The Denver Summit

HL Deb 24 June 1997 vol 580 cc1482-92

4.6 p.m.

Lord Richard

My Lords, with the leave of the House I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the summit of the Eight held at Denver last weekend. I have placed in the Library of the House the communiqué and the other documents issued following the summit.

The Statement is as follows:

"One of the most stimulating discussions at Denver was on the need for structural reform in all our economies. Different countries face somewhat different problems. But we all face the challenge of how to take advantage of increasing globalisation and provide new job opportunities. In many countries, unemployment—particularly among young people—is far too high. We need to combine greater labour market flexibility with action to improve work incentives, skills and employability, and reduce the risk of marginalisation. There was a welcome for the United Kingdom's plan to take forward work on this at a meeting of G8 finance and social affairs Ministers in London early next year and then at the Birmingham summit.

"We also discussed the problem of transnational organised crime, which is a growing preoccupation for all of us. Crime is becoming increasingly sophisticated and international, and criminals will quickly exploit the newest technologies to evade detection. We must fight them on their own ground, developing greater international co-operation and new techniques to match the threat. Over the coming months we shall work up specific proposals on co-operation against crime, including drug-trafficking and financial crime, which we can consider in detail at next year's summit.

"In Denver, the finance Ministers reported on the progress they had made on measures to increase financial stability. My right honourable friend the Chancellor of the Exchequer will lead the follow-up next year on plans to improve further co-operation between financial supervisors.

"The summit focused particular attention on Africa. We agreed on the need to combat poverty through debt relief, improved market access and support for education. The priority is to focus assistance where it is most needed and will reap most benefit—that is, to those countries which are introducing economic reforms and which respect the principles of human rights and good governance. We emphasised the importance of not wasting money on unproductive, especially military, expenditure and of combating corruption. I announced that Britain would, over the next three years, increase by 50 per cent. our support for primary education, basic health care and clean water in sub-Saharan Africa.

"We discussed UN reform and welcomed the Secretary General's efforts. We encouraged him to undertake a system-wide review of the UN and its agencies. We agreed on the need to develop the UN's ability to prevent and resolve conflicts. And we all recognised the needs to solve the UN's funding crisis as soon as possible.

"The leaders of the Seven also agreed to provide 300 million US dollars towards the cost of restoring the sarcophagus over the Chernobyl reactor to prevent any further leak of radioactive material.

"I was pleased to get the strong support of all other leaders for our views on Hong Kong. The communiqué underlined the G8' s durable interest in Hong Kong's stability and prosperity and looked forward to democratic elections there for a new legislature as soon as possible.

"Foreign Ministers discussed a number of regional and global issues and presented a detailed report to heads. The summit issued a separate statement on Bosnia, reaffirming our commitment to the peace agreement and backed efforts to achieve a lasting settlement in Cyprus. The communiqué also records unanimous support for progress towards a legally binding international agreement to ban anti-personnel landmines.

"I welcome Russia's participation as a major partner in the summit of the Eight. President Yeltsin played a fuller role than ever before and we agreed to continue our efforts to help Russia integrate into the global economic system. Russia will shortly be participating as a creditor in the Paris Club.

"We naturally devoted considerable time in Denver to environmental issues, many of which are being followed up at the UN General Assembly special session which opened yesterday. There is much we need to do to improve the environment we live in. Cleaner air, cleaner water, less congestion and better use of scarce resources are things that matter to all of us. And, in developing countries, alleviating poverty is the key to sustainable development. We are committed over time to reverse the decline in Britain's development assistance that occurred under the previous government.

"Much of the public attention though has focused on efforts to tackle the threat of global warming. We made some progress at Denver, which I hope to see consolidated at the UN session in New York. Everyone accepted that, by the time of the Kyoto conference later this year, we must agree binding targets for reductions in greenhouse gas emissions beyond the year 2000. As the House will know, the European Union has already put forward proposals for a target reduction of 15 per cent. in greenhouse gases by the year 2010. The British Government have indicated their readiness to go further. We are already likely to achieve a reduction of 10 per cent. in greenhouse gas emissions by the year 2000.

"Such targets are tough but achievable—achievable by the sorts of policies that are sensible in their own right: an integrated transport policy that makes public transport more attractive and gets traffic flowing more smoothly; increasing the use of renewable forms of energy; improving energy efficiency in firms and the public sector up to the standards of the best, and increasing the use of combined heat and power; and improving energy efficiency in homes, for example, through promoting self-financing schemes by the energy suppliers.

"Measures aimed at producing environmental benefits are often seen as burdensome or unachievable when they are first proposed, but experience shows that sensible measures produce sensible results, as we saw with measures to promote the use of unleaded petrol, for example.

"We also discussed a number of other key environmental issues, including the need to work for an international agreement on forests with suitably high standards. We also discussed how to increase access to clean water and sanitation, and how to improve international co-ordination of efforts to protect oceans and to manage fisheries.

"This was my first G8 Summit and I was struck by how much better the discussions were when we had time to focus on the key issues common to all our countries. Next year I want to take that further and concentrate on fewer issues in greater depth. In some senses it will mean a return to the original concept of G7 and G8 summits, using the opportunity for informal but substantive discussions.

"At Birmingham, I want in particular to concentrate on two subjects: the issue of jobs and employability and the challenge posed by organised crime. The first will also be a major theme of our presidency of the European Union in the first half of next year. Both are of central importance in all the G8 countries.

"I am grateful to the President of the United States for his hospitality at the Denver summit this year and to the authorities there. I am also grateful to the people of Birmingham for agreeing to host next year's summit, which I am confident will be an equal success."

My Lords, that concludes the Statement.

4.14 p.m.

Viscount Cranborne

My Lords, I and the whole House are grateful to the Lord Privy Seal for repeating the Statement. Indeed, I am sure the House will agree that there is a great deal to welcome in the Statement. For instance, it is clear that the involvement of Russia in the G7 context—now the G8—is to be welcomed, and it is something for which the previous Government worked as assiduously as their successors.

We welcome the Statement on organised crime, with which we could not disagree in any material respect. We also welcome the firm line on human rights in Hong Kong. We will watch with sympathy the Government's efforts to make sure that those sentiments are translated into fact.

We also greatly welcome the remarks about improved market access as far as third world products are concerned. Everyone in your Lordships' House will be aware that trade, rather than aid, is a more dignified and effective way of helping third world countries. We will be extremely interested to know to what extent the Prime Minister and the Government are able to make sure that these principles are translated into action as far as our European partners are concerned. I would be grateful for any comment that the Lord Privy Seal could make in that respect.

We also welcome the remarks that the noble Lord has made about UN reform. I am sure it is something which he in particular, with his experience, will welcome.

We welcome, too, the Prime Minister's continued understanding, certainly apparent from his rhetoric, of how to tackle and reduce unemployment, which all of us agree is the principal internal evil affecting the countries of the European Union—other European Union countries at the moment, fortunately, rather than our own. It is striking that the theme of the Denver Summit was the success of what, in shorthand, has come to be known as the Anglo-Saxon economic model of low tax, low regulation and free labour markets, as against the Rhineland model of high taxation and high regulation. It therefore seems to this side of the House all the more extraordinary, in view of the Prime Minister's rhetoric, and in particular the rhetoric he deployed recently to his socialist colleagues in that remarkable speech in Malmö, that he has agreed to the social chapter at the Amsterdam summit.

One thing the Government will need to make clear is whether there is any difference in their approach in government from their approach in opposition. In government we need to see a match between actions and words rather than merely sticking to the rhetoric.

It is all very well to sign the Denver communiqué and its pious declarations about greater deregulation and responsive labour markets, but is it sensible at the same time to plan restrictions on working time, more regulation in the work place and a minimum wage, if the minimum wage is to be at a level to make a significant difference both to the unemployment rate and to the income of the people who will benefit from it? The time will come when that choice has to be made. I hope that the Government will look to the realities with which business has to grapple in the competitive world in which the Government admit we live. We must not merely be addicted to headlines, however Messianic and attractive the rhetoric may be.

If I may pass to environmental matters, perhaps I should declare a commercial interest as a shareholder and a former chairman of a company involved in developing emission control technologies. The reality is that, for all the grandiose speeches, the Denver and New York summits clearly failed to produce agreement, notably between the United States and other countries. This is in interesting contrast to the Rio summit five years ago, when my right honourable friend Mr. John Major played such a distinguished, if less public, role. I hope that we will see more concrete results over the coming five years in the wake of this summit.

Is the Lord Privy Seal aware that the United Kingdom is one of only three countries which have met the Rio targets? That, of course, is entirely the responsibility and achievement of the preceding government. I hope that the Lord Privy Seal will give some credit not only to the previous government but also to my right honourable friend Mr. John Gummer for his extraordinary efforts in that regard. I am grateful to the Government Deputy Chief Whip for his multi-partisan approach to this matter.

I am particularly concerned by a statement in a Labour Party document that, Labour does not accept that the market mechanism is inherently superior to regulation". I wonder whether the Lord Privy Seal will accept that there is at least a respectable argument to suggest that in the field of the environment that may be precisely wrong. We can look at the record of the German Government, who were one of the leaders, and much to their credit, in the field of pollution regulation. One of the difficulties of imposing limits is that once the limits have been reached by the people who are concerned with them there is no longer an incentive to spend money on research and development into new technologies in order to make the performance of pollution control more effective still.

Can the Lord Privy Seal give us the Government's view about future regulation regimes both in this country and worldwide? Does he think that there is merit, for instance, in introducing in this country, and encouraging other countries to introduce, such devices as tradeable credits, which introduce flexibility of this kind and which can produce incentives through the regulatory regimes to make sure that there is an incentive to invest in new technologies so that the bare achievement of basic standards can be exceeded rather than merely achieved?

Can the noble Lord also tell the House whether during the course of the Prime Minister's visit to the United States he took the opportunity to have conversations with the World Bank and other institutions providing credit facilities to the third world, where most of the greenhouse gases will be emitted during the course of industrialisation over the coming decades, and whether there might be some possibility of encouraging the World Bank and its allied institutions to make, as part of their loan agreements, conditions for pollution control before money is disbursed?

I have a feeling that the rhetoric coming out of the Government at the moment, not only from the Denver summit but also from the Prime Minister's meetings in New York, is merely softening up this country for an increase in taxes on the back of a desire, above all, to attach that increase in taxes to the motherhood and apple pie of green issues. If that is so, I hope that the Lord Privy Seal will be able to tell us whether he recognises that that really will not do. It is at least possible that higher taxes could have exactly the opposite result of what the Government's rhetoric suggests and that it may well be that the new technologies that are increasingly available to us now can be used as a cheap method of achieving far more effectively what higher taxes can achieve.

If you are Prime Minister you do not have to make casual remarks about issues of such gravity affecting many millions of people, all private motorists and many branches of industry. I hope the House will recognise that there must be a clearly thought out policy. In that context perhaps I may say that there appears to be a measure of confusion between some reports and the Statement that the Lord Privy Seal has so kindly repeated to us today as to what the Government's targets are. For instance, I note that the Prime Minister backed an EU target of reducing CO₂ emissions to 15 per cent. below 1990 levels by 2010. He was also reported elsewhere as setting a higher unilateral target of a 20 per cent. cut by 2010. Are those reports correct? Is this target purely for CO₂ emissions or is it for, as the Statement implies, all greenhouse gases? This, as the House will realise, is important because it is infinitely more difficult to achieve that reduction for CO, emissions rather than for all greenhouse gases. I should be grateful if the Lord Privy Seal could explain that for us.

I hope also that he will be able to explain for us how these emission cuts will be achieved. Will this mean an alteration in the Labour Party's traditional support for coal? Will he be looking at road tolling? Will the use of private cars be restricted, or are the public just being softened up yet again for unjustifiable tax increases in the Budget?

Denver also looked to co-operation on solutions for the costs of ageing populations. Is it not true that, thanks to previous governments, Britain has far better funded private pensions than any other European nation? Against the background of the Denver summit, would it not be astonishing to contemplate changing corporate taxation and reforming ACT in such a way as to cut pension fund income? I hope that the Lord Privy Seal will be able to reassure us today that he will be making clear the danger of tinkering with ACT to the Chancellor of the Exchequer in advance of the Budget and that if he fails in that endeavour he will explain to the pensioners of this country the danger to the size of their pensions that tinkering with ACT represents.

There is much to be welcomed in the Statement but, as so often with the Government's record in their short tenure of office so far, their declarations raise infinitely more questions than they answer.

Lord Ezra

My Lords, I thank the Lord Privy Seal for repeating this important Statement. Like the noble Viscount, Lord Cranborne, I should like to associate these Benches with what was said about help to Africa, the statement on Hong Kong, Bosnia and Cyprus, and to welcome the increased participation of Russia.

There are three issues on which I should like to ask questions. Two of them were dealt with by the noble Viscount. The first is the question of unemployment. Fortunately, unemployment is diminishing in this country, although it is still at a very high level in some other EU countries. The Government were quite right to emphasise that greater market flexibility has to be associated with skills training and employability. Those are crucial to continuing the progress already made. It would be helpful to know whether, in advance of further discussing these matters with their international partners at the Birmingham summit, the Government will be putting forward proposals that we can discuss in this House.

The second issue is financial stability, which is obviously of crucial importance but was dealt with very briefly in the Statement. It merely said that the Finance Ministers had already discussed this and that there would be further discussions between what are described as financial supervisors. That makes it sound rather technical. Is it more substantial than that or is it merely a question of supervisors getting together to see how they would supervise financial flows or the movement of money which has originated from doubtful sources? I should be grateful if this could be expanded on a little because it is an important issue.

Finally, there is the environmental question. I am very pleased that the Prime Minister should have put so much emphasis on this not only in the G8 Conference but also in his remarks yesterday to the United Nations in New York. I am glad that the United Kingdom intends to take a lead in this matter and that in addition to the proposal from the EU for a 15 per cent. emission reduction by the year 2010, we have put forward the proposal for a 20 per cent. reduction. What we should like to know is how this will be achieved. Here again I hope that before this is debated further with the heads of state at the G8 Conference in Birmingham next year we shall have a full opportunity of hearing the Government's views on the two major issues which the Prime Minister identified as leading to this desirable result; namely, a more efficient, integrated transport system and improvements in the efficient use of energy and encouragement for the use of renewables.

These are three issues which have been under consideration for many years and on which a good deal of progress has already been made. But in order to achieve this challenging objective which the Government have rightly set, we have to recognise that although the year 2010 may sound a long way off, it is only another 13 years away. If the structural changes to the environmental scene have to be put in place by then we have to start very soon indeed. If we are going to do that, then we need to know how we are going to set about it.

Therefore, generally speaking, we welcome the Statement. We are very pleased that these issues will be taken up again in Birmingham. However, in view of the importance of the environmental issues, I am not clear why the Prime Minister should have left that subject off the agenda for Birmingham. He stated that the agenda would deal with employment and organised crime. There is a very strong case for the environmental problems to be taken further at that meeting to which the Prime Minister so effectively referred recently.

Lord Richard

My Lords, I am grateful for at least some of what the noble Viscount and the noble Lord said. I thought that the noble Viscount was doing rather well in making the first eight or 10 points that I noted, but he then veered off track and became somewhat carping. Indeed, at one stage I felt that he was a trifle patronising.

Baroness Blatch

Can't take it!

Lord Richard

Oh dear me!

Viscount Cranborne

I would not dare.

Lord Richard

My Lords, whatever the verb is, no doubt to patronise is in the eye of the beholder, as all kinds of other things are.

I was asked a number of detailed questions by the noble Viscount and perhaps I may give some detailed and authorised answers. As regards tradeable credits, we have to look at this matter as part of the Kyoto negotiations. They may well have a part to play, but they cannot be used as an excuse for countries not taking domestic action. I was asked about financial stability. It is a technical subject, which has been discussed in depth by G8 experts. The aim is simple. It is to create co-ordinating supervisors who will monitor financial transactions and prevent irregularities which can remain hidden in increasingly complex international transactions.

I was asked whether the proposed follow up discussions by my right honourable friend the Chancellor will be only with supervisors. No, it is about supervisors and making sure that supervision is better co-ordinated. The schema, if I can put it that way, is that that should take place at the beginning of next year and then obviously the matter will come back to the summit in Birmingham.

The noble Viscount seemed a little afraid that my right honourable friend the Prime Minister did not give the previous government any credit. He asked me whether I would give the previous government some credit for what they had done about the gas emissions target. My right honourable friend said to the UN General Assembly: I attacked the last British government for many things. But they did deliver on the greenhouse gas emission targets set at Rio. Some other countries cannot say the same including some of the great industrialised nations. To them I say this: our targets will not be taken seriously by the poorer countries until the richer countries are meeting them". I hope that the forum of the United Nations General Assembly is sufficiently public to satisfy even the noble Viscount.

I was asked specifically what my right honourable friend said about emissions at the General Assembly. Perhaps I should read what he said, which is the simple way of doing it. He said, Perhaps the most worrying problem is climate change. If greenhouse gas emissions continue to rise unabated, by the year 2100 global temperatures will have gone up 1 to 3.5 degrees centigrade and sea levels risen by perhaps as much as a metre. Some small islands are seriously at risk. So the EU has proposed the new and challenging target of reducing carbon dioxide emissions in developed countries to 15% below their 1990 level by the year 2010. In Britain we would he ready to go further to a 20% target". As the noble Viscount pointed out, Britain's record, I am happy to acknowledge, is good. Compared to 1990 we have reduced emissions by 10 per cent. already. Therefore, we are well on track for the reduction of 15 per cent. by the year 2010, which is the proposal, as the noble Viscount knows, of the European Union as a whole. We believe that we can do better than that. We can reduce the figure by 20 per cent. without engaging in any of the rather drastic measures which the noble Viscount delighted in putting up only to knock down. I have noticed over the years that that is one of the favourite ploys, but an affectionate one, if I may put it that way, used by the noble Viscount. When in trouble he erects an Aunt Sally which he proposes to knock down. As the noble Viscount knows and as my right honourable friend has said on a number of occasions. the way to achieve the target is by the methods set out specifically in the Statement.

My right honourable friend refers in the Statement to four specific matters. One of these is, an integrated transport policy that makes public transport more attractive and gets traffic flowing more smoothly". The noble Viscount will know that a White Paper is in preparation on that matter.

The Statement mentions increasing the use of renewable forms of energy". I do not believe that anyone in the House will question that.

There is reference to, improving energy efficiency in firms and the public sector up to the standards of the best, and increasing the use of combined heat and power". We had a Question about combined heat and power at Question Time today in which the Government expressed support for the concept.

Finally, the Statement mentions, improving energy efficiency in homes, for example through promoting self-financing schemes by the energy suppliers". If those measures are enacted, we believe we can achieve the 20 per cent. reduction by the year 2010.

Any matter concerning taxation is for my right honourable friend the Chancellor of the Exchequer. I am learning quite quickly what a delight that sentence is when standing at the Government Dispatch Box. I am sure that my right honourable friend the Chancellor will read with great interest what has been said in the House today and will take such account of it as he believes appropriate and sensible.

There was considerable discussion at the summit about the ageing population, particularly the idea of active ageing. When I read the communiqué, it seemed to me that in some ways your Lordships' House is a very good example of what was being talked about. The communiqué states: We discussed the idea of 'active aging'—the desire and ability of many older people to continue work or other socially productive activities well into their later years, and agreed that old stereotypes of seniors as dependent should be abandoned … We discussed how our nations can promote active aging of our older citizens with due regard to their individual choices and circumstances, including removing disincentives to labor force participation and lowering barriers to flexible and part-time employment that exist in some countries". It seems to me that your Lordships' House might provide a good case study of active ageing.

To be a little more serious for a moment, we believe that the summit was a success. As the noble Viscount said, we believe it important that Russia was involved. We believe it will be increasingly important that Russia becomes more involved. It is true that environmental targets were not reached at Denver. The important time for targets to be reached and accepted by other countries is at Kyoto. There is a commitment in the communiqué that those targets will have to be expressed in time for the Kyoto summit.

4.40 p.m.

Lord Harmar-Nicholls

My Lords, the speeches that followed the Statement were the kind of speeches that could have emanated from any mutual admiration society. For my part, I detect only one positive sentence in the Statement. It is a sentence with which I wholeheartedly agree and it is one that I hope will come to fruition and give satisfaction. But for that sentence, which I will enlarge upon in a moment, the Statement is a series of generalisations tacked together which add up to almost nothing. The positive sentence that is good and should be watched indicates that the Prime Minister has recognised the generality of the remainder of the Statement. He says that at future summits he will try hard to see that the discussions concentrate upon definite points that can be debated in detail and amount to something. That is important, and I approve of it. I hope that he will be successful in bringing that about. Often one is faced with anodyne Statements such as that before us today. It could be nothing else. I do not criticise the Prime Minister for presenting nothing; he did rather well. Too often particularly on matters that emanate from European summits one hears general speeches that tell one nothing, only to find months later that the country has been committed to one detail or another that is antagonistic to the good of the UK. Therefore, if there is one positive sentence saying that there will be detailed discussion, that makes the Statement worth listening to because it means something. That is good. It is a sentence of which I heartily approve.

Lord Richard

My Lords, I am sorry that the noble Lord is disappointed. However, the mere fact that he cannot disagree with the Statement does not make it of no consequence. If one looks at the Statement and the communiqué one sees a good deal of meat. Of course, one does not find total agreement. One would not expect that. My right honourable friend says that this is the first G8 summit that he has attended and he has recognised that it did best, if I may put it inelegantly, when it had time to concentrate and focus on a particular subject. Therefore, he will try next year in Birmingham to focus on two, which I believe most people agree is a sensible way to proceed.

Lord Harmar-Nicholls

My Lords, I hope that he will succeed.

Lord Fraser of Carmyllie

My Lords, I should like to ask the noble Lord for clarification on a very important and welcome point made in the Statement; namely, the 300 million dollars that is to be spent on the sarcophagus at Chernobyl. My understanding of the situation is that there is already some commitment on behalf of the G7 countries to repair the sarcophagus. It would be helpful to know whether that is an additional or new commitment to repair the sarcophagus. If so, is the noble Lord able to give any indication of the contribution of the United Kingdom to the cost of that significant, albeit necessary, improvement because it is still in a very dangerous condition?

Lord Richard

My Lords, I shall try to find the precise page in the communiqué that assists the noble and learned Lord. I thought that I had flagged the page. I do not believe that it was a previously existing commitment. The Government of the Ukraine is grateful that 300 million dollars is to be made available. Help has now arrived. I am informed that G7 and other countries have already given some money to the Chernobyl clean up and the Ukraine energy sector, but this is new money to make the sarcophagus safe.