The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

1994Prime Minister (1990-1997)

Mr Major’s Commons Statement on the 1994 Economic Summit at Naples – 11 July 1994

Below is the text of Mr Major’s Commons statement on 11th July 1994 regarding the 1994 Economic Summit at Naples.


The Prime Minister (Mr. John Major) With permission, Madam Speaker, I shall make a statement on the Naples summit of 8 to 10 July, which I attended with my right hon. Friend the Foreign Secretary and my right hon. and learned Friend the Chancellor of the Exchequer. I have placed the communique of the seven-nation economic summit and the chairman’s statement on the eight-nation political summit in the Library of the House.

The summit process is changing in two important ways. In 1991, I invited the then Soviet leader to join the seven for a meeting after the London summit. This practice was continued in 1992 and again in Tokyo last year. I discussed a new format with President Yeltsin in February. That was to invite Russia to become a full and equal partner in our political meeting. That was accepted and President Yeltsin’s involvement brought an extra dimension to the political aspects of the summit. He made it clear that Russia will co-operate closely on the most difficult international problems, from Bosnia to North Korea ; and he was warmly welcomed in that spirit.

The second change is that the summits are returning to the informality and free debate which characterised the early meetings 20 years ago. The move away from set-piece speeches and pre-scripted discussions made it the most wide-ranging summit which I have attended. We shall allow even more time for unscripted discussions next year at Halifax.

We spent some time discussing international institutions. Many of the main world bodies–the United Nations and the Bretton Woods institutions, for example–have been with us for nearly half a century. The world has changed enormously in that period and so have some, but not all, of our institutions. For example, the World Trade Organisation will take over as a permanent body in place of GATT, itself originally a temporary structure. But, generally, we concluded that we should think about further changes to those institutions which may be needed in the future. We need to decide how best to meet the huge tasks confronting the different parts of the United Nations and how to respond to new economic problems. We may need to revitalise those institutions. We shall all consider that between now and the summit at Halifax next year. If we conclude that changes are necessary, we shall begin the process of bringing them about. The summit countries alone cannot make those changes, but it is right for us to ask whether they may be necessary.

On economic matters, the summit built on the G7 countries jobs conference held in Detroit earlier this year. The world economy is now emerging from recession. At Naples, there was wide agreement on the policies that the G7 countries now need to pursue : free trade, flexible labour markets, deregulation, policies that help and encourage unemployed people back in to work, and investment in education and training. Those themes will be familiar to the House, because they precisely match the policies that this Government have been pursuing. They were all warmly endorsed by the G7.

Further trade liberalisation is an important part of the G7’s strategy. The completion of the Uruguay round was a significant achievement that will increase trade and growth right around the world. We need the various agreements to be ratified by the end of this year. Thereafter, we should consider further initiatives on trade and on economic liberalisation.

The summit proposed additional debt relief for the poorest countries. That is something I have long been pressing for. At Naples, we agreed on two specific measures to help those countries facing special difficulties : first, more help with debt payments, taking the level of relief above 50 per cent.–to two-thirds and perhaps beyond ; and, secondly, reductions in the stock of debt. We also agreed to explore ways of getting the international financial institutions to use their resources more effectively to help the poorest and most indebted countries.

Since I introduced the Trinidad terms initiative four years ago, 22 countries have benefited, with nearly $3 billion of debts written off thus far. The new proposals agreed at Naples will provide further help to lift a burden from some of the world’s poorest countries. We urged that there should be more help for the Palestinian authority, which is setting up an entirely new administration in Gaza and Jericho and needs to encourage new enterprises. Britain is contributing £75 million, bilaterally and multilaterally, over three years, including the extra help for running costs and technical assistance announced last week.

Likewise, in South Africa, Britain has allocated £100 million to transitional aid over the next three years. South Africa’s re-entry into the economic mainstream could do much to revitalise southern and central Africa.

We also spent some time on Ukraine, where there is an evident need to restructure the economy. Given her position and size, it is important to have both a stable and prosperous Ukraine. The summit countries and the international financial institutions are keen to help that process, which must include reform of the energy sector. We are putting forward an action plan to close the Chernobyl nuclear plant, where there are continuing worries about the risk of another accident. Our plan will require reform by the Ukrainians as well as providing significant financial help from the west. We agreed also to replenish the nuclear safety account.

On the environment, the G7 were concerned about the slow progress in meeting the commitments made at the Earth summit in Rio, and agreed to speed this up. Britain itself has fully met her commitments under the action plan agreed after Rio by the Group of Seven. We have published the plans required under the climate change convention. We all agreed to report further progress at next year’s G7 summit. At the Commonwealth conference last year and the European Council in Corfu, I argued for more action by Governments to oppose transnational crime, drug trafficking and money laundering. This approach was strongly supported at Naples. Where necessary, we are urging countries around the world to introduce legislation to prevent money laundering.

Bosnia was discussed in my bilateral meetings with both the Russian and American Presidents and, of course, at the political summit itself. Collectively and individually, our Governments will urge the parties to accept the Contact Group’s settlement proposal. We are completely united on that point. There is a risk of a wider and more intense conflict if this opportunity for peace is not taken. Later this week my right hon Friend the Foreign Secretary, together with the French Foreign Minister, will visit the former Yugoslavia to impress this point on the parties.

We need assurances about North Korea’s nuclear programme, including compliance with the non-proliferation treaty and with International Atomic Energy Agency safeguards. The summit supported the efforts of the United States and of South Korea to develop a dialogue with the north, and I hope that they will be resumed when North Korea has a new leader.

In Yemen, the recent, brutal civil war has left fears about the country’s future stability. Iraq’s support for the north has caused justifiable concern to our friends in Saudi Arabia and Oman, both of which border Yemen. The summit called on the Yemeni authorities to resolve internal difficulties without repression. We were concerned that Yemen would become a new source of instability in the region. I have highlighted the key political and economic points of what was effectively two summits in one. Summitry has proliferated over the past 20 years. I believe that we need a critical approach to make the best use of these occasions. Many worthwhile changes are now taking effect, and the Naples meeting was much more valuable as a result. I commend the outcome of the summit to the House.

Mrs. Margaret Beckett (Derby, South): There is much in the communique that we welcome, and much on which the Prime Minister touched only lightly, if at all. In particular, we welcome the communique ‘s strong emphasis on the need for action to create jobs, to promote growth and the increased wealth that that creates ; to tackle the damage being done to our environment and especially the problem of Chernobyl, to which the Prime Minister referred, and to work with the Ukraine to remove its nuclear stockpile. I join the Prime Minister in urging acceptance of the settlement proposals for Bosnia since, unsatisfactory though some may think them, continued conflict could surely only be worse.

We were also pleased to see in the communique that a start is being made on the reform and modernisation of the World bank and the International Monetary Fund. After talking about third-world debt relief on Trinidad terms for four years, it may actually begin to happen on a wider basis.

However, does the Prime Minister acknowledge that for many in the developing world, money will still just be going around in circles with money freed by bilateral debt relief going to the World bank or the IMF instead unless steps are taken towards multilateral debt relief, building on the approach already adopted ?

Although the Prime Minister spoke this morning of the advantages of increased international trade, does he accept that unless we find some way of oiling the financial wheels and promoting international support for the economic reconstruction and development to which he referred–in South Africa, the middle east as well as in eastern Europe–it simply will not happen ?

We welcome the reference in the communique to the fresh allocation of special drawing rights for which the IMF and the new members from eastern Europe have called. However, can the Prime Minister tell us anything about the time scale for that decision and what discussions were held on other measures, perhaps, as in the past, financed from IMF gold stocks ?

Will the role of the G8 be reviewed alongside the IMF and the World bank, as John Smith urged earlier this year, exploring the idea of an Economic Council of the United Nations alongside the Security Council and drawing in therefore, as the G8 at present fails to, other major economic players such as China and South America ?

The Prime Minister’s principal contention in what he said about the economic summit is that the rest of the world is following Britain’s lead and that this because of our proven economic superiority. I can only describe that observation as self-deluding since it is supported neither by the words of the communique –and I urge Conservative Members to read the communique in the Library–nor by the facts. As anyone who reads the communique will discover, it calls for the co-ordinated pursuit of growth, job creation, skills enhancement, support for innovation and infrastructural renewal. Those are all Labour party policies since before the last election and they were all denounced by the Prime Minister as irrelevant and wrong. That leads one to wonder why he signed a communique which calls for precisely those measures.

The Prime Minister should recognise that, if those words in the communique that he signed are to be more than empty words, a complete change of British Government policy will be required. Is it not the case that, far from endorsing the Government’s recipe of never-ending deregulation and lower wages, in the discussions the American Secretary of Labour called it

“part of the problem not part of the solution”

and that, although there is a call in the summit communique to reduce employment costs, this Government have increased them by pushing up national insurance and loading sick pay costs on employers ?

The Prime Minister must also be aware that the truth is that, while all our competitors are keeping, and in some cases increasing, minimum wage protection–for example, in France and in some parts of the United States–and bringing measures like extra family leave into train, their record on growth, skills and job creation is better than ours.

Is not the real message of the communique that our more successful rivals are pursuing, not the policies of this Government, but the path that we advocate? The Prime Minister and his colleagues show every sign of failing, yet again, to understand why they are failing Britain.

The Prime Minister: I must say that that was a very novel interpretation, on which I shall comment in a few moments. I welcome the support that the right hon. Member for Derby, South (Mrs. Beckett) offered on a number of proposals in the communique relating to jobs, energy, environmental matters and on the approach that we are proposing on Bosnia. I also welcome what she said about the Trinidad terms. A substantial amount of debt has been written off already, but there is further to go. Some countries have been resistant to implementing the Trinidad terms, but I think that the Paris Club can now move ahead as a result of the agreement reached at the G7 in the past few days. That will be immensely helpful to many poor countries.

As the right hon. Lady intimated, there are other ways of helping poor countries. It was rather masked in the arcane language of the communique , but we looked at using the IMF’s gold stocks to assist not only the very poorest countries in the world, but areas such as Gaza and South Africa, where there is a self-evident need for help. That is a wise way for us to proceed. In terms of job creation in those countries, the opening of markets, the liberalisation of trade and the elimination of debt will all provide an incentive for growth that will show within those countries–providing we are able to proceed with those proposals. The right hon. Lady then moved on to other matters and quoted rather selectively from the communique . Alas, she missed some points, such as a number of structural measures to reduce labour rigidities, which add to employment costs or deter job creation, eliminate excessive regulations, which will ensure that indirect costs of employment are reduced where possible, and to pursue active labour market policies.

The right hon. Lady’s eyes apparently skimmed past a range of other things as she quoted from the communique . If she thinks that all those measures are Labour party policies, my hon. Friends and I will be very pleased to have learnt, at last, what it is that the Labour party stands for in terms of economic policies. As for the right hon. Lady’s concluding remarks about the relative performance of the United Kingdom, that is an old ground of dispute between us. I do not agree with her interpretation, because there is no doubt that our country is leading the European Community out of recession–there can be no doubt about that, because our growth this year is likely to be twice as high as that of any other European Community country. I find it astonishing that, when this country is doing well and companies and the work force are doing well, that is something that the Opposition appear to regret deeply. I am sorry to learn that.

I must tell the right hon. Lady that we are leading the country and Europe out of recession. It is extremely good news for the world economy that the American growth now exists, that the Germans are now out of recession and that the G7 as a whole is moving back into growth by following the sort of policies that have brought this country out of recession, and not the policies that the Opposition advocate, which would take it straight back into recession.

Mr. David Howell (Guildford): Does my right hon. Friend accept that he did an excellent and workmanlike job for Britain at the Naples summit ? He is to be congratulated on it. Like my right hon. Friend, I hope very much that the Contact Group will succeed in bringing peace of some kind to Bosnia. Can he explain why the Serb Bosnians should cease their fighting, after a 100-year ambition to expand their areas of control, when they have an unending supply of arms and equipment from Serbia proper? Has not the time come, particularly as Mr. Yeltsin is more on side now, to strengthen the embargo against Serbia proper in all sorts of ways? That would bring home to the Serbians and Serbian Bosnians that they cannot go on defying world opinion and that they must come to the peace table with everyone else.

The Prime Minister: In his last few words, my right hon. Friend set out clearly the message which my right hon. Friend the Foreign Secretary and the French Foreign Minister will take to the Serbs in the course of the next few days. It must be made clear to Serbia that Serbia and the next generation of Serbians have no future unless they are prepared to come to an agreement that is satisfactory to the world community. They cannot continue as they are and they can certainly expect no relaxation of sanctions or any international help until and unless they reach an agreement that will bring the fighting to an end.

For some time, both the Serbians and, on occasion, other parties have moved away from the settlement that could have been reached in the belief that, if they waited, they would get a better deal in the future. There is now no doubt that the international community is determined to do whatever it can to enforce a settlement. I find it striking that each of the political heads of the G8, including the President of Russia, were determined that now was the opportunity to put every conceivable pressure on all the parties to come to a satisfactory settlement.

Sir David Steel (Tweeddale, Ettrick and Lauderdale): Does the Prime Minister acknowledge that the forthcoming mission of the Foreign Secretary and the French Foreign Secretary, backed by President Yeltsin, to try to persuade the warring parties in Bosnia that they must accept the peace settlement, however imperfect, deserves the united support of this House?

On the economic section of the communique, will the Prime Minister forgive me if I do not quote bits of Liberal Democrat policy in its support, following the pattern already set? On the institutional changes contemplated in the world financial bodies, will he assure us that he will also look at their lack of accountability to member Governments and member Parliaments for the policies that they pursue?

Finally, does the Prime Minister accept that, although the communique is less specific than his statement, we welcome the new debt relief proposals that he has achieved? He will know that the all-party Africa caucus lobbied the Chancellor before the meeting, and he saw us last year. We are deeply grateful for the progress that has been made. It will certainly bring widespread relief to at least six of the poorest countries in Africa.

The Prime Minister: I am grateful to the right hon. Gentleman for his final point. As soon as we have moved a little further with debt relief, we need to look again at the countries that are eligible for it. Some countries fall on just the wrong side of the debt relief line currently available under the Trinidad terms, but those countries may be helped by the point which the right hon. Member for Derby, South (Mrs. Beckett) asked me about–the proceeds of institutional gold sales by the IMF. That would not necessarily be restricted to Trinidad terms countries.

On the institutional changes, accountability certainly needs to be examined. That is perfectly clear. The underlying reason for that examination is simply to determine whether, after so many years, the institutions themselves are still relevant to the problems that are likely to face us in the next 10 or 15 years. By “institutions”, I mean not only the Bretton Woods institutions–the IMF and the World bank–but we need also to look at the United Nations, the development of NATO in the light of “Partnership for Peace”, and the enlargement of the European Union, as well as the changes that we have already seen with GATT becoming the World Trade Organisation. Those are not matters which the G7 can determine but, in all those institutions, the G7 countries are leading members.

If we decide that there needs to be some reform, at that stage we shall wish to consult other members of those institutions in an attempt to bring about the reform. But I emphasise that the G7 does not see itself as a directorate that can impose those changes on the institutions. We are simply making the point that now is the time to examine them to see what changes are necessary.

I agree with what the right hon. Gentleman said about Bosnia and I am grateful for his support for the visit of my right hon. Friend the Foreign Secretary.

Several hon. Members rose

Madam Speaker: Order. A number of hon. Members seek to question the Prime Minister. I am now looking for one brisk question each and, if I may, brisk answers.

Sir Peter Emery (Honiton): Was further consideration given to the extension of the non-proliferation treaty to those countries that have not signed it? Will Japan support any action that might be taken against North Korea if the situation deteriorates rather than progresses?

The Prime Minister: There was, in discussion, unequivocal support by all the G7 members, including Japan–and of course Russia as part of the G8–for the indefinite extension of the non-proliferation treaty in 1995.

Mr. Peter Shore (Bethnal Green and Stepney): The summit communique reads remarkably like the election manifestos put out by my hon. Friends who are candidates for the Labour leadership– [Interruption.] –so, obviously, there are good things in it. In particular, I welcome the movement of the G7 into the G8, including Russia, and the arrangements for a very searching 50-year anniversary review of the institutions set up in Bretton Woods. On the question of aid, can the Prime Minister tell us what figure he hopes to put on the further concessions of debt relief as compared with the $3,000 million debt relief already gained ?

The Prime Minister: I think that it is difficult to put a precise figure on it. I will examine the scope for further reduction, and I will write to the right hon. Gentleman with a figure. It will be a very substantial figure indeed, but I cannot immediately put a figure on it.

On the earlier points, I am pleased to have the right hon. Gentleman’s support for the review of the institutions. I was a little surprised to hear of the apparent similarity between the communique and the manifestos of the potential leaders of the Labour party, which I have read with great interest– [Interruption.] I am not sure that my vote would swing the result–not least, though, alas, he is not with us this afternoon, that of the hon. Member for Kingston-upon-Hull, East (Mr. Prescott), who, despite what was in the G7 communique , said on 4 July :

“Deregulation has been an economic failure”.

Mr. Iain Duncan Smith (Chingford): Notwithstanding my right hon. Friend’s reply to the question of my right hon. Friend the Member for Honiton (Sir P. Emery) about nuclear proliferation, does he agree that one of the biggest problems is that North Korea and China are at the apex of a chain of proliferation which has already taken place, and that many countries in the middle east, not least Iran, Iraq and Libya, have significant capability and within the next five or six years are likely to have a launch facility which will be able to strike parts of Europe? Does he agree that now is the time for us to accept that proliferation has to some extent failed, and to find new measures?

The Prime Minister: I am disinclined to accept the concept that proliferation has failed because I think that it is extremely important that we press the case for non-proliferation whenever and wherever we have the opportunity. It is not always entirely clear precisely who has the capacity to launch nuclear weapons and who has them. I wish it were a good deal clearer than it sometimes seems to us. But there is no doubt that we need to maintain pressure. My hon. Friend mentioned a number of countries which we have been pressing precisely on this point. He could probably name others, and so could I. However, we intend to continue to press for non-proliferation both through the treaty and, of course, bilaterally.

Mr. Tam Dalyell (Linlithgow): What did President Yeltsin say to his colleagues about sanctions against Iraq ? How does the Prime Minister feel about continuing sanctions and the shortage of water filters and water pumps in the sweltering heat of Baghdad which will most certainly lead to massive disease in the Euphrates and Tigris valleys ?

The Prime Minister: The hon. Gentleman knows of the humanitarian options that are available, and he and I have had the opportunity of discussing them in the past. President Yeltsin did not express a view on this matter, but Russia, of course, has supported the imposition of sanctions on Iraq, and continues to do so.

Mr. Toby Jessel (Twickenham): Can my right hon. Friend tell us whether the Group of Seven considered the long-term economic impact on the rest of the world of the growing industrial strength of Asiatic countries, not only Japan, Korea and Taiwan, as it was, but now increasingly India, China and half a dozen other countries?

The Prime Minister: We did not specifically discuss those countries in that sense, but in all the economic discussions of employment and growth, the changing position of south-east Asia and the Pacific basin countries was ever present in our minds. Many of the countries that were relatively captive markets to western states 20 or 25 years ago are now not only competing with those previous supplier countries but competing very successfully with them in different parts of the world. That is one of the matters that I think underlies the concern that we have for the maximum amount of industrial efficiency in this country, because competitiveness is far greater as a result of what has happened in the Pacific basin than it has ever been before.

Mr. Andrew Faulds (Warley, East): The right hon. Gentleman mentioned the contribution that Her Majesty’s Government are making to the rebuilding of Palestine. Would he be good enough to give the House some idea of what contributions his G7 colleagues are likely to make to that purpose, and does he consider them anything like sufficient for the immense job that faces President Arafat?

The Prime Minister: It is, as the hon. Gentleman says, an absolutely immense job. Apart from our bilateral contributions, there will be bilateral contributions of various sizes from a number of the other G7 countries, and also a substantial collective contribution from the European Union. I shall write to the hon. Gentleman with details of the figures that we have.

Mr. Nigel Forman (Carshalton and Wallington): May I return to the issue of non-proliferation in relation to nuclear matters ? Was there any consideration at the summit of measures that it might be right for the G7 to take–and Russia to take–to encourage other sources of energy in countries that might be tempted to go nuclear precisely because they see nuclear power as their best chance for the future ?

The Prime Minister: There was no discussion on that point–time did not permit detailed discussions on it. We are primarily concerned to make sure that the non-proliferation treaty is extended and that it sticks. As my hon. Friend will know, a large number of countries are at the moment disinclined to sign it; we are very concerned to make sure that they do.

Mr. Dennis Skinner (Bolsover): Another summit, another jamboree. Why did not the Prime Minister tell us about the part of the communique that he had to deliver at the end of the summit in respect of those two Tory Members of Parliament with their noses in the trough?

On the subject of deregulation, why should big business have to carry the on-costs of lining the pockets of Tory Members to put down questions ? In some of the other G7 Parliaments, the rule is : one Member of Parliament, one job only. If people cannot manage on £31,000 a year, they should not put up for the job.

The Prime Minister: The hon. Gentleman no doubt thinks that these summits are enormous fun. Set against the attractions of a cricket final at Lords they do pale to a certain extent, at least for me. The matters mentioned, with his usual delicacy, by the hon. Gentleman were not discussed at the summit.

Mr. Patrick Cormack (Staffordshire, South): When the Foreign Secretary goes on his crucial mission this week–we all wish him success in that–will he and his colleagues see President Milosevic, Mr. Karadzic and General Mladic together, to impress on them not only how seriously the G8 view their appalling actions but also the fact that those who are responsible for war crimes will be brought to book?

The Prime Minister: I am confident that my right hon. Friend will meet each and every one of those gentlemen, but I very much doubt whether he will meet them together. There are likely to be separate meetings. He certainly proposes to see the leaders of the Serbs and the Bosnian Serbs, and I have no doubt that he will make my hon. Friend’s final point to them.

Mr. Peter Mandelson (Hartlepool): Did the Prime Minister, in one of his scripted or unscripted moments in Naples, discuss the presidency of the Commission? In his quest for anyone but Dehaene to succeed Delors, can he tell the House who now is in the frame and what qualities they have?

The Prime Minister: That too was not a matter for the G7 summit. There was no formal discussion at Naples of the Commission presidency.

Dr. John Cunningham (Copeland): Go on.

The Prime Minister: I shall repeat it for the right hon. Gentleman’s benefit : there was no formal discussion in Naples of the Commission presidency. It would be wholly wrong for four member states to form a caucus. [Laughter.] The House is well aware of the objection that I took to that on a previous occasion when there seemed to be a caucus. What is needed is thorough consultation between all 12 states, and that is what the German presidency has in hand.

Mr. Anthony Coombs (Wyre Forest): The conclusions of the summit properly recognised the importance to economic growth of deregulation and labour market reform–despite the somewhat spurious claims of the Johnnies-come-lately on the Opposition Benches. Would my right hon. Friend agree that, in a European context, subsidiarity is particularly important? Does he agree with Klaus Kinkel, the German Foreign Minister, who recently said that subsidiarity provides the opportunity to roll back European decision making? Is not that evidence that European decision makers are at last coming round to the British view on subsidiarity?

The Prime Minister: I certainly know that the German presidency proposes to take subsidiarity a good deal further during its presidency of the European Union in the second half of this year. I have not heard the particular quote by Mr. Kinkel, but it is certainly one to which I would subscribe, and it is an indication of the extent to which the terms of debate in Europe have changed.

Mr. Harry Barnes (Derbyshire, North-East): If the Government think that they are dragging us up the economic hill, taking the G7 countries behind us, who took us down in the first place?

The Prime Minister: One might ask the same question of all the G7 countries which suffered recession.

Mr. Barry Field (Isle of Wight): In three weeks’ time, the Bank of England will be celebrating 300 years of survival. Does my right hon. Friend agree that the best news to come out of the summit is that the G7 central banks, and the Bank of England in particular, would no longer be required to chase the US dollar all over the Pacific?

The Prime Minister: The tercentenary of the Bank of England is a remarkable occasion : the bank has been an astonishing institution over the years. My hon. Friend makes his point with great clarity.

Mr. Harry Cohen (Leyton): Virtually the whole House will approve of the G7 putting up the money to close down Chernobyl nuclear power station. When is that likely to come about? There are other nuclear power stations of similar design in the former Soviet bloc. Will money be put up to close them down as well?

The Prime Minister: We have reached agreement on the way to help the Ukrainian authorities to close the Chernobyl plant. That involves closing the remaining reactors and assisting to complete new reactors with modern safety standards. That will now have to be discussed with the Ukraine. That will happen speedily, and I hope that the resources can then be made available. We have centred on Chernobyl because of the nature of that reactor and its condition, which is one of the special concerns.

Mr. John Greenway (Ryedale): Given that much of the nervousness in world financial markets appears in part to be due to worries about long- term inflation, what discussion took place on inflation prospects? Were other countries present able to point to the good news on inflation such as that we had today on factory prices?

The Prime Minister: Yes, there was some discussion on inflation. There is no doubt that at the moment inflationary tendencies are subdued, not just in this country but in other countries. It is certainly the intention of the G7 Governments, as far as it is practicable, to keep inflation at the lowest possible level. I hope that that will have its long-term impact on the markets as soon as it is apparent to them that that is happening.

Mr. Tony Worthington (Clydebank and Milngavie): The news that the United Nations and its organisations and the international financial institutions are to be reviewed is welcome, but is not this a matter of such importance that it would be appropriate for the Government to issue a consultation paper so that there could be widespread debate in this country on those matters?

The Prime Minister: We first have to consider the matter ourselves. I shall consider the hon. Gentleman’s point. I am not immediately attracted to issuing a White Paper. I think that the first process is for us to consider as a Government–and I accept that it is certainly a reasonable matter for a debate in the House–whether we think that changes are necessary and, if so, what they might be. However, I would prefer to engage in discussion with other Governments before deciding what to press for. Although I hope that other people would not hesitate about letting us have their views, I am not at the moment attracted to publishing a White Paper.

Mr. Jacques Arnold (Gravesham): May I draw attention to the pressure, according to the communique , that the G7 countries and Russia are putting on the Haitian junta to step down? In his campaign for democracy and human rights, will my right hon. Friend bear in mind the last Latin American republic that has still not returned to democracy and human rights–Cuba?

The Prime Minister: My hon. Friend is right : Haiti is a matter of some concern to a number of countries and, of course, particularly, for self-evident reasons, to the United States. We should certainly like to see the restoration of President Aristide and democratic government. That is equally the view of the other G7 Heads of Government.

Mrs. Ann Clwyd (Cynon Valley): The Prime Minister spoke of the concern of the G7 Governments for the poorest in the world. Was he able to tell them when his Government would reach the UN target of 0.7 per cent. of GNP for overseas aid?

The Prime Minister: No Government was able to give a commitment as to when that would be. As the hon. Lady knows, I think that we have the sixth largest aid programme in the world. I think that our record is unequalled by any other country in terms of the amount and speed with which we have completely written off historic debt.

Mr. Michael Brown (Brigg and Cleethorpes): I believe that my right hon. Friend said that South Africa was discussed at the summit over the weekend. Will he confirm that it is imperative that the G7, rather than just the United Kingdom, contributes to ensuring the economic development and regeneration of South Africa? If that country succeeds economically, the trickle-down effect across the whole continent will be of great benefit.

The Prime Minister: I agree with my hon. Friend. There is no doubt that other countries also recognise the importance of South Africa. In effect, they recognise that in two ways–the importance of dealing with the internal difficulties of the new South African Government ; and, equally, the impact of a successful South Africa on the whole of southern and central Africa. I have no doubt that other countries will offer assistance. My right hon. Friend the President of the Board of trade is currently in South Africa, with business men, to determine what assistance can be given.

Mr. Geoffrey Hoon (Ashfield): In his statement, the Prime Minister suggested that the G7 supported his Government’s calls for flexible labour markets. However, was it not the case that in the final communique other members of the G7 insisted specifically that the word “flexible” was not part of the final words? Is not that because they have quite a different view from Government policy on the best way to create jobs?

The Prime Minister: I am not sure where the hon. Gentleman heard that, but it did not occur in any discussion to which I was party.

Mr. Ian Bruce (South Dorset): Following directly from the question asked by the hon. Member for Ashfield (Mr. Hoon) about job creation, did not the G7–now G8–countries discuss the introduction of an information super-highway? Did not they have before them the European Commission’s White Paper on growth, competitiveness and trade? If so, were not they surprised that it is full of the British solution to introducing an information super-highway, which is competition, deregulation and privatisation?

The Prime Minister: That White Paper was referred to in the discussions, although the super-highway was not mentioned other than in the general sense of greater liberalisation of telecommunications.

Ms Glenda Jackson (Hampstead and Highgate): Will the Prime Minister tell the House why the G7 nations cannot bring pressure to bear on the International Monetary Fund and the World bank on the issue of accountability? Will pressure be brought to bear on the IMF and the World bank to ensure that in future developing nations will be genuinely treated as equal partners and not as beggars?

The Prime Minister: I do not think that the IMF views indebted countries in that fashion. It tries to assist them and to help them out of their difficulties. That is one of its purposes. Certainly those IMF officials whom I have met would not in any way characterise the countries in the way that the hon. Lady described them. There is no doubt that there is a need for assistance for those countries. I believe that the IMF provides it. However, as we examine the future of the IMF and other institutions, we need to consider whether that can be done better in the future than it has been done in the past.

Mr. John Marshall (Hendon, South): Although the whole House welcomes the trade and aid policies being pursued by the European Union towards Gaza and Jericho, does my right hon. Friend agree that the responsibility for helping those parts of the world goes much wider than just Europe? Was any estimate made of the contribution that the oil-rich Arab states could make to the regeneration process?

The Prime Minister: My hon. Friend touches upon an important point. There is no doubt that the Arab states–many, although not all, of which are oil-rich–should make a significant contribution to the future development of Gaza. That point is relevant– [Interruption.] I hear an Opposition Member whispering that some of them have already committed.

Mr. Dennis Skinner (Bolsover): Some of the money has gone.

The Prime Minister: The hon. Gentleman interrupts me. An Opposition Member whispered that some of the Arab states have already contributed. Others have indicated that they will do so.

Dr. Norman A. Godman (Greenock and Port Glasgow): Was there any discussion of the urgent need to provide continuing financial assistance to those countries most heavily affected by the imposition of United Nations sanctions against Serbia and Montenegro? The Prime Minister will surely agree that Bulgaria, Romania, Hungary and Macedonia deserve continuing assistance.

The Prime Minister: There was no specific discussion of that matter, for the simple reason that the international financial institutions take that into account in the assistance that they provide at present.

Mr. Michael Bates (Langbaurgh): Is my right hon. Friend aware that news that the considerable needs of the poorest nations of the world featured so high on the agenda of a meeting of the richest seven nations will be deeply refreshing to many people throughout the country? Will he ensure that the review of international institutions, which is long overdue in the eyes of many, will specifically examine the costs of bureaucracy and duplication so that the maximum amount of money can go to those who need it most?

The Prime Minister: My hon. Friend is entirely right about that. In providing further assistance to many of the poorest countries, there is a need not only for cash assistance–and I do not resile from the fact that much of that is necessary–but to do whatever can be done to ensure that the money is used for the purposes for which it was intended.

Mr. Michael Connarty (Falkirk, East): Did I hear the Prime Minister make a fleeting reference to unemployment and employment creation? If I did, does the right hon. Gentleman accept Library statistics that show that, in Britain today, only 25 million people are in employment when the peak figure in 1990 was 26 million? We are 1 million jobs short. Will the Prime Minister give an assurance that, when the G7 nations discussed that matter, they did not settle on the part-time, low-wage, poverty-making employment that the right hon. Gentleman’s Government have created? What will they do to provide real jobs at decent wages for people in G7 countries?

The Prime Minister: I have to say to the hon. Gentleman that he is completely wrong. Perhaps he would like to tell me how many countries have a higher proportion of their adult population in work than does this country. There is only one in the European Union, and the hon. Gentleman would go a long way outside to find another that is better. The drivel talked by his hon. Friends can safely be ignored.

Mr. Mike O’Brien (Warwickshire, North): Will the Prime Minister confirm that, either at the summit or in his bilateral discussions with President Clinton, he raised concerns about the fall in the US dollar and the impact that that would have on constituents such as mine who work at Jaguar who need to export to the US market?

The Prime Minister: No. I am not going to make any comments in the House on currency values.