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Westminster Hall
Thursday 2 December 2004
[Sir Nicholas Winterton in the Chair]
The Caribbean
Motion made, and Question proposed, That the sitting be now adjourned.—[Vernon Coaker.]
The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas) : I thank Mr. Speaker for deciding to allow this debate. The Caribbean is a remarkable part of the world. Its intellectual contributions have been outstanding. It has produced three Nobel laureates and has a world-class tertiary education institution in the university of the West Indies. The sporting prowess of the region's people at Olympic events and, of course, cricket, are well-known and continue to draw international admiration. It has given the music world a global icon in the person of Bob Marley, and reggae, calypso and carnival have all entered British culture as a result of our engagement with the Caribbean.
Apart, too, from its beauty, it is a region of huge energy and creativity, with a very diverse history and rich cultural traditions. It is also a region that has made significant economic and social progress in, for example, the strides that it is making towards achieving the millennium development goals, its current progress towards economic integration and the ability of the region to collaborate politically and to support a thriving business sector.
Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab): Would my hon. Friend the Minister agree with me that the region has also produced one United States Secretary of State and one British Member of Parliament?
Mr. Thomas : My hon. Friend intervened too quickly; I was going on to point out exactly that fact, and I am more than happy to endorse her point.
A sun-sand-sea image of the Caribbean belies the image of a region in which there is still considerable poverty that must be tackled, and requires donors to provide continuing support. The English-speaking countries of the Caribbean include some 334,000 people living in extreme poverty: that is 8 per cent. of the population by international standards. That figure increases dramatically to about 8 million people if we include the troubled state of Haiti, and those people who move in and out of poverty. It is also a region in which every country faces risks to its gross domestic product out of all proportion to its population or its capacity. No other region of the world faces that potent mix of issues and challenges, all of which contribute to the unique vulnerability of the Caribbean islands.
So how can we expect those countries to protect, for example, their social services, their law and order or their arts, if levels of growth are consistently being undermined by the impacts of global shocks and the
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result of climate change? In the Caribbean, small economies compete in an increasingly globalised world, with the increasing indebtedness of those countries, and the damage that that causes to economies, such as the loss of preferential access to European markets for bananas, and the proposed changes to the European Union sugar protocol. There is also the real and increasing threat posed by HIV/AIDS in the region, the effects of the narcotics trade, and crime more generally, as well, as I have alluded to, the impact of natural disasters, of which there has been almost one a year on average since the late 1980s.
The challenges facing the Caribbean start with scale. These countries are small, open economies in transition from a narrow export and economic base, but carrying high levels of debt, a heavy reliance on trade preferences, rising crime rates due to drugs, and the second highest level of HIV/AIDS outside Africa. Three major hurricanes this year and, more recently, a severe earthquake in Dominica are a reminder of the impact that natural disasters have on the economies of the region. Tourism has become a mainstay of most economies, alongside financial services and, increasingly, medical training. Although those industries earn foreign currency, they do not help enough in terms of helping the poor with jobs and employment prospects.
Remittances from the Caribbean diaspora play a vital role in helping to keep poor people above subsistence levels. In Jamaica, remittances are estimated at $1.4 billion annually, which accounts for about 18 per cent. of Jamaica's GDP. Furthermore, countries such as Guyana, Grenada, St. Vincent and Dominica still depend strongly on primary agricultural commodities. So, growth and employment prospects in the region are mixed.
Greater economic integration will play a key role in responding to these economic challenges by improving the competitiveness of the region's economy and increasing economic growth. The movement towards the formation of a Caribbean Community single market and economy, starting with Barbados, Jamaica and Trinidad and Tobago on 1 January next year, signals an important shift in political will in that direction. Those countries will be role models for the region, demonstrating, in particular, that giving the private sector the right incentives can make a difference and that business can create jobs.
The UK's task is clear. As an EU member state, we must ensure that the Commission supports the single market process rapidly, effectively and coherently. To give one example of the private sector development that we are supporting, we are providing £550,000 in technical support, staff development and training to a Caribbean microfinance company, Microfin. The company provides loans of up to £5,000 to small and micro entrepreneurs in Grenada and St. Lucia. Another example of DFID's financial support to private sector development is our funding of technical assistance for the establishment of microfinance services in Guyana. Some hon. Members will also be aware of the support that we give to the Caribbean Development Bank. That, too, helps to support the micro-enterprise sector and to get round the difficulties of the formal banking sector's requirement for collateral guarantees for loans.
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Micro-enterprise clearly does not need such guarantees and it can help small and medium-sized business to grow and develop jobs.
On debt, the Caribbean is home to seven of the top 10 most highly indebted emerging economies in the world. As a result, Jamaica faced a currency crisis in 2002, Dominica faced economic collapse in 2003, and, following hurricane Ivan, Grenada faces a financing crisis that threatens its stability. Debt is undoubtedly impeding growth, and it was fuelled by Government spending throughout the 1990s. Again, our task is clear. Given the right progress by the countries involved, we need to complete the process of cancelling UK debt under the Commonwealth debt initiative. We need also need to support better debt management and fiscal management and the better delivery of services. In doing so, we should not only make use of our own technical assistance and financing, but seek the help of others, including institutions in the region.
Preferential trade access is probably one of the key issues for the Caribbean and its relationship with Europe at this time. As a result of trade preferences, bananas and sugar have been part of the platform for the development of the region's middle-income status, and access will remain important for the economic survival of some countries in the short term. However, as hon. Members will be aware, change to those regimes is inevitable. An agreement between the EU, the USA and Ecuador in the follow-up to the World Trade Organisation Doha round will trigger a major shift to a tariff-only regime for bananas exported to Europe, which will come into force before 2006. The level of the new tariff will clearly be important to Caribbean banana producers, many of whom struggle to compete under the current regime because of higher production costs.
There has been a dramatic reduction in banana production in the Caribbean over the past 10 years, and the region is having to deal with the economic and social costs. In Dominica alone, the fall in production has led to the loss of 4,800 of 5,800 banana-producing jobs over the past decade, with limited alternative employment opportunities being created. Instead, people are looking for jobs as taxi drivers, small traders and in root-crop farming, with which to eke out a living.
Research commissioned by my Department has shown that reform to the banana regime could still mean that countries such as Belize and possibly Jamaica should be able to compete under the new regime if their industries restructure. Clearly, it is incumbent on Europe and countries such as Britain to assist with that restructuring process. Other producers in the Windward Islands are unlikely to make a profit in the tariff-only regime, despite continuing attempts to diversify banana production with fair trade and other niche market strategies. DFID has commissioned further work to consider options for transitional assistance for affected countries, which could lead to some reform of the European Commission's special framework of assistance to banana-producing countries.
Reform of the unsustainable EU sugar regime is also inevitable and very much on the agenda not only of the Commission, but of Caribbean countries. We have lobbied hard, and will continue to do so, to ensure that any changes take account of the impact on African,
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Caribbean and Pacific sugar-producing countries, particularly the Caribbean. Reform will undoubtedly have significant impacts on Caribbean economies, and requires careful analysis.
On a visit to the Clarendon community in Jamaica last week, I saw the huge concern there about regime change. The community depends completely on the sugar-producing business, and all its members were clear that they are looking to Britain for support in their engagement with the European Commission. In turn, we were able to give reassurance that we will continue to work with the community, and consider those issues.
The EC has promised to initiate a dialogue with affected ACP suppliers on the basis of an action plan, which will be used to define transitional measures of assistance. Those measures will include finance and help with diversification where restructuring and improvements in competitiveness in the sugar sector are not sustainable.
We are working with affected countries, the Commission, other member states and international financial institutions to ensure that that transitional assistance is sufficient, effective, and properly targeted in line with the needs of each country. We are also working closely with Caribbean leaders on the challenge posed to the region by HIV/AIDS.
Ms Abbott : On the question of sugar: the region will be reassured to hear of the Minister's concern, but I am sure that some people will ask why, if the Government are so concerned about the social and economic effect on the region of the change of regime in sugar, they support a 24 per cent. price cut in sugar from 1 July 2005, and a 37 per cent. cut from 1 July 2007, despite the unified voice of the regions saying that such abrupt price cuts would be catastrophic in social terms.
Mr. Thomas : We continue to talk to the region and country leaders about the proposed changes, but we are and have been clear about the fact that change is inevitable and that we must recognise that those cuts are coming. Of course, we must get the transitional assistance right. When I was in the region, Caribbean leaders reaffirmed that message to me in strong terms, as they have to other members of the Government. With the Commission, we continue to look at what else we can do to support the transitional assistance that is needed.
Jeremy Corbyn (Islington, North) (Lab): Will the Minister be more specific about what transitional support is available, because the sugar crop is crucial to many islands in the region, as is the banana crop? Simply saying that world prices force change is not good enough, we have to be more specific about what will be done to help those economies, otherwise what do we do but drive people into unemployment or the arms of the drug trade?
Mr. Thomas : I accept absolutely my hon. Friend's point that there may be security implications if we do not get right the transitional assistance that we offer to help the region adapt to changes in sugar prices. That is why we are working with the Commission on its action plan, why we are seeking to galvanise the international financial institutions to work with us on getting the
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package of transitional assistance right, and why, crucially, there is continuing dialogue with the region's Governments on the right measures to support effective transition from dependence on sugar.
The Caribbean has the second highest HIV/AIDS prevalence rate in the world after sub-Saharan Africa. In 2000, the total cost of the epidemic in the Caribbean was estimated to be close to 6 per cent. of GDP. Funding for HIV/AIDS has quadrupled in the past couple of years, and cheaper, high-quality anti-retroviral drugs and drugs to treat opportunistic infections are slowly becoming more widely available. We are supporting UK non-governmental organisations, such as International HIV/AIDS Alliance, to assist eastern Caribbean Governments, for example, to ensure that people living with AIDS and other vulnerable groups are directly involved in planning and implementing national programmes to respond to the epidemic.
One key challenge in using the support to get results on the ground is the high level of stigma and discrimination against people living with HIV/AIDS. That was the theme of a conference held in St. Kitts last week, which I jointly opened with the Prime Minister of St. Kitts and Nevis, Dr. Denzil Douglas. It came out of a discussion that Caribbean leaders had with my right hon. Friend the Prime Minister last year, when they specifically asked for UK support in challenging the stigma and discrimination that is undoubtedly fuelling the spread of AIDS in the region.
We know that people are too frightened, because of the potential reaction that they fear from their friends, neighbours and community, to be tested and to access treatment. As the epidemic spreads from particularly vulnerable communities, such as men who have sex with men, injecting drug users and sex workers, into becoming a more general epidemic, stigma is undoubtedly holding back an effective response. That is where the media, music industry and leading celebrities, as well as political leaders, can make a huge difference and positive impact.
Champions of change are emerging in the Caribbean, led by Dr. Douglas and Sir George Alleyne, who are respectively the Caribbean Community spokesman on HIV/AIDS and the UN special envoy for HIV/AIDS in the Caribbean. They both spoke extremely eloquently at the conference, alongside Courtney Walsh, the Mighty Gabby and other leaders from the Caribbean community, highlighting the successes that have been achieved and what other measures are necessary. The UK will continue to support Caribbean leaders, working through regional institutions, to establish a further programme of support directly to address stigma and discrimination, particularly working with the private sector.
The earnings of the narcotics industry in the Caribbean are estimated at $3.3 billion, which is nearly half the combined GDP of Jamaica and Trinidad. Drugs are transhipped through the Caribbean to Europe and the USA, and the criminal business is highly organised and very violent in both the recipient and transit countries in the Caribbean. In Jamaica, crime and violence continue to dominate the national development agenda and the response from the international community. The World Bank estimates that the public cost of crime and violence to the Jamaican economy is $350 million a year.
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The costs to individuals are equally high. Jamaica's murder rate this year so far is the highest ever recorded for the country, with more than 1,100 people murdered by the end of October. Violence tends to be concentrated in urban areas, where the poorest and most marginalised live and where organised crime syndicates compete for control. For example, people living in some downtown Kingston neighbourhoods do not know that their children are entitled to go to school or that they are entitled to free health care or a passport without having to pay a fee to the controlling criminal gang.
The UK is co-ordinating its response in Jamaica across several Departments. My Department is providing support to modernise the Jamaica constabulary force and to ensure that security initiatives are implemented hand in hand with community development work and the strengthening of institutions in Jamaica.
At the end of October, my hon. Friend the Member for Harlow (Mr. Rammell), the Under-Secretary of State for Foreign and Commonwealth Affairs, signed the Caribbean Community and Common Market and United Kingdom co-operation plan on behalf of the UK. The plan will focus on four key priority areas: training security and law enforcement officials; establishing a regional information and intelligence-sharing network; maritime co-operation; and border security. Other Departments are leading the provision of assistance to the region to implement the plan, but the Government continue collectively to attach a high priority to continuing to work for better security and development in the Caribbean.
This year has also been a stark reminder of the last of the challenges that I flagged up. The Caribbean may have had the worst hurricane season in living memory. I alluded to the significant storms that have occurred almost every year since 1988. On my visit to Grenada last week, it was clear that efforts to tackle broader development challenges can all too easily be derailed by a hurricane or another natural disaster. The Governor-General's home in Grenada was completely devastated by the hurricane. Standing in the porch of what used to be his home and looking out at the community below, I could see a huge number of roofs covered with tarpaulins—another sign of the significant damage that had been done. I also visited several hotels; again, to speak to private-sector businesses. One hotel was employing only 40 people at a time of year when it would usually employ 240. That is one small indication of the damage done by the hurricane.
We continue to support the region in an attempt to increase its disaster preparedness.
Tony Baldry (Banbury) (Con): Will the Minister confirm that the money used to assist comparatively wealthy islands—overseas territories such as the Cayman Islands—will not come out of the budget of the Department for International Development?
Mr. Thomas : I cannot give the hon. Gentleman that assurance because the money that we provided to the Cayman Islands in the immediate aftermath of the hurricane came out of our humanitarian budget. It is absolutely right that it did, given the devastation on the islands. We sent a range of immediate goods and provided services such as access to water and a range of
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other vital commodities. We have also helped to fund the Bermudan regiment, which engaged in clear-up work on the Cayman Islands. It is right that we continue to provide that support.
The Royal Navy also stationed two ships in the region, which provided support in the immediate aftermath of the hurricane and were paid for separately. They provided immediate assistance not only to the Cayman Islands but to Grenada. It was right that that support was provided.
Jeremy Corbyn : I thank the Minister for giving way for the second time. I also thank him and his Department for the support that they gave to the victims of the hurricane and for the fact that he and the Secretary of State were prepared to meet me, my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) and others to discuss that aid and support. Will he say what lessons have been learned about both hurricane prediction and the preparedness of all the islands that were affected: Grenada, the Cayman Islands, Jamaica and Cuba? Some islands seemed to be much better prepared for the hurricane and more able to cope than others. Clearly, there are lessons to be learned. Perhaps we could direct our aid packages in future to provide better civilian protection and shelter. Hurricanes will happen and will continue to happen, and anything that we can learn from this particular disaster will mean that we can save lives in the future.
Mr. Thomas : We are considering the lessons that we can learn from the impact of the hurricane. We were not expecting the hurricane to strike Grenada. Warnings that it was likely to strike Grenada came very late in the day, and that is the explanation for the considerable damage and loss of life. My hon. Friend is right; we need to continue to review the support that we give, and our preparedness for disaster. We are doing that. I want to record the Government's gratitude to Baroness Howells of St. Davids, who visited Grenada in the immediate aftermath in order to help us to understand how we could provide assistance. That was particularly useful.
Last, but certainly not least, I should mention the UK's special responsibility to the overseas territories in the Caribbean. The hon. Member for Banbury (Tony Baldry) helpfully alluded to the support that we gave to the Cayman Islands in the immediate aftermath of the hurricane. Of course, there are other overseas territories in the region, not least Montserrat. We can be pleased with the progress that has been made since the volcano erupted there. The progress of other overseas territories towards self- sufficiency over the past 10 years has been impressive, and it is only Montserrat that needs bilateral development assistance. We will remain engaged in support of Montserrat's efforts to sustain and deepen its economic self-sufficiency. I was pleased to visit the territory in June and to meet the Administration.
We will continue to provide advice and support on issues such as HIV/AIDS prevention, disaster preparedness and environmental management. During my visit in June, I was able to announce further support for Montserrat of some £40 million for 2004–05 to
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2006–07. I also saw the new airport, which is almost complete. That is a powerful symbol of Montserrat's progress since the volcanic eruption.
The Caribbean is a region of remarkable people with huge energy and vitality. It has made significant economic, social and political strides. However, it is also a region that remains uniquely vulnerable, and we have a responsibility to support it in its development journey. To that end, I look forward to the UK's continuing to work with Governments and to support regional institutions in the Caribbean.
Mr. Deputy Speaker. Before I call the spokesman for Her Majesty's Opposition, I belatedly welcome all hon. Members to this first sitting of Westminster Hall of the new Session. I also draw attention to the new clocks, which have been fitted by authority of Mr. Speaker after consultation with the appropriate Committee. The upper display shows the time of day and the lower will record the time when an hon. Member gets to his or her feet. They are intended to replicate the Annunciator in the House itself, and will enable hon. Members in this Chamber to know for how long they have spoken. I am sure that hon. Members will take my point.
2.58 pm
Mr. Mark Simmonds (Boston and Skegness) (Con): I am delighted that we are having this debate. Like the Minister, I have recently been to the Caribbean and I shall say a few words about that. Sadly, the region has received far less attention from the UK Government in recent years than it ought to have done—[Interruption.] I shall come on to why I think that if the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) will contain himself. I make the point particularly in view of the strong historic ties that this country has with the Caribbean, both through the Commonwealth and the dependent territories and through the significant Caribbean community within the United Kingdom.
Caribbean issues should be higher up the Foreign Office list of priorities. Sadly, however, the behaviour of the Government following the recent hurricanes demonstrates that that is not the case. Like some other areas, notably Latin and central America, the Caribbean has steadily been demoted in the view of the Foreign and Commonwealth Office. We all understand that the conflict in Iraq and the rebuilding in Afghanistan are priorities, but they should not come at the expense of long-standing relationships with our close friends in the Caribbean and elsewhere.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab/Co-op): I do not know what world or universe the hon. Gentleman is living in. This Government set up the UK-Caribbean forum to promote dialogue with the Caribbean. This Government moved quickly to help in the aftermath of the disaster. The Under-Secretary of State for International Development and the Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Rammell) have just returned from the Caribbean. There have been more ministerial visits to the Caribbean over the past few years than ever before. I think that the hon. Gentleman is barking up the wrong tree and should try a different one.
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Mr. Simmonds : I am interested and intrigued by that intervention. I shall explain why I have come to my view—the evidence is there. If the right hon. Gentleman had spoken recently to some of the Ministers in some of the Governments of some Caribbean territories, he would know as I do that there are serious issues with the relationship between the United Kingdom Government and Governments in the respective Caribbean territories. I shall come on to specifics later.
I was pleased that the Minister visited some of the countries affected by the hurricanes in the Caribbean, and I wonder whether he or the Department for International Development have a view on whether those hurricanes were a consequence of global warning. What assessment have the Government made of that and of the impact that climate change has had on the Caribbean? What assistance and safeguards can be put in place to ensure that, if such events take place in the future, Caribbean countries will be better prepared to tackle them with assistance from the UK and other countries? I accept his point that early-warning systems do not always work, but I would be grateful to hear his thoughts. I hope that we are in a position to represent the views of the Caribbean on climate change through our standing in global organisations and communities, particularly the G8, in which Caribbean countries do not feel that they have a significant enough voice.
As we all know, the hurricanes and storms were particularly bad in Grenada and Haiti. The devastation caused in Grenada was immense, and it suffered more physical damage than during any other storm season. According to the Organisation of Eastern Caribbean States, it will cost more than £500 million to repair and rebuild the island. That is no small sum considering that the island's gross domestic product was half that—about £250 million—in 2002. The tourism industry has been destroyed, and the main crops of nutmeg and cocoa have been completely wiped out. It will take at least 10 years to re-grow the nutmeg groves. Many of the island's 7,500 farmers had no insurance and are left with nothing.
Rightly, the British Government provided immediate assistance to Grenada during the crisis. Fortunately, HMS Richmond and Royal Fleet Auxiliary Wave Ruler were in the vicinity to assist with the rescue and recovery efforts. I extend the Conservative party's gratitude both to the Department and to our armed forces, which did all that they could to provide assistance during the crisis.
In Haiti, already ravaged by chronic political and economic instability, the storms led to a humanitarian disaster. The devastation of tropical storm Jeanne was accentuated by wide-scale deforestation, which led to mass flooding and some 3,000 deaths. Haiti is in danger of becoming a failed state as lawlessness prevails and the UN Interim Government gradually lose their grip on the country. The implications of having a failed state in the Caribbean would be enormous. What are the Minister's Department and the Foreign Office doing in the international community to address the problem and the enormous migration out of Haiti that is causing problems in other Caribbean countries?
Cuba was also severely affected by the hurricanes, and I understand that there were a number of deaths. Although many people do not immediately recognise
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Cuba as being part of the Caribbean, it has the largest population in that region. During my recent visit to Havana, I discussed the emergency procedures in place in Cuba to deal with the hurricane season. While I was there, I visited the Havana trade fair where, I must say, I was extremely disappointed by the de minimis number of British companies. What are the Government doing, if anything, to facilitate and stimulate trade with Cuba, given that it has successful and strong trading links with many other European countries, such as France, Germany and Spain?
Jeremy Corbyn : Does the hon. Gentleman agree that an important and helpful development for Cuba would be pressure on the United States to lift its ludicrous embargo so that Cuba could trade reasonably, openly and fairly with the rest of the world, including the country 90 miles away?
Mr. Simmonds : I agree entirely with the hon. Gentleman. One of the things that I learned while I was there was that the embargo is hypocritical. Large amounts of agricultural produce come from the United States under the 2000–01 agreement reached with Cuba following the devastation that took place then. That produce includes wine from California. How wine from California fits into the humanitarian aid category, I am not particularly sure.
Ms Abbott : Would the hon. Gentleman agree that it has long been the position of British business and people who trade in the region that Her Majesty's Government could do more to put pressure on the US to lift the embargo? Cuba was successful in minimising the loss of life after hurricane Ivan. It has effective methods of evacuating its population, including farm animals, into underground shelters.
Mr. Simmonds : The hon. Lady makes a good point. However, the European Union has reacted properly to the recent human rights abuses that have taken place in Cuba. We should not be under any illusion that it is a pluralistic, democratic, open and transparent society. It is not. That does not mean that the facilitation of economic trade and growth should not go ahead, but we must also put pressure on the Cuban Government to make sure that they improve their human rights record and democratise society to enable people to live in a way that we all accept and understand as civilised and appropriate.
I want to make some specific remarks about the Cayman Islands, which I also visited when I was in the Caribbean. It became clear to me that much of the infrastructure was torn apart and that many people lost their homes. I have seen the devastation for myself. The scale of the damage in the Cayman Islands has been significantly overlooked by the UK media and, to some extent, by the Government. The successful financial centre has made huge efforts to return to normality, and I am pleased that the islands' 600 banks are once again open for business.
The Government's statement that the Cayman Islands are uniformly wealthy and affluent is, in my view, incorrect. Well over 50 per cent. of the population live in poverty. Many people from the socio-economically challenged groups in the Cayman
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Islands are now homeless. They have had their homes and livelihoods destroyed. Inevitably, the poorest in society have been worst affected. Many who have lost their homes are unable to rebuild them because they had little or no insurance. It is certainly the view of the Government of the Cayman Islands that the Foreign Office and the Department for International Development could be doing more to facilitate and help the Cayman Islanders to get back on their feet.
In British dependencies, it is the duty of Her Majesty's Government to ensure that adequate emergency procedures are put in place to deal with such wide-scale devastation. In my view, the Government have a moral duty to ensure that adequate resources are provided to rebuild dependencies. Although the Government rightly provided considerable assistance to Grenada, it seems that the view taken that the Cayman Islands and other dependencies are rich enough to sort the problems out themselves is not necessarily always the case. There is significant poverty, as the Minister rightly pointed out, across the Caribbean, including in our own overseas territories. The Government should recognise that when prioritising aid and assistance packages.
It has already been stated absolutely correctly that poverty is closely linked to the spread of AIDS.
Tony Baldry : There is considerable poverty in Florida. We do not suggest giving development assistance to Florida. The Cayman Islands and other overseas territories, such as Bermuda, have an average income that is substantially greater than that of the United Kingdom. It is wrong that such countries should continue to expect first call on DFID's budget for ever more, simply because they are overseas territories. They are substantially wealthy countries, which should be planning contingency reserves to meet such disasters themselves, just as the United States has to do for Florida. Just because they are small islands does not mean to say that, given their wealth, they should not provide adequate protection. The idea that one should take money away from very poor people in other parts of the world to give to the Cayman Islands is wrong.
Mr. Simmonds : I have a tremendous amount of respect, as I know all Members of the House do, for the work that my hon. Friend does as the Chairman of the International Development Committee and his tremendous knowledge in this area. However, I think that the statistic that he has given for the average GDP wealth of the population of the Cayman Islands is misleading. The Government, too, have used that statistic as a reason why more aid does not go to the Cayman Islands, but there are some very poor people there and in other Caribbean countries. I do not see why they should not benefit from aid, when they need it, from the development Department budget of this Government and those of other affluent countries, just as poor people in other countries should benefit too.
Before we get too bogged down in specifics, I want to say a few words about the spread of HIV/AIDS. I am sure that we are all aware that yesterday was world AIDS day. However, few people realise, although the Minister said this earlier, that the Caribbean is second
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only to sub-Saharan Africa in that respect. Last year, 52,000 people in the Caribbean were newly affected by HIV and up to 60,000 children and adults died. I am pleased that the Caribbean Heads of Government have recognised the problem and taken steps to combat the spread of the disease, securing substantial aid assistance from the United States through the Caribbean community. I hope that the British Government continue to be involved in programmes to combat the spread of that terrible disease throughout the Caribbean.
The key to fighting disease and poverty and to maintaining robust civil society and democratic governance lies partially but importantly with transparent macro and micro-economic policy. The success of Caribbean economies to date has relied heavily on tourism from Europe and north America, but that industry has been particularly damaged by the recent devastation caused by hurricanes.
I shall give an example. Last year, the Bahamas had a GDP of $5.3 billion, 70 per cent. of which was generated from tourism-related businesses. However, it is estimated that as a result of the damage done by the storms and hurricanes, tourism will contract by 25 per cent. this year, resulting in lost revenues of about $26 million. The reliance on foreign tourism leaves Caribbean economies particularly vulnerable to national disasters and the prosperity of other countries' economies.
Key to resolving the problem is trade with the European Union, which has played an important role in the development of Caribbean economies. The 1975 Lomé convention and its successor agreement have provided the Caribbean, as part of the African, Caribbean and Pacific group, with preferential prices for agricultural products, such as sugar, bananas, rice and rum. Those agreements have provided a certain amount of economic security and stability to Caribbean country economies by providing jobs for local people, generating local wealth and bringing much-needed capital flows into the region.
The agreements, however, have failed to spur on Caribbean development and diversification as much as had been hoped. Unfortunately, the region's economies still depend largely on remittances and a limited range of agricultural and mineral products. A Caribbean trade policy consultant has stated:
"By using tariff barriers that would allow 'infant industries' to grow and develop, the objective was to use trade, as well as aid, to contribute to development. Today after more than 25 years, these barriers persist, protecting 'mature industries' that have not grown or developed significantly".
I believe that that shows that tariff barriers supposed to protect infant industries can have the opposite effect and stifle development and efficiency.
We must recognise, as the Minister set out in some detail, that the banana and sugar industries continue to account for a significant proportion of many small island nations' economic activity. That is why the decisions that will be made in the remaining stages of the Doha round of World Trade Organisation talks are so vital to the future of Caribbean states. Trade liberalisation poses a real challenge to the viability and vitality of the region's economy. During the negotiations, the UK must stand up for the interests of the dependencies and Commonwealth countries in the Caribbean.
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I welcome the efforts made by CARICOM to deal with the difficult economic issues facing the Caribbean. The development of a single Caribbean market to stimulate production and trade in goods and services throughout the region is a necessary step in stimulating growth. However, although it is important that the Caribbean further develops economic alternatives, it cannot realistically be expected to embrace full-blown free trade in bananas and sugar. It simply cannot cope with the lower-cost and higher-volume producers in south America.
Many Caribbean countries support the view of EU Commissioner Lamy that the EU should set a tariff for non-ACP countries exporting bananas into the EU at €275 per tonne rather than the €75 proposed by south and Latin American countries. This issue is complex and I will not go into it in great detail this afternoon. Suffice it to say, it is immensely important to resolve it satisfactorily in an agreement between all sides.
If the fragile industries on which the Caribbean has relied for so long are allowed to diminish without global assistance to facilitate a transition, the consequences may be immense for the entire region. One example is the enormous dependency of the St Kitts and Nevis economy on sugar. As the Minister will know as he visited the islands recently, that was a major factor in their recent general election campaign. The sugar production makes an enormous loss per annum, which is subsidised by the taxpayers.
I shall say a few words about the relationship between education in the Caribbean and education in the UK. If the Caribbean's core industries diminish and they are unable to compete in the freer market against countries with lower cost bases, not only will the consequences be felt immediately in that industry and that sector but the countries may have insufficient resources to fund much needed infrastructure developments such as education and health care. That in turn will lead to a further decline in their innovation and economic competitiveness.
Many of the Caribbean's brightest young people are educated here in Britain. That is already expensive given the strength of sterling and the rising cost of overseas student fees and visa costs. As the Caribbean countries' economies continue to adjust fewer able students can afford a British education. That is to the detriment of the UK and of many Caribbean countries where the majority of Heads of State and Government figures have attended British universities. Therefore it would to the detriment of vital UK-Caribbean bilateral relationships.
The cost of studying here has already been significantly increased now that students from the Caribbean have to pay £250 just to renew their visas annually. That charge looks set to increase dramatically to more than £400 a year if Home Office proposals are brought into force. Would the Minister care to comment on that potential barrier to entry, which may dissuade bright, capable, foreign students from coming here to be educated and possibly to continue to work in the UK?
I shall make a few specific points about the overseas territories. This country has a duty to look after and act for those countries internationally. The 1999 White Paper which sets out the framework for that relationship, "Partnership for Progress and Prosperity",
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outlined a four-point future partnership between the UK and the territories. I understand that the territories were particularly hopeful that the document would pave the way for better working relationships.
I am sure that we would all agree that the term partnership implies mutual benefits for both sides. However, as I am sure the Minister is aware, the view is that the relationship is far from a partnership. I have had meetings with several representatives of Caribbean countries and the consensus is that London imposes its will on the territories. If a territory is unwilling to comply with a particular request, the Government threaten to legislate, and if the territory still will not come into line it is swiftly reminded of the alternative, which is independence.
When Lord Hurd was Foreign Secretary he made it clear that the Foreign Office would no longer issue instructions to the territories. Things have clearly deteriorated subsequently. The Government have been less than helpful about contingent liability issues. Dependencies like the Turks and Caicos face real problems raising the necessary capital to invest in and build adequate infrastructure, including schools and hospitals. The Government, despite their so-called partnership for progress and prosperity, appear to remain unwilling to assist in resolving the contingent liability issue. Perhaps the Minister could tell us what progress is being made.
My final point relates to the EU's savings directive. The Government have failed to recognise the significant implications of EU laws on the territories. Whether we like it or not British law has become increasingly entwined with that of the European Union. The territories are therefore subject not only to British law but to that of the EU. That has created serious issues for the British Virgin Islands and the Cayman Islands, which have developed into successful international financial centres.
If the directives are fully implemented, the effects on the territories will be immense, not only economically, but socially and politically, as set out in the Maxwell Stamp report. For example, 70 per cent. of the British Virgin Islands' income comes from the financial services sector. Should the directives be fully implemented, there is likely to be a 20 per cent. fall in the GDP of the British Virgin Islands.
It is no secret that the Government have failed to keep the dependencies up to date on EU initiatives. A briefing paper that discusses the impact of such initiatives says:
"However, no-one was more surprised than us when a matter of months later the latest EU Communication . . . was announced making specific reference to and demands on overseas territories. Prior to the announcement certainly we were not involved in any discussions or given . . . notice."
That is hardly a harmonious partnership.
The overseas directives are clearly misguided. It is right that all in the banking sector should provide greater transparency and information exchange in the tax field. That is what the respective Governments are working towards and wish to do further.
I think that I have spoken for long enough. Many hon. Members wish to participate in this debate. I conclude by saying that it is essential that the UK continues to enable and to encourage good relationships with the Caribbean, rather than turn its back on historic
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friends. Many Caribbean countries look to Britain for guidance, assistance and advice in the spirit of national partnership. We should not disappoint.
3.22 pm
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab/Co-op): I, too, welcome the debate and congratulate the Government, who get an awful lot of criticism—most of it unwarranted—for taking their time to initiate this debate. You have been here for a long time, Mr. Deputy Speaker, and, as you indicated, it is really fantastic that the first debate in Westminster Hall this session should be on development in the Caribbean.
I congratulate the Minister and the Secretary of State on their work generally. We have a superb team in the Department. They are second to none and do an extremely good job.
Ms Diane Abbott : Will my noble Friend give way?
Mr. Foulkes : Right hon. Friend.
Ms Abbott : Can I share my right hon. Friend's appreciation of the Secretary of State's keen interest in the situation post-Hurricane Ivan?
Mr. Foulkes : I appreciate that. Incidentally, I am not "noble", but I am now "right hon.", although I do not mind what anybody calls me—and my goodness, I have been called some things in my time.
The hon. Member for Boston and Skegness (Mr. Simmonds) did himself no favours. There are areas in which we can ask the Government to do more and I will do that. However, we must first give them credit for what they have already done, and then say that we should do a little more.
I want to concentrate on sugar. I shall mention a few other things, but sugar is the most urgent problem, as my hon. Friends indicated in their interventions. I want also to pay tribute to the work of Derrick Heaven, the distinguished former high commissioner for Jamaica and now chief executive officer of the Sugar Industry Authority in Jamaica. He is doing a superb job lobbying on sugar. He has come to Parliament and met hon. Members and Ministers—most of us here will have met him—as well as the trade commissioner in the European Commission. He is putting the case effectively and forcefully, and deserves a good hearing.
I can do no better than use Derrick Heaven's words, from his recent address to a European Parliament committee. He went back to 1975 and the historic Lomé convention, which gave the Caribbean clear guarantees on cane sugar. He then mentioned the Cotonou agreement, which was signed in 2000, overtaking and subsuming the Lomé convention. He specifically noted that article 36.4 reconfirmed the importance of preserving the benefits of the sugar protocol and that the provision had given Caribbean countries some reassurance.
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Three months later, however, before the ink on the agreement was dry, a leaked document told the Caribbean Governments that the EU was proposing, without consultation, to make provisions for the least developed countries, including many African, Caribbean and Pacific countries, that would have an impact on arrangements under the agreement that had just been made. As my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) noted, the leaked document said that there would be major price cuts, with a 20 per cent. cut in the first year and a 37 per cent. cut overall. That was devastating news for the region, and Derrick Heaven noted:
"All along we were assured at the highest levels in Europe that any change to the treaty would be gradual and designed to be least disruptive. How wrong were we to have accepted these assurances of the European Commission and some member states."
As Derrick Heaven pointed out, the sugar industry provides by far the most important economic activity in rural Jamaica. Indeed, in most of rural Jamaica it provides the only economic activity. It directly employs about 40,000 people and provides a livelihood for thousands of small farmers. In many areas, sugar is grown alongside the banana crop, but as we know, that, too, is under threat. As my hon. Friend the Member for Islington, North (Jeremy Corbyn) told us, if those industries collapse, many people are likely to resort to growing other things, which will be less acceptable and will create huge problems for those countries and ours.
Derrick Heaven went on to say that Governments in the Caribbean are not complacent; they accept that change must take place and have been preparing and planning for it. However, that change should not be as rapid or as dramatic as has been proposed. He said:
"We are looking at the ways in which we can produce bio-ethanol, sugar refining for our soft drinks industry, co-generation and a range of other options."
However, he stressed that the successes
"of such endeavours are predicated on there being a secure market for our sugar at a price and in a time frame that is viable. Unless this is secured, there is no solid commercial base on which to finance the added value of diversification."
Jeremy Corbyn : Does my right hon. Friend agree that when powerful western countries such as ours encourage countries such as Jamaica to diversify and produce other goods, it is incumbent on us to ensure that trade barriers to the added-on value of processed sugar, processed fruit and anything else are lifted? At the moment, those barriers impose prohibitive costs, which mean that countries simply cannot gain entry to European markets.
Mr. Foulkes : My hon. Friend makes a good point. I cannot add anything to it or express it better.
Derrick Heaven went on to say not only that countries are facing immediate, sudden and drastic cuts, but that any measures to help them would not enter into force until 2007. In a familiar phrase, he describes that as "too little too late".
The point that I want to put to the Minister, and with which I hope he will deal in his reply, is what should be
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done. Derrick Heaven said:
"In the interest of fairness, transparency, integrity and the spirit of partnership, we would suggest . . . that the proposals that the Commission has placed on the table, be redefined to reflect a more gradual approach with a reasonable start-up time. We would also suggest that before any action plan is proposed that the Commission might find it useful to engage with all of the sugar industries of the ACP, their views and objectives for their industries in order that any action might have relevance to those that their plan is intended to benefit.
For these reasons we believe that measures be immediately put in place to encompass the modified proposals that will compensate for the losses of our economies and industry, and an easily accessed fund"—
that is important in the European context, as some funds are not very easy to access—
I hope that the Minister will reassure us. We have allies on the issue, including the French and the Spanish. I hope that he will push strongly within the Council of Ministers, and will press the Commission to ensure that it has a rethink. It is a crucial issue, as the Opposition spokesman said—I agree entirely with his comments on the sugar industry—and as my hon. Friends have made clear.
I turn now to bananas, but before doing so, I thank the Minister for the written replies that he gave me today, which indicate what the Government are already doing. Although I appreciate that, I think that the issue is so urgent that more must be done.
The new banana regime repeats the problems that there were with sugar. Again, there is the potential for small producers to be devastated. Britain is a key export market for Caribbean bananas and any move to reform the system will inevitably have a severe effect on small farmers, particularly in rural areas. When one contrasts what is happening in our overseas territories with what is happening in the French dependencies, specifically where they are departments, one sees that they are part of the European Union and receive all the assistance of the common agricultural policy. Our territories are therefore at a particular disadvantage. I hope that the Minister and his colleagues will continue to pursue a vigorous approach to sugar and bananas.
I shall deal now with one or two specific Caribbean countries and shall pick up on what the Opposition spokesman said about Cuba. If he is keeping up with what is happening, he will know that the Cuba initiative has just had a major trade mission to Cuba, led by Lord Moynihan. [Interruption.] I do not know that the Opposition spokesman should dismiss Lord Moynihan in such a cavalier way. There were representatives of 40 countries, wanting to develop, improve and increase trade with Cuba. I know that the Foreign Office has been initiating, within the European Union, a review of our approach to Cuba, and I hope that that will result in some changes in our diplomatic relations with Cuba within the near future.
Mr. Simmonds : To correct the record, I have great admiration and time for Lord Moynihan and the excellent work that he has done on building relations with Cuba, as the Cubans also do. What I was trying to put on the record and emphasise is that when I was there, only about three weeks to a month ago, just
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before Lord Moynihan's visit, the British representation at the Havana trade fair was negligible, in fact almost non-existent. However, our other European competitor countries had significant business opportunities that were being facilitated with Cuban companies. I am delighted to hear that the Foreign Office is now starting to move in that direction.
Mr. Foulkes : Clearly, things looked up as soon as the hon. Gentleman left Cuba. Perhaps he could encourage his friend, Lord Ashcroft, to take an interest in Cuba as well. I am sure that he would also see many opportunities for trade and investment in that country.
I should like to mention another country, from which I have just returned: the Dominican Republic. It is often overlooked in the United Kingdom and in this Parliament. On this occasion, the trade mission to the Dominican Republic was led by me, as president of the Caribbean-Britain Business Council, and we had a very good visit with 15 companies represented. There is a huge opportunity for trade and investment in the Dominican Republic. Now that President Leonel Fernández has taken over, the economy is improving rapidly. The Dominican Republic is the largest exporter to the United Kingdom of organic bananas. That is our biggest import from the country, and our biggest export there is whisky, I am glad to say, as an MP representing a constituency that produces a lot of whisky. Trade between us amounts to only about £80 million. Considering the size of the country, it should be substantially more than that.
I commend our excellent ambassador in Santo Domingo. Andy Ashcroft is the epitome of what a British ambassador should be. He is actively involved with industry, politics and the local community and is a personal friend of the President and of the Foreign Secretary. He looks after our interests extremely well. We can be proud of that; it indicates the vital importance of our diplomatic posts in such countries. The country would like to receive a ministerial visit. I am not sure whether my hon. Friend the Minister is the most appropriate person, but I hope that he might encourage one of his colleagues from the Department of Trade and Industry to visit the Dominican Republic with a view to increasing and developing trade between our countries.
I want also to mention briefly—I know that other hon. Members are waiting to speak—a country that is often forgotten, although it has been mentioned today. Haiti is the poorest country in the western hemisphere. It has been through awful political problems and natural disasters. I do not think that it has been fully understood that, in the hurricane, nearly 2,000 people were killed and 200,000 lives and livelihoods were affected, as the Christian Aid briefing that we have received pointed out. I know that, because it is not part of the Commonwealth and is not in our traditional sphere of influence, we do not always see it as having a high priority. However, I hope that, because it is such a poor country, the Department will look at it again to see what more can be done to help poor people there.
I shall finish where I started. The fact that we are having this debate in Government time is good. The fact that we are here—not in huge numbers, but many of us are involved deeply in the Caribbean—will be a source of comfort to the Governments and people of the
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Caribbean that they are not forgotten in the United Kingdom Parliament. They are certainly not forgotten in the UK Government, as I hope will become clear to the Opposition spokesman over the next few weeks and months. We understand that small island economies are particularly vulnerable and that because of our colonial past we have a particular responsibility. I am glad that our Government recognise that and are fulfilling their responsibility.
3.38 pm
Tony Baldry (Banbury) (Con): I agree with everything that the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) has said on sugar, and I shall say more about trade.
It would be helpful if we had a clear indication from the Government that in the Cotonou discussions they will, as far as possible, speak up for the Caribbean Commonwealth. Often, there is an ambiguity about the line that the Government seek to pursue. I agree entirely with the Minister's comments on the fact that because the Caribbean is seen as sun, sand and sea, we often do not take its needs on board.
Let me return to the bee in my bonnet about the overseas territories. The Government give money to the Cayman Islands—not on development grounds, but because, under the British Overseas Territories Act 2002, the overseas territories top slice. Let us be clear about that. We are closing Department for International Development offices in Honduras and Lima, so it is strange that wealthy countries such as Bermuda, the British Virgin Islands and the Cayman Islands expect an indefinite contingent liability in respect of the UK. That is the bee in my bonnet, which I shall return to whenever it comes up.
Mr. Thomas : I reassure the hon. Gentleman that only Montserrat and St. Helena will continue to receive direct budgetary assistance. My point about the Cayman Islands is that we believe it was right to respond with immediate humanitarian assistance, given the devastating impact of the hurricane there, as we did in the case of Grenada and Jamaica.
Tony Baldry : I entirely understand the Minister's point. I simply believe that places such as Florida, or anywhere else that is prone to hurricanes, are sufficiently wealthy to be able to provide their own contingency. That is the only point I am making.
I shall now make some comments that are unbelievably tedious, for which I hope colleagues will forgive me.
Jeremy Corbyn : What a health warning.
Tony Baldry : Indeed. I simply hope that colleagues bear with me, because I am concerned that we have got so far in this debate without undertaking any real analysis of Cotonou and trade discussions on Cotonou. We have all spent an enormous time on the World Trade Organisation.
The International Development Committee produced two very substantial reports on the WTO: one before Cancun and the other after it. The Minister's
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officials are all extremely good, and we are grateful to those of them who gave evidence on Cotonou to the Committee earlier this week. Every member of the Committee, having heard that evidence, believes that collectively we have not kept our eyes sufficiently on the ball on Cotonou and on the impact that discussions on Cotonou could have on the ACP countries. The "C", of course, stands for the Caribbean. The Committee will seek a very early meeting with Commissioner Mandelson to voice our concerns. If the House will bear with me, I shall summarise some of them.
Unfortunately, it is impossible to read into the Hansard report of this sitting a diagram of the chaos of the EU trade system. However, a great advantage for the Caribbean countries of the ACP group was that they benefited from the pyramid of preferences. They had more generous tariff preferences on a broader range of products and were subject to less restrictive rules of origin. Some agricultural products received tariff preferences and some ACP countries benefited from special trade protocols on bananas, sugar and rum, all of which are important to the Caribbean.
In 2000, the Cotonou agreement replaced Lomé, and marked a shift from non-reciprocal tariff preferences to establishing reciprocal trade agreements for all ACP countries. Now the Cotonou agreement proposes to create WTO-compatible economic partnership agreements between the EU and the six regions of the ACP, one of which is, of course, the Caribbean. Those EPAs will be regional trade agreements between a group of developed countries—the EU—and groups of development countries, which in this case means the Caribbean.
The ACP group will continue to exist, but its role and scope will be radically altered. There will be strange circumstances, so providing differential treatment to ACP states at different levels of development within defined regional arrangements will remain problematic. As the Overseas Development Institute has pointed out, Haiti, about which we have heard quite a bit this afternoon and which is the least developed Caribbean country, will participate alongside Barbados in CARICOM negotiations or in an EPA.
The EU has said that the EPAs will have a strong developmental emphasis, but that they will also include reciprocity. In other words, as the markets of the EU open up, the EU is expecting the markets of the poorer countries to open up.
In evidence to the Select Committee, officials stated that economic partnership agreements will
They also said that the regional trade agreements "must include reciprocity". As I said, this is a technical but important point. I would welcome an indication from the Minister as to how these two seemingly incompatible objectives—maintaining preferential access and including reciprocity—will be put into effect in a WTO-compatible manner. If that does not happen, which side will the UK be on? Will we support the Caribbean countries or simply be part of a tidying-up exercise for the EU?
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"further analysis will need to be done to look at which sectors, and on what time scale, reciprocal market opening by the ACP would best meet their developmental needs".
We know that the economies of the Caribbean are pretty fragile and that they do not have a huge number of markets. Who will conduct the analysis and, given that the economic partnership agreements are due to begin in 2008, when will it be carried out? I suggest, as others have, that it might be sensible to try to postpone the Cotonou negotiations until after the Doha development round is completed, not least because St. Kitts and Nevis has precisely four officials dealing with all the WTO and Cotonou negotiations.
Indeed, the Minister has more officials in his private office than St. Kitts has to negotiate the WTO and Cotonou agreements, so I do not see how the small island countries can be expected to act in the time frame. They just get rolled over, which leads to considerable resentment. If the economic partnership agreements are to be tools for development, fundamental changes need to be made to the process and substance of negotiations.
In a recent speech to ACP Heads of State, Kofi Annan said:
"A major concern, for example, is the impact that the trade liberalisation to be wrought by EPAs would have on fiscal revenue. Many of your countries are heavily dependent on income from tariffs for government revenue. The prospect of falling government revenue, combined with falling commodity prices and huge external indebtedness, imposes a heavy burden on your countries and threatens to further hinder your ability to achieve the Millennium Development Goals."
That is powerful stuff from the Secretary-General of the United Nations—he is telling ACP states that the negotiations will make life a lot more difficult for them rather than a lot easier.
I hope that the Government produce a timetable and their own action plan for work on EPAs, while recognising that the aim is to promote development in ACP countries, including those in the Caribbean. We should seriously consider dropping the principle of reciprocity in the EPA negotiations, because reciprocity between the EU and ACP countries constitutes a substantial threat to ACP economies—and not just those in the Caribbean. When the Prime Minister is rightly focusing on Africa, and the Commission for Africa, it would seem somewhat strange for us to make life more difficult for it.
It is perverse that while everyone in the House worked hard to get the Singapore issues withdrawn from the WTO negotiations, they are still in Cotonou. We understand that the reason for the Singapore issues dragging on through Cotonou, despite having been put to one side in the WTO, is that Cotonou started before the WTO. That is Nurofen-inducing; it must be a complete nightmare for trade negotiators in Jamaica, Antigua or any other Caribbean sovereign state, who are trying to work out how best to protect their interests.
The Government are suggesting that there could be alternatives to EPAs. One suggestion is for a generalised system of preferences. What are the limits of such systems? It is probable that it will prove impossible to offer all developing countries "Everything but Arms" access. What steps are the Government taking to ensure
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that a viable alternative, with at least as good access, is available to those ACP states not wishing to pursue an EPA? The House needs to know.
Jeremy Corbyn : I am grateful for the hon. Gentleman's health warning, given to us earlier, because it has helped us to get through his speech. I think I understand what he is saying about the Singapore issues living on long after they died in Cancun, but what does he propose to replace them with? The problems at Cancun were dumping of food and refoulement of profits by multinational companies in third-world countries.
Tony Baldry: The Singapore issues specifically involved investment, competition and public procurement. I realise that the subject is technical and I did not want to trespass on the House's good will, so I am talking in political shorthand, but I suggest to the Government that the Singapore issues should be withdrawn altogether from EPA negotiations. The EU must acknowledge ACP countries' opposition to commencing negotiations on those issues. They were opposed to them during the WTO talks and it is wrong that they be obliged to negotiate them now.
I hope that we hear a clear statement from the Minister on where the Government stand on Cotonou. I cannot understand how we can examine the Caribbean without considering trade preferences, which requires a focus on Cotonou. This matter may seem technical and tedious, but if we get it wrong it will be to the detriment of Caribbean countries.
Mr. Foulkes : I think we should absolve the hon. Gentleman from blame for tedium, because that stems from bureaucrats at the Commission, who are probably the world's experts on producing enormously tedious material. However, some people have seen through the tedium and understand the implications. I have received several letters from constituents expressing concerns such as he is expressing.
Tony Baldry : The coalition against the Commission's proposals is enormous. I have a briefing—I have not quoted from it at length, but I am sure that the Minister and his officials have seen it—from ActionAid, Oxfam, Christian Aid, the Catholic Fund for Overseas Development and a number of development non-governmental organisations, which is entitled, "Six Reasons to Oppose EPAs in their Current Form". Although the House has been lobbied extensively for months over the WTO, I am concerned that Cotonou is slipping under the wire. This is an issue of EU competence and Mandelson competence.
Those of us concerned about development in general and particularly about the Caribbean should focus collectively on the issues. That is a mea culpa to us all, and I give notice to the Minister that the International Development Committee intends to try to achieve redress.
I hope that the Minister tells us that the Government are alive to these concerns and to the concerns of the individual countries and the development community. I hope that he confirms that they are doing their best to ensure that we avoid the risk, which Kofi Annan described, of many of these countries moving even further back from meeting the millennium development goals.
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3.55 pm
Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab): I am grateful to have an opportunity to speak in this important debate. Let me join my noble—sorry, my right hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) in congratulating the Government on holding the debate in Government time.
As someone who has been a Member of the House since 1987, I want to begin by saying that there is no doubt that since the mid-'80s the Caribbean region has slipped down the Government's agenda. That is to take nothing away from the indefatigable efforts of former Ministers in previous Governments and this Government or the indefatigable efforts of Baronesses Amos and Scotland, friends of mine who have worked very hard in the other place to represent the interests of the region. Whatever Heads of Government tell Ministers over cocktails, they tell everyone else that over the past two decades the region has slipped down the agenda.
I do not blame any particular Government for that. There are historic trends; the end of the iron curtain and of the cold war meant that regions that were once cockpits of the cold war fell from the attention of the United States, and to a lesser extent that of the UK. With the rise of the Asian tigers and the emergence of the massive economies of Taiwan, China and Korea, our economic focus has moved. The importance of eastern Europe and Russia has led attention, capital flows and economic interest away from the region to other parts of the world.
Undoubtedly, the Department for International Development's otherwise laudable emphasis on helping the very poorest countries has been at the expense of allegedly middle-income countries such as Caribbean countries. It is regrettable that the region has dropped down the Government's agenda. It is regrettable philosophically because of the historic links between the region and Britain and because of the existence of large and passionately engaged Caribbean communities in all our great cities. It is also regrettable practically.
I come to this debate having spent the morning at a conference on gun crime organised by the Metropolitan police. I am sure that Ministers appreciate that in a globalised world we face globalised crime and globalised social disorder. Ministers cannot pursue policies in relation to trade liberalisation, and the so-called modernisation of the public sector, which will inevitably lead to job losses in the region, without that having an impact on security and crime issues right here in Britain.
If people sneeze in west Kingston, we catch a cold in Hackney. The criminals are as globalised as any multinational company. I regret that for all the energy that Ministers put into security, crime and drug issues, they do not link it to their trade liberalisation policies and modify them accordingly. Of course change has to come—to bananas, to sugar and to the whole region—but the pace of change and the ability of the countries to draw down funds to manage that change is crucial if this is not to result in social disorder and dislocation in that region, which directly impacts on us here in London.
I am sure that hon. Members will forgive me if I return to sugar, because it is a major issue. People are very unhappy with how things have developed. I join my
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right hon. Friend in congratulating the distinguished former ambassador, Derrick Heaven, on his work defending the sugar industry of the region and Jamaica specifically. I do not want to repeat what my right hon. Friend said, but these new proposals on sugar—whether they are in technical breach of the Cotonou agreement or not, they certainly breach its spirit—specifically reconfirm the importance of preserving the benefits of the sugar protocol.
Although I may not say this over cocktails with Ministers, as far as the region is concerned, the new proposals on sugar and the precipitate slashing of the sugar price are a breach of faith. There has been a lot of talk about transitional arrangements, but, like my right hon. Friend, I quote the ambassador's recent speech:
"As our region's experience with bananas and rum shows, the delivery of development assistance to industries undergoing finite transitions as a result of trade liberalisation measures bears very little relationship to the reality of the situation that the ACP now faces."
The ambassador is a diplomat, but I am a politician, so let me put the matter in clearer language. People were promised money and aid in relation to bananas, but until now they have not been able to draw down even a fraction of that money, nor do they want to repeat that experience with sugar.
For Ministers, trade issues are in some sense abstract, as they have to fit in with a wider Government agenda. Perhaps Ministers think it is enough to say that change must come, but I remind hon. Members of the economic, social and psychological importance of sugar to the region. We are, after all, talking about sugar islands that were the jewels of the British empire precisely because of sugar production. The structures of the societies on those islands—their economies and internal social relations—are still based on the world that sugar made. Those economies are still major employers of unskilled and semi-skilled labour.
The Minister will probably tell me about diversification, but I want to know how an unskilled sugar cane worker in Portland, Jamaica, is going to diversify and become a computer programmer. That is the reality that people across the region face, not just in Jamaica, but in St. Kitts and Nevis and elsewhere. Ministers talk too glibly about diversification without considering the reality of the work force that they are trying to diversify and the work available.
Ministers must also remember, when they glibly talk about diversification, that there is no major political party in the sugar-producing islands of the region that does not have its political base in the sugar unions. What politicians are being asked to do is turn to their bases and say that an economic structure and source of work and prosperity that has been relied on since the beginning of those island societies is going to go, and go much more rapidly than anyone anticipated at the time of Cotonou.
Let me remind Ministers that those sugar industries were originally constructed as suppliers to the metropolitan market. Unlike British beef producers, they do not enjoy sizeable domestic purchasing bases, which is one of the things that makes the current price proposal so untenable. Let me also repeat that most countries want to diversify. They do not want to rely on the same economic and social relationships that existed in the 18th century.
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There is sufficient surplus land and labour to diversify, albeit not at the expense of the industry. Having been a Member of the House since 1987, I have seen Ministers with responsibility for the Caribbean come and go, but there is a list of large-scale experiments that the Caribbean islands have entered into in an attempt to diversify their agricultural production for the large and lucrative US market. Many of those experiments have failed, owing to all sorts of structural difficulties.
When Ministers talk about diversification, they also ignore the fact that in most islands the structure of the economy, small populations and underdeveloped internal and international transport militate against the establishment of new businesses. Where there are communications structures, people have realised that they could, for instance, move out of bananas and into other crops. But guess what—up to now, how would they have transported those new crops to Europe and America? The answer is on a banana boat. If we smash up the banana industry, we also smash up the transport infrastructure with which the agricultural produce of those islands could be moved about as a whole.
There is a lack of joined-up thinking among International Development Ministers about diversification. Ministers also need to remember that the economic pressures affecting sugar are also hammering other industries, such as bananas and citrus.
Finally, Ministers need to remember that in the long-term search for diversification in infrastructure and added value, many ACP countries have become deeply indebted and will simply be unable to attract new finance for that diversification.
Mr. Foulkes : My hon. Friend has directed her criticism at DFID Ministers. I wonder whether she ever thinks that, as agreement has to be reached within the European Union, 25 countries have to agree. It may well be the case, as I believe it to be, that Ministers go to meetings and argue the case that she has been arguing, but cannot always convince the 24 other countries to go along with them. I hope that she understands that process and that she will not necessarily criticise Ministers for not making these arguments. I believe that they are making exactly the arguments that she is.
Ms Abbott : One has to listen to my right hon. Friend with respect as he was a Minister, but I have noticed that even when Ministers come back from the region and have seen what devastation a precipitate, savage cut in the sugar price—I am not saying that it should not be cut—will lead to, they still refuse to consider staggering that price cut. It is argued in such debates that Her Majesty's Government are among the keenest proponents of a price cut, but I defer to my right hon. Friend.
The other issue that the region would want raised is the unequal treatment meted out to the ACP countries compared with the European producers. They are bearing the full brunt of the introduction of tariff-free access by the least developed countries. Under the new proposals, they are also required to bear the cost of the removal of the cane sugar refining subsidy by bearing a larger price cut than European producers. How can it be fair that sugar producers in one of the poor regions of the world have to bear a larger price cut than European producers?
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When pressed on the sugar question, Ministers will tell us that it is all about British consumers and that they want them to have cheaper sugar. Consumers in Hackney call me for lots of reasons, but they do not call for cheaper sugar. Let us be clear: consumers in Britain or Europe will not benefit from lower sugar prices. The main beneficiaries will be an oligarchy of sugar producers in Brazil and the large sugar-using industrial manufacturers.
I can only concur with what my right hon. Friend said about the significance of sugar, stress my disappointment that the Minister is still unwilling to consider phasing in the price cut and re-emphasise what I am sure he was told on his visits to Clarendon, my parents' parish: what will be the social consequences of a precipitate collapse of the sugar industry?
The people in the precise categories of the labour market that the sugar industry employs are not those who will find it easy to diversify into new industries. They will not just grow ganja—if they were growing ganja alone, that would be one thing—but we will see an accelerated drift of young men from the rural areas of St. Kitts, Jamaica and elsewhere to the big cities, where they will find themselves involved in criminality and then fan out into international crime between New York, London and the region. That is the consequence of trade liberalisation if sufficient thought is not given to the transition.
I want to touch briefly on the post-Hurricane Ivan situation. There can be no question but that the Government's response immediately after the hurricane was exemplary and much appreciated in the region. It was also appreciated that the Foreign Secretary sent my noble Friend and colleague, Baroness Howells, as his personal envoy. I said at the time, as Ministers will be aware, that the test of the Government's commitment to the region would be not the immediate sending of tarpaulins, bandages and plastic sheeting—wonderful as the immediate assistance was—but what they did in the medium term.
Some islands, such as Jamaica and Cuba, will do their best to make good their economies, but let me repeat that Grenada has had its tourism industry and its nutmeg wiped out. There is an economic vacuum in Grenada, and let me say this plainly and clearly: if that vacuum is left for any length of time, the drug industry will step in.
Ministers must start to link their concern about security with trade policies and aid and development issues. It is also important, post-Hurricane Ivan, that efforts be made to intensify disaster mitigation processes. I am aware that the Department for International Development is doing work on that, but let me return to what was said about Cuba. I listened with great interest to what my hon. Friend the Minister said, but the Government should do more to put pressure on the United States over the Cuban trade embargo. The fact is that the US position on the embargo is conditioned more by electoral concerns in Florida than by any strategic approach to the region and how it is possible to help to lead a post-Castro Cuba to genuine free-market democracy. Her Majesty's Government—having such a close relationship with America under George Bush—could do more on the embargo.
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It would be wrong to end my remarks without saying a few words about Haiti. I know that we do not have the historical relationship with Haiti that we have with the English-speaking countries in the region, but it is the very poorest country in the Caribbean. It lost thousands of people as a result of Hurricane Ivan, and DFID could make a difference there. I have read what DFID has to say about whether it can add value to Haiti in the next few years, but there must be a plan actively to explore what difference the Department could make in Hackney—sorry, Haiti. Hackney is never far from my thoughts.
There must be long-term support from DFID in Haiti. We must consider cancellation of Haiti's debt and mitigate future emergencies. Part of the reason why Haiti lost so many people post-Hurricane Ivan and Cuba lost so few is the disorganisation and social chaos in Haiti as opposed to Cuba, which is a well-run Stalinist society.
I would not want the debate to end without a repetition of what was said about the importance of the British overseas territories and of considering our policies in the region not just as they affect the sovereign states there, but as they affect the British overseas territories. The point was well made about the financial services industry in the British Virgin Islands and other British overseas territories: those countries understand the need for a level playing field, but are concerned that EU institutions may simply try to take out competitors.
As I said at the beginning of my remarks—I speak as one who has been a Member of the House since the mid-1980s—there is no question but that the region has, although not through the fault of any particular Administration, gradually slid down the agenda of Her Majesty's Government. We can see that. People protest and talk about the UK-Caribbean Forum. That is very nice. They talk about visits by junior Ministers—it is always a treat to have such a visit—but we can see that the region has slid down the Government agenda when we look at the institutional arrangements in DFID and the Foreign Office for dealing with the Caribbean.
Mr. Foulkes : My hon. Friend is chairman of the all-party Caribbean group, and its secretary, the hon. Member for Totnes (Mr. Steen), has just arrived in the Chamber. Does my hon. Friend not think that there is an important role for that group to play in raising the profile of the Caribbean, tabling questions and motions, and pressing the Government not only in this forum, but in every other one?
Ms Abbott : Absolutely. Within days of Hurricane Ivan, we organised a very successful meeting in the all-party group, which was attended by all the Caribbean high commissioners, my right hon. Friend the Secretary of State for International Development and relevant non-governmental organisations. The secretary of the all-party group, my hon. Friend the Member for Totnes (Mr. Steen), and I continue to table questions on Haiti, the British Virgin Islands and Jamaica post-Hurricane Ivan. I am committed to using the all-party group to help to drive forward the agenda I have set out.
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Mr. Anthony Steen (Totnes) (Con): I apologise to the House for coming in late, but I have been attending the fisheries debate in the main Chamber. As I now have the largest fishing port in the UK in my constituency, I am sure that hon. Members will understand why I had to be there.
I pay tribute to and thank my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) for her wonderful work as chairman of the all-party Caribbean group. Does she agree that the most effective way of operating is to have all the islands as sub-groups of the main committee, and that to have fragmented groups is not the best way to operate in this place? Does she also agree that she should welcome, as I do, the many people involved with the Caribbean and in raising its profile in the House of Commons, but under the auspices of an established all-party Caribbean group?
Mr. Deputy Speaker : Order. The House does not look well on people coming in and immediately intervening in a debate to which they have not listened. However, we understand the hon. Gentleman's position, and I am in a very agreeable mood this afternoon.
Ms Abbott : I am grateful for the support of my hon. Friend the Member for Totnes in building up the all-party group. Let me say this on the dangers of fragmentation: most people in the Chamber may not remember or have learned about the history of the West Indies Federation, but when Britain sought to oversee the move to independence of different Caribbean islands, the original idea was that they should form part of that federation, because it was clear all those years ago that individual islands and dependencies would find it difficult to impact on international institutions, let alone the British Government.
Those countries, led by Jamaica under Alexander Bustamante, resoundingly rejected the idea of the federation, but as we move into the 21st century the islands of the region need to act more collectively and to have a common view on issues. In recent years, I have tried to lobby on issues such as bananas, but I have often found it difficult to establish the common view of the region, despite the fact that it has been represented by distinguished diplomats.
The region is building and reinforcing its common institutions and is trying to take more of a common view on issues. Here in Parliament, it is wonderful to have a multiplicity of groups, but in the context of making an impact on Ministers, the more that we can move together in a common organisation the better.
It is regrettable that the region has moved down the Government's agenda, but it will never move down the agenda in the hearts and minds of those of us whose parents and grandparents came from the region immediately after the second world war. I constantly urge diplomatic representatives here to do more to harness the passion and concern of the Caribbean diaspora because, as well as building up the parliamentary work, that would be an important weapon to help the region.
On the weekend of Hurricane Ivan, I remember sitting with friends watching the news bulletins hour by hour. We all had friends, family and villages of which we
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were thinking. I would like to see a time when the institutional arrangements in DFID and the Foreign and Commonwealth Office, the funding, the concern, and the approach to trade matters reflect in their understanding of Caribbean issues the genuine love and concern that so many of us have for the region.
4.19 pm
Tom Brake (Carshalton and Wallington) (LD): I welcome this debate and the focus that it puts on a region that is experiencing serious problems and that, as many Members have said, has close links with the UK. All Members who spoke made valuable contributions, but I particularly thank the hon. Member for Banbury (Tony Baldry) for highlighting the importance of economic partnership agreements and the implications of reciprocity. I will listen carefully to the Minister's response on that, because the economic partnership agreements are setting alarm bells ringing not only in the Caribbean, but in regions such as the Economic Community of West African States.
Debates such as this are significant and play an important role in keeping track of the Minister's whereabouts and travels. I want to start by focusing on the regional assistance plan for the Caribbean, which has identified three key themes that I fully support: economic and fiscal management and public service delivery in the framework of poverty strategies; trade, competitiveness and economic integration; and HIV/AIDS and violent crime. That shows the right focus and, as today's debate has shown, the issue of trade is key to the process.
I will abbreviate the regional assistance plan to RAP from now on—I understand that the Minister is familiar with a couple of forms of rap, which I will come on to later. The RAP helpfully sets out the scale of poverty in the Caribbean, with 8 per cent. of the population living in extreme poverty. Although, with the exception of Haiti, the Caribbean countries are middle-income countries, there are still considerable levels of poverty and there is great inequality. For that reason, it is unfortunate that as part of the changes related to the reconstruction of Iraq, a budgetary shift was made away from middle-income countries. As today's debate has underlined, that was regrettable to say the least. As the RAP sets out, the overall challenge facing the Caribbean is whether it can maintain and develop the gains that it has made and whether it can put in place the measures needed to limit vulnerability and take the opportunities available for sustained pro-poor growth.
I will now touch on other issues raised in the RAP, including drugs, hurricanes, bananas, sugar and HIV/AIDS. All of those point to a strong challenge facing the region—one which I hope that it can overcome with the assistance of the UK Government. The RAP raises a couple of important questions. The Government identified the need to increase efficiency in aid delivery and I hope that the Minister will set out some ways in which the Government intend to do that. It is interesting that the RAP identifies co-ordination as a problem in terms of the donor community and its different projects, yet the Government are promoting bilateral programmes, certainly for Guyana and Jamaica. I hope that the Minister will explain the reasons behind that. Will he
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also explain what exit strategies will be put in place for middle-income countries for when they reach the end of their bilateral funding arrangements with the UK?
Development in the Caribbean will be severely hampered, if not stopped in its tracks, if the drugs issue in the region is not tackled. The statistics are grim. It is estimated that $60 billion in drug trafficking and organised crime proceeds is laundered through the Caribbean every year. Drugs trafficking organisations move about 90 tonnes of cocaine from Colombia via Jamaica, the Bahamas and the Dominican Republic. The Caribbean is also one of the principal smuggling routes for cocaine towards north America and Europe.
There is evidence that, at a local level, Caribbean criminals are moving large quantities of drugs by boat, air and person through the region, which clearly has a negative effect on the area. Smugglers are paid in cocaine rather than cash, so have to create their own local markets to raise funds from the merchandise that they receive. Perhaps the most obvious evidence of that trade in the UK are the drugs mules, often single mothers coming to the UK, who are caught and serve prison sentences here.
It has been suggested—I hope that the Minister will be able to say whether there is any evidence to support it—that the US-led war on drugs in Colombia is having a negative effect on the Caribbean, because as the effectiveness of the campaign in Colombia increases, the drugs barons may be shifting their attention to a region where they are perhaps under less pressure. Are the Government aware of that concern and do they have any evidence to support that allegation? If so, what, if anything, can the UK Government do about it?
As has been acknowledged by many hon. Members, bananas are a key crop for a number of islands in the region, and are particularly important to the Windward Islands. It was estimated in 1999 that roughly a third of the entire labour force was dependent on bananas and that there was no other economic activity in the eastern Caribbean that had similar multiplier effects on employment levels. In the last 10 years, there has been a significant decline in the number of registered banana farmers, but the number is still significant and would suggest that about a sixth of the labour force might still be employed in that sector.
I hope that the Minister will be able to set out what assistance can be provided. As other hon. Members have suggested, simply to argue that diversification provides the solution is not as easy as it sounds, particularly