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Volume 454: debated on Tuesday 5 December 2006

2. What recent discussions she has had with the Government of Iraq and other Governments about war reparations. (107306)

I have met the Governments of key debt holders and urged them to consider the long-term benefits of reducing the burden of Saddam Hussein’s legacy, including the financial burden. As part of the Paris Club creditors’ agreement, the United Kingdom has agreed to forgive 80 per cent. of the Iraqi debt to the UK. Other countries have also slashed Iraqi debt, but some—especially among Iraq’s Arab neighbours—have declined to do so. We continue to encourage others to follow our lead in order to help significantly with the vital reconstruction of the Iraqi economy.

I welcome the tone of the Minister’s reply, but why have the Government acquiesced in an arrangement whereby $40 billion of Iraqi oil money that should have gone into reconstruction and development has been siphoned off for reparations, including very large payments to companies such as Bechtel, Halliburton and even Kentucky Fried Chicken for lost profit opportunities during the first Gulf war? Is that not obscene, as well as stupid?

I am not entirely sure that I go along with the adjectives that the hon. Gentleman has just used. I remind him and the House that reparations for losses incurred as a result of the Iraqi invasion of Kuwait have been dealt with by the United Nations Compensation Commission, which was set up by the United Nations Security Council in 1993. These have been paid out of the UNCC compensation fund, and payments to British recipients have now been completed.

I do agree with the hon. Gentleman, however, in that the vital need is to reconstruct Iraq. This situation does not help and is unsatisfactory, and I certainly agree that the new democratic Iraqi Government should not have to pay for the crimes of Saddam. However, thosewho loaned money to Iraq and who suffered under the Iraqi occupation of Kuwait have a right to expect recompense—a right that was recognised, as I said, by the United Nations.

Does my hon. Friend not agree that the UNCC regime must be brought to an end? It undermines the democratically elected Government of Iraq, because they are forced to levy their oil revenues to pay wealthy Kuwaitis and American big business. It is a regime imposed by the United Nations that was appropriate in its time, but its time is now over. Will the Government help to bring it to an end?

We have made it clear to the Paris Club creditors’ that this debt burden is a significant hindrance to the reconstruction of Iraq. However, I should point out that many honest businesses and countries suffered as a consequence of Saddam Hussein’s invasion of Kuwait—not least the Kuwaitis themselves. I am sure that in a perfect world we could bring this situation to early closure, and we have to convince those Governments and companies that that is the right thing to do. Believe me, some of those Governments and companies feel extremely bitter about the losses that occurred as a consequence of Saddam Hussein’s illegal action.

Does the Minister agree that a resolution of the reparations question must involve the regional powers, such as Syria and Iran, and that an allied withdrawal from Iraq would force those countries to face up to their responsibilities in the region? Rather than arming the militias in Iraq and fomenting the civil war there, they should start to build for stability. So in fact, an allied withdrawal might accelerate peace and stability in the region.

I certainly agree with the right hon. Gentleman that Syria and Iran—the two main countries that he is talking about—should take a much more positive role to try to bring stability and prosperity to Iraq. We have to talk not just to the Syrians and the Iranians, but, most importantly, tothe Iraqi Government—the democratically elected Government of Prime Minister al-Maliki. They have made it clear to us that they want a transfer of responsibility for security and for shaping the future of their own country. They very much hope that their neighbours will play a more positive role, and have been trying to achieve that in discussions with Syria and Iran.

I note that Syria, for example, is to open an embassy in Baghdad, which is a good move. However, I am not sure that a hasty retreat from Iraq would necessarily help that process. We have to undertake it in stages carefully and, most importantly, with the co-operation of the Iraqi Government.

My hon. Friend asks a pertinent question, as those issues hardly get any coverage in this country. I was in Basra last week and saw for myself how initiatives such as Operations Sinbad and Better Basra are achieving a great deal. I know that the right hon. Member for Richmond, Yorks (Mr. Hague), who speaks on foreign affairs for Her Majesty’s Opposition, has also been in Iraq recently.

I saw one project that alone involves the planting of 8,000 date palms, as part of Operation Sinbad, and employs 4,000 people in Basra. What Basra needs above all is for young men and women to get jobs and not to be prey to the militias that cynically use them to kill our troops. Many good things are happening in southern Iraq, and in the Basra area in particular, which is reflected in the urge of the provincial Government and other authorities in southern Iraq to take on more responsibility.

While we are talking about war reparations, will my hon. Friend look at the situation of the British people taken hostage in Kuwait when a British Airways plane landed there during the invasion of that country by Saddam Hussein? Many of those families were taken to Iraq as human shields and many are still suffering from the trauma of their ordeal. The Americans on the plane received compensation; the British never have. Will my hon. Friend look again at the matter?

I will be only too glad to do so. I know that my right hon. Friend feels strongly about what happened during the early days and weeks after the invasion of Kuwait. I believe that a comprehensive statement was issued by the previous Government, and I shall be glad to furnish her with a copy so that she and I between us might be able to discover what compensation might be paid out.