§ Dr. Vincent Cable (Twickenham)What consultations took place with the British Government on the foreign investment and tax policies introduced in Iraq by the interim authorities. [132043]
The Secretary of State for International Development (Hilary Berm)The order on foreign investment and the tax policies in the 2004 draft budget were approved by the governing council. The British Government have been kept informed about the coalition provisional authority's proposals for economic reform, and we have secondees in the CPA, assisting in Iraq's development. We share the CPA's aim of attracting investment into Iraq and the creation of a diversified tax base.
§ Dr. CableMay I add congratulations from the Liberal Democrat Benches?
Since the first major decision was to spend £550 million of British taxpayers' money in Iraq, what steps has the right hon. Gentleman taken to assure himself that the economic policy framework is sound and democratically based? In particular, how does he 104 respond to the criticism of the Nobel laureate, Joe Stiglitz, and others that Iraq is being used as a laboratory experiment for the ideas of the extreme right wing of the American Republican party?
§ Hilary BennThat is not a view that I would share. I think that what the House is concerned about is how we can support Iraq in the process of getting the country back on its feet. The most important answer to the hon. Gentleman's question is that the governing council took the decision about the steps on tax policy and investment. Iraq desperately needs investment because, if we can combine that with political progress and security and as it is a country with talent, resource, expertise, and a well-educated population, it should have a prosperous future if we stick with the course that we are currently charting.
§ Mr. Peter Mandelson (Hartlepool)May I add my congratulations to my right hon. Friend on his promotion? I think that he will do his job very well, and I wish him every success.
May I also commend the Government for their decision to contribute financially to the rebuilding of Iraq? Although there is obviously a mountain to climb, does my right hon. Friend agree that, since the removal of Saddam Hussein's vicious and destructive regime, security has been restored to the overwhelming bulk of that country, the police and the army are being rebuilt, the economy is stable, food and water are getting to the Iraqi people and the governing council is a vital step to restoring sovereign government in that country? Is not all that something that we in Britain can take considerable pride in helping to bring about?
§ Hilary BennI agree with my right hon. Friend's description of what is happening in Iraq at the moment—a description that one would not always get from just reading the newspapers and watching the television. It is important that people have a balanced picture of the progress that is being made, while recognising the continuing security concerns. He is absolutely right: if Saddam were still there, we would not be having any of this conversation about the possibility of a new future for the people of Iraq.
§ Tom Brake (Carshalton and Wallington)I too congratulate the Secretary of State on his new position. I know that he will fight hard on behalf of his Department.
Did the consultations include an assessment of whether the policies to be introduced by the Iraqi governing council are, in fact, in breach of the advice given by the Attorney-General to Her Majesty's Government? Does the Secretary of State favour the economic shock therapy that will be introduced in Iraq? Does he not in fact believe that that will only fuel resentment against foreign companies and foreign countries, particularly the US and the UK?
§ Hilary BennI congratulate the hon. Gentleman on his first appearance as the Liberal Democrat spokesperson on international development.
105 The most important answer to the hon. Gentleman's question is that this was a decision of the governing council. The House needs to trust the Iraqis, who now have responsibility for taking forward that country in the decisions that they take and in the hard process of moving from the nightmare that they have experienced for the past 25 years to the prosperous future that we all want for it.
§ Mrs. Caroline Spelman (Meriden)In the Department's most recent Iraq update, 70 per cent. of Government investment in reconstruction has been allocated through the UN and yesterday's written statement reveals a further blank cheque. The Department has flatly refused to fund individual projects, such as the rebuilding of the spinal injuries unit in Baghdad. Does the Secretary of State accept that, because of that loss of control over how the money is spent, good projects such as that one just do not get a look in?
§ Hilary BennThe Government have not given a blank cheque. We are funding practical progress and real investment, as the hon. Lady will know, including in southern Iraq, where 17 projects have been approved to improve water and sanitation under the scheme that started just over a month ago. In relation to the particular hospital, in which I know that she takes a real interest, the discussion needs to take place with the Minister of Health, who is now in post, about Iraqi priorities for the future of the health service in that country. We need to back Iraqi judgment.