HC Deb 16 October 1996 vol 282 cc756-77

11 am

Mr. Jacques Arnold (Gravesham)

I am most grateful to Madam Speaker for granting this Adjournment debate, the latest in the current Session, on Britain's relations with Latin America. This is the ninth successive yearly debate that we have had on Latin America, a tradition started in the House in 1988. It is interesting to contrast the debate those nine years ago with the debate today, based on the situation in Latin America in those years.

Nine years ago, we were viewing the early stages of a return to democracy and the demise of the dictatorships that so stained the reputation of Latin America. The House itself was involved in heated ideological warfare with Chile on the one hand and Nicaragua and Cuba on the other, and Latin America was then a byword for high inflation. Today, we debate Latin America against a background of stable economies and stable Governments. It is interesting that the recent great political pressures in Venezuela and in Paraguay did not lead to the traditional overthrow of the Government and imposition of a dictator.

In recent years, we have also witnessed the impeachment processes of the Presidents of Brazil and of Colombia and how that painful process resulted in democracy holding sway, albeit with very different outcomes in the two countries. Today in Latin America there are stable economies, stable Governments, historically low inflation, growth, open markets and privatisation, all of which provide great opportunities for Britain.

We should not forget the power of the Latin American region. It ranks alongside the Pacific rim and southern Asia in opportunities for our country. Latin America's economy is equal to or greater than those of Africa, the Indian sub-continent and south-east Asia put together. We should reflect on the fact that Brazil alone has an economy as powerful as that of Spain and that its state of Sao Paulo alone has an economy equal to that of Belgium.

The economy of Mexico is greater than those of Sweden, Hong Kong and Nigeria put together. The economies of Venezuela and Colombia, taken together, are more powerful than that of South Africa, an area in which this country takes a considerable interest. Last, but not least, Chile's economy is greater than that of either Malaysia or Singapore.

British interests in Latin America are nothing new. George Canning, then Foreign Secretary, said in a Commons debate in 1826 that Britain had called the New World into existence. to redress the balance of the Old."—[Official Report, 12 December 1826: Vol. 16, (2nd Series) c. 397.] From independence onwards, Britain has taken a major partnership role in the region's development, involving railways, public utilities, banking and shipping, to mention but a few aspects.

The historic links with this country are perhaps best exemplified by an event that is taking place just a few hundred yards from the House, as President Eduardo Frei of Chile lays a wreath at the tomb of Admiral Lord Cochrane in Westminster abbey. The House will perhaps recall the colourful career of that naval officer, who took a leading role in the independence struggles not only of Chile but also of Brazil and of Greece. Lord Cochrane's contribution to Latin American independence ranks alongside the midwife roles of Canning, of Ponsonby in Uruguay and of the British soldiers and sailors of the Legion Britanica who served under Simon Bolivar in the independence struggle in northern and western south America.

So much for history; what of today? Our Foreign Affairs Select Committee has just returned from its journeyings in Latin America duly impressed, and we look forward to its report. The Inter-Parliamentary Union has dispatched delegations to Argentina, Uruguay and Brazil in the past three months, all of which have been successful. Members of the House have played a key role in the six successive Argentine-British conferences, which have done so much to reconstruct relations between our two countries following the tragedy of the south Atlantic only 14 years ago.

In all those ventures, our embassies and consulates in the region have played a valuable facilitating role. I pay tribute to the valued work of our diplomats in all the countries of Latin America—we can proudly use the word "all", with the recent opening of our new embassy in Santo Domingo in the Dominican Republic.

There was a time, particularly under previous Governments, when we closed and reopened missions with the regularity of yo-yos. I hope that the tight spending round in progress will not lead to a recurrence of that dismal process and that my hon. Friend the Minister will be a doughty fighter on our behalf in that respect. That is particularly important, as Latin America represents a massive opportunity for Britain, which we would do well indeed to get up and grasp.

I commend the proposed conference of key British business men due to be held in January next year, co-ordinated by the Foreign and Commonwealth Office and the Department of Trade and Industry, with key Latin American speakers from the highest level in the continent. It will be a magnificent opportunity for British business to learn more, building on the "Links into Latin America" programme of the DTI. I also commend the initiatives of Canning house, the Latin American centre in London, and its series of conferences and seminars, not least in the educational sphere.

Perhaps the biggest challenge in Latin America is the development of trading blocs. Mercosur, which is in effect the southern common market, was established as recently as 1991 by Brazil, Argentina, Uruguay and Paraguay, and has flourished. Although much work needs to be done to free up sectors and to apply a common external tariff, the volume of intra-group trade between the countries has grown impressively. In 1990, the year before Mercosur's inception, trade among the four countries amounted to $4 billion; by 1995 it had more than tripled to $14.5 billion. The impact of Mercosur is clear.

Above all, the venture of Mercosur is seen as a union of nation states with a minimum of supranational institutions, and with decisions taken by consensus. It is significant that it is avoiding the pitfalls of excessive bureaucracy, over-regulation and money-churning that have become the hallmark of the European Union. To date, Mercosur has maintained only a small secretariat in Montevideo and work is conducted through joint working parties, particularly to deal with the non-tariff issues.

Both President Fernando Henrique Cardoso of Brazil and President Carlos Menem of Argentina have given an impressive lead in those developments, and the four countries are pushing a five-year programme to develop the free trade area and the customs union.

Close ties are being developed with Chile. Tariffs are falling and Chile, the region's fastest growing economy, is coming closer to Mercosur. Bolivia is next into the frame to be associated with it. Mercosur has concluded an inter-regional co-operation agreement with the European Union that was signed in Madrid a year ago.

Sir Kenneth Carlisle (Lincoln)

I was interested to hear what my hon. Friend had to say about Mercosur. Does he agree that one of the most interesting developments to arise from that freer, larger market is the substantial investment by European and other countries in the Mercosur countries, especially in the automobile industry? There has been great investment by, for example, Volkswagen and Fiat simply because the market in that area is so much bigger now.

Mr. Arnold

Stability and free trade have already had the remarkable effects for Mercosur that I have outlined. The opportunities for British investment are certainly there. I hope that the Rover Group will read the debate and bring its proposals for that area to a more rapid conclusion.

Mr. Robert Banks (Harrogate)

Does my hon. Friend recall that the Trade and Industry Select Committee visited Argentina and Brazil last year and submitted a report to the House pointing out the advantages for British companies in trading with both those countries and in looking more widely to the Mercosur region? There are considerable opportunities. Mercosur is a very good and expanding organisation.

Mr. Arnold

I thank my hon. Friend for raising the important Select Committee on Trade and Industry report and the hard work done by the Committee, which I hope will further highlight the opportunities for Britain.

Elsewhere in the continent, progress is being made by Colombia, Ecuador and Venezuela in the rejuvenation of the Grupo Andino, which is working on a free trade agreement with Mercosur, perhaps including Peru, and with which Panama is associated.

The process undertaken by Mercosur and the Grupo Andino contrasts with the north American free trade agreement, which was severely jolted by the Mexican financial crisis last year—a crisis that brought about a paralysis of any extension of NAFTA which has been exacerbated by United States internal politics.

All this points to opportunities for Britain and Europe. There is a growing tide of opinion in favour of a coherent relationship between a Latin American trading bloc bringing together its component parts, and a partnership with Europe and other regions around the world. The NAFTA experience and the Uncle Sam tendency, best exemplified by the haughty treatment of Colombia when it was struggling with the drugs menace can only emphasise Latin America's will to have close ties with the wider world.

All these matters underline the key role and opportunity for Britain. We are the natural point for Latin American countries' relationship with Europe—the logical first port of call in Europe. President Frei is here today. President Zedillo of Mexico was here earlier this year, when he addressed a meeting of both Houses of Parliament in an exceptional way. President Cardoso of Brazil is expected next year. Dozens of other high-powered Ministers, business men and so on have come to London in recent months.

Not only is London the world's leading financial and business centre, but our patterns of international trade are unique in Europe. That best ties in with the interest and preference of the Latin American republics. We are the obvious champions for Latin America within the counsels of Europe. Whereas France, Spain and Portugal have interests, particularly agricultural ones, which are competitive with those of Latin America, our interests are almost entirely complementary to those of Latin America. I look forward to my hon. Friend the Minister of State, Foreign and Commonwealth Office highlighting our work in that context.

To highlight the economic progress of the past year, I point to the stable currencies and low inflation in Brazil and Argentina, although I wonder what pressures are building up behind their highly valued currencies. We should note the continued excellent performance of Chile and the renaissance of Peru and Bolivia. Mexico is making a steady recovery after its financial crisis last year. We are also witnessing a coherent fight in Venezuela. Many of us were fascinated to hear the presentation at the House yesterday by the Venezuelan Finance Minister and the president of its central bank.

It is interesting to note in passing that the economy of the Falkland islands is also doing well, particularly in the fishing sector and the oil industry, in which more harmony is developing with its neighbour, Argentina.

Over the years, Britain has been a leading partner in infrastructure projects. One thinks of the Rio-Niterói bridge in Brazil, and we are looking at the Bolivia-Brazil pipeline. A massive series of projects is linked with the Hidrovia project—a project to develop the navigational capacity of the Parana and Paraguay rivers and their tributaries, from their upper waters in Bolivia and Brazil through Paraguay, Uruguay and Argentina to the River Plate and the Atlantic ocean. The scale of the engineering projects—to the tune of US$2 billion—presents massive opportunities for British companies. From the upstream terminus at Puerto Suarez in Bolivia, through the navigation channel up the Itaipu dam, opening up the Brazilian waterways as far as Sao Paulo, down to Nueva Palmira in Uruguay—the major open sea port at the mouth—there is much work to be done. Furthermore, there is the massive proposal for a River Plate bridge between Buenos Aires and Colonia del Sacramento in Uruguay. I hope that our embassies in all five countries are on the ball, and that our excellent trade promoters will alert potential British participants to the opportunities.

Privatisation is one of the greatest recent British success stories, and it is being emulated throughout the region. There are massive opportunities for British expertise and experience, not only in the process itself and the development of local stock markets but in popular shareholding. There is also a massive opportunity for British investment in the privatised companies. Our record, notwithstanding local successes such as British Gas in Buenos Aires, is not as good as it might be. There is much to be done. We must be in there, playing a leading part as the privatisation programme continues to roll out.

Education and training is another area of opportunity for us. My right hon. Friend the Secretary of State for Education and Employment recently visited Chile and Colombia and my noble Friend Lord Henley has visited Brazil, Argentina and Mexico. It is fascinating to note the enthusiasm of many Latin American countries for our national vocational qualification system. A major project is under way in Mexico in conjunction with our National Council for Vocational Qualifications. That project is funded by the World bank. There are also interesting developments in Colombia, Argentina and Brazil in that respect.

Throughout the region, there is dynamic activity in English language teaching, British cultural events and projects involving British higher education. This is being fostered and led by the British Council and its sister Cultura Inglesa institutes. Local British schools, notably in São Paulo and Buenos Aires, are flourishing. I am sure that the work of all of them will be encouraged by the Government.

Drugs are a scourge that afflicts Latin America, taking up too much Government time, corrupting the body politic and ruining lives. Let us always remember that the drug trade would not exist if the developed world did not pay very high prices for the deadly stuff. The solution is co-operation, not head banging. The disgraceful treatment of Colombia by the United States, with its certification process, is not the answer. The discreet professional assistance that we provide to Colombia and other Latin American Governments is the commendable route to take.

Latin America is a vibrant and developing area of the world and we ignore it at our peril. We must redouble our efforts, work with our friends and play a part in the continent, because it will rank alongside the Pacific rim as a focus of growth in the 21st century.

11.18 am
Mr. Jeremy Corbyn (Islington, North)

I shall speak briefly and I hope that the House will forgive me if I leave briefly when I have finished speaking. I will return for the rest of the debate.

It is good that we are yet again debating the situation in Latin America and relations with it. As the hon. Member for Gravesham (Mr. Arnold) said, this is the ninth year that we have had such a debate. It is usually at 3 o'clock in the morning, so this is a great improvement. We should put it on record that President Frei of Chile is visiting Britain this week. In the sense that he represents democracy in Chile and the removal of the dictatorship, his visit is extremely welcome.

Far less welcome are the strong rumours that General Pinochet is also in Britain. He is associated with the reign of terror in Chile and the destruction of human rights as well as of many Chilean trade unions and other organisations. He is here, presumably, on yet another arms buying spree. His very existence serves as a memory of the danger of the power of the military to any democratic movement in Latin America. Of course, the British Governments of the past happily sold arms to that dictator.

The hon. Member for Gravesham is true to himself, as he preaches privatisation in this country and everywhere else. He is an advocate of the trickle-down theory, whereby, if one makes a lot of people very rich, some of the poor might get a bob or two as a result. Unfortunately, the trickle-down theory does not work here any more than it works anywhere else, as he may well know.

The hon. Gentleman offered a rosy view of Latin America and suggested that the economic expansion that he described in a number of countries is working fine. That is merely a surface impression gleaned from the economic journals that the hon. Gentleman reads. There are serious human rights abuses in a number of those countries, as well as enormous problems of poverty and, indeed, the impoverishment of the poorest people in those countries.

The way in which the World bank and the International Monetary Fund have promoted privatisation projects and structural adjustment programmes is deeply regrettable. In many ways, such programmes pose a threat to the democracy that those organisations purport to support. British companies are making a great deal of money out of those privatisations.

Many of us look askance at the behaviour of British Gas. At the time of its privatisation it was sold cheap to shareholders, and it is now using the resulting enormous profits that it has made from share dealings in this country to invest in privatisation programmes in other countries. I find that deplorable, because Latin America needs long-term investment in infrastructure development and, above all, support to develop and improve public services, particularly education and health.

There has not been a vast increase in expenditure on education and health in some of the countries mentioned by the hon. Member for Gravesham. Indeed, the structural adjustment programmes adopted in many of them have led to cuts in public expenditure as a result of the combination of privatisation and the closure of a number of public service projects. That is a serious matter.

During the summer, I had the pleasure of meeting Hector Villamil, a member of the Ecuadorean Parliament, who was elected in May as a representative of an environmental party and represents part of the Ecuadorean Amazon region. He was on a lecture tour in this country, and when he visited my home we had a long discussion about what is happening in Ecuador. He described how oil companies, mostly owned by the United States, have been given enormous franchises for the Ecuadorean Amazon region and the problems that that has caused.

Hector's party has circulated a paper describing the problems that have arisen since those companies commenced oil drilling in the Amazon region. It states: Since then, oil drilling has left an indelible mark on the Ecuadorean Amazon: untreated toxic wastes have been dumped in the rainforest, rivers and soils have been contaminated, trees have been cut down and wildlife destroyed. Oil drilling has also seriously disrupted the lives of indigenous communities in this remote region by damaging natural resources they use for nutritional, medicinal, domestic … religious and recreational purposes. The oil companies' invasion of traditional territories has dislocated and dispossessed entire ethnic groups (such as the Cofan and Tagaeri). Oil pollution has also affected the health of local inhabitants, with increased incidences of skin rashes, fevers, headaches, malnutrition, and miscarriages. Crucially, that paper goes on to report: Little, if any, of the wealth generated by oil has found its way back to these communities. Hector was here in part to promote a book describing what is known as the "green guerrilla process" and recounts how the poorest people in the poorest regions of many Latin American countries are incensed by the activities of multinational corporations, some of which are based in this country. Those corporations are in the process of rapidly extracting oil and other minerals from the ground, but they pay scant or no regard to the needs of the people in those communities and the long-term damage caused to them.

One can understand the outrage and anger felt by those people when they see enormous wealth being made from their communities and none of it being fed back to them. Despite the vast profits made from those regions, those people still suffer high levels of infant mortality, a low life expectancy, poor education and almost non-existent health services. Moreover, the environmental destruction in Ecuador is not an isolated incident: one can see the same effects in Colombia and Venezuela and particularly in Peru and Bolivia.

On Sunday, Nicaraguans go to the polls for the first round of their elections—obviously, we do not know the final outcome. The programmes that the Chamorro Government have agreed with the IMF and the World bank have caused high levels of unemployment and massive privatisation. That has led to an increase in poverty and violence. Arms that were provided either to the Sandinista army or to the Contras during the Contra war are now in the hands of people who are either struggling to survive or who intend to use them for criminal purposes. The poison of the war waged by the United States against the Nicaraguan people in the late 1970s and the early 1980s is still with us. Those of us who saw "Newsnight" will be aware of the report about CIA sales of crack within the United States. That, too, emanates from the poison of that conflict.

It is interesting to note that, whatever the result of the election, the structural adjustment programme strategy of the IMF and the World bank will pertain. The national Government will have little power to alter it because those organisations have made it clear that they reached an agreement with the Chamorro Government, and that that agreement must stick.

Those who support the structural adjustment programmes which have led to the privatisation of utilities and state-owned enterprises and are opposed to land reform and all that goes with it should recognise that they are storing up enormous problems for the future. The rising in the Chiapas region of Mexico mirrored the activities of the Frente Farabundo Marti para la Liberacion Nacional in El Salvador and the Sandinista in Nicaragua, who responded to the impoverishment experienced in the 1960s and 1970s and the denial of democracy. We are storing up exactly the same problems for the future and this time British multinationals are as much involved as anyone else. We cannot just ignore those facts—we must bear some responsibility for them.

For many years many of us have been deeply concerned, if not appalled, at the human rights record of Haiti. It is important to put on record that the successive Duvalier Governments were cited in common parlance around the world as an example of a Government who destroyed human rights and lived entirely by the power of the secret police and the threat that they posed. It is difficult to say exactly which is the poorest country in the world, but Haiti, unfortunately, is certainly one of the poorest.

At least a mass popular movement and protest succeeded in getting rid of the Duvaliers. Since then, the Haitian Governments have looked to countries that espouse democracy for support and aid to develop an education system, a health service and all the other connected essential public services, but they have looked in vain. Instead, that country has been visited by representatives from Washington and the World bank. A structural adjustment programme has been introduced that has privatised the publicly owned services and industries, such as they were. Above all, however, that programme means that Haiti is used as a source of cheap labour for United States-owned multinationals. That is the US strategy.

Sir Kenneth Carlisle

rose—

Mr. Corbyn

I will not give way, as I want to conclude soon.

Multinational corporations, acting through a trading arrangement promoted by the US, intend to use the Caribbean basin and central America as a source of cheap labour. That policy will cause a huge conflict in the future. There could be competition between workers in the United States and workers in that region. However, a conference of trade unions in the United States this summer—which I attended—was told that people employed by the same multinationals on either side of the border are getting together because they believe that unity and not competition in low wages is the way forward.

Sir Kenneth Carlisle

Will the hon. Gentleman give way?

Mr. Corbyn

No, I will not give way. The hon. Gentleman has plenty of time to make a speech, so he need not worry.

When the Minister replies, I hope that he will deal with the concerns of many human rights organisations about the position in Guatemala, the training of the Guatemalan military and the supply of equipment by Britain to Guatemala. Although on the surface things have changed somewhat, as they have in many countries—Governments have changed and there are now some democratic opportunities—beneath the surface the same secret police, the same oppressive armies and the same people who abused human rights for so long still have substantial power. There is much concern about the fact that we are involved in training the Guatemalan military, which has an appalling human rights record—it is almost second to none in the continent. I do not believe that we should have such involvement.

We have an important role to play in supporting human rights and the democratic agenda in Latin America. If we promote an economic strategy which increases the gap between rich and poor, creates vast shanty towns, destroys people's environments and livelihoods, we are storing up enormous troubles for the future. The poorest people in that region will not sit idly by and watch their oil and other minerals being exploited by foreign multinationals while none of the benefits ever trickle down to those impoverished rural communities.

11.31 am
Mr. Ray Whitney (Wycombe)

We are participating in what has become a happy tradition in the House of Commons. I am sorry that the hon. Member for Islington, North (Mr. Corbyn) has to leave us, but I understand why. He has become part of that tradition, which is to remind all of us present, and anyone who cares to read the record of the debate, where the soul of the Labour party still lies and how unreconstructed and resolutely backward-looking most of it is.

I am not sure whether the hon. Gentleman has participated in all nine debates, but for many years he has given the same performance as he gave this morning, which is to look resolutely backwards to the problems and ills of the 1970s, and even of the 1960s, and to talk about the dreadful threat of the multinationals. That shows his failure to understand the benefits of free-market economics, which almost everyone in the world save this last redoubt in the British Labour party has come to understand. The hon. Gentleman's contribution was comforting, because we can now feel at home again. I hope that the hon. Member for Stretford (Mr. Lloyd) will try to take his party a little further forward—if he cannot make 1996, perhaps he can at least get to the 1980s and take us out of the 1960s, where his hon. Friend left us.

I congratulate my hon. Friend the Member for Gravesham (Mr. Arnold) not only on initiating this ninth debate, but on his indefatigable contribution to the causes of British parliamentary links with Latin America at all levels. Those of us who know what he does will warmly support my remarks.

As my hon. Friend said, this debate has become an annual fixture, so the perspective inevitably changes. Last year, we were still in the shadow of the Mexican currency and political crisis and its impact on Mexico and the rest of Latin America. Happily, the 12 months since then have been good economically for Latin America—we always have the problem of not being able to itemise each country but having to speak about them as a generality. Solid progress has been made in the economic sphere, especially in the southern cone countries. We are all extremely thankful for that.

The free-market philosophy, which Opposition Members find so difficult to swallow, has continually proved its effectiveness. Although there are problems, to which I shall refer later, there has undoubtedly been a trickle-down effect. The Financial Times of 25 March 1996 contained an interesting statistic that caught my eye. The article referred to the better diet of the poor in Brazil, and stated that 17 per cent. more chickens were consumed in 1995 than in 1994. That statistic may be of interest to the hon. Member for Islington, North, who is worried about the trickle-down effect. More must be done, but the trend is in the right direction.

The privatisation process has been tremendous. The most recent figures that I have seen show that, in the five years from 1990 to 1995, no fewer than 645 state corporations throughout the countries of Latin America were brought into the private sector. Much of that transition was based on experience in this country. Many experts from Britain went to Latin America to assist, and made an important contribution to that process.

Most Latin American countries have conducted economic stabilisation policies that have achieved significant success. Legendary inflation rates—we all talked about the banana republics of Latin America with their 500 per cent. or 1,000 per cent. Inflation—are on their way out. In Brazil, the inflation rate in 1994 was 92 per cent., but in 1995 it was reduced to 22 per cent.

It is still high, but the figures are going in the right direction, as they are in virtually every country in Latin America. As my hon. Friend the Member for Gravesham said, every country is still exposed to certain pressures and dangers. The export earnings of Latin America increased last year by 20 per cent., and investment flows were estimated at $18 billion, which held up on the figure for the previous year. All that is very good news.

Growth in 1995 was only 0.3 per cent.—it was seriously affected by what had happened in Mexico—but this year it is 10 times that—about 3 per cent.—4 per cent. is forecast for 1997, and still greater growth is predicted for the year after. Economic progress is greatly to be welcomed and applauded.

Economic co-operation between the countries of Latin America has made significant progress. Those of us who have been connected with Latin America over the years will recall the many efforts made to establish regional co-operation that were not successful, and which gently trickled into the sand or into the pending trays of one or two diplomats. Now, there are two well-established organisations—the North American Free Trade Agreement and Mercosur—and we have every reason to believe that they will be successful.

What happened in Mexico has put a slight check on NAFTA's development, and the devaluation of the Mexican peso has changed the balance and the issues involved for the United States and Canada, but NAFTA is here to stay, whatever the trend. However, Mercosur is a story of considerable success. A recent forecast suggests that the links that Chile has developed will create a market of 220m people with a combined GDP of nearly $1 trillion and total trade of $175 billion. That makes it a … powerful … counterpoint to NAFTA and is very significant for the European Union. My hon. Friend the Member for Gravesham mentioned the development of links between our country and the European Union and the Mercosur countries. I welcome that process.

With the forthcoming addition of Bolivia, and perhaps of other countries, Mercosur will become increasingly important. Those of us who believe in free trade hope that it will develop throughout Latin America, that links between the European Union and the whole of Latin America will be enhanced, and that we will increase collaboration and not develop into two antagonistic trading blocs. Britain has a very significant role to play in developing that collaboration.

We all applaud the fact that, despite problems here and there, there is political stability. In three or four countries, there is a new tendency for presidents to become eligible for second terms. Some people regard that as a dangerous step, but it is to be welcomed within proper democratic limits because it gives stability and coherence. We should not forget that Latin America has had a turbulent political, military interventionist history since the second world war, and we should not take for granted the democratic stability that it has achieved. It needs to be further developed and entrenched by allowing presidents second terms.

That constitutional stability has been achieved at a time when many—probably all—Latin American countries have been obliged to institute tough economic stability regimes. As we know in this country and across the channel, tough measures of economic restoration carry with them political pressures and dangers; many Latin America leaders have successfully faced up to those pressures.

The threat of military intervention, to which we had grown accustomed in Latin American countries, did not materialise. The only example—the threat of General Oviedo in Paraguay to President Wasmosy—failed. Pressures from other Latin American countries and strength in Paraguay ensured that General Oviedo and all the other military leaders in the continent are back in barracks and, pray God, will stay there to do the job that they are meant to do instead of intervening in the political process.

The political stability that Latin American countries have achieved has enabled them, in their growing self-confidence, to play a much more justified role on the world stage. Brazil has strong ambitions for a permanent seat on the Security Council of the United Nations. Argentina makes important contributions to the United Nations' activities. That emphasises the fact that the United Kingdom Government must take Latin American countries extremely seriously—strategically, diplomatically, politically, economically and commercially—as I expect they do.

That is not to say that the countries of Latin America are without problems. It would be strange if they were. The strong personal presidential focus that occurs in so many countries poses dangers. The problems of the caudillo, which are traditional in Latin American countries, must be avoided. It is important that they create the democratic concept of a loyal and established opposition, with a democratic transfer of power from one group of politicians to another without upheaval. In each country, the concept of what we would describe in Britain as traditional political parties must be strengthened. There should not be a clique in the capital, wheeling and dealing for its own benefit. Progress is chequered, not uniform, but it is being made.

Progress is also being made in developing governmental and bureaucratic structures—education, health and all those things that people in many countries may take for granted—although there are problems. The infrastructure in many Latin American countries needs to be enhanced.

Many Latin American leaders admit that the gap between rich and poor is a growing problem, and I agree with the hon. Member for Islington, North that Latin American politicians must tackle it. Although I believe that the statistics prove that, in general, the trickle-down effect is working, there are some worrying data about the very rich in Latin America. The latest figures I have show that There are 35 dollar-billionaires in Latin America, according to Forbes magazine, of whom 15 come from Mexico. Although I have no objection to the accumulation of wealth in principle, that problem deserves serious attention in countries where there are the social problems of which we are aware and the linked problems of corruption and drugs. I shall not repeat the points made by my hon. Friend the Member for Gravesham.

The existence of such problems must not be allowed to obscure the great progress that has been made and the potential that continues to be developed in Latin America. That brings us back to the United Kingdom and to what Her Majesty's Government should do. For more than a quarter of a century, I have been involved. on and off, with efforts to make the British public—especially the British business community—aware of the potential of Latin America. Many are the initiatives that British Governments have taken and continue to take. It is time for a further renewed effort, especially—as I have said several times—in the regions of the United Kingdom. There is much knowledge in London, especially the City, about what happens in Latin America. Many of our old-established enterprises—trading houses and so on—in Latin America do very well, but in my opinion they tend to get on with it quietly and do it themselves.

We must make further efforts to ensure that medium-sized companies throughout the United Kingdom do not become fixated on, for example, the Asian tigers and think that Sao Paulo, Rio de Janeiro, Caracas, Buenos Aires and Santiago are strange places with funny generals in funny hats and unstable regimes. All hon. Members know that that is far from the truth. The reality is much more encouraging, but we must make further efforts to get that information across. I hope that all of us do what we can as Members of Parliament to further that campaign, but we look to the Government for a lead. I hope that my hon. Friend the Minister will be able to reassure all of us that the ambition to spread an awareness of the opportunities in Latin America is shared by Her Majesty's Government.

11.50 am
Sir Kenneth Carlisle (Lincoln)

I am delighted to take part in this annual debate. I add my thanks and congratulations to my hon. Friend the Member for Gravesham (Mr. Arnold), not only for organising this yearly debate, but for everything else he does during the year to promote our good relations with Latin America. I have great respect for his activities in that regard.

I am delighted that our relations with Latin America have improved so much. All of us who love that part of the world can only take pleasure from the fact that our trade with that area is growing, that our links with the people are ever more active and that we appear to be moving on a strong upward curve toward re-establishing our historic links with those countries. That is undoubtedly occurring because free trade and firmly based democracy are now dominant in Latin America.

I am especially interested in watching the development of Mercosur. In my intervention on my hon. Friend the Member for Gravesham, I mentioned the stimulating effect on investment, free trade and the growth of jobs that that development has had over the past five or six years. Investment into the whole region is impressive and I am delighted that the United Kingdom is at the forefront of that effort.

As we all know, substantial UK companies such as British Gas, our water companies, British Petroleum and other oil companies, are now operating in Argentina and other countries. We are also investing in manufacturing in telecommunications. That is mirrored by the huge interest and activity of the financial services sector. Only a week or two ago, I visited a merchant bank in the City that had realised that it had to get back into South America because all its rivals were setting up offices there. Such activity promotes not only businesses that are already established and growing, but the skills that we can offer—for example, our experience in privatisation ensures that our aid and advice on that subject are second to none.

The scene is one of growing activity and encouragement. We all have an interest, therefore, in the continuing stability and growth of Latin American economies. It is not easy for countries to achieve those aims. For example, the value of the Argentine currency is high and unemployment is great. We must try to ensure that growth continues at the level that is needed to cut unemployment. Stability, democracy and inward investment are essential in that effort.

I strongly echo the words of my hon. Friend the Member for Wycombe (Mr. Whitney) about opportunities for this country. Although many of our major companies are active in Latin America, we need to spread the word to get middle-ranking companies involved to a much greater extent. I am always impressed by figures showing that our investment is, I believe, the second largest in Latin America—it certainly is in Argentina—but our exports are not as high in the league. We need the involvement of smaller companies if we are to do better.

We can help Argentina to face its current unemployment problems by investing in growth, but we should also support President Menem's courageous efforts to address the structural inflexibilities in Argentina's labour market. That is a difficult long-term problem and President Menem is trying to get the unions to address practically the requirements of modern economies. We wish him well in that brave effort.

In general, our relations with South America are encouraging. One of the most interesting aspects of free trade and economic stability is their effect on democracy. I tried to intervene on the hon. Member for Islington, North (Mr. Corbyn) to make that point, but he was determined not to listen. As my hon. Friend the Member for Wycombe said, the example of Paraguay, where the threat to democracy was overcome by pressure from neighbours, is a tremendous tribute to what can be achieved by free trade and large areas of economic co-operation. Everyone in Paraguay knew that, if a dictatorship were re-established, the country would have to leave Mercosur and all the advantages that that brought. In that part of South America, free trade and democracy go hand in hand.

My hon. Friends and I are adamant that we should seek to ensure that the European Union is generous and open with Mercosur. We do not want trading blocs to raise tariffs against each other. This country's reputation for supporting free trade should lead us to ensure that barriers between trading blocs continue to fall. It is of the greatest importance that our Government should pursue that aim over the next two years.

Before ending, I should mention the continuing difficulties associated with finding a long-term solution to the questions surrounding the Falkland Islands. I know that both the British and Argentine Governments are working hard to develop co-operation in matters such as oil exploration and fishing. We must work hard to find practical solutions. We must be tolerant. We must work hard to get the support of the peoples of both countries and make them see that the long-term solution to the problem is real co-operation and ever closer links. In the end, that is the only solution. I am grateful for the opportunity to speak in the debate. Next week, I shall have the great privilege of going with a party to Argentina to take part in the British-Argentine conference. The hon. Member for Stretford (Mr. Lloyd) was to have accompanied us, but I am sorry to say that he will no longer be coming. Such conferences are an example of how the exchange of ideas and people can lead to better understanding and they help to ensure that our links with that important and delightful part of the world will continue to strengthen.

11.58 am
Mr. Robert Banks (Harrogate)

I join in the congratulations to my hon. Friend the Member for Gravesham (Mr. Arnold) on initiating the debate. I have a warm regard for his close involvement in Latin America and his great knowledge of that region.

I have had the privilege of visiting Argentina and Brazil with the Trade and Industry Committee. In previous years, I visited Venezuela and, this year, I visited Colombia, Ecuador and Peru privately. On all those occasions, I found that there was a strong sense of this country's historic links, which go back centuries, with countries in that part of the world. I was enormously impressed by the landscape and the stunning beauty of the countries that I visited, and I think that they offer a huge opportunity for people to see something quite different from our civilisation.

I should like to concentrate my remarks on Peru. I do not think that anyone doubts that the economic progress made in that country in the past six years is anything short of stunning. In 1990, it had an inflation rate of 36,000 per cent.—which is extreme hyper-inflation. The inflation rate is now below 15 per cent., and it may even be below 10 per cent., which is a huge tribute to the economic management of that country. President Fujimori has clone a remarkably good job in Peru, and has laid down the foundation for steady growth. We are now exporting ever more goods to that country, and we have very considerable opportunities for foreign investment and for building a sure economic connection with it.

The foundation of that growth has been the privatisation of some manufacturing and of the telecommunications, mining, banking, transportation and energy sectors. There is no doubt that the work that has been done in privatisation in the United Kingdom has had an enormous effect worldwide and that it is being copied. There is also no doubt that the success of the economy in Peru is nothing short of miraculous and that it is due, in part if not in the main, to their privatisation policies. Domestic investment there has grown, and our exports to that country are rising considerably.

There have been ministerial visits to Peru—which I know have been warmly appreciated—including that by my right hon. Friend the Secretary of State for the Environment, who was there only a few weeks ago, following an earlier visit. I recall vividly his description of his visit to Machu Picchu, which was recounted at a lunch he hosted for a Peruvian delegation to the United Kingdom. That description played a part in convincing me of the importance of visiting that quite remarkable place, which is one of the world's greatest wonders. I shall never forget the visit I made there earlier this year with my wife and daughter.

Peru is not without its problems—it is in considerable debt to international banks and the international finance community. In the light of Peru's terrific economic progress, and in recognition of its poverty—such as exists in a great many Latin American countries—I hope that we will give careful consideration to recycling and alleviating some of its debt. We have an obligation to do what we can to help in the provision of education and health services.

I know that our Minister for Overseas Development is acutely aware of the work that is being done by the British Council, and particularly by the Overseas Development Administration, to deal with the problems that I have outlined in Colombia, Ecuador, Peru and elsewhere. I think that we do very well in providing aid, considering the restrictions that have had to be placed on our budget.

I believe that there are substantial opportunities for British companies to go out to Latin America, particularly to countries such as Brazil, Argentina and Peru that have shown that they have dealt with their economic problems and have laid the foundations for stability, which will give us opportunities for greater trade and closer links with them. I know that all hon. Members would welcome that.

12.3 pm

Mr. Tony Lloyd (Stretford)

I join other hon. Members in welcoming this annual debate. I know that the hon. Member for Gravesham (Mr. Arnold) arranged the debate to coincide with the visit of President Frei to Great Britain, which is a very important event in cementing relations between Chile and Great Britain. More generally, however, this debate is a symbol of the importance of Latin America to us because of trade and the role in world affairs that we seek to play with our partners in Latin America.

The growth of interest in Latin American affairs in the House is very welcome. We have had a visit not only by President Frei but, earlier this year, by President Zedillo. President Cardosa will, we hope, visit Great Britain early next year. I regret that I shall not be able to take part in the visit to Argentina next week, but that visit is significant. The Trade and Industry Select Committee's report on Brazil and Argentina last year, and this year's examination by the Foreign Affairs Select Committee of Latin American affairs demonstrate the increasing importance of relations with Latin America to the House and to the political system in Great Britain.

I must, however, introduce a note of controversy. We must examine some aspects of our relations with Latin America and of our failure to maximise those relations. I do not want to arbitrate between my hon. Friend the Member for Islington, North (Mr. Corbyn) and the hon. Member for Wycombe (Mr. Whitney), but it is desperately important that we do not have a one-sided emphasise on relations with Latin America. Important though they are, we do not have only trade relations with Latin America; it is also important to recognise the need for economic progress and eradication of poverty there. Those matters are fundamental if we are to achieve political stability in Latin America, which all hon. Members desire.

We have a vested interest in political stability in Latin America because poverty and the corruption that sometimes feeds on poverty allow the widescale development of the drugs industry, as has been mentioned by hon. Members in this debate. The hon. Member for Gravesham is right: demand for drugs in countries such as Great Britain, and even more so in the United States, fuels the drug trade in parts of Latin America, where it is an endemic and deep-rooted problem. We cannot separate those issues.

The issue of economic progress is important, but it must be linked to building democracy and developing an active policy on human rights in Latin America. If we are to co-operate effectively in the spheres of drug control and eradication, we must consider all the issues.

The hon. Member for Gravesham has already mentioned the importance of Latin America and the growth of Mercosur. This month, Chile acceded to associate status in Mercosur and, early next year, Bolivia will achieve the same status. Mercosur is developing rapidly. I was recently in Venezuela, and the Venezuelans told me that they also are keen to enter negotiations to accede to Mercosur.

The hon. Member for Wycombe made the important point that trading blocs—of which Mercosur is now the third largest—must not develop as competitive and rival blocs. It is desperately important for Great Britain and for the European Union that we use our role to ensure that the European Union opens up a wide relationship with Mercosur and with Latin America, because the alternative—which needs to be spelled out—is economic hegemony by north America, and particularly by the United States.

I do not say that with any sense of aggression towards the United States, as it is and will continue to be among our most important political and economic contacts in the world. We must recognise, however, that we have to ensure that Latin America, and particularly Mercosur, can count on Great Britain, within Europe, to keep open world trade. We must also ensure that we keep open our access to Latin America, and that we give Latin America an alternative to the free trade areas of America as the only outlet for trade in that region. That will be good for Britain, good for Latin America and, in the long run, good for the world.

Despite the importance of Latin America and the warm words that we have heard, Britain performs relatively badly in Latin America, if we compare our trade performance with that of other comparable European countries. In virtually every country in Latin America, Britain performs worse than Italy, much worse than Germany and in most cases worse than France. That is a long-term phenomenon, but the situation is not improving. In 1994 and 1995, Britain's share of world exports to Latin America dropped. In fairness, that should be seen in the context of the rising tide of trade; nevertheless, we are slipping behind the countries that I mentioned.

Is it still the Government's view that we can double our share of trade? We ought to aim for that target. Is the benchmark of the year 2000 realistic? Many people have pointed out to me that, until we examine why we do so badly, we will not be able to rectify the problems. Other hon. Members have identified various relevant factors, but I should like to suggest one or two further respects in which the Government are not playing their role as we would wish.

For example, some 30,000 young people in Britain are studying French at GCSE level, whereas the number taking Spanish is little more than 4,000, and fewer than 200 are taking Portuguese. We should have begun to examine such statistics 30 years ago when we started to develop an interest in Latin America. The time is long overdue for us to rectify that problem.

The BBC World Service is widely respected throughout Latin America. Why is the BBC world television service not beamed into all parts of Latin America as it should be? I am told that there are plans to close down the Brazilian service of the World Service. Perhaps the Minister can tell us whether the matter has been resolved. as it would be outrageous if that happened. I hope that other hon. Members would support that statement.

On the staffing of British diplomatic missions in the region, the Minister took part in a debate with the Select Committee on Foreign Affairs, to which he said: I think that the Foreign Office is under-funded". I hope that we will hear more such candour on the Floor of the House today as he rightly berates his Treasury colleagues. The memorandum that he sent to the Select Committee demonstrates that staffing levels in our embassies throughout the region are well below those of the embassies of France, Italy and possibly Germany. There have been recent increases, but the staffing of our embassies has been cut significantly over the past few years. Government rhetoric points us in one direction, but reality points us in another. I hope that we shall receive assurance this morning that the weaknesses will be examined and rectified.

Economic development is a necessary partner to the development of human rights and democracy building. Democracy and human rights are not a bolt-on extra to the debate. It is disappointing that the Minister's submission to the Select Committee contained only three short paragraphs on human rights. On the human rights clauses in European Union treaties with Latin America, he said: There was a concern but we have helped to allay it that this was somehow picking off the Latin American countries as being in need of human rights clauses. However, it is a universal clause in all EU trade treaties of this kind and therefore we managed to placate the Latin American sensitivities on that subject. There is no question of sensitivities. We should be actively supporting the many people in Latin America who want strong democracy and who want to build societies in which human rights are taken for granted, not seen as extraordinary.

Latin America will not introduce democracy and better human rights as a result of bullying by Britain or other countries. It has not done so in the past and will not do so now. We should state, and a Labour Government will state, that we will work with Latin American Governments and people to build the institutions, particularly the legal and judicial systems, that will give proper recourse against those who perpetrate abuses against the civilian population. That still exists on a wide scale, but this is not the time to discuss individual countries and cases.

There are many countries in which the existence of a notionally democratically elected president does not guarantee individual liberty, and certainly does not guarantee that other institutions, especially the military, have been conclusively taken out of the political system. We should say—as a Labour Government will say—that we want to work with democratic forces in Latin America and that we will pursue a policy actively supporting democrats and discouraging perpetrators of abuses against the civilian population.

The new Guatemalan ambassador is being introduced today at Buckingham palace and the Court of St. James. Having long taken an interest in that country, I welcome the recent ceasefire and movements towards a conclusion of the problems in that sad country. Those movements are a beacon and an example of satisfactory developments on the continent.

We do no justice to our democratic traditions if our relationships are determined solely by narrow economic interests. We have a broader interest to exercise on that continent. We are greatly respected there. We should not overplay our hand or think that our role is greater than it is, but people and Governments in Latin America want Britain to play a constructive role in trade and equally in the development of strong democracy and strong human rights.

12.16 pm
The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor)

I add my voice to those of other hon. Members who have congratulated my hon. Friend the Member for Gravesham (Mr. Arnold) on his now annual routine of introducing this debate. It is a useful opportunity for us to review the relationship between our country and Latin American countries.

Latin America is one of the most exciting parts of the world and one with which we can develop a close and worthwhile relationship, not only—as the hon. Member for Stretford (Mr. Lloyd) said—in respect of human rights and human rights abuses and so that we can together act on the international stage through the United Nations and other forums to our mutual advantage, but to build British-Latin American trade. As I said, this debate is a welcome opportunity to deal with such matters. I am sorry that I have so little time in which to respond, but I shall do my best to deal at least with the main issues that have been raised today.

When we last debated Latin America a year ago, the United Kingdom had just become a permanent observer of the Organisation of American States and the European Union was about to sign the agreement with Mercosur, which my hon. Friend the Member for Lincoln (Sir K. Carlisle) so rightly welcomed. That is a good step towards developing European trade generally in Latin America, and I think that, over the years, it will prove to be a constructive base on which to build.

Links with Latin America have been strengthened considerably since then. There has been much promotion of our interests in the region and special emphasis has been put on trade and investment in pursuit of the joint Department of Trade and Industry-Foreign and Commonwealth Office Link into Latin America trade campaign. The House will be aware of the conference that we are planning for January. I think that it will take that notion forward and provide a foundation on which we can build.

We have built a political dialogue with Latin America on global issues, involving the United Nations and the World Trade Organisation in particular. We also play a leading part in assisting Latin American countries to fight the evil drugs trade. In addition, we assist in fighting crime and terrorism and we take action in support of human rights and the environment. In all these regards, the British Government are taking a lead, which I am sure will be welcomed by all hon. Members.

There has been a good deal of progress on democracy in the region and I am glad that we have been able to watch closely the elections in Argentina and in Peru. There have also been presidential and congressional elections in Guatemala, which were observed by the Organisation of American States and the European Union, and which were widely acclaimed as being free and fair. There were presidential elections in Ecuador and the Dominican Republic and municipal elections in Argentina and Brazil.

Nicaragua's second presidential, general and municipal elections take place next Sunday. The absence of violence in the campaign is encouraging and, all in all, the strides that have been taken in Latin America towards democracy, in fighting the human rights abuses which we all abhor and in trying to combat the drugs trade and the increasing trend of criminal violence, as opposed to political violence, are to be widely welcomed.

There have been many ministerial visits to that part of the world this year. I will not go through them except to say that there have been, in all, 36 UK ministerial visits to Latin America and that 30 Latin American Ministers have visited the United Kingdom. Our particular pleasure in welcoming President Frei this week demonstrates the mutual warmth and closeness of our relationship with Chile. That country is developing extremely fast; it is one of the fastest growing economies in the western hemisphere, and the opportunities for British business and the EU-Chile framework co-operation agreement signed at the European Council meeting in June in Florence show the advances being made and the closeness of our relationship with that country.

We signed three agreements with Chile during President Frei's visit: a memorandum of understanding between the Ministries of Defence, an agreement between the British Council and the Chilean Ministry of Education and an agreement between our Securities and Investments Board and its Chilean counterpart. All those agreements are extremely welcome.

We are trying to deal with the long-standing and vexed problem of the tax on Scotch whisky. I believe that some progress, although not the progress that we would like, has been made on that front. The taxation regime on an extremely important export to the region should be relaxed. As I have said, it has not yet been relaxed quite as far as we would like.

Great progress is being made in our relationship with Argentina, building on the 1989 agreement whereby we have put the Falklands sovereignty issue aside and have gone forward as far and as fast as we can in building good bilateral relations in all other spheres. We have made some progress in attempting to reach a long-term fisheries agreement with Argentina; that is high on our agenda for the coming year. I hope that, next time we have a debate on this subject, we shall be able to report that we have made a breakthrough on that front.

We have, of course, had great success in the joint declaration on hydrocarbons which took place in September last year. The first round of licences is due to be announced shortly by the Falkland Islands Government. There is every sign of co-operation with Argentina on that front and I am pleased by that.

The success of Brazil's Real plan this year has been marked. The inflation forecast is 12 per cent. for this year which is a remarkable achievement as, two years ago, the monthly inflation rate was 50 per cent. The economy is stabilising, and the well-being of the Brazilian people has been largely improved. Brazil is a huge market; it has a population of more than 159 million people. It is extremely important that we take every advantage we can find to encourage British business to operate there.

The main threat to Brazilian progress is the delay or dilution that may occur in their key structural reforms. We will keep a close eye on that. President Cardoso has much to achieve. The economy will have to move forward quite fast if he is not to lose the momentum which has begun.

My hon. Friend the Member for Harrogate (Mr. Banks) mentioned Peru; I need do no more than endorse warmly everything he said. Peru has also benefited from doing a Brady deal on the outstanding debt with many banks and has received a lot of help from the Paris Club. We have been able to assist Peru in both areas, and it is making substantial and welcome progress.

I visited Peru briefly last year and then went on to Colombia. The continuing political crisis in Colombia remains a dominant problem and President Samper faces an enormous range of political and economic problems. His difficult relationship with the United States is not a help. The recent upsurge in guerrilla violence rather upstages his successes against the cartels. I am afraid that narco-trafficking and the link between the guerrillas and the drug barons remain serious concerns to all of us.

Our Government's position is that we wish to continue to help. We give a great deal of help to Colombia in terms of its fight against drugs and we will continue to do so. We encourage British business men to do business with Colombia and we will continue to do so, as long as that Government maintain the fight against drugs to our satisfaction. At the moment, I am confident that they are taking great steps to try to deal with that problem.

In May this year, I went to Venezuela. There has been substantial economic improvement there. Since my visit, the International Monetary Fund approved a $1.4 billion loan in July which will support the economic reform programme announced in April. That includes the complete lifting of foreign exchange controls, the freeing of interest rates, large rises in petrol prices—that was a brave move politically because, in the past, it has always been a source of great social friction—and increases in VAT and other taxes. The position in Venezuela is stabilising, and we can look forward to further progress in that country.

I would like to cover many other countries but, I am afraid, time is running out so I will limit myself to mentioning only Mexico. As has been mentioned, we welcomed President Zedillo to London at the beginning of this year. He and the Prime Minister signed a joint action plan to deepen our relations on a range of bilateral and global issues. I believe that our relationship with Mexico is extremely close. Liaison between the two countries is also effective in global terms, and the vexing question of Helms-Burton has led to substantial collaboration and co-operation between Mexico and ourselves in expressing our substantial dislike of the extra-territorial legislation that the United States has seen fit to put in place.

Mr. Corbyn

Will the Minister give way?

Sir Nicholas Bonsor

I do not have time. The hon. Gentleman did not give way to my hon. Friend the Member for Lincoln. I have only four minutes left.

As the Mexican economy pulls out of the worst recession for many years, helped by the North American Free Trade Association and by Mexico's other free trade agreements, we want in every way we can to encourage the British business community to re-investigate the opportunities in Mexico particularly, as well as in other parts of Latin America.

I now turn to the general point of our economy and our business links with that part of the world. There are two elements: the first is trade and the second is investment. It is true that our trading links with Latin America are very much weaker than those with our main European competitors and much weaker than our Government would like them to be. We are doing everything we can to encourage those links. I talked about the Link into Latin America campaign. The Department of Trade and Industry and the Foreign Office are joining forces to try to spread the word throughout the country, through the business links system, that there are huge opportunities for British companies to trade in Latin America.

I take the point made by the hon. Member for Stretford about learning of the Spanish language, and I know that my right hon. Friend the Secretary of State for Education and Employment is concerned about that and is looking at ways in which we can encourage more people to learn Spanish. I did not know that only 200 people were learning Portuguese. That presents a mammoth challenge if we are to improve the situation substantially enough to affect our trade with Brazil.

The investment picture is much happier, as hon. Members will know. We are the largest European investor in Latin America and we are the third largest global investor in Latin America. That tells us that our very large companies are fully involved in Latin American business. We now need to concentrate on encouraging medium and perhaps even small companies to take advantage of the huge range of opportunities throughout Latin America.

The hon. Member for Stretford also mentioned what I told the Select Committee. Perhaps he should read all that I said and not just part of it. I pointed out that the Treasury has difficulty in matching its expenditure to its income and the Foreign Office, together with all Government Departments, expects to take its share of the hardship that goes with that. As our economy improves, I am sure that greater resources will be put our way, and when that happens, I shall make certain that a fair proportion is put towards our Latin American efforts.

Finally, I reassure my hon. Friend the Member for Wycombe that the Government and I share his enthusiasm for Latin America and his determination that our businesses take advantage of that market, and that Latin America and Britain are better off as a result.

Madam Deputy Speaker (Dame Janet Fookes)

Order. We must now move on to the next debate.