§ 4. Mr. Colin Challen (Morley and Rothwell)What assessment she has made of the impact the general agreement on trade in services initiative will have on public services. [76420]
§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)Public services are excluded from the scope of the GATS, provided they are not supplied on a commercial or competitive basis. The Government have made it clear that we have no intention of making commitments under GATS that would call into question our ability to continue providing public services such as health and education.
§ Mr. ChallenDespite that, a lot of people fear that the liberalisation of trade in services will lead to the liberalisation of trade in public services. For example, only 10 days ago the principal of the university of Strathclyde said:
There hasn't even been the beginning of serious thinking about the implications of this. It could change the character of higher education dramatically and a lot of universities in the UK would sink.Does my right hon. Friend know of the examples of Leeds and Bradford, where the education authorities are run by private companies? Will she strengthen her unequivocal commitment to preventing the liberalisation of trade in public services and commit herself to publishing the full responses to all the requests for liberalisation during her consultation?
§ Ms HewittMy hon. Friend makes an important point. Unfortunately there has been a great deal of misleading information, particularly from some of the non-governmental organisations about the impact of OATS. Let me make it quite clear to the House again that GATS cannot force this or any other Government to privatise public services. We have already published an extensive consultation document which is on the DTI website about requests that have been made to the United Kingdom under GATS. That document is currently out to consultation. Of course we shall publish 990 responses to the consultation, if the respondents are happy with that and our own decisions in the light of that consultation.
§ Mr. Jonathan Djanogly (Huntingdon)Is not the whole point that under GATS the west should be able to sell its services to developing countries in return for which the developing countries want the abolition of production subsidies, particularly for foods, in the UK and Europe? Is it not the case, therefore, that the Prime Minister's failure to secure the ending of production subsidies in Brussels means that everyone will lose out and that Doha has been delayed?
§ Ms HewittThe hon. Gentleman is absolutely wrong. Had he listened to what my right hon. Friend the Prime Minister said in his statement on Monday, he would understand that at the summit over the weekend, we succeeded first in ensuring that after 2006 there will be a reduction in real terms in the total amount of subsidies going out through the common agricultural policy. Secondly, and even more importantly, the mid-term review of the common agricultural policy remains on track and remains a matter for the Agriculture Council subject to qualified majority voting. In other words, no country has a veto on it. We are absolutely clear that reform of the common agricultural policy is essential, not only for Europe's farmers and consumers, but above all for the people of the developing countries, and we will continue pressing in the Agriculture Council for radical reform of the CAP.
§ 5. Lawrie Quinn (Scarborough and Whitby)Whether Governments will be required to privatise companies under the GATS initiative; and if she will make a statement. [76421]
§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)As I have just explained, the GATS cannot force any Government to privatise services. The requests submitted to other World Trade Organisation member countries by the European Union make clear that the EU is not seeking the dismantling of public services, nor the privatisation of state-owned companies in developing countries. Where other Governments decide in their own interests to open services to private sector supply, we are asking in those negotiations for non-discriminatory access to those markets.
§ Lawrie QuinnI thank my right hon. Friend and welcome her response. In the light of the recent summit in Johannesburg on sustainable development and the recent experience of liberalisation of markets in Russia and Asia, should not the so-called developing world be allowed to develop through partnership and a more sustainable approach? Above all, British companies should offer a helping hand to enable those countries to fulfil their opportunities in the trade round and their opportunities for future prosperity.
§ Ms HewittI entirely agree with my hon. Friend. As we saw in the Asian crisis, if developing countries open some of their markets—for instance in financial Services—too quickly without having adequate regulation in place, that can have most unfortunate 991 consequences. However, provided that the sequencing is right and, where appropriate, there is proper regulation by the domestic Governments, I have no doubt at all that increased foreign investment and trade is the best way out of poverty for developing countries. That is why we are so strongly committed to the Doha developing countries round and why my right hon. Friend the Secretary of State for International Development has led the way by committed £30 million to helping developing countries participate fully in those negotiations.