HL Deb 20 May 1998 vol 589 cc1680-91

5.5 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 G8 Summit in Birmingham last weekend. Since they are relevant, the Statement will also touch on the EU/US Summit in London on Monday, and the WTO meeting which my right honourable friend attended yesterday in Geneva. The documents issued at these events have been placed in the Libraries of both Houses. The Statement is as follows:

"I must 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 and their delegations. I should like to take this opportunity to make clear to the city council and the people of Birmingham my 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 these objectives were achieved. The new format proved so successful that Germany, which hosts next year's summit, has decided to follow suit.

"This was the first summit clearly 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. This 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 these 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 fora 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 economy recovery, and welcomed the launch of EMU.

"We also discussed the wider implications of the Asia crisis, emphasising that economic reform can be soundly based only where political legitimacy exists. This 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 only served to confirm this.

"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 Treaty and Non-Proliferation Treaty. There was grave concern at the implication of India's action for international security and agreement that it 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 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 WHO 'rollback malaria' initiative, to which Britain will be contributing £60 million. The aim is to cut radically by 2010 the death rate from a disease which 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 pursuit of this Government's policy of setting targets for the year 2000. In particular, the G8 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 the year 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. We also all agreed to forgive aid-related debt to reforming least developed countries—a step which Britain has already taken.

"We are not satisfied by these steps. I pay tribute to the Jubilee 2000 campaign and its dignified breaking the chain demonstration in Birmingham on Saturday. This is a vast and complex issue which cannot be solved overnight. And we have to mix realism with our idealism. For debt relief to be effective, recipient countries must be committed to policies which ensure the benefits reach the poor. But 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; help the young and long-term unemployed; encourage entrepreneurs and make the tax and benefit system more employment friendly while promoting life-long learning. Here, too, there is a growing degree of consensus among the G8. 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. This requires ever closer co-operation between our governments and law enforcement agencies, including joint law enforcement action. The G8 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, and 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 this further next year.

"We welcomed the forthcoming UN 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 UK is contributing £10 million to the World Bank Trust Fund to help developing countries 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 over a year. The US Administration are now committed to waivers for EU 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 counter proliferation and terrorism. As a result our companies can now invest with far greater predictability while we have reinforced EU-US co-operation against unacceptable policies. This was a major step forward.

"These 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 GATT 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 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. I was therefore pleased to announce 10 million dollars of technical assistance to help these countries prepare.

"Finally, I should mention the support I found both in Birmingham and Geneva for the Northern Ireland Agreement. The goodwill towards the people of Northern Ireland was remarkable and heartwarming. They confirmed that stability and peace in Northern Ireland have every chance of being reinforced by a boom in investment and prosperity from around 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 these goals and that the results were good for Britain and for other countries. I commend them to this House."

My Lords, that concludes the Statement.

5.15 p.m.

Viscount Cranborne

My Lords, as usual, the whole House will be grateful to the noble Lord the Leader of the House for repeating the Statement. I believe that the good sense of waiting until today before reporting the results of the G8 Summit enabled the noble Lord to show how integral to the overall scheme of things were the other two summits which the Statement touched on and how sensible it is to take the three together.

Having said that, I hope that the noble Lord will forgive me if I express a degree of disappointment about the results of the G8. We had hoped for something perhaps a little more substantial. Sadly, I am bound to say that they turn out to be a little thin, to say the least.

As always, I have taken to heart the noble Lord's advice to me and, more particularly, to the whole House, when our roles were reversed before the last election. If memory serves me right, he always advised the House to refer to the communiqué rather than to the Statement which the Government produce in the wake of any of these great international events. I have to say to the noble Lord that I am beginning to find that advice more than usually good.

There are a number of aspects which we greatly welcome in all three of the results. I take first the subject of economic growth and trade liberalisation. I hope that we can all agree with the emphasis placed on these important matters. Freeing trade and reducing business regulation are perhaps the single greatest engine to increased prosperity worldwide. Is the Leader of the House aware that we welcome the strong commitment of the G8 to continue trade and investment liberalisation? Does he accept that while the Prime Minister and President Clinton have said that free trade with the United States is firmly on the agenda of both the United Kingdom and the European Union, that aim does not ring true from the pages of the final communiqué of the G8 nor indeed from European Union declarations?

Will the Leader of the House agree with the view that we have expressed on this side of the House that the nations of the European Union have a particular duty to set an example to the world in not erecting new barriers to trade, in opening up the frontiers of Europe to the east and in reaching out for new free trade agreements across the world, and indeed in refraining from threatening protectionist measures against the Union's own members if they happen to disagree with some of the measures being proposed?

The EU-US talks have important ramifications in that context. We greatly welcome what the Statement says about the Helms-Burton Act and indeed the Iran-Libya Sanctions Acts. But can the Leader of the House tell us what specific goals and target dates have been set for concluding detailed agreements on free trade between the European Union and the United States? Many thousands of jobs would result from progress here. Indeed, does the noble Lord agree that that would be one of the best routes to the second declared aim of the G8 Summit of job creation? Can he tell us whether the Government have now accepted without reservation the view that we on this side of the House have long argued, and which the success of the United States and United Kingdom economies in job creation demonstrate, namely, that deregulating and reducing bureaucracy create jobs? Does the noble Lord also agree that jobs are not created purely by the frankly absurd idea of government action plans, even if those plans are given capital letters? Does he accept that jobs are created by individuals and businesses working hard in a free environment, free from unnecessary burdens and interference, and with flexible labour markets?

I hope that the noble Lord will also agree that if most of us had promised an action plan to help new businesses and the unemployed, unlike the Government we would not be taking through this House a Bill to impose a minimum wage—something that the Bank of England declared again recently will destroy jobs. Nor, if we had made the thoroughly desirable pledge at G8 to make the tax system more job-friendly, would we have introduced a Budget that will tax billions of pounds out of British industry, parts of which are now sliding into recession.

On the very important question of debt relief, I hope that the noble Lord will agree that the enthusiasm that my right honourable friend Mr. Clarke and my noble friend Lady Chalker showed in the past was greatly to be welcomed and that in some ways it has shown us the way forward in this area. I am glad that this matter is being taken seriously. The communiqué mentions the importance of strong national institutions for countries which at the moment are labouring under a great burden of debt. Will the noble Lord recognise that strong institutions, powerfully reformed administrations and the resolution of conflicts—all of which are referred to in the communiqué—must be present in those countries if debt relief is not to have diametrically the opposite effect to that intended? Further, was much said about debt for equity substitution programmes?

On the question of malaria, we greatly welcome the contribution to the "rollback malaria" initiative.

The G8 communiqué also refers to the question of nuclear power plants. Is the Leader of the House satisfied that paragraph 10 of the communiqué gives quite enough weight to the dangers of Soviet-designed nuclear power stations which, as we know, are scattered all over Eurasia? I wonder whether the worrying question which they present for all of us should not be driven far higher up the international agenda than it is apparently at the moment.

On the question of non-proliferation, I understand that G8 members can, as the communiqué suggests, strengthen their own controls over proliferation. However, does the noble Lord feel that the G8 has quite enough influence over other countries which may be potentially far more guilty than the G8 countries in this respect? Is there anything that the noble Lord can do to increase our understanding of what G8 members feel that they can do to increase their influence over such countries?

As I said, I am grateful to the noble Lord for repeating the Statement. It is inevitable that such meetings should not be wholly conclusive, but I am bound to say that this meeting seems to have left an unusually large number of questions in the air and perhaps wholly unanswered.

5.23 p.m.

Lord Rodgers of Quarry Bank

My Lords, we on these Benches also thank the noble Lord the Lord Privy Seal for repeating in this House the Statement made in another place by the Prime Minister. Like, I am sure, the whole House, I particularly welcomed the reminder towards the end of the Statement that there was a widespread expression of good will at both Birmingham and Geneva for the Northern Ireland Agreement. We all hope that that will make a contribution to a successful outcome in the referendum, without in any way acknowledging (if that was thought to be the case) that the G8 was in a position to interfere.

It is, however, difficult to be enthusiastic about the outcome of the summit unless the initial expectations were low. It is yet another case, of which there are so many, of a communiqué being agreed in advance and requiring no amendment as a result of the weekend. The dominant note was discussion and good intentions, not decisions or action plans—whatever doubts the noble Viscount may legitimately have about them. That was never more so than in relation to world debt.

I wonder what will be remembered about this weekend. I am inclined to think that it will be the pop concert, the day spent in the countryside at a stately home, President Clinton in a Birmingham pub and President Clinton teaching the Prime Minister to play golf—all good fun, good for Birmingham, but making very little difference to the world.

It must be said that even on the subjects of the Indian nuclear tests and of Indonesia, there is nothing in the communiqué which could not have been anticipated. There is certainly nothing significant in it about the environment. The communiqué does not take the argument forward one little bit.

However, I realise that it is necessary to be realistic about summits. They are accompanied by a great deal of hype and perhaps if we recognise their limitations we can acknowledge modest achievements from modest objectives. First, we can all welcome what was a more focused summit than some. It will be good news if that form is continued in the future. Secondly, in so far as the summit was meant to be low key, perhaps it is churlish to complain if it succeeded in being exactly that. Thirdly, all of us with experience of conferences of all kinds acknowledge that much that is said in the bilaterals and at the margins of conferences is just as important as what is said under the spotlight in the main plenary sessions. There is always a great advantage in discussions between the President of the United States, ourselves, and our partners in the European Union. Fourthly—I say this with all the qualifications that I have already expressed—I think it is possible to welcome the communiqué so far as it goes, although that is not very far.

If I am wrong about what will be remembered about the Birmingham G8, the real test is whether it has helped us to see how to prevent the poor of the world becoming poorer as the rich become richer. That is the central economic question which the G8 and all of us must face. I would be grateful if the noble Lord the Lord Privy Seal could summarise in a sentence how far he really believes that the weekend summit at Birmingham and the two subsequent events have contributed to that.

Looking back at the G8 Summit—it used to be the G7—I wonder whether it is not time to turn back the clock a little and consider what the G7 was originally meant to be. It was meant to be a meeting of minds on strategic economic questions. There are all sorts of ways in which world leaders can exchange views and negotiate with each other from time to time, but the original purpose of the G7 summit was to consider the large, central, strategic economic questions, including dealing with third-world debt and helping to prevent the poor getting poorer. Will the noble Lord reflect for a moment on whether we need to return to an even more focused G8 which will consider the central economic questions in a way in which no other gathering could?

5.28 p.m.

Lord Richard

My Lords, I am grateful to the noble Viscount and the noble Lord for their welcome for large parts of the Statement. It was not an unqualified welcome—indeed, it was a somewhat disappointed response from the noble Lord, Lord Rogers, and a somewhat detailed welcome from the noble Viscount, Lord Cranborne. Nevertheless, they welcomed the Statement.

One should not have any illusions about what a summit such as the G8 is and what it is not. It is not an executive body taking decisions. It is a forum within which the leaders of the eight economically most powerful countries in the world can meet, exchange views and get to know each other. We believe that from that have emerged some reasonably positive conclusions. It is no secret that as to some the Government were somewhat disappointed.

I turn to some of the more detailed questions that have been put. The noble Viscount asked whether there had been any discussion of debt for equity. I do not know the answer to that. I cannot find the answer in the communiqué. As the noble Viscount will be aware, one of the problems of repeating a Statement made by the Prime Minister in another place is that he was party to the negotiations and knows exactly whether or not debt for equity was discussed. I shall endeavour to find out. If I discover anything significant I shall write to the noble Viscount.

As to US-EU trade negotiations, on many occasions we have expressed our strong support for WTO and multilateral liberalisation. That is spelt out in reasonably forthright terms in paragraph 5 of the communiqué. The US-EU trade negotiations are bound to be complex and I do not believe that there is a target date. However, we believe that it is a priority to conclude them as soon as we reasonably can.

A question was asked about paragraph 10 and Russian nuclear reactors. Formerly, G7 did a great deal of work on nuclear safety in that particular region. Under G8 the work will continue. This is high on the G8 agenda. The United Kingdom contributed 17 million dollars to the Chernobyl fund to make the sarcophagus safe. So far I believe that a total of 384 million dollars has been raised for that purpose. Although there is still some way to go, I believe that that demonstrates the G8's commitment to it. I do not share the view expressed as to the tentativeness of paragraph 10 of the communiqué.

Debt was a matter raised by both the noble Viscount and the noble Lord. I believe that that was the major disappointment of the noble Lord, Lord Rodgers. The Government have consistently pursued steps to increase and speed up the debt relief available for heavily indebted countries. I pay tribute to members of the previous government who also pursued that policy. At Birmingham we persuaded our G8 colleagues to make two important commitments: first, to bring as many as possible of the highly indebted poor countries (HIPCs) into the process of debt relief by the year 2000. The Mauritius Mandate target is that 15 of the 20 eligible countries should be in the process by the year 2000. The second new and important commitment was to facilitate debt relief for post-conflict countries such as Rwanda. Both of those are significant and important steps.

However, one should not forget that over the past three years the official creditors of the Paris Club have forgiven 8 billion dollars, more than 5 billion dollars of that going to Africa. Six countries have already qualified under the HIPC initiative for debt relief totalling a further 5.6 billion dollars, of which 650 million dollars has already been received by Uganda. In addition, G8 members deliver some 10 billion dollars per year to HIPCs in development assistance. Therefore, a good deal is going on. I do not disguise from the House, just as my right honourable friend the Prime Minister has not disguised from the House of Commons this afternoon, that we would have liked further steps to be taken. The Government will continue to pursue that policy with the vigour that we can and, it is hoped, with continued success.

On the whole, the summit responded positively to the view of the thousands who went to Birmingham to demonstrate their support for debt relief. There is perhaps a slight tendency to understate the importance of the concessions then made. The noble Lord, Lord Rodgers, almost suggested—not quite—that the G8 should go back in effect to a nice fireside chat when the leaders of the world met together to discuss economic strategy and nothing else. I do not agree. This is a summit at which views are exchanged and leaders get to know each other. I do not believe that it would be very helpful for it to turn into a glorified executive body which took decisions justified on the basis that they represented in the same room 60 per cent. of the world's GDP. I am not in favour of that. It must be structured and focused in order for it to produce reasonable results; it is not enough that they should merely meet.

My summing up of the summit is that it was moderately successful and useful; some progress, but not sufficient, was made on debt.

5.36 p.m.

Lord Naseby

My Lords, the Leader of the House in quoting from the communiqué stated that the G8 members had unanimously condemned the actions of India on nuclear testing. His noble friend sitting on his left made a Statement last week in the House that this was the first of three opportunities that the Government would have to try to ensure some focus on this particular problem. Possibly this is the most significant problem that the world has faced since the Gulf War. The Leader of the House went on to say that the G8 was not an executive body and therefore no executive action could follow. Therefore, exactly what happened to the condemnation of India? In reality what does that mean to the Indian Government who so far have shrugged their shoulders at the world's comments on their actions?

Lord Richard

My Lords, it means that the leaders of the G8 countries expressed a unanimous and concerted view about the fact that India carried out these tests. It was quite important that those eight countries should be unanimous in their strong condemnation of the tests and their desire to see India adhere unconditionally to the Comprehensive Test Ban Treaty and the Non-Proliferation Treaty. The United Kingdom has recalled its High Commissioner. It was agreed by G8 that each member should use its own contacts and take its own steps to achieve the end in which all were in favour; namely, to persuade the Indian Government to adhere to those two treaties. That shall be done in whatever way each country believes to be the most effective. Within the EU the matter is to be discussed by the General Affairs Council on 25th May. In both the World Bank and IMF we shall work for a common approach with other shareholders. The G8 members also collectively and individually agreed to urge Pakistan to show restraint and avoid a further escalation of the arms race in the region. In our view and in the view of G8 Pakistan has more to gain from restraint than from testing.

I believe that this is a considerable garnering of international opinion. To understate it by saying that G8 did not impose sanctions on India or take some other dramatic decision at Birmingham is to downgrade it somewhat. After all, these are very powerful countries all moving in the same direction. They are condemning India for its previous actions and trying to persuade it to sign the treaties. If I were the Indian Government I would listen hard to what that group of countries was saying.

Lord Ponsonby of Shulbrede

My Lords, in repeating the Prime Minister's Statement my noble friend referred to the importance of international crime. I would have thought that that would meet the criteria of the noble Lord, Lord Rodgers, in that crime is a matter of strategic international importance. My noble friend referred to the meeting in Moscow in July which is to look at this issue. Can my noble friend go further and say in the most general terms what kinds of agreements and practical actions he hopes will emerge from the meeting in Moscow to combat international crime?

Lord Richard

My Lords, I do not believe that I can go very much further than I have. I have described the discussions that took place at the G8, and the type of areas in which it is hoped that international discussion and co-ordination may continue to bring benefits. The follow-up meeting will be held next year in Moscow. I do not think that I can take that further.

Lord Gillmore of Thamesfield

My Lords, I apologise for arriving a few seconds after the Leader of the House began the Statement. In the course of the G8 Summit was there any discussion on Japan—the subject of a short debate in your Lordships' House last night—and, if so, was there any discussion of the current economic crisis in Japan? Did the other leaders offer to their Japanese colleague their encouragement and support in his avowed but somewhat shaky intent to reform radically Japanese corporate institutions and its banking and financial systems?

Lord Richard

My Lords, of course Japan was there. One should not forget that. So to a large extent the discussion took place with the Japanese Government being present. The G8 expressed its support for the Japanese Government's efforts to revitalise their economy, which everyone recognises is essential for Asian economic recovery itself. To that extent, there was discussion. I am afraid that I do not know whether it got as far as looking at the details of the Japanese Government's plans for reforming their corporate financial institutions. There was some discussion of Japan, particularly, as I understand it, in the context of the Japanese position in relation to the rest of Asia.

Lord Stewartby

My Lords, will the noble Lord be more forthcoming about the rather disappointing progress on the relief-of-debt-servicing costs on the poorest countries? Like the noble Lord, Lord Rodgers, he openly accepted that things did not go as far as he hoped they would. It is a subject which has been of great concern to successive governments back to the time at least of my noble friend Lord Lawson. In the past, there have been fundamental differences of principle in the approach of different leading nations as to how that issue should be addressed. In the G8 discussions were some of those differences of principle narrowed, which enabled the 2000 commitment to be made, or did difficulties arise in the practical implementation? It would be helpful to know. If the noble Lord can enlighten us more about that, it might help us to form a judgment as to how much progress is likely to be made by 2000.

Lord Richard

My Lords, it is impossible to know what progress is likely to be made by 2000. Before the G8 met at Birmingham, I think that most people felt that it would not make the progress that it did. I accept that there is not unanimity of approach. Certain countries take a more restrictive view than do the UK Government. Their concerns are obvious ones. They are concerned about money, and they have the more legitimate concern—I am not downgrading money, but in the context of the argument I am saying that it is more legitimate—that it is important that whatever steps are taken, the benefits go to the poor in the country, and that the institutions in the relieved countries are capable of handling it. So, yes, there was a difference of approach. My impression—I, of course, was not there—is that the division between those countries which were more restrictive and those which were less restrictive is somewhat less stark now than it was a few years ago. At least the Government are persuaded that it is worthwhile continuing to push in that area, and that we propose to do.