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Palestinian Authority

Volume 560: debated on Wednesday 13 March 2013

We estimate that the Palestinian Authority’s funding gap in 2013 is likely to be at least $500 million, which will continue to make it hard for it to pay salaries and deliver essential public services. The PA must of course show financial discipline itself, but for it to become stable it is essential that international donors support it in a consistent manner, and that Israel eases its restrictions and meets its legal obligations to transfer tax revenues.

I thank the Minister for that answer, but is he aware that British aid donations to the Palestinian Authority general budget are being used to pay salaries of up to £2,000 a month to convicted Palestinian terrorists, many of whom have been properly convicted? What assurances can the Government provide that no further UK aid donations will be spent in that way?

I can assure my hon. Friend that we have a system in place under which DFID’s support to the Palestinian Authority is used specifically to pay for the salaries of civil servants. The list of approved recipients is subject both to vetting processes and to independent audit.

Does the Minister agree that the best way to improve the financial stability of the Palestinian Authority would be to lift the blockade of Gaza and movement and access restrictions on the west bank? Does he also think that the EU should be trading with the Palestinians and not with the illegal Israeli settlements?

A 2011 International Monetary Fund report estimated that without movement and access restrictions the Palestinian economy would be 78% larger in terms of GDP a year, amounting to about $6.3 billion. That would remove its dependence on aid.

Is there not a more general question about international donor money being used to support Palestinian institutions that have taken violence against Israel? What steps are the Government taking to ensure that that money genuinely contributes to financial stability and is not used in a way that undermines the peace process?

We rigorously monitor any danger there might be that the Palestinian Authority in any way incites violence, but it is committed to doing exactly the opposite, and it is right that we support it, the potential Government of a Palestinian state. We wish to see further progress towards the peace process over the months ahead.

We all support the creation of a viable two-state solution in the middle east, but that will come about only if the Palestinians are able to run an effective country. What assessment have the Government made of the structures available in the Palestinian Authority to make that happen?

The structures are sorely stretched, which is why we continue to support the Palestinian Authority, and of course we also urge other donors, particularly the Arab states, to carry their fair share of commitment, because if the Palestinian Authority were to collapse there is a serious danger that all prospects of proper peace negotiations would collapse as well.