HC Deb 20 May 1998 vol 312 cc957-72 3.31 pm
The Prime Minister (Mr. Tony Blair)

With permission, Madam Speaker, I should like to make a statement on the G8 summit in Birmingham last weekend. Since they are relevant, I will also touch on the European Union-United States summit in London on Monday and the World Trade Organisation meeting I attended yesterday in Geneva. I have placed in the Library of the House the documents issued at those events.

I start by warmly congratulating Birmingham on how it played its part as host. The city looked magnificent and the preparations impressed all the visiting leaders, their delegations and visiting members of foreign media. I take this opportunity to make clear to the city council and the people of Birmingham our gratitude for all their efforts and for their forbearance over any disruption the summit caused.

After last year's Denver summit, I said that we hoped to make this year's summit smaller, more focused, more businesslike and less formal than some recent summits. I am pleased to report that those objectives were achieved. Indeed, the new format has proved sufficiently successful for Germany, which is to host next year's summit, to decide to follow suit. This was clearly also the first summit for the whole G8 and I was particularly delighted that President Yeltsin was able to play a full part in our discussions.

The Asian financial crisis of the past year put economic issues firmly back at the centre of the summit agenda. It is vital that we learn the lessons for the future. We must, as far as we can, prevent a repetition and at least ensure that future warning signals can be seen by all at an earlier stage. We therefore endorsed a report from G7 Finance Ministers on strengthening the global financial system. That sets out concrete proposals for improving the transparency of the international financial system and national financial data, introducing codes of good practice with publicity for those who fall short, strengthening national financial systems to cope with global capital flows and involving the private sector more closely in resolving those crises—effectively a set of international financial standards countries can sign up to as a way of rewarding good practice. We asked our Finance Ministers to seek rapid decisions in the appropriate forums and to report back to us without delay.

We expressed our support for Japan's efforts to revitalise its economy, which will be essential for Asia's economic recovery, and welcomed the launch of monetary union.

We also discussed the wider implications of the Asia crisis, emphasising that economic reform can be soundly based only where political legitimacy exists. That requires political accountability and transparency, too. In particular, we issued a message on the urgent need for political reform in Indonesia to accompany economic change. Events since have served only to confirm that.

We unanimously condemned India's nuclear tests, urged restraint on neighbouring countries and called on both India and Pakistan to adhere unconditionally to the comprehensive test ban and non-proliferation treaties. There was grave concern at the implication of India's action for international security, and agreement that the action had reduced India's standing in the world and her ability to play a central role.

We delivered clear messages on the importance of maintaining momentum in the middle east peace process and of ensuring a real dialogue in Kosovo that would lead to concrete measures to lower tension and stop violence.

We devoted considerable time to the problems of developing countries, particularly those in Africa. We committed ourselves to reach the internationally agreed targets for reducing poverty, maintaining a substantial flow of aid and untying it wherever possible to make it more efficient. We supported the World Health Organisation "roll-back malaria" initiative, to which Britain will be contributing £60 million. The aim is to cut radically by 2010 the death rate of a disease that strikes, above all, the poor of the world.

We also devoted considerable attention to the reduction of the burden of debt on the most heavily indebted poor countries. Birmingham marks a significant step forward in the pursuit of the Government's policy of setting targets for the year 2000. In particular, the G8 countries are now signed up to the Mauritius mandate target that all eligible highly indebted poor countries are at least in the debt relief process by 2000, and to granting interim relief where necessary. Particular attention will now be given to meeting the immediate needs of poor post-conflict countries, especially those in Africa. Moreover, we all agreed to forgive aid-related debt to reforming least-developed countries—a step which Britain has already taken.

We are not, however, satisfied by those steps. I pay tribute to the Jubilee 2000 campaign and its dignified breaking-the-chain demonstration in Birmingham on Saturday. The issue is vast and complex, and it cannot be solved overnight—we have to mix our realism with our idealism. For debt relief to be effective, recipient countries must be committed to policies that ensure that the benefits reach the poor. However, I am in no doubt that we must do more.

Birmingham was notable for the extent of agreement on the environment agenda, including our common determination to make the Kyoto agreement on climate change a reality through tough domestic action, developing international trading and other mechanisms and drawing in the developing countries over time.

Also on the economic side, we discussed our national action plans to promote employability and inclusion, to help the young and long-term unemployed, to encourage entrepreneurs and to make the tax and benefit system more employment friendly while promoting lifelong learning. Here, too, there is growing consensus among the G8 countries. None of us can be content while unemployment remains so high despite our relative prosperity.

We discussed the growing threat of transnational crime as borders become more open and we all become more dependent on information technology. That requires ever closer co-operation between our Governments and law enforcement agencies, including joint law enforcement action. The G8 countries have made real progress since the Lyon summit two years ago, but we agreed new steps to make our fight against crime more effective. We endorsed a 10-point action plan on high-tech crime, and an intensification of action against money laundering and financial crime. We underlined the increasing dangers of official corruption from the proceeds of crime, the need for further action against trafficking in human beings and the rising threat of the illegal firearms trade. A ministerial meeting in Moscow will pursue that further next year.

We welcomed the forthcoming United Nations General Assembly special session on drugs and confirmed our determination to pursue a comprehensive strategy to tackle all aspects of the drug problem—production, transport and consumption.

Finally, we discussed the huge challenge posed by the millennium bug and agreed on further action to ensure the right level of international awareness and preparedness. The United Kingdom is contributing £10 million to the World bank trust fund to help developing countries to tackle the problem.

Immediately afterwards, President Clinton, Jacques Santer and I met in London for the six-monthly EU-US summit. Our discussions focused on two key issues: resolving our long-standing differences over US sanctions on Iran, Libya and Cuba; and launching a new transatlantic trade initiative.

Negotiations on the serious problems of extra-territorial jurisdiction raised by the Helms-Burton and Iran-Libya sanctions Acts have been going on for more than a year.

The United States Administration are now committed to waivers for European Union companies under the two Acts, and will resist attempts by Congress to push through similar legislation in the future. At the same time, we reaffirmed our joint commitment to countering proliferation and terrorism. As a result, our companies can now invest with far greater predictability, and we have reinforced EU-US co-operation against unacceptable policies. That was a major step forward.

The agreements also paved the way for a major new EU-US trade initiative, the transatlantic economic partnership, to remove remaining barriers to trade across the Atlantic and provide more effective co-operation in developing the world trading system.

Yesterday, I was in Geneva for the 50th anniversary of the general agreement on tariffs and trade to make clear Britain's continued championing of the cause of free trade. We must continue to resist protectionism, not least in the wake of the Asian economic crisis. A major challenge that we face is to manage the movement towards free trade so that all can participate and benefit. Developing countries must be able to take full advantage of the opportunities, so I was pleased to announce some $10 million of technical assistance to help those countries to prepare.

Finally, I should mention the support that I found in both Birmingham and Geneva for the Northern Ireland agreement. The good will towards the people of Northern Ireland was remarkable and heart warming, and confirmed that stability and peace in Northern Ireland have every chance of being reinforced by a boom in investment and prosperity from right round the world.

It is important that Britain plays a strong, international role in support of sound economic and political policies throughout the world, as a champion of free trade, and in the fight against international crime. I believe that the summits contributed to those goals and that the results were good for Britain and for other countries.

Mr. William Hague (Richmond, Yorks)

May I join the Prime Minister in the congratulations that he extended to the city of Birmingham and endorse what he said about Northern Ireland? It is good to know that, when we go to Belfast this afternoon, we will take with us the support of so many friends and allies. Let us hope that the people of Northern Ireland grasp the chance to turn the agreement into a lasting peace.

I welcome, too, the strong commitment to continuing trade and investment liberalisation to which Heads of Government have signed up through the World Trade Organisation. Will the Prime Minister take this opportunity to confirm the Government's support for the goal of achieving worldwide free trade by 2020?

Does the Prime Minister regret the failure of the United Kingdom presidency of the European Union, under his chairmanship, even to have Sir Leon Brittan's plan for a free trade area of Europe and America on the agenda of the EU-US summit? Can he confirm that that plan, which aimed for the abolition of industrial tariffs by 2010 and a free trade area in services, was effectively dropped; that 14 EU member states and the United States were in favour of pressing on with the plan; and that the episode shows once again that the Government's presidency of the EU has often produced little other than platitudes and press releases?

I welcome the acknowledgement in Birmingham of the need for structural reform to encourage growth and job creation in the world economy, but does the Prime Minister recognise that it is far easier to talk about the need for structural reform than it is to implement measures that will create jobs and prosperity? Does he recognise that the current low unemployment in Britain is the result not of communiques but of labour market reforms pioneered by the previous Government, and that some of the current Government's policies threaten those reforms?

May I offer my support for the points made in the G8 communiqué about the former Yugoslavia? The future of Bosnia will be in the balance this year, and everyone in the House hopes that a stable and prosperous state can be created. I hope that the Prime Minister will share my concern that there is the potential for another disastrous ethnic conflict in Kosovo. Will he argue for the return of the Organisation for Security and Co-operation in Europe monitoring force, to promote confidence within the province, and join us in urging President Milosevic to allow confidence-building measures to be put in place and to restore Kosovo's autonomy?

It was right that debt relief should have been high on the summit's agenda. We will support the Government if they continue to give a lead to other donors, such as the G8 countries, the World bank and the International Monetary Fund in promoting well-thought-out debt reduction programmes that offer the prospect of sustainable economic growth.

I am sure that the Prime Minister will recognise the enormous contribution of the previous Government and former Conservative Chancellors. Indeed, the G8 countries are continuing the initiative begun by the previous Government to help the most indebted countries. Why did the summit fail to convince other Governments to widen the debt reduction agenda as we had all hoped?

Will the Prime Minister note the Opposition's concern for the future of Indonesia, and our deep regret at the loss of life? Does he have any plans to review the agreements that international financial institutions have made with Indonesia? If not, will he confirm that he intends them to be implemented fully and swiftly?

Does the Prime Minister accept that the summit's response to events in India appeared confused? The G8 nations were unable to put together a united response to the nuclear tests carried out by India. Does the United Kingdom support sanctions, like the United States, or the ending of arms exports, like Canada, or the approach of the French and Russian Governments, both of whom made it clear that they are not contemplating such measures?

The G8 summit appears to have been better organised and more productive than some other conferences that the Prime Minister has chaired recently. Could that have anything to do with the fact that the Foreign Secretary was not there? Is the Prime Minister claiming the credit for that success, or did the Foreign Secretary simply fail to notice the invitation in his red box? In the interests of maintaining good relations with as many countries as possible, will the Prime Minister undertake to repeat that success at future summits?

Mr. Dennis Skinner (Bolsover)

The right hon. Member will not be occupying the chair.

The Prime Minister

No, I think not.

We remain committed to free trade worldwide. As the right hon. Member for Richmond, Yorks (Mr. Hague) knows, we strongly supported Sir Leon Brittan's package, but it had to be supported unanimously, and it was not. It is not right to say that 14 countries were in favour and only one against, but it had to be supported unanimously; that is simply how it is.

We were able to agree significant measures on the transatlantic economic partnership that will have an impact on trade. The measures that we were able to agree on United States sanctions will have an important bearing on the ability of British and European companies to trade with countries against which the USA imposes sanctions. It was a successful meeting. Of course, we would have liked to go further, but consent for that simply was not there.

On growth and job creation, I simply point out that unemployment is significantly down since the Government came to office. People cannot have it both ways on this. [Interruption.] Neither of us can, on national health service waiting lists and class sizes, for example. The plain fact is that we inherited from the previous Government a position in which one in five non-pensioner families had no one of working age in work. We have significantly changed the way in which unemployment statistics are calculated, because they were not right. Most people believe that the new deal, which we have implemented in the teeth of opposition from the Conservatives, is doing a great deal to reduce unemployment and help with the problems of social exclusion.

Mr. Bernard Jenkin (North Essex)

It has only just started.

The Prime Minister

I must tell the hon. Gentleman that the Conservative party opposed those measures.

On Kosovo, we agree that President Milosevic must take the necessary action outlined by the contact group, and that confidence-building measures are helpful.

I am happy to pay tribute to what the previous Conservative Chancellor did about debt reduction. However, it is not correct to say that the G8 came up with nothing new. The proposal for interim relief for heavily indebted countries was new, and the proposal for interim relief for countries that get into the process by 2000 was also new. The measures agreed on post-conflict countries were also new. In addition, the measures agreed for the World Health Organisation were new. I have said already that we would have preferred to go further. Nevertheless, considerable progress was made, and was made in circumstances in which people believed we would make no progress.

Our view on Indonesia is clear. There must be political and economic reform. It is not for us to interfere in the internal politics of Indonesia, but we should reiterate our commitment to the economic reform and political transparency that would help that part of the world.

The G8 did, indeed, put out a united position on India. Countries have their own positions on sanctions, and I do not know whether the right hon. Member is arguing that we should have imposed economic sanctions on India. I do not think that that is the position.

The conference was a significant success. The reason for that was that we delivered a focused agenda with a series of concrete steps. In respect of the previous European conference, after yesterday's speech, the summit would have been rather less well organised and delivered if the right hon. Gentleman had been in charge.

Mr. Paddy Ashdown (Yeovil)

Given the number of summits that the Prime Minister has attended recently, I am tempted to ask him which he would look forward to least—another summit or another round of golf.

There is much in the G8 summit that we welcome, including the proposals on sustainable growth, jobs and transnational crime, but does the Prime Minister agree that one failure that cannot be glossed over is the failure on debt restructuring? Is it not the case that the summit did not even fulfil all five conditions in the Commonwealth Finance Ministers' meeting in Mauritius? Is it not the case that the Prime Minister himself hoped and argued for more? Will he confirm that he shares at least some of the disappointment at the outcome of the 40,000 who gathered outside in what he rightly described as a dignified and powerful demonstration? May we conclude from that that the Prime Minister and the Government will wish to go further?

It is a good thing that the G8 is signing up to Kyoto, but does the Prime Minister realise that he will have to go further? He certainly should, because what has been done is not sufficient to fulfil his manifesto commitment to achieve a 20 per cent. reduction in CO2 by 2001.

On the question of the transatlantic economic partnership, will the Prime Minister confirm that the most-favoured nation principle will be followed, and that any bilateral agreement between Europe and the United States will subsequently be thrown open to multilateral access? Otherwise, such an agreement can act as a block to free trade and not as an encouragement.

Does the Prime Minister agree that one could not have a more eloquent statement of the current state of the Conservative party than the contrast between the welcome to monetary union given by all the world's leaders at the G8 summit and the increasingly neurotic and isolationist speeches made by the leader of the Conservative party, which do good neither to his party nor to the country?

The Prime Minister

I share some of the disappointment of Jubilee 2000 on debt restructuring. I doubt whether we will ever go far enough to meet the full concerns of any group in that respect, but we would have wished to go further. Having said that, before the summit a great deal of concern was expressed that we would be unable to get an agreement at all. Some of the comment that has been made post the G8 summit has understated significantly the amount of progress that was made. The Finance Ministers are now tasked with coming back to us and saying specifically how they intend to take that further. My right hon. Friend the Chancellor of the Exchequer, who was here until a moment ago, will be handling that himself. The measures that he has proposed through the Mauritius mandate and elsewhere in the past few months have been immensely helpful.

We are on course to meet our Kyoto targets. We obviously have to be careful to ensure that we pursue the right policies on energy and energy conservation. That is the reason for the Budget measures and the programmes to promote conservation.

In respect of the transatlantic partnership, yes we want to see that there is multilateral access to the bilateral EU-US relationship. However, it is important to emphasise that, on any basis, that relationship is the most important trading relationship anywhere in the world. It should not be, and, as far as we have anything to do with it, it will not be, a conspiracy to shut out other people.

I agree with what the right hon. Gentleman says about monetary union, but, fortunately, that is not a matter for me.

Mr. Stuart Bell (Middlesbrough)

The Prime Minister was perfectly right at Birmingham to seek to regain the informality of Group 8 summits that prevailed in the 1970s when it was Group 4. It will not have escaped his attention that 60 per cent. of the world's gross domestic product was represented at Birmingham. It was therefore right and fitting that time should be spent on the debt, aid and health of the third world. The Prime Minister has referred to the eligibility of nation states under the debt bracket and to the new interim measures. Can he confirm what was not in the statement—that the United Nations has a commitment to reduce third-world debt by half in the next 15 years? Building on the statement made by the right hon. Member for Yeovil (Mr. Ashdown) and given my right hon. Friend's own determination, will he confirm that that is a noble goal for his Government in the days, weeks, months and years ahead?

The Prime Minister

Yes, my hon. Friend is absolutely right; we did agree to meet those aid and development targets. That is obviously an important part of our own domestic policy, quite apart from our international policy. In respect of the G8 meeting, as I said, Germany has now indicated that it will follow the same course of informality next year. There was a feeling that it was far easier to get measures agreed. Incidentally, I would highlight the measures on international crime and the fact that there will be specific concrete steps taken by all the G8 countries as a result. In the end, as much as anything else, that will prove to be one of the benefits of the G8 summit in Birmingham.

Mr. Bowen Wells (Hertford and Stortford)

Can the Prime Minister help the House to understand exactly why it was not possible to make as much progress on third-world debt as he had hoped to make and as the Select Committee on International Development had hoped that he would make at Birmingham?

What were the arguments adduced around the table in Birmingham against being more generous and more comprehensive, speeding up the process and selling IMF gold to provide a fund against which to write off the debt? What sort of arguments do we have to use and what does the right hon. Gentleman think that we, he and his Government should be doing to persuade those who do not agree with us—Germany, Japan and the United States—to agree to the proposals put forward, very sensibly, by the Chancellor of the Exchequer and himself? If he can help the House, perhaps we will make some progress.

The Prime Minister

It is not so much helping the House that I need to do, as making the case to other countries. Their concerns are obviously about money and about whether there is sufficient reform in the indebted countries to which debt relief has been granted. Our view is that the most persuasive case for more debt relief is that it is only when those countries can escape the burden of their debt that they are able to develop economically. That is not a zero-sum game in which they gain and we lose; on the contrary, it is a game in which we can both win.

Many of those countries are struggling with huge debt repayments every year, which squeeze out the spending that they require on infrastructure and other things. We made those points and we shall continue to make them.

I have said this before, but I am sure the hon. Gentleman will forgive my repeating it: it does actually matter that we got more agreement than might otherwise have been expected. I know that it was not enough for us and for others, but it was more than most people were expecting before the G8 met.

Mr. Robin Corbett (Birmingham, Erdington)

May I thank my right hon. Friend for bringing the summit to the city of Birmingham, on behalf of the people of that city, its council and loads of companies that helped to ensure its success? May I thank him for his kind comments and invite him to commend the activities of West Midlands police, in ensuring in an unobtrusive way the security of all those taking part? Will he find a way of thanking my constituent Nyla Yousuf, who was the lead UK delegate to the parallel young people's summit taking place at the same time, for the magnificent way in which she chaired that event and the commendable communiqué on which all the delegates agreed?

The Prime Minister

I am delighted to do that on both points—to repeat my thanks to the people of Birmingham for their tremendous welcome and to the council for the way in which it organised the summit. My hon. Friend is quite right to say that the West Midlands police were superb in organising the summit. My summit experience, which has recently been very extensive, is that their work was done in the most unobtrusive way—very calm and very well policed—which made a great difference to the overall feel of the conference.

Nyla Yousuf, whom I met when I went along to the young people's G8 summit, conducted it with extraordinary skill. If she carries on doing that for some years, I can well see her being in a position to make statements like this in future.

Mr. Michael Fabricant (Lichfield)

I congratulate the Prime Minister on strengthening the undoubted ties that already exist between him and President Clinton. I cannot blame him for strengthening those ties, given the comments that Viktor Klima, Chancellor of Austria and the next President of the European Union, made when he said that the Prime Minister gave a summit which demonstrated how not to conduct summits—which was not very helpful to the Prime Minister.

The Prime Minister said that a veto by one country has prevented the European Union and the north Atlantic countries from enjoying free trade. Does that mean that the World Trade Organisation plan and aim for world free trade by 2020 is dead in the water?

The Prime Minister

No. Indeed, it is fair to say that more than one country objected to what Sir Leon Brittan was proposing. I did not accept those objections, but they were based on those countries' desire to do things through the WTO. However, we believed that it would have been perfectly consistent with that to have had the transatlantic trade deal as well. I do, however, stress, as I did a moment ago, that we made considerable progress with the transatlantic economic partnership—it was not as much as we wanted, but it was significant progress—and, especially because of the additional measures in relation to sanctions and extra-territoriality, we made more progress on those things at the EU-US summit than we have made for very many years.

In respect of strengthening ties with the United States, I think it is always in this country's interests to have strong relations with the US.

Mr. John Cryer (Hornchurch)

Bearing in mind the Prime Minister's support for free trade, will he nevertheless accept that there are some things that we cannot allow to move freely around the world, such as white asbestos, which is an especially deadly substance? Will he look toward some type of control, perhaps extending to a ban, on the importing of white asbestos?

The Prime Minister

That is under consideration both in this country and in the European Union, although we have given an—I believe, justified—undertaking to Canada and other countries that produce white asbestos that we shall proceed on the basis of the scientific evidence. That scientific evidence exists; we are analysing it, and we shall make our views known when that analysis is complete.

Mr. Bernard Jenkin (North Essex)

May I thoroughly endorse the Prime Minister's words in his statement that economic reform can be soundly based only where political legitimacy exists. That requires political accountability and transparency, too"? Can he not see that those are precisely the criteria that my right hon. Friend the Leader of the Opposition seeks to apply to the future management of the single currency in Europe, because it will lack political legitimacy, transparency and accountability, and is therefore likely to be unstable?

The Prime Minister

I do not want to intrude on the private debate between various members of the Conservative party, but I must say that it is bizarre to claim that monetary union lacks the support of the countries joining it; it has the support of their democratically elected Governments. As far as this country is concerned, we have made it clear that it will be subject to a referendum.

It would be very, very foolish of Conservative Members to get themselves into the position of hoping that monetary union fails, because it will not be in anyone's interests if it fails. The history of the past few years is that Conservative Members have said, "It will never happen. If it happens, only a few countries will take part. If there are more countries, it will all fall apart very quickly." They have been wrong at every juncture.

The accountability lies in the procedures that have been set out in the Maastricht treaty.

Mr. Jenkin

indicated dissent.

The Prime Minister

The hon. Gentleman may shake his head, but I remind him that it was negotiated by the Prime Minister of the Conservative Government, under whom he served as a Member of Parliament.

Mr. Jeremy Corbyn (Islington, North)

Will the Prime Minister accept that the origins of the debt burden of the poorest countries are sky-rocketing interest rates and consistently falling prices for basic commodities and basic agricultural products? Does he further accept that this issue must be revisited urgently, to ensure, first, a massive write-off of the totally unjust and immoral debts that the poorest African countries are burdened with, and, secondly, a system of price adjustments to ensure that the poorest countries receive fair prices for the products that they produce, and that huge profits do not continue to be made in the west on the basis of cheap products from overseas?

The Prime Minister

I think that what would help the poorest countries most would be to start opening out some of the world trading system, especially in relation to agriculture. As I said at the GATT anniversary conference in Geneva yesterday, that would do a tremendous amount of good for many of those countries.

In respect of debt relief for those countries, I shall not repeat myself, but yes, we do want more debt relief to go to the heavily indebted countries. We want them all in that initiative by the year 2000. There are now provisions for interim relief. I gather that six of those countries already qualify for some £5.6 billion of relief. The creditors of the Paris club have already forgiven $8 billion. It is important that we carry on with that process. It is not moving as fast as we should like, but some progress is being made. Some of the comments that I have read in the past few days, effectively suggesting that the debt relief package has been rolled backwards as a result of the G8, are wrong. It has not been pushed forward as much as it should be, but it has been moved forward.

Dr. Jenny Tonge (Richmond Park)

Is the Prime Minister aware that every day 16,000 people are infected with the AIDS virus and, of the $18 billion a year that is spent on research into and treatment and prevention of that disease, only 1 per cent. is spent on developing an AIDS vaccine? Does he accept that the G8 summit went a very small way indeed in encouraging research into the AIDS vaccine, and will he give his support to all the people who say that the development of such a vaccine is the only way in which we shall conquer the world epidemic?

The Prime Minister

Yes, I agree with the hon. Lady. As she knows, we included in the communiqué a specific passage pledging ourselves to continue our efforts to reduce the global scourge of AIDS through vaccine development, preventive programmes and appropriate therapy, and by our continued support for UNAIDS. We also specifically welcomed the French proposal for the so-called therapeutic solidarity initiative, and other proposals for the prevention and treatment of AIDS. In addition, we have requested that our experts come back with a study on the feasibility of their implementation, plus the additional measures that we need to take to ensure that a greater amount of the research is specifically directed at the developing world. Again, that is at least something.

Mr. Dale Campbell-Savours (Workington)

I return my right hon. Friend to the question asked by the Chairman of the Select Committee on International Development, the hon. Member for Hertford and Stortford (Mr. Wells), on the reasons why Japan and Germany specifically were identified with those who seemed to be resisting a new debt initiative. My right hon. Friend referred to their demands for reform. To what specific areas of reform are they alluding? What do they want that they cannot have at the moment?

The Prime Minister

We are all agreed in the sense that any money, whether by way of aid or debt relief—any assistance going to the developing countries, particularly the heavily indebted ones—should go under a regime which ensures that the money goes for the purposes for which it is required, and that economic reform programmes are in place that allow the best use to be made of the assistance that has been given. Some countries feel more strongly than others that not sufficient is being done in that direction, and some countries feel that there is a financial problem with the amount of aid and debt relief that can be given. But it is wrong to single out particular countries in a particular way.

It is true to say that international discussion on this issue, particularly after the Mauritius mandate, which was agreed by our Chancellor and pushed through by him, has particularly advanced the process. It is just not advancing as quickly as we should like. We shall have a chance to return to that in other international forums, and we will return to it. We have tried during this past period to push on significantly the measures proposed to aid those developing countries, and we are doing that not merely out of compassion for the developing world, but because, in the end, it is solidly in our interests to do so.

Mr. David Willetts (Havant)

I congratulate the Prime Minister on his boldness in going beyond his Secretary of State in appearing to say in response to my right hon. Friend the Leader of the Opposition that he expects the new deal to reduce the number of workless households. Will he now say what sort of effect he expects?

The Prime Minister

It has been set out many times. As a result of the new deal, thousands of young people are coming off benefit and going into work. One of the worst legacies of the previous Government was the large number of long-term unemployed young people who had never worked in their lives. It requires a special programme to get them off benefit and into some form of work. We are pushing it through as much as we can. Already many thousands of youngsters are off benefit and in work, which I think is a good thing. I do not know why the hon. Gentleman opposes it.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Further to the point made by the hon. Member for Hertford and Stortford (Mr. Wells), the Chairman of the Select Committee on International Development, does my right hon. Friend agree that it is unacceptable for any country to have to spend more on the repayment of debt than on its health and education programmes? That puts into perspective the girns that we regularly hear from the Opposition on those topics in relation to our own country. When other nations at the G8 summit speak of reform in those countries, to what extent do they recognise that when people are living in such a deep state of poverty, reform is unlikely? As Bertolt Brecht famously said, a man is only human—he must eat before he can think.

The Prime Minister

That is why we want to take the process further. It is correct to say that we must make sure that the money that we put in—for example, into post-conflict countries—is going into countries that are prepared to reform. For example, in Geneva yesterday I met a Minister from the Rwandan Government, who specifically thanked us for the work that we have been doing. Work is being done, but we need to go further and do more.

Mr. Nicholas Winterton (Macclesfield)

I warmly welcome the Prime Minister's positive and rational support for the Jubilee 2000 campaign. There is no doubt that on-going action is necessary, and I am sure that he will get support from all parts of the House for what we seek to achieve.

Did the Prime Minister see the television news coverage of the desperate famine in south Sudan, the passive acceptance of their plight by the people of that country, and the apparent inability of the world to provide them with food help, even when there are huge surpluses in Europe alone? Will the Prime Minister use his office as President of the EU to co-ordinate a campaign to get food to the people of south Sudan as soon as possible, to prevent thousands of unnecessary deaths?

The Prime Minister

I agree totally with those sentiments, and I saw those pictures. We have already used our position as the presidency of the EU to step up significantly the amount of aid that we are giving, and, on our own account, we have pledged several million pounds more in the past few weeks.

Again, however, it is also important to achieve the necessary political change. Some of the humanitarian aid is not getting through as it should, not because the will is lacking to get the aid through, but because the aid is being prevented from getting through. It is important that we make the necessary provision to aid famine in those countries, and, at the same time, make it clear that we require a process of political reform so that the money and the aid that we are getting in go to the people who really need it. However, we will carry on looking to see what more we can do to relieve the terrible suffering of the people there.

Ms Tess Kingham (Gloucester)

Our Government, under their ethical foreign policy, have taken the view that it is best to engage directly with countries such as Indonesia and China. That view is obviously not taken by the United States in relation to Cuba, which it has cast into the outer wilderness. Can my right hon. Friend tell the House whether we have made that case to the US Government? Have we asked them to take a leaf out of our book and to engage directly with the Government of Cuba, to have a productive dialogue and to bring Cuba into the world community rather than casting it aside?

The Prime Minister

Obviously, American foreign policy is a matter for the United States. We have always made it clear that we disagree with the extra-territoriality provisions in the Helms-Burton Act and other legislation. The European Union shares that position. I hope that, over time, there will be greater acceptance of Cuba into the world, and also greater acceptance by Cuba of proper democratic political reform. The two things must ultimately go together.

Mr. Robert Key (Salisbury)

In the detail of the European Union-United States communiqué there is an important and welcome reference to increased co-operation to counter chemical and biological terrorism. If we are to avoid the absurd over-reaction that we witnessed earlier in the year when the Home Secretary sensibly issued a routine warning to ports, does the Prime Minister agree that we need an improved public education programme that will tell people exactly what is going on? Is that envisaged as part of the welcome move that has been described?

The Prime Minister

I cannot answer that point in detail, so I shall write to the hon. Gentleman and tell him what specific steps we are taking. He is right to say that our general purpose is to ensure that people receive as much information as possible in a way that does not alarm them or generate scare stories that are no good for anyone.

Several hon. Members


Madam Speaker

Order. Seven Labour Back Benchers are still standing. I hope that they will put their points briefly to the Prime Minister, who has been at the Dispatch Box for a very long time.

Mr. Dennis Skinner (Bolsover)

When my right hon. Friend strides across the world stage, will he remember that, on the question of debt relief, it is important not to repeat the experiences of the past 18 years when the Tory Government wrote off the debts of the top four clearing banks—NatWest, Midland, Barclays and Lloyds—to the tune of £5 billion? This time, let us make sure that we use that £5 billion—if we can find the money by getting rid of the Tory spending plans—to write off the debts of under-developed countries.

The Prime Minister

I agree with those sentiments entirely.

Mr. Michael Clapham (Barnsley, West and Penistone)

Very speedily, may I say that I listened to what the Prime Minister said about the progress that has been made in helping the heavily indebted countries? Does he agree that, if we are to achieve the target of halving the world's poverty by 2015, the G8 must adopt a much more realistic approach? Will he work continually to inject that realism?

The Prime Minister

Yes, I agree with my hon. Friend. That is why we shall continue to try to make progress on two fronts. Greater debt relief, forgiveness of debt and aid to the developing world will be matched by the institutions through which that aid is channelled putting in place the necessary economic reforms. Countries can take advantage of their often enormous natural resources only if they are freed from some of their burden of debt and pursue the right economic policies. They could be wealthy trading partners with the rest of the world if they were given the chance. The combination of debt relief and political reform offers the best way forward.

Mr. Peter L. Pike (Burnley)

Does my right hon. Friend think that the G8 has done everything possible to make the Government of Pakistan understand that, however justified they may feel in responding with a nuclear test and although there may be public pressure within the country to conduct such a test, it is in the best interests of Pakistan not to respond in that way? Should not the G8 send a clear message that India and Pakistan must sit around a table and resolve the problem of Kashmir? That would unlock the logjam and enable them to look at the real problems facing those two countries and that part of the world.

The Prime Minister

Of course, we want to see progress in respect of that dispute, but those countries must work it out for themselves. In respect of the possibility of Pakistan conducting nuclear tests, I hope, even at this stage, that it will refrain from doing so. If it did, it would receive enormous support and congratulations from around the world. We remember the example set by Brazil and Argentina, and I hope that Pakistan will take a leaf out of their book.

As the President of the United States said on Monday, India is an immensely important and powerful country. Its potential is virtually unlimited. I say to the Indian Government and the Indian people—they are friends of this country and we feel the great bond and tie of history between our two countries—that there are other and better ways of enhancing their international standing and security than nuclear testing.

Mr. Harry Barnes (North-East Derbyshire)

As a follow-up to the previous question, may I ask the Prime Minister to elaborate further on the G8 attitude to Pakistan? What is the G8 doing to encourage Pakistan not to explode any nuclear bombs? There is a sense in which Pakistan's response is almost more important than what has taken place in India. It is often the person who is seen to retaliate who gets the red card. It would be unfortunate if Pakistan moved into that position.

The Prime Minister

I agree that our position cannot be different in respect of the two countries. We are looking, both on our own account and as President of the European Union—I know that the United States is doing the same—to find all the arguments that we can to persuade Pakistan that it does not need to follow suit with India, and that it would be better for it and world security if it did not.

Ann Clwyd (Cynon Valley)

Will my right hon. Friend agree that the G8 should have called for political reform in Indonesia a long time ago, when Suharto was strong, rather than now, when he is weak and no longer of any use to his friends? May I ask my right hon. Friend, as leader of the European Union, whether he could not beef up the statement a bit and call for Suharto to stand down now to avoid further bloodshed and suffering in Indonesia?

The Prime Minister

We do not believe that it is for us to tell particular leaders to stand down, but we have made a strong statement in respect of political reform in Indonesia. There is no doubt that the future of Indonesia—after all, it is one of the largest countries in the world with a population of 200 million and with tremendous potential—is best secured through both economic and political reform. If that were to happen and Indonesia ended up with a more transparent financial system and a more accountable political system, its future would be extremely bright. Obviously, that is what we should be working for.

Mr. Hugh Bayley (City of York)

May I congratulate my right hon. Friend the Prime Minister on ensuring that the communiqué made specific reference to the need for OECD countries to ratify the convention on transnational bribery? May I ask my right hon. Friend to read the United Kingdom tax inspectors' manual, which makes it clear that the fiscal regime that we inherited from the Conservatives does not make international bribery an offence in UK law, and, in many cases, makes it tax deductible? Will my right hon. Friend consider that and make the necessary changes to the law as part of our ratification process of the OECD convention?

The Prime Minister

I have to say that the Inland Revenue tax inspectors' manual has not yet found its way on to my bedtime reading list. I shall obviously try to rectify that. I do not know the answer to my hon. Friend's point offhand, but I shall certainly look into the matter and tell him.

Mr. Andrew Miller (Ellesmere Port and Neston)

The whole House will welcome the section of the communiqué on drugs trafficking. Is it likely that, as a result of that, we may see sanctions imposed on those regimes that engage directly in drugs trafficking, especially countries such as Burma that are killing our kids and systematically killing their own children and families?

The Prime Minister

We are looking at every way in which we can discourage countries from the production of drugs, especially if that has anything to do with Government encouragement. The most important thing that the G8 did was to agree a series of actions in respect of high-tech crime, international crime and money laundering in particular. It is the money laundering for the drugs trade that is its real point of vulnerability and weakness if we can attack it properly.

Vast sums—billions of dollars—move across frontiers to support the drugs trade. We have asked our Finance Ministers to come back to us with specific measures that we can take to enhance our ability to strike at money laundering. I should like to see us move eventually to a system that is accepted worldwide where we can make progress on tackling this issue. If we are to tackle the drugs problem, we need to tackle demand, which we and other countries are trying to do. We need also to attack the supply.

Mrs. Louise Ellman (Liverpool, Riverside)

I welcome the initiative and the lead that this country has taken, particularly on debt reduction. Is my right hon. Friend able to give a commitment that this country will continue to support European and international programmes that permit the exchange of knowledge and skills between the UK, and countries and areas in the process of development or reconstruction, which would allow those countries to develop their own local and regional economies in a way that suits them, and also permit good governance to take place?

Will my right hon. Friend support that approach within the context of local Agenda 21 groups, where a variety of people in local areas work with international support to develop local economies and good governance together?

The Prime Minister

The $10 million that I announced in Geneva yesterday will be specifically for technical and other forms of assistance to allow developing countries to take advantage of a more liberal trading regime, and will be geared to ensuring that they have the best possible chance of developing precisely as my hon. Friend describes. That will certainly happen in respect of exchange programmes, which are already a big part of our education programme and which we intend to develop further.