a debate such as this, there would be no movement towards fulfilling what I regard as a moral obligation to help many individuals.

I agree with the hon. Member for Rhondda (Mr. Rogers) that it must be a priority that individuals and families are compensated ahead of companies, many of which had great losses. We are talking about many millions of pounds. If Saddam Hussein were the sort of person one could approach, he could be asked for, say, 10 million barrels of oil to put into the compensation fund. But he has no regard for anything other than himself.

It was the worst possible scenario for the end of the Gulf war to leave that man in charge. We are not getting anywhere with him. I am sure that the Minister will say that Hussein will in no way compensate anyone and that we can only hope that the Government who comes after him will be more amenable. I wait anxiously for the Minister's response.

7.3 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd)

It might be helpful if I reply to this short debate by bringing hon. Members up to date on the current situation in regard to claims for compensation. I shall, in particular, refer to the constituency case raised by my hon. Friend the Member for Southampton, Test (Mr. Hill) and the points raised by the hon. Member for Rhondda (Mr. Rogers).

I assure the House that the Government are doing their utmost, in concert with their coalition partners and through the United Nations, to ensure that compensation is paid at the earliest possible time to the claimants. As my hon. Friend the Member for Test recognises, against the obduracy of Saddam Hussein, it is not possible to say when that compensation will be available. But I can report the procedure and the up-to-date situation relating to the claims, which hon. Members will be reassured to hear are proceeding, even though there are by no means sufficient funds available at present for the payment of compensation to all the claimants.

The administrative arrangements in the United Nations Compensation Commission have progressed well since the cease fire in 1991, and particularly during the last 12 months. We have seen the establishment, first, of the claims criteria and, secondly, of the rules of procedure for assessing claims. Those two developments are significant. In the context of claims against other sovereign states for which I am responsible in the Foreign Office, the speed with which the machinery has been set up and the establishment of the rules for assessing claims has been quick in comparison with other situations.

After the establishment of the claims criteria and the rules of procedure for assessing claims, we have the commission, which is already working on a preliminary assessment of the claims it has received. In March, the commission gained approval for the appointment of a first panel of commissioners who will carry out the main assessment of claims.

We have no problems with the proposed method of assessment of claims which, in the case of individual claims, will involve the use of a comprehensive computer system. Legal officers of the commission will enter all the information on the claim forms into the computer. The commission is supported by experts, who will thus be able to deal with a large number of claims quickly, as a result of the expedited procedures. We hope that the form of assessment will commence in September and November of this year. That is when the commissioners are first due to meet to consider the assessment of claims.

We do not have sufficient funds available in the United Nations escrow account to pay all the claims. The hon. Member for Rhondda invited me to comment on how Iraq is surviving in the face of United Nations sanctions preventing the sale of oil, except through the procedures allowed by United Nations resolutions. We have no firm evidence to indicate that Iraq is exporting oil in breach of sanctions, but we have made clear to the Iranians and all Iraq's neighbours our views about the need to uphold the sanctions regime.

We are determined to keep up the pressure on Iraq to implement all the relevant Security Council resolutions in full, but Iraq continues flagrantly to deny United Nations authority across the board. We do not believe that any sanctions should be lifted until Iraq complies fully with all the relevant sanctions.

Mr. Rogers

The Minister said in Standing Committee: Iraq has not started to sell oil in the world markets under United Nations resolutions. I believe that the Iraqi Government have sold some oil outside United Nations monitoring, but they have not started to comply with United Nations resolutions." — [Official Report, Standing Committee D, 2 March 1993; column 7.] I gathered from that statement—the Minister would not have made it without some backing—that the Government had some evidence that Iraq was getting round the UN resolutions, under which Iraq is entitled to export $1.6 billion-worth of oil to pay for its own needs. If Iraq is selling substantial amounts of oil, the 30 per cent. due in compensation should be collected.

Mr. Lennox-Boyd

I answered the hon. Gentleman's question. I shall comment on the $1.6 billion-worth of oil that Iraq is entitled to export under UN resolutions to place into the escrow account so that 30 per cent. is available for compensation.

With regard to the availability of funds, as I have said, there is not enough money in the kitty to fund the compensation commission's activities. As the hon. Member for Rhondda said, there is $24 million worth of funds available for the compensation commission, largely from frozen Iraqi assets, as authorised under Security Council resolution 778. Those funds have originated from Kuwait, Saudi Arabia, United States and from Japan. For the moment, that will be enough to maintain the commission and to get the assessment process off to a good start which is an essential preliminary to payments being made. We expect that more funds will become available in due course via the sequestration route, although how much is not clear.

The hon. Member for Rhondda inquired about the position in Britain, and I wish to comment on the position in respect of sequestration in Britain. Under resolution 778, the United Kingdom can take similar action. To give effect to that resolution, an Order in Council was laid before the Privy Council on 12 May. That will come into force on 24 May.

That Order in Council provides powers to identify funds that represent the proceeds of oil sales and to sequestrate those unencumbered by third party claims for transfer into the United Nations escrow account. However, the difficulty is determining whether they are encumbered by third party claims. The Bank of England will have to investigate that and, under the Order in Council, it has power to ask financial institutions to identify funds. Those investigations will take a considerable time and I am afraid that we will not have the results before the end of the year.

With regard to any assets that could be sequestrated in Britain, I should say—and it would be wrong of me not to—that the judgment at the moment, although full investigation will confirm whether this is the case, is that 100 per cent. of the Iraqi assets held in the United Kingdom will be subject to prior claims. With regard to assets in Britain, claimants will have to await the payment of funds by Iraq into the compensation fund as provided under the resolutions.

Mr. Rogers

The Minister's first point filled me with great joy. I was pleased that an Order in Council was finally available, although very late in the day in comparison to the Americans, to allow the sequestration of those funds. However, the Minister then said that there are claims on those funds so the money will not be collected.

If the present $21 million is not sufficient to pay any claims, but is simply money to run the commission, perhaps the Government should consider sequestering that money to pay British nationals under the Foreign Compensation Act 1950 instead of allowing the money to fund a massive commission. As I understand it, representatives of 15 different countries have set up a huge superstructure which is sucking in $21 million. That money is not enough to run the commission and the sequestrated money will not go to claimants such as the constituent of the hon. Member for Southampton, Test (Mr. Hill). Instead, it will simply be used to run the machine.

Mr. Lennox-Boyd

That is not true. The hon. Gentleman is aware that we are dealing for claims for the whole world. Sequestrations from the United States, Japan, Kuwait and Saudi Arabia are going into the fund for claimants from all over the world.

I want to consider the precise position with British claims in terms of timing. We are about to send our ninth batch of claims to Geneva. Some 2,575 claims will then have been dispatched relating to 1,900 claims. We are in correspondence with another 800 to obtain additional evidence for clarification of various points. Only preliminary processing has been carried out in Geneva as yet and that has not covered all the claims that have been sent. All the claims are being dealt with in order of receipt and there are huge numbers of them. The process is set in motion and, as I have said, from September and November, the commission will be at work and we hope that, within a few months after that, we will see its determination.

The hon. Member for Rhondda and the world are aware that determination depends on the payment by Iraq in compliance with United Nations resolutions. We must keep the pressure up to bring that payment about. There is no other way in which claims can be met save by Iraq observing the United Nations resolutions so that claimants all over the world—not just in the United Kingdom—can have their claims assessed and then met. We must keep up the pressure to that end.

The Bill is an undoubted asset in pursuing that end. When the Foreign Compensation Act was passed in 1950, it was not expected that there would be a situation in which compensation would have to flow from an international organisation or tribunal. Under the provisions of UN Security Council resolution 687 of 1991, the Security Council set up the United Nations Compensation Commission and fund to receive claims for damage or injury to individuals, Governments or corporations as a result of Iraq's unlawful invasion and occupation of Kuwait.

We hope that in most cases it will be possible for the Government to pass that compensation on directly to British claimants. However, there may be circumstances in which it would be appropriate for the Foreign Compensation Commission to conduct further adjudication of the claims and to distribute compensation between British claimants. The Bill will enable the Foreign Compensation Commission to do just that.

In conclusion, I want to comment specifically on the constituent of my hon. Friend the Member for Test. He graphically described the distress of Mrs. Major and his sentiments were supported by the hon. Member for Rhondda who also raised the case of poor Mrs. Major who was bereaved as a result of her husband's death from a heart attack while being held hostage.

I am aware of that unfortunate case. It took some time, with the assistance of her husband's former employers, to establish the details of her claim. However, all her claims were sent to Geneva on 20 April. They have reached Geneva and they will be in the process which, as I have said, will take place from September. The criteria have been established for the method of approaching the claims and it is now up to the United Nations Compensation Commission to decide whether to make an award and, if so, how much, in accordance with the procedures that will take place from late summer onwards and in accordance with the procedures that will be adopted for the other cases before the UNCC.

As I have said, the United Kingdom Government have complied fully with all the necessary preliminary work and have sent Mrs. Major's case to Geneva for consideration. On that note, I recommend to the House that the Bill be read a Third time.

Question accordingly agreed to.

Bill accordingly read the Third Time, and passed with an amendment.