Iran (Nuclear Talks)

John Howell Excerpts

Tuesday 25th November 2014 Commons Chamber

[Mr Hammond]

We have a separate bilateral dialogue with the Iranians in which we urge them, as I said earlier, not to meddle in the internal affairs of other countries and not to take actions that would destabilise the region, but these nuclear discussions are taking place at P5 plus 1 or E3 plus 3, whichever people choose to call it. On many of the issues that my hon. Friend listed we would not get agreement among the P5 plus 1 about what is happening on the ground, so we have chosen—I think it is the right decision—to keep these nuclear talks ring-fenced and separate from all other bilateral and multilateral strands of discussion with Iran.

[John Howell (Henley) (Con)]

Does the Foreign Secretary agree that Iran must be asked to provide details of its previous nuclear activity? Otherwise a mechanism for monitoring Iran’s future actions will be fundamentally flawed.

[Mr Hammond]

Yes. An essential part of the agreement will be a proper investigation into, and understanding of, past breaches of Iran’s international obligations in respect of nuclear weapons.

Ukraine, Middle East, North Africa and Security

John Howell Excerpts

Wednesday 10th September 2014 Commons Chamber

[Mr Alexander]

We took a different position to the Government on the export of arms—once they managed to sort out what their position was—by saying that no arms should be exported during this conflict, and certainly that no arms should be exported where there were reasonable concerns that the consolidated criteria were not being adhered to by the end user, which in this case was the state of Israel. Of course any allegations of war crimes that are brought to the attention of the United Nations, and others, should be investigated.

On my hon. Friend’s substantive point, the nature of the military relationship between the United Kingdom and Israel is profoundly different to the relationship between the United States and Israel. It is important to nail the misperception that somehow the sustained military aid provided by the United States Government to the state of Israel, based on their long-standing strategic alliance, is comparable in a meaningful way to the export of arms to Israel under tightly drawn consolidated criteria and on a commercial basis by arms manufacturers in the United Kingdom.

When I was Secretary of State for International Development under the previous Administration, I oversaw the largest ever package of aid to the Palestinian Authority. We do not provide any aid to the Israelis as they are a much wealthier nation. The reasons we sent that aid to the Palestinian Authority were twofold. First, of course, we had an obligation on poverty reduction to make sure that we were ensuring a higher standard of living for impoverished people, not just on the west bank but in Gaza. Critically, we also supported those aid payments because we wanted a credible negotiating partner for the state of Israel. If we are serious about matching our words about a two-state solution with deeds, we must continue to make what I recognise are often difficult decisions and choices to continue to support the legitimate voice of the Palestinian peoples, the Palestinian Authority. If we are to be questioned about our aid relationship with the region, the facts are that we do not provide aid to Israel, but we do provide hundreds of millions of pounds to the Palestinians—and rightly so—both in the service of poverty reduction and to ensure a capacity for meaningful negotiations in the future.

[John Howell (Henley) (Con)]

The right hon. Gentleman’s analysis of the situation will come across as extremely one-sided, and as far too dismissive of the role of Hamas in this situation.

[Mr Alexander]

I am not entirely clear of the basis on which the hon. Gentleman makes his point, but let me reiterate for the record, and so that he can rest assured, that I am unyielding in my condemnation of Hamas, both for the indiscriminate killing of Israeli civilians and for the destructive role it has played when we have tried to secure the two-solution we want. Please do not be in any doubt as to where I stand on wanting a unification of the Palestinian community so that we can have that meaningful two-state solution, but I am also unequivocal in my condemnation of the use of rockets as a weapon of war by Hamas and other terrorist organisations operating out of Gaza. There should be no uncertainty or ambiguity about my position.

--- Later in debate ---

[John Howell (Henley) (Con)]

I came to this debate to listen to what was being said, and I have to say that I was deeply impressed by the speech of my right hon. Friend the Member for North Somerset (Dr Fox). I was one of those who stood up in eastern Europe to defend our values. I was one of those who stood up for the values of tolerance, freedom of speech and particularly the rule of law. In this speech, I want to take us back to the situation in Israel and Gaza, notwithstanding that there is a ceasefire, which continues to hold. I also want to draw attention to my entries in the Register of Members’ Financial Interests.

The trouble with saying anything about the Israel-Gaza situation is that unless we come out immediately as pro-Palestinian, we are put down as just listening to pro-Israeli military propaganda. This is both untrue and misses the point. Nothing I say is going to be anti-Palestinian, but what I say is going to be completely anti-Hamas.

I have no sympathy for Israel when it comes to the building of settlements. The Foreign Secretary has already condemned this and I agree with him, and I urge Prime Minister Netanyahu to think again, but it would be wrong to address the situation in the middle east without condemning Hamas. It would be too easy to be dismissive of the role of Hamas in the current conflict, preferring to take a one-sided view of what Israel can do, rather than also round on Hamas. I am well aware of the history of the region. I have been in the region during a period of Hamas rocket attacks. In fact, I think I was in Jerusalem when Hamas fired its first rocket in that direction.

We should not forget that this conflict came about as a result of Hamas firing rockets at Israel. I cannot see that it does any good to claim that this is not so. Hamas launched over 4,000 rockets in the recent period. It does no good to claim simply that these were homemade rockets when so many were Iranian in origin. What does this say about those who call for an arms embargo against Israel while allowing Hamas still to receive these rockets—these rockets that bring so many in the region within their reach? I cannot see that it does any good to claim that few of these fell in Israel or that Iron Dome protected Israel, as if simply having the means of protection was itself a crime. Nor does it do any good to see this as a numbers game. We all want to see an end to the killing, but totting up how many have been killed does not provide a justifiable comparison. If we simply descend into a one-for-one argument, we descend into an area into which I, for one, would be ashamed to go.

We cannot achieve any results without looking at the tactics of either side. Hamas effectively uses the civilian population as a shield for its rockets and as a safe haven from which to fire those rockets. We have already seen it using United Nations schools and a medical facility to store rockets. Hamas was described by a constituent as a

“brutal and anti-Semitic group which has been accused by Amnesty International and other NGOs of human rights abuses against the people of Gaza and of war crimes.”

The shocking images of 22 Palestinians being lined up to be shot for allegedly supporting Israel should have sent shivers down the spines of those watching. This all demonstrates that the solution to Gaza does not lie in a Hamas-controlled state. I remain convinced that the region needs a two-state solution. Israeli attempts to build more settlements are admittedly not the way forward, but neither is a situation that includes Hamas in its current position.

Oral Answers to Questions

John Howell Excerpts

Tuesday 22nd July 2014 Commons Chamber

[Mr Ellwood]

It is worrying that on 8 July a Hamas spokesman called on civilians in the Gaza strip to serve as human shields. We have seen on television the pictures of those tunnels, and I have seen reports that 20% of the concrete that goes into Gaza is put to use in making them. That is a shocking indictment of the priorities of Hamas and it needs to change.

[John Howell (Henley) (Con)]

19. I draw the House’s attention to my entry in the Register of Members’ Financial Interests. On 15 July, 17 July and 20 July, Israel agreed to accept a ceasefire, but was greeted by Hamas firing more rockets at Israel. What assessment has the Foreign Secretary made of the refusal by Hamas to accept a ceasefire?

[Mr Ellwood]

My hon. Friend rightly points out that Israel has put forward its interest in a ceasefire, and that remains today. We call upon Hamas to join the ranks in Egypt to discuss not just the ceasefire but long-term peace prospects for the area.

Middle East and North Africa

John Howell Excerpts

Thursday 17th July 2014 Westminster Hall

[Alistair Burt (North East Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank the Backbench Business Committee, which I know was under enormous pressure for effectively the last bits of Backbench Business time before the recess. The Committee found time for three hours for the middle east, and I appreciate it. I also appreciate the support of many colleagues who agreed that it was important in the circumstances, with so much happening in the region, to have an opportunity to talk about events there.

I should declare some interests. I travel quite a lot in the region. I am not yet sure of all the etiquette relating to interests, but as I have been flying into the region and have been given hospitality in numerous places that I shall mention, I wanted to draw attention to those interests in the register. Last but definitely not least, I am sure that I speak on behalf of all of us in welcoming the new Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood), to his brief. The Department is fortunate to have a new Minister who is aware of the area, has spent time there and knows different parts of it well, and who has always demonstrated a strong interest in foreign and middle eastern affairs while a Back Bencher. We all welcome him as Minister.

Accordingly, I thought that the best thing to do would be to set him up right away with a debate on the middle east and north Africa, which would give him and his hard-working officials a great opportunity to be fully briefed. I am sure we all agree that we do not expect him to answer all the key questions on the middle east, of which most of us have two or three in our back pocket that would stump any Government. This does not seem to be the day to throw them in the new Minister’s direction. I can also see from those who are prepared to take part in this debate that he will have an opportunity to hear from experts in the House who have studied the area and care about it deeply, and who have a lot to say and to listen to. There could not be a more ideal introduction for him than this debate.

It is easy to concentrate on all the negatives in the region, so although I shall be as brief as I can, I shall start with some of the positives before going on to look at the problems. I drew the title of this debate deliberately wide. Rather than finding a contentious motion on which to divide the House, I wanted to provide as wide an opportunity as possible for colleagues with many diverse interests in the region to talk about them, whatever they may be. I am sure we will hear about many different things. I shall concentrate a little on the prosperity issues in the region, and then talk about three or four specific areas. That will mean leaving out an awful lot, as we all know, but I am sure that other speakers will fill those gaps by the end of the afternoon.

One of the successes of the Foreign and Commonwealth Office over the last three or four years has been the attention paid to the prosperity agenda. Prosperity matters. It is not simply a question of pounds and pence or of money in the bank for the United Kingdom; prosperity means that people have jobs and opportunities, and their states have an opportunity to prosper as well. Never has that been more needed in the region we are discussing, according to various estimates. I saw an estimate from Deloitte a year or so ago saying that 40 million new jobs will be needed in the next decade to cope with the growth in population. There is an obvious connection between idle hands and problems, and ensuring that people have enough work to do is key to the region.

Accordingly, I am proud of the role that the United Kingdom has played in the prosperity agenda. We can see it demonstrated across the region. In north Africa, for example, the Lord Mayor of London, Fiona Woolf, concluded a seven-day visit last month to Algeria, Morocco and Tunisia. In each country, she met with the Head of State or Government and numerous Cabinet Ministers, including Finance Ministers, and the governors of three central banks. She led informative discussions on the development of the economy in each of the regions, focusing on economic diversification, managing each one’s different and abundant energy resources and developing education, training and qualifications. The north African region, of course, has been the birthplace of the Arab spring, and has been through a series of issues that are far from resolved. Each state is identifiably different from the others, but as part of the future of the region, the prosperity agenda will play a large part, and the United Kingdom can undoubtedly make a contribution.

I shall focus for a second on Tunisia in particular. Although we discuss the difficulties of politics in the region, I have seen far too little in the media recently acknowledging what has happened in Tunisia. Rather than people taking to the streets or political leaders finding reasons for division among themselves, the Tunisians have worked extremely hard to find out how they can come together on a constitution and make new politics work after the overthrow of the Ben Ali dictatorship. We should watch Tunisia carefully and give every encouragement to the development of democracy there.

I pay tribute to the work of the FCO and the British Government through the Arab Partnership to consider what values we hold in common. Instead of telling states, “This is what you should do,” the Arab Partnership has simply offered a menu: “We think these sorts of thing work. Which is right for you in terms of building democracy, a Parliament and a new politics?” I am proud of the work that has been and continues to be done there, including by all the diplomats and officials in the region. I am delighted to mention Tunisia. Its success should counterpoint some of the difficulties in other places.

[John Howell (Henley) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Why, in my right hon. Friend’s opinion, has the experiment in Tunisia not worked well in other north African countries?

--- Later in debate ---

[Richard Burden]

I think it was pretty clear from my opening remarks that the answer to that is an unequivocal yes, but that gets us no further. It is a statement of fact that Hamas should stop firing rockets, and that if it fires rockets at civilian areas that is a war crime that deserves to be condemned. It has to stop; I say that to Hamas. However, that does not in any way justify a continued occupation. My point is that unless we tackle that issue we will not move towards peace. In plain speaking, settlement building is illegal.

[John Howell]

I do not wish to interrupt the hon. Gentleman, who is very passionate about this subject; I simply want to approach it from a different aspect. In November 2012 I was in the region, and it was not very pleasant to be there. Should not the starting point be an acknowledgement by the states surrounding Israel of the borders of Israel and of Israel’s right to exist? That covers a number of the issues that he is addressing.

[Richard Burden]

Israel absolutely has a right to exist, and I will speak about that when I wind up.

If we accept that continued settlement building is contrary to UN resolutions, the Geneva convention and international law generally, what do we do about it? I am not suggesting any military action against Israel, but I am suggesting that we uphold international law. That means we should have no contact with illegal and illegitimate settlements. We should not trade with them, and we should insist that if Israel wishes to export goods from the settlements, it separates them from goods produced in Israel. If it does not, I am sorry, but the trade preferences that apply to goods from Israel should not apply to goods from the settlements.

I will conclude by responding to the point made by the hon. Member for Henley (John Howell). People say that the Palestinians should recognise Israel. I agree. The Palestinian Authority, including Fatah and the Palestine Liberation Organisation, recognised Israel years ago. It has said that Hamas should recognise Israel. The Quartet takes the view that not only should it recognise Israel, but it should already have done so, in order to get into talks. That demand has never been made of Israel the other way around. Let us think about it. Continued settlement building removes the practical chance of a two-state solution. In practical terms, Israel does not recognise the right to a Palestinian state; in practical terms, it is removing it before our eyes. That is the reality; is it also the theory?

Last week, Prime Minister Netanyahu gave an interview that was reported in The Times of Israel by David Horovitz. It was given in Hebrew, but it has helpfully been translated by The Times of Israel, which is not a Hamas organ, or even a Palestinian Authority organ. I urge hon. Members to read it because it makes Prime Minister Netanyahu’s view of a Palestinian state pretty clear. It says:

“He”—

Prime Minister Netanyahu—

“made explicitly clear that he could never, ever, countenance a fully sovereign Palestinian state in the West Bank.”

That should give us all pause for thought. If we are all in favour of a two-state solution, both sides must abide by that, not as a matter of negotiation, but as a matter of right. If Israel demands, as a matter of right, to be recognised by the Palestinians, it is not wrong and not too much for the international community to say to Israel that as a matter of right it should recognise Palestine. Perhaps we could help that along the way by doing it ourselves.

Oral Answers to Questions

John Howell Excerpts

Tuesday 29th October 2013 Commons Chamber

[John Howell (Henley) (Con)]

12. What recent reports his Department has received on child executions in Iran.

[The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)]

We receive regular reports on the human rights situation in Iran, including information about executions. Executions for crimes committed by people under the age of 18 are a breach of international law, and the UK opposes the use of the death penalty as a matter of principle.

[John Howell]

According to leading human rights groups, Iran has the shameful record of being the world’s largest executioner of juvenile offenders. What representations can the Government make to ensure that that barbaric practice ends, in accordance with the country’s obligations under the convention on the rights of the child?

[Hugh Robertson]

My hon. Friend is absolutely right. This country has, under the EU sanctions regime, helped designate over 80 human rights violators in Iran, and, of course, helped establish the UN special rapporteur on Iran’s human rights and lobbied for his mandate to be renewed at the March UN human rights council.

Palestinian Resolution (United Nations)

John Howell Excerpts

Wednesday 28th November 2012 Commons Chamber

[Mr Hague]

The right hon. Lady is absolutely right. That is the judgment—how to weigh those things. We want the Palestinian Authority to succeed, and we believe that President Abbas is the best interlocutor that Israel will have to bring about peace. We also believe, however, that the other factors that I have described are essential for that to work. Our way of weighing those two factors in the balance is to try to combine them in a successful resolution.

I make again the point that I made in response to the right hon. Member for Paisley and Renfrewshire South: if these assurances were received, and we could vote for the resolution, and it was passed with a large majority, would the chances of negotiation beginning again and succeeding be greater than they are today? The answer is undeniably yes, and that is the logic of our position.

[John Howell (Henley) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests. I welcome the Foreign Secretary’s statement. When I was in Israel and the Palestinian territories, I did not detect any appetite for overreacting to the passing of the resolution. What has he heard that has changed his mind?

Middle East

John Howell Excerpts

Tuesday 20th November 2012 Commons Chamber

[Mr Hague]

Yes, we are in close touch with the United States. I have regular discussions with Secretary Clinton and we are to have another very shortly. The wider solution for Gaza, not just an immediate ceasefire, is of course important. It includes the role of better access to and from Gaza and greater assurance that weapons are not going into Gaza—there are many aspects. We will discuss that with the United States as well as Egypt directly.

[John Howell (Henley) (Con)]

I declare an interest: I have just returned from a visit to the Palestinian authorities and to Israel. The Foreign Secretary’s statement that Hamas bears the principal responsibility for the crisis and could end the conflict by stopping bombardment of Israel was heard attentively, but does he agree with me that the use by Hamas of long-range imported missiles capable of striking Jerusalem has made that much more difficult to achieve?

[Mr Hague]

Yes, absolutely. It is clear that the armoury of rockets in Gaza has changed since the time of Operation Cast Lead; there are now longer range rockets, which have been launched at Tel Aviv and, in at least one case, at Jerusalem. Of course, that is an escalation of the threat to Israel, but it only underlines the importance of taking forward all the work on a negotiated peace and settlement in the middle east, which is supported across the House.

Oral Answers to Questions

John Howell Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Bellingham]

I had the chance to visit Khartoum in July. I had a meeting with Sudan’s Foreign Minister, at which I made it very clear that the lack of humanitarian access, the lack of progress on the CPA and the action on both sides of sponsoring proxies were completely unacceptable. We also robustly condemned the recent bombing of Yida and Quffa. We need a negotiated political settlement to move this issue forward.

[John Howell (Henley) (Con)]

11. What assessment he has made of the UK’s relationship with Turkey; and if he will make a statement.

[The Minister for Europe (Mr David Lidington)]

Turkey is a key partner in trade and investment, and in building international security. Last week’s state visit by President Gul demonstrated the vitality of our bilateral relationship.

[John Howell]

Economic growth in Turkey was 9% last year and its trade in goods with the UK is expected to reach £9 billion this year. Should not those be clinching factors in ensuring that we have a positive relationship with Turkey, and that the EU does not foolishly turn its back on that country?

[Mr Lidington]

We strongly support Turkey’s ambitions for EU accession. We think that Turkish membership of the EU would be extremely good news for the single market and for British and wider European business opportunities.

Emerging Economies

John Howell Excerpts

Monday 14th June 2010 Commons Chamber

[John Howell (Henley) (Con)]

Let me start by thanking all the hon. Members who made maiden speeches tonight. I suspect that when I came into the House after a by-election colleagues breathed a sigh of relief at the fact that they had only one maiden speech to concentrate on. Tonight we have had three, but they have been three excellent speeches. I particularly welcome a fellow central and east European cold warrior to the Conservative Benches, particularly in the context of this debate.

It is nice, too, to return to a subject that I left professionally almost a decade ago, when I was the author of the Ernst and Young emerging markets reports. It was a monthly attempt to score key markets for attractiveness, principally from the point of view of foreign direct investment. The big emerging markets of the day were in eastern Europe, which seem still to be the big emerging markets of today, as if nothing had happened. Many are still on the list, despite being members of the European Union. Then, as now, the big enigma was the role of Russia.

In the intervening decade there seems to have been in the field a long march of taxonomists, who have sought to subdivide emerging markets almost ad infinitum. The Financial Times divides them into advanced and secondary emerging markets, based on national income. Morgan Stanley divides them into developed, emerging and what it calls frontier markets. There is a core group of markets on which everyone agrees, with a few others, such as Saudi Arabia, around the edges.

I am not sure that such taxonomy is of any use. What we are still dealing with are industrialising countries with large growth and large potential, accompanied by equally large risk and insecurity. Most of that taxonomy, anyway, is capital markets-driven, but a very different picture often emerges if one looks at those economies not as capital markets, but as markets for foreign direct investment or for export. Indeed, when for a brief while I presented business programmes for BBC World Service television, I visited more emerging countries’ stock exchanges than I care to remember. Undoubtedly the smallest but one of the most enthusiastic was that in Mongolia, but we should remember that the Mongolian stock exchange is not there to generate capital for its companies; it is there as a social device for the equitable distribution of newly privatised assets, most of those by means of mass or voucher privatisation, which the UK has sponsored. Inevitably, those are high-risk procedures, but experienced capital-market players can largely cope with such risks.

A good question is how we define the difference between emerging economies and emerging markets. We are talking about the attractiveness of such economies in business terms, with their export-led focus, use of agents, joint ventures and, indeed, direct investments. In my time as a partner at Ernst and Young, I helped many small and medium-sized enterprises into emerging markets, but we have to be realistic, because one of the biggest constraints on them is the amount of time involved in entering such markets.

Sadly, the majority of SMEs that came to me for advice came when they were on their last legs in the UK—their markets having disappeared for one reason or another—and they wanted an emerging market and an emerging economy as a means of getting them out of their problems. I am not saying that that cannot be done; it can. The company that I set up with a business partner did so, but it meant that one of us was always on the road, particularly as our first major project was to produce what I can only describe as a pop video of Manmohan Singh, to be shown at an international conference. It was incredibly difficult, because the essential humility of the man meant that his character did not fit into the pop video class. The business meant having to be away for quite a long time and, in a business with two principals, one can imagine the difficulties that arose.

We need to take a balanced view of individual countries, and to make an assessment that some will need more help than others and more encouragement from Government if they are to export. There is a lot of talk about the emerging economies that are in fashion today and out of fashion tomorrow, but not all of that is based on the objective, analytical criteria of companies such as Morgan Stanley; much of it is based on gut feeling.

We spoke earlier about one barrier being the difficulty of language, but one that is frequently overlooked is the difficulty of culture. I remember how, at an INSEAD seminar, the most distinguished cultural scientist on the matter, Fons Trompenaars, put forward his view on cultures and how that can help people assess them and do business. His view is based on a number of individual dilemmas that he put to about 15,000 people throughout the world.

The most famous is known as the dilemma of the car and the pedestrian. Essentially, we are in a car driven by a friend who exceeds the speed limit and knocks down a pedestrian. On the question of the driver’s expectation that we will lie for him, the worst place in the world, according to Fons Trompenaars, is Canada, where 96% of people would shop their friends to the police. Emerging markets, however, are some of the best places to have friends: in South Korea, 26% would shop their friends; in Russia, 42% would; and in China, the figure is 48%.

Those responses should not be taken literally, but they are indicative of how much obligations to the state outweigh obligations to individuals. [Interruption.] The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne) laughs, but Britons figure at 90% on that scale, so the UK is not too good for friendship. Interestingly, however, those questioned in the UK asked how seriously the pedestrian was hurt. If they were more seriously hurt, there was more of an obligation to the state than to the individual. One has only to cross the channel to obtain completely the opposite result, where the more the pedestrian is hurt, the more the driver obtains our assistance in lying, because their punishment would be more severe. That may seem academic, but I recommend the work of Fons Trompenaars to hon. Members; it provides a useful, pragmatic framework for considering emerging markets. For example, it draws out the frequency with which developed countries depend on legal agreements and big contracts.

[Gordon Birtwistle]

My concern, which the hon. Gentleman may well be able to answer, is about the fact that the emerging markets have now taken away our heavy industry—shipbuilding, steel and things of that nature. How do you see this country fighting back against the emerging markets, with jobs of the future? I accept that we have advanced engineering in aerospace and other such sectors, but many residents of the country do not have the skills to be involved in that type of industry. How do you see the UK fighting back against the emerging markets in respect of less skilled jobs?

[Mr Speaker]

Order. I gently point out to the hon. Gentleman that I do not see anything, although I think that the hon. Member for Henley (John Howell) will.

[John Howell]

I thank the hon. Gentleman for his comments. Clearly, British industry still has a big role to play in emerging markets, but we need to be realistic about in which markets it can play that role, what assistance is needed and what size companies can play in which markets.

The dilemma that I was discussing draws out the frequency with which developed countries depend on legal agreements, big contracts and lawyers, and how relationships tend to get ignored. Emerging markets, however, depend more on the relationships that are built up; the handshake comes first, rather than the contract—hence the amount of time required to develop business in them. That is important not only for foreign direct investment or the export trade but for capital markets and understanding the role of supervisory regimes—the structure of those market institutions and how the regimes are approached. The point is also a crucial piece of understanding about how such countries will perform in international forums. One thinks immediately of the expectation of honouring OECD template agreements, which are the lowest common denominator but often do not fit within the cultures of the countries that we are talking about.

I respectfully suggest to Ministers that the issue also appears in diplomacy. When I was leading a delegation of British business to a G7 meeting, I remember being able, because I had the benefit of such an understanding of cultures, to get the Hungarians and French on side with us Brits to overturn an American proposal for Russia to simplify bureaucracy by introducing a new ministry. The proposal was quickly defeated; the Hungarians got on board and the French commented that they had never previously recognised that a Brit could understand la psychologie.

That provides a link to another issue as well. Part of the reason why some emerging markets never fully emerge is their lack of understanding of the fact that economics and politics cannot be separated. It is difficult to find an emerging economy that is not also an emerging or problematic political system. Russia is the principal example of that—bedevilled by an incomplete set of reforms that left politics behind economics.

The know-how fund was one of the institutions set up by the previous Conservative Government, who appreciated that market economics needed to go hand in hand with democracy. Their well placed £100 million or so laid the ground for much of eastern Europe to come into the European Union. The know-how fund was aimed not at Governments but at providing assistance to NGOs to build capacity on the ground. That is still a good approach. Sadly, however, the know-how fund was not allowed to finish its work in Russia.

The shadow Minister, the hon. Member for Rhondda (Chris Bryant), took the biscuit when he complained about the position in which Russia was left, given that it was his Government who abandoned the know-how fund, turning it over to the European Union as part of a multilateral package. They also abandoned the east European trade council and the British Association for Central and Eastern Europe. In a debate in 2008, the hon. Member for Birmingham, Edgbaston (Ms Stuart) pointed out that since 1991 BACEE, a small organisation with a minuscule grant in aid from the Foreign Office, had had more than 5,000 politicians, civil servants, judges, journalists and business people from countries of central and eastern Europe participating in its programmes as alumni. That is the way to build up understanding of the politics in emerging market countries.

Unfortunately, when the know-how fund was delivered to the European Union, chaos resulted, with companies turning up in countries to be told that the same contract had been let twice. We also had the ridiculous situation of trying to bring into emerging markets in central and eastern Europe an Italian system of accounting, a French system of law, and an English system of stock exchange. It is no wonder that some of these emerging markets failed to emerge fully during the course of their transition.

Over the years, the role of UK Trade & Investment in this field has swung between a focus on geography and a focus on sectors. During that time, I have had a role in swinging it towards sectors, but I appreciate that it swings back again. An emphasis on sectors is fine provided that one recognises that some markets require more hand-holding than others. I praise UKTI for its services, which have been excellent.

As regards the transition in future, we will need to see markets as separate countries. The acronym, BRIC—Brazil, Russia, India and China—makes no sense in terms of relationships, just as a massive grouping. The transition should be acknowledged both in business and in aid. As regards aid, we must recognise that while there is a move away from providing aid to countries such as India, China and Russia, which I welcome, there is a difference between providing aid and technical assistance. Even after one has moved beyond the trade part, there is still a need to recognise that many of those countries still do not have fully developed local democratic institutions, civil society groups, media or, indeed, enterprise that is fully reflective of a market economy and democracy. I urge Ministers to look carefully at that to ensure that we do not throw the baby out with the bathwater but continue the process, looking back at the mistake that was made in relation to Russia, where, if we had continued our focus, we could have done a lot more to ensure that there was the continuity needed to bring that economy fully out of its emerging status to play its full role in the world.