HC Deb 15 June 1995 vol 261 cc953-66

Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]

7.14 pm
Sir Thomas Arnold (Hazel Grove)

I am grateful for this opportunity to raise British policy towards the Caribbean. I shall focus on three issues this evening: first, the continuing problem of Cuba, not least in the light of legislation that is going through the United States Congress; secondly, Britain's constitutional relationship with the five dependent territories; and, thirdly, the difficulties that are clearly apparent with the export of bananas.

Before I deal with each of those issues in detail, I wish to propose an over-arching theme to my hon. Friend the Under-Secretary. The Caribbean covers a wide area. With the exception of Cuba, the population of most of the countries is small. Those countries are fragile and often find themselves in difficulty. They clearly need a lot of help and guidance. There is an overriding need for stability in the region. Many of the issues are complex and that complexity often leads to complications of some kind, as my hon. Friend knows only too well. Stability in the modern world does not mean a quiet life, even in the Caribbean, and the image that most people have of the Caribbean is far removed from the reality with which local residents must deal on a day-to-day basis. Stability therefore means a lot of hard work for those engaged in framing, executing and implementing policy. I urge my hon. Friend to promote a policy aimed at stability because I have doubts about the present policy, particularly with regard to the dependent territories, with which I shall deal later in my speech.

I draw the House's attention once again to Cuba, particularly the legislation that is going through the American Congress, which I regard as a retrograde step. That legislation is, I understand, making steady progress, although we cannot be sure exactly what form it will take by the time it emerges, or what the attitude of the United States Administration will be in the event of the legislation passing through Congress.

Before I go further, I wish to draw the House's attention to the declaration that I made in the Register of Members' Interests and make it clear that my host in Havana was a leading British business man, Mr. Michael Ashcroft, who is a keen supporter of the Cuban reform programme and who is engaged in business in Cuba.

On the subject of British business men in Cuba, I was extremely pleased to learn that British-American Tobacco and its chairman, Sir Patrick Sheehy, are now heavily engaged in investment in the Cuban economy. On a matter of more long-standing activity in Cuba, I should like to say how grateful I am personally for all the help and advice that I have been given by Mr. Nicholas Freeman, who has supported his Cuban business through good and difficult times, and who is arguably this country's foremost importer of Cuban cigars.

It is vital that the United States, in particular, should show a greater understanding of some of the issues involved in Cuba. I am a keen supporter of the reform process, and support just as keenly doing everything possible to improve human rights in Cuba. However, I doubt whether those two goals will be furthered in any meaningful way by the legislation currently before the US Congress; on the contrary, that legislation is likely to make life much more difficult. For one thing, it appears to have little flexibility. It has no end date. Obviously, the provisions regarding expropriation and compensation can be regarded as a retrograde step because they open the basis of expropriation and compensation to much wider actions than have been envisaged historically.

I was very pleased that the European Commission, in the figure of Sir Leon Brittan, made strenuous representations to the United States Government at an early stage. On several occasions, Sir Leon drew attention to the difficulties that the legislation was likely to cause European Community countries. He said that he believed that the new legislation, if enacted and implemented, might lead to legal chaos by extending US jurisdiction to possible, and as yet unregistered, property claims by US citizens who have held Cuban citizenship at the moment of compensation.

Sir Leon said: I think that these collective provisions will interfere with European Union companies and individuals doing business in Cuba, to such an extent that a negative spill-over into the overall transatlantic relationship appears unavoidable. I also think that the approach taken in this legislation would not help a peaceful and orderly transition towards democracy in Cuba. I agree with him about that.

I wish to draw the attention of the House to a statement issued by Mr. David Jessop, executive director of the Caribbean Council for Europe, in the US recently, in which he said: Attempts to prohibit the entry into the US of sugars, syrups and molasses from third countries unless it is certified that such products will not be imported from Cuba are to be deprecated. He said: The European Union and individual member states have already indicated that such measures violate international law, would be challenged under WTO rules and would lead to retaliation. In this and other contexts the bill runs counter to the US approach to free trade. I strongly agree with Mr. Jessop about that. I hope that, even at this late stage, the United States Congress and then the United States Administration will reconsider before going ahead with that further tightening of the United States' embargo.

Cuba, with a population of 10 million, is such an important entity in Caribbean terms that instability in respect of Cuba only helps to promote a feeling of uncertainty and instability throughout the region. All of us, including the United States, should work towards a solution to the problem of Cuba. We know that it is a difficult one in terms of the United States. We know that it engenders very high, passionate feelings, not least in Florida and in Miami. However, far from intensifying difficulties, surely the sensible approach is to try to persuade the Cuban Government to speed up the process of reform, to do more in respect of human rights and gradually to bring about an improvement so that there can be greater confidence and then, using those confidence-building measures, to promote an understanding between the United States and Cuba, which could lead to the dismantling of the present legislation and the lifting of the embargo.

I hope that my hon. Friend the Under-Secretary will be able to say, in this short debate, what the Government are doing to further the representations that were made earlier by the European Commission and, I believe, by officials from the Department of Trade and Industry, especially in Washington this year.

Let me move on to discuss the position of the dependent territories. I am not an expert in the matters to which I shall refer, but I have followed developments in the dependent territories and I feel a certain unease. All is not well. I feel that so strongly that I urge my hon. Friend to consider carefully—and perhaps not give me an answer tonight—whether the time has come to set up a further inquiry to consider the relationship of our Government with the dependent territories, including the constitutional position and our attitude to the possibility of further political reform.

I have taken a long interest, in the House, in the position of dependent territories. Indeed, I instituted an Adjournment debate about the Falkland Islands and other dependent territories as long ago as 1982. Given the problems of the Caribbean, the five territories for which we are responsible require more understanding than they are receiving at present. One of the complaints is that the secretariat in Barbados has distanced the dependent territories even further from London. On this reading, the secretariat is too bureaucratic, cautious and slow. I do not know how much weight to give to that criticism, but I suspect that there is some truth in it. I hope that my hon. Friend will comment on that point this evening and perhaps reflect on it further in due course.

The Government's policy is to promote self-sufficiency, but that clearly carries with it some considerable costs for the local governments, chief ministers and others as well as for our Government. The administration costs of the dependent territories are not negligible. In answer to a recent parliamentary question, I was told that those costs were about £20 million per year. We must consider that cost carefully in terms of value for money and whether our relationships are exactly as we would wish.

There is a feeling that the governors should consult the chief ministers about reserve powers more often than they appear to do. The chief ministers are not saying that those reserve powers should not exist, or that they should not be used if circumstances warrant it; however, they would like to have more say in how some of those powers are exercised. If we are to be creative and forward-looking and try to establish sensible arrangements that will take us into the next century in respect of the territories, we should establish an inquiry to examine the situation.

I shall not say what form I think that inquiry should take; the Government can decide perfectly well whether it should be a royal commission or something less grand. Perhaps a more informal inquiry would be appropriate. After all, what is sensible in one dependent territory may not necessarily be sensible in another.

What is interesting about the dependent territories in the Caribbean is that there is no great demand for independence. Therefore, we have to find ways and means, short of independence, of meeting the legitimate aspirations of the islands to govern themselves while at the same time remaining under the protection of the Crown and all that that affords.

I mentioned earlier the need for stability while recognising the problems of the islands. I think that those problems can be summed up in one word—jobs. The islands need jobs, jobs and more jobs. Although some of the larger investors, such as Cable and Wireless, should be welcomed and are important and significant, the overall employment picture remains difficult. Unless that problem is addressed, there will be no stability in the Caribbean.

The Caribbean continues to face real problems with illegal drugs. That should concern us greatly. I was certainly appalled to hear—I accept that it is only a rumour—that voices in the Treasury are suggesting that we should move the dependent territories towards independence on public expenditure grounds. I think that that would be a very unwise step, given what we know and what the Governments of the dependent territories, including the chief ministers, know about the difficulties that they face with regard to the importation of illegal drugs and the flow of those drugs through the territories.

Banking in the dependent territories is something of a hotch-potch. Different arrangements are in place in different territories, although that is not a bad thing in itself. The whole business needs greater clarity. Time is passing, and although I understand the Government's desire to ensure that things are done properly and that there are no grounds for believing that money laundering, for example, is taking place, more work needs to be done as soon as possible.

The time has come for us to make up our minds about the dependent territories and their form of government. What should their future status be? What relationship should they have with Whitehall? It is fair to say that Ministers have been repeating a certain mantra for some time, and fresh thinking is required because the problems to which I have referred will not go away. There is some uneasiness and a feeling that a new relationship needs to be developed.

That brings me to the difficult issue of the regime for bananas. I have had correspondence and briefing papers from the Caribbean Banana Exporters Association about the "banana crisis", saying: This is a time of great anxiety for the Caribbean—and particularly for those states whose economies are largely dependent on their banana exports to Europe. Their traditional market in the European Union—essentially in the United Kingdom—is under serious threat from political campaigns both in the USA and within the European Union. For some, notably the Windward Islands, this could mean the loss of almost 60 per cent. of all their export income. The association explains that Germany and some other member states, which hitherto had an unrestricted market, were opposed to the present system from the start and continues: More recently, at the behest of Chiquita, the world's leading banana trader, the USA launched proceedings against the European Union, threatening trade sanctions unless changes were made which would increase Chiquita's market share. This increase would in practice be at the expense of the Caribbean. Last week the new European Commissioner for Agriculture, Dr. Fischler, on a visit to the USA, made the astonishing public statement that he personally did not like the EU banana regime and would be seeking a mandate from the Agriculture Council in July to negotiate changes to it with the USA. He mentioned in particular the need to review the quota and other mechanisms which currently protect Caribbean and other African Caribbean and Pacific imports. The issue is extremely serious and I hope that my hon. Friend will make it clear this evening that the Government strongly support Caribbean interests in this matter. There is still a potential blocking minority under the European Union voting system, so we can stand firm by the present arrangements. In essence, I hope that the Government will give every signal that they intend to stand firm, in particular to avoid damaging arbitrary increases in the quota or changes to the preferential licensing arrangements.

I referred to the fragility of some of the Caribbean economies and the problems in respect of bananas illustrate that only too well. There are those who say that the situation is potentially dangerous and that the current United States threat will promote instability, further uncertainty and difficulties all round.

I recognise that some issues go way beyond the present position and touch on the whole nature of the European Community post-Lomé IV and the thinking on and relationship with the Caribbean region. Current thinking appears to favour specific regional agreements in which the Caribbean and central America will be treated in much the same way through advanced co-operation agreements. There are some difficulties with that approach. Above all, it is essential that whatever is decided should take account of the different sizes of the Caribbean economies.

France and Germany have already begun to consider post-Lomé IV relations with the Caribbean. I should be grateful if my hon. Friend could say what work is in hand with regard to Britain's interests in the matter and what line he is taking in Brussels. After all, future policy for the Caribbean will be decided, I suspect, as much in Brussels as it will be here and in other EC capitals. That is the nature of the relationship into which we have entered with our EU colleagues. I should be grateful if my hon. Friend will outline the manner in which he proposes to negotiate in the Community on these problems. The difficulties of the banana-producing countries are real and urgent, and solutions are necessary.

To conclude, let me go back to the beginning and say that a policy that produces stability, however paradoxical it may sound, will be an active policy. Implementation will require a good deal of thought and care, not least because of the complexity of the issues.

I recognise that the difficulties surrounding Cuba are formidable, but if we do not face up to them, and if Britain does not have a clear, coherent policy, that will only magnify some of the other problems in the region. We have already seen what the Cuban refugee problem can mean in the case of the dependent territory of the Cayman Islands. My hon. Friend may be able to say a word about developments in that regard. I understand that the situation is now much better; I would be grateful for my hon. Friend's confirmation of that.

Above all, I should like to make it clear that I would like to see the Caribbean in an optimistic, settled frame of mind, with some of the problems to which I have referred this evening being attenuated by a mixture of wise policy and constructive, good government. The region needs help. for the reasons I have given. I know that the House and the Government want to do everything possible to bring that about.

7.36 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry)

I am grateful to my hon. Friend the Member for Hazel Grove (Sir T. Arnold) for initiating this debate. The Caribbean is a diverse and exciting region, and we take it very seriously. After all, we have long-standing friendships with all the Caribbean, and a quarter of the members of the Commonwealth are to be found there.

The Caribbean is a significant market, too. Taking trade and investment as a whole, the Caribbean is a large market for the United Kingdom, accounting for £1 billion of visible exports last year. Non-oil exports have risen from £400 million a few years ago to £700 million last year, and we have an estimated £2.7 billion-worth of investment in the region.

In addition to our trade links, we maintain close links in other ways with all the countries of the region—the human links represented by Caribbean communities in this country, for instance. There are continuing close associations in many areas such as law and education, and we give and receive close support to and from our Commonwealth colleagues in the Caribbean.

My hon. Friend the Member for Hertford and Stortford (Mr. Wells), chairman of the all-party Caribbean group, who is also present, could testify to the fact that the Commonwealth countries in the Caribbean support us. I hope that we support them as well.

I shall say a little more about bananas later, but I think that Commonwealth colleagues would recognise that we have been in the forefront of seeking, in the EU, to represent their best interests when it comes to commodities such as rum; and we have been staunch defenders of the EU banana regime, not least because we see it as a way of helping to represent not just our interests but those of our friends in the Caribbean.

I am glad to say that our Commonwealth colleagues there give us support, too. We received close support from them recently in the United Nations. Two recent examples are the extension of the nuclear non-proliferation treaty and the CARICOM contribution to the solution of the Haiti crisis.

Traditionally, we have strong links with many countries in the Caribbean. Although they have mainly been with the Anglophone parts of the Caribbean, we are understandably paying increasing attention to the Hispanic-speaking countries.

Ms Diane Abbott (Hackney, North and Stoke Newington)

The Minister must be aware of the feeling in the Caribbean nations that, as Britain has become more involved with new friends in the European Union, it has become less concerned about the weakening of links with old friends in the Caribbean. I hope that he will accept that people of Caribbean origin in this country are very worried about Her Majesty's Government's policy on the Caribbean, and want the Government to use their influence in the United States to ensure that its Cuban policy is driven less by domestic electoral concerns and more by concern about the stability of the region.

Mr. Baldry

I think that the hon. Lady is mistaken. We have a close and continuing relationship with the Caribbean, and I do not believe that a single Caribbean country feels that Britain's attention to the region has lessened. Indeed, I think that most Caribbean Commonwealth colleagues recognise that Britain is unique in being a member of both the Commonwealth and the European Union. On many occasions—the recent negotiations on rum provide a straightforward example—that has enabled us to articulate the best interests of Caribbean Commonwealth colleagues in the European Union.

I shall deal with Cuba shortly. I do not think that hon. Members are likely to fall out on that subject, but I also do not think that any suggestion that Britain has other than a close and continuing friendship with the whole Caribbean region can be sustained. As my hon. Friend said, we still have some continuing and specific responsibilities for our five dependent territories in the region: Anguilla, the British Virgin islands, the Cayman islands, Montserrat and the Turks and Caicos islands.

My hon. Friend raised three specific issues. The first was Cuba. The situation in Cuba is changing—for the better, we hope. A number of useful visits have been made by, for instance, my hon. Friend the Parliamentary Under-Secretary of State for Trade and Technology. That was a welcome first visit. We hope that economic reform in Cuba will continue; we also hope that political relations will progress in tandem with our improving trade and investment links. While we have made some headway, we still have our differences, human rights and fundamental freedoms being areas of particular concern; but, despite those difficulties, we are making progress, and I hope that that encouraging trend will continue.

Because we do not believe in the desirability of isolating Cuba, we cannot share the views that lie behind the Helms-Burton legislation recently introduced in the United States Congress. Unfortunately, the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who asked about Cuba, has disappeared; if she were here, I hope that she would be reassured to learn that we are strongly opposed to the extra-territorial provisions of that legislation, and have supported the efforts of Sir Leon Brittan to bring home to the American Government the damage that the legislation could cause to world trade. The response of the US Administration clearly reflects the representations that we and our other partners have made.

As I said earlier, although our traditional links have been with the Anglophone part of the Caribbean, we are very conscious of the increasing importance of the Hispanic-speaking countries. For that reason, we not only pay more attention to Cuba, but—I am glad to say—have decided to reopen our embassy in the Dominican Republic.

I pay tribute to the sterling efforts of our honorary consul in Santo Domingo, Maureen Tejada, who has maintained our links with the country and facilitated the efforts of United Kingdom business men there, as well as looking after the increasing number of British tourists. We all owe her a great debt, and I am delighted that we shall soon send an ambassador to the Dominican Republic again.

I also pay tribute to Dr. Ian Court, our other honorary consul of note in the region—in San Juan, Puerto Rico—who has contributed significantly to the upsurge in our commercial relations with Puerto Rico.

I would also like to mention the work done by Margaret Guercy, our vice-consul in Port au Prince, who is currently in the United Kingdom on a well-deserved visit after the difficult times which Haiti went through last summer. We have recently sponsored an important visit to London by a leading figure in the new political scene in Haiti. We hope that the elections that are due to take place there will soon help to improve stability, because, as my hon. Friend said, what we all wish to see in the Caribbean region as a whole is stability.

The Caribbean dependent territories are all specific and all different. Taking them from west to east, the Cayman Islands has long since been weaned off direct aid and now has a higher GDP per head than Hong Kong or Singapore. However, the Turks and Caicos Islands are still dependent on British aid, although they have recently made considerable strides through the development of tourism and offshore finance.

As I will make clear in a moment, it is important that offshore finance should be properly regulated, or the results may prove counter-productive, as happened in the past. The situation in the Turks and Caicos is now much healthier than it was in the late 1980s, when, as some hon. Members may remember, there were a number of unfortunate difficulties.

Offshore finance and tourism have also been the making of the British Virgin Islands, which is now broadly self-sufficient and no longer reliant on significant United Kingdom aid. I take this opportunity to pay tribute to the Government of the British Virgin Islands, and in particular to the late Chief Minister, Lavity Stoutt, who sadly died recently and who did so much to encourage the development of his territory.

Anguilla has a population of only 9,000 and although it has also been successful, small islands such as these have special problems in providing essential Government services and maintaining the infrastructure for their development. That applies also to Montserrat, where our aid programme is making an important contribution.

By providing manpower and expertise in areas such as the budget, auditing, police and customs, we can improve the quality of government in the dependent territories. This is essential, because the future of the territories, whether they decide to move to independence or not—and we have made it clear that it is their decision—will inevitably depend on their being well run.

My hon. Friend asked whether I might undertake a review of the dependent territories. I think that the definitive text on our approach to the dependent territories was given by my right hon. Friend the Member for Enfield, North (Mr. Eggar), one of my predecessors as Under-Secretary of State, who, in December 1987, said in reply to a written question: Following the concern expressed within the Commonwealth about the security of small states, and the suspension of ministerial government in the Turks and Caicos Islands, we have conducted a review of policy towards our five Caribbean dependent territories and Bermuda. We did so in the light of our commitment to the principle of self-determination and our determination to live up to our obligations under the United Nations charter, and our responsibilities for the good government and development of the dependent territories. The review concluded that we should not seek in any way to influence opinion in the territories on the question of independence. We would not urge them to consider moving to independence, but we remain ready to respond positively when this is the clearly and constitutionally expressed wish of the people. That is still exactly our position today.

My right hon. Friend continued: As a result of the review, we are, however, implementing a number of administrative measures to improve the effectiveness with which we discharge our obligations to ensure the good administration, and economic and social development of the dependent territories. The reasonable needs of the dependent territories will continue, as before, to be a first charge on United Kingdom aid funds."—[Official Report, 16 December 1987; Vol. 124, c. 574.] We have since then sought to make a number of changes to improve our relations with the dependent territories. For example, a little while ago, we instituted a dependent territories ministerial group. It is a ministerial group that meets regularly twice a year to discuss developments in the territories. A number of ministerial colleagues who are members of the group have visited the Caribbean and take an active interest in the dependent territories.

For example, in April my hon. and learned Friend the Solicitor-General attended a meeting of the Attorneys-General of the five Caribbean territories and of Bermuda; and my hon. Friend the Parliamentary Secretary to the Lord Chancellor's Department has recently been to Montserrat and Anguilla to examine some of the problems and requirements of the judicial system there.

As has been said, we also set up a regional secretariat for the Caribbean dependent territories based in Bridgetown alongside the British development division in the Caribbean. The secretariat concluded formal agreements with the majority of the Caribbean dependent territories to ensure that our aid is well planned and properly spent, and that it achieves value for money.

My hon. Friend the Member for Hazel Grove suggested that the secretariat has tended to increase the administrative distance between London and the dependent territories. Having had the opportunity to visit all the Caribbean dependent territories and the regional secretariat in Bridgetown, I am bound to say that I cannot accept that suggestion.

I pay close attention to the maintenance—of direct and close links with Chief Ministers. Last October, I attended the annual meeting in Montserrat of Chief Ministers and Governors. At the end of this month—very shortly—I hope to see many of the Chief Ministers again in London.

In connection with that visit, we have encouraged the Commonwealth Development Corporation to organise an investment seminar, which I hope will help some of the dependent territories in their search for inward investment. I also intend to go to Brussels with the Chief Ministers and Governors to seek greater support from the European Union for our dependent territories in the Caribbean.

The Government have paid and continue to pay close attention to the needs of the dependent territories. I take this opportunity to thank the Governors and the heads of regional secretariats for their efforts. I also pay tribute to the work being done by Chief Ministers and others within the dependent territories to ensure the continuing prosperity of their own territories. However, we shall, of course, continue to ensure that our international obligations are adequately discharged at a reasonable cost to the British taxpayer, and that the contingent liabilities associated with these territories do not increase.

There are no plans to change the constitutional relationship between the Government and the Caribbean dependent territories. It is certainly not in the interests of good government to contemplate a further devolution of powers to Caribbean dependent territories. That would leave us with full responsibility, but without the power to discharge that responsibility properly.

My hon. Friend mentioned reserve powers. There is an enormous amount of misunderstanding about these powers, which are, by definition, powers in reserve for the Governor to use if the Government of the dependent territory involved do not discharge their responsibilities properly. There should be no need to discuss the reserve powers with the Governor if a territory has been properly governed and run.

Of course, from time to time the dependent territories have problems that are wholly outside their control. My hon. Friend mentioned the problem of illegal migration. Two of the dependent territories have recently been affected by serious influxes of economic migrants.

Last summer, the Cayman Islands received almost 1,200 illegal immigrants from Cuba within a matter of days. That figure must be put against a resident population of only 30,000. I am glad that, as a result of the intense and humane efforts of the Governor and the Government of the Cayman Islands, and with the help of our partners in the United States, the figure has subsided significantly. Indeed, I think that almost all the economic migrants have left and gone elsewhere to settle.

I pay tribute to everyone in the Cayman Islands who helped to deal with that extremely difficult human problem sympathetically and in a humane way. It is a matter of some note that one could have had that influx of migrants without it attracting any press attention here or elsewhere, so well was it dealt with.

In the Turks and Caicos Islands, there have been several waves of illegal migration from Haiti. Just after Easter, we took action again, with the help of our United States friends, to try to curb the latest flow, but as long as conditions in Cuba and Haiti remain difficult, the potential problem is likely to remain.

The last substantive issue that my hon. Friend mentioned was that of bananas. Let me make it absolutely clear to him that we have taken, and will continue to take, an active role on that issue in Brussels and in Washington. It is an important issue. I held a meeting with the leaders of the four Windward Island countries mainly concerned, when I was in the Caribbean to attend the biennial conference of our heads of mission earlier this year. The Windward Governments have accepted the recommendations of a study funded with British aid money, which sets out a comprehensive strategy for restructuring the industry, to make production more efficient and competitive. That is beginning to happen in the Caribbean, for example, with Jamaican bananas. We are also working closely with the local European Union aid office to ensure that European Union funds available for restructuring, such as STABEX, are used to maximum effect.

We have worked hard to secure an increase in Belize's annual quota, and the 15,000 tonnes allocated in January are a step forward. But we are also supporting amendments to the banana regulation currently under discussion in Brussels, which would bring additional benefits to Belize and other Commonwealth Caribbean producers.

If bananas fail and if there is not sufficient economic diversification, there is always the danger that we shall start to see an increase in the trafficking and production of illicit drugs, so we must ensure that we do all that we can to help promote an environment that allows the Caribbean to prosper through equitable trading arrangements with us and north America.

Ms Abbott

The Minister, I hope, will not need me to remind him that, for many of the Leeward Islands, bananas represent the greater part of their foreign exchange and are important creators of work, which is so important in creating social stability. The Minister talked about restructuring, but at the end of the day bananas from the Caribbean cannot compete on a level playing field with bananas from south America, because the plantations will always be at an advantage compared with the small family allotments in the Caribbean. What are the social consequences for the Caribbean of the collapse of the banana industry and the failure of Her Majesty's Government to support it?

Mr. Baldry

The hon. Lady has been in and out of this Adjournment debate like a yo-yo. I would be prepared to listen to her advice on the Caribbean a little more closely if she was at least able to tell the difference between the Windward and the Leeward Islands.

Ms Abbott

Will the Minister give way?

Mr. Baldry

No.

We are also encouraging diversification in the Caribbean economies and are generous in our aid for that. I note that the new Prime Minister of Dominica, who was elected earlier this week, is a specialist in agriculture and, of course, we wish him and his new Government well. I take this opportunity to pay a public tribute to the achievements of his predecessor, Dame Eugenia Charles. The Commonwealth and Commonwealth meetings will be all the poorer for the loss of her presence.

One has to remember the dynamics of the situation that underlies the whole issue of bananas in the Caribbean. If access is reduced, farmers will go out of business, and the World bank has made some bleak forecasts in that respect. But the volume of bananas to be transported will also be reduced, and that will make their transport less economic, which will, in turn, increase the unit costs. Moreover, if fewer boats call, it will be more difficult to ship any alternative products, such as passion fruit, and the chances of a successful diversification strategy replacing the banana industry will be correspondingly reduced.

Those are the economic facts, and I do not think that anyone can be in any doubt as to why we support, and will continue to support, the EU banana regime and why we support, and will continue to support, Commonwealth Caribbean colleagues whose livelihoods are largely dependent on bananas. But they must recognise, as we recognise, that their banana industries have to become as efficient as possible.

We all recognise that we must maximise the potential for economic diversification in the region and, of course, there is much successful diversification in the Caribbean. One aspect of that is the growth of offshore banking and financial services, and the development of those services has made an enormous difference to the well-being of many people in the region. There are dangers that the opportunities provided by those services will be abused and will threaten them. We have paid special attention to that and a full-time expert is attached to our mission in Bridgetown, to advise on and improve the necessary safeguards.

All our Caribbean dependent territories now operate banking guidelines that are based on the Basle principles. We are discussing the introduction of legislation on regulatory co-operation and international businesses and exempt companies. Our success in deterring shady dealing was amply demonstrated in recent months by the closure of the Guardian bank in the Cayman Islands and the anti-money-laundering operation that was mounted so effectively with the aid of the United States authorities and the diligence of the Governor in Anguilla. There is an increasing realisation that the key to building a sustainable and successful offshore financial industry is to have effective and transparent regulations.

There is always a suspicion that the financial regulations that every dependent Caribbean territory has to introduce are in some way tougher than those that are introduced by other such territories. That is not the case. We want to ensure that every dependent Caribbean territory has tough, proper financial regulations, so that there is only sound money in those islands and there is no suggestion of bad money coming to them. That must be in the interests of those territories and I am sure that they recognise that.

One of the reasons for the offshore financial industry suffering an unsatisfactory image in the past is that it can offer opportunities to drug dealers and other criminals to support their illegal operations. The cultivation of drugs in the Caribbean is not high despite the natural advantages of climate, but the area has become a significant conduit for the transport of drugs between the major sources of supply in south America and the major market for narcotics in north America and Europe. There have, for instance, been some very large seizures in the waters off the British Virgin Islands. We are providing considerable assistance to both independent and dependent territories in the region to combat that threat. The West Indies guard ship has played an important role in that connection, often co-operating with other Governments who have interests in the area such as the American, French and Dutch Governments.

At our suggestion, the United Nations international drugs control programme organisers will hold a workshop in the region later this year to agree further practical anti-narcotics measures.

There are many challenges ahead in the Caribbean, and probably the most important of them is to encourage good government. Without that, dependence on aid and drugs will be difficult to avoid. For example, it is better to have trade in bananas than unproductive aid that might be channelled into unsatisfactory activities such as drug trafficking or money laundering. The North American free trade area is a significant new factor in Caribbean trade. The key to the Caribbean's response will be the ability of all its diverse elements to overcome traditional differences. For that reason, we are watching with close interest the formation of the Association of Caribbean States.

We already give strong support to the Caribbean Community and Common Market, the Organisation of Eastern Caribbean States and the regional security system. In that context, we have maintained a British military advisory and training team based in Barbados. We also maintain a naval presence in the Caribbean and the guard ship has played an important role not only in relation to the defence of Belize but recently in connection with the Haiti crisis. In London, we continue our grant to the West India Committee and I hope to see the leading members of that committee again next week.

I hope that I have answered all the questions of my hon. Friend. If the hon. Member for Hackney, North and Stoke Newington wishes to ask a final question, I should be glad to try to answer it.

Ms Abbott

The Minister was dismissive of my remarks earlier, but I am anxious that Her Majesty's Government, in their policy formulation in relation to the Caribbean, take the interests and genuine concerns of people of Caribbean origin living here as seriously as the interests of business people. I re-emphasise that there is a genuine concern and wish that we be taken seriously when we speak out about our relatives and interests in the Caribbean, just as business men are taken seriously.

Mr. Baldry

I am amazed that the hon. Lady should feel it necessary to make such a point. Let me take just one example: the Caribbean dependent territory of Anguilla. I have probably seen far more members of the Anguilla community resident in the United Kingdom than people with business interests in Anguilla. As I made clear earlier, in this country, a large population of Caribbean origin obviously take a close interest in what takes place in the Caribbean and we pay considerable respect and attention to their views, but anyone who has any knowledge of the Caribbean, and particularly of the Commonwealth Caribbean, will recognise that the UK is, has been and continues to be at the forefront of being a friend to those countries.

The Caribbean is an important region to us. We have many friends there. It will continue to be an important region to us and I am confident that, as we go into the 21st century, we shall continue to have many friends there.

Question put and agreed to.

Adjourned accordingly at six minutes past Eight o'clock.