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Multilateral Institutions: Parliamentary Scrutiny

Volume 589: debated on Thursday 7 May 1998

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3.16 p.m.

asked Her Majesty's Government:

What is their policy towards more systematic parliamentary scrutiny both of the policies and decisions of multilateral institutions such as the World Trade Organisation, the World Bank, the IMF and the specialised agencies of the United Nations, and of the views expressed by representatives of the United Kingdom within such bodies.

My Lords, the Government recognise the increasing importance of multilateral institutions and are committed to working for greater transparency in their operation. The policies which the Government pursue through these institutions are subject to parliamentary scrutiny in the same way as all other government policies. Where the UK's policies in these multilateral institutions are pursued through the European Union, the standard parliamentary scrutiny arrangements for EU matters apply.

My Lords, I thank my noble friend for that Answer. Does he agree that the traditional secrecy surrounding multilateral institutions—for example, the IMF—may have aggravated the consequences of the recent East Asia crisis because of the absence of timely analysis and the right data for discussion and debate among those with political responsibility? Does he further agree that when there is so much concern about improving the quality of democracy within the United Kingdom, an immense question arises about the accountability of those making policy on our behalf in international institutions? I welcome the proposals of the Chancellor of the Exchequer on an evaluation unit—for example, in the IMF—does the Minister agree that that must be accompanied by improved parliamentary scrutiny across the world?

My Lords, I do not dissent from the proposition advanced by my noble friend. We have sought to maximise the possibilities of transparency; for example, in relation to the current negotiations on the multilateral agreement on investment. We have pressed for that and shall continue to do so. However, it is for Parliament rather than for the Government to assert its right to consider what goes on in these institutions. If Parliament wants to step up its activities in that respect, so be it.

My Lords, the noble Lord, Lord Judd, has raised an important issue. What representations have been made with regard to some of the serious consequences of political unrest, in particular in Indonesia where the IMF's proposals have led to a 71 per cent. increase in the cost of fuel, a more than doubling of the cost of train fares, creating large increases in the cost of basic food elements, and consequently to the use of live bullets in demonstrations? In view of that, will the Government consider making it clear to the IMF that in addition to economic considerations political unrest must be taken into account in the prescriptions it proposes to Asian governments?

My Lords, as I said before, I believe that this Government have certainly progressed the whole question of transparency through those international institutions in a fairly unprecedented way. But it does not fall for me to make a determination about that. I shall certainly pass on to the Treasury what the noble Baroness said and, in particular, her very strong observations about greater transparency affecting especially the IMF.

My Lords, surely the noble Lord, Lord Judd, is quite right to draw attention to the significant decisions recently taken by the World Trade Organisation, two of which seem to me extremely serious. The first is the decision taken to unravel the painfully reached European agreement on the import of bananas which threatens the economies of the British colonies in the Caribbean. The second is the decision to oppose or undo the decision taken by the European Union to ban the import of beef with hormones from the United States. It may be that national parliaments are not very effective in controlling the activities of those organisations and that a better course would be for Her Majesty's Government to raise their voice in the annual meetings of the WTO council, or to arrange for suitable debates to take place in the economic and social council of the United Nations or, indeed, in the General Assembly. We really cannot have the accepted rules of international trade on general preferences overturned by such unilateral decisions.

My Lords, the difficulty about that proposition is that it seeks to undermine the process of the disputes resolution procedures which are so crucial to the WTO. I disagree violently with the view that has been expressed occasionally in Congress in relation to using the baseball method of three strikes and you are out. The fact is that we shall win some disputes and lose some. But we must respect the rule of law. I have a good deal of sympathy for the producers of bananas, particularly in the Windward Islands and elsewhere, but we must now create a different regime which is WTO-proofed.

My Lords, bearing in mind the Private Notice Question which was asked in the other place earlier this week—

My Lords, I really do believe that it is the turn of this side of the House and then no doubt the noble Lord can ask his question.

My Lords, what would be the Government's reaction to the suggestion that, given the globalisation of everything and the greatly increasing power of the global international organisations, there should begin to be a system for international parliamentary and, indeed, governmental scrutiny of what goes on which could, in some ways, be analogous with the system for the scrutiny of what goes on in the European Union, which we have had for so many years now and which has worked so well?

My Lords, when agreements are made through the WTO—and the European Commission acts as agent of the member states in that respect under Article 113—the Government, as a matter of course, submit to the scrutiny committee their views about whatever may be in issue. The question of scrutiny is a matter for parliaments. We cannot dictate to the French Parliament how it should go about its considerations. But we have a duty to ensure that we carry out adequate and systematic scrutiny. I am sure that there is room for improvement.

My Lords, bearing in mind the Private Notice Question which was asked in the other place earlier this week in relation to the United Nations and certain of its policies, is it not rather rich of Her Majesty's Government to suggest that further work should be done on scrutiny when it does not seem clear to any of us that there is a sufficiently clear line between the responsibility of Ministers and their officials on existing policies?

My Lords, that is rather far from the Question which we are considering; but as I like the noble Lord and have played golf with him, I shall answer his question directly. As the noble Lord well knows, this matter is under investigation. It would be quite inappropriate for me to comment on it and, with respect, I believe that he knows that.