Occupied Palestinian Territories

Part of the debate – in Westminster Hall at 4:37 pm on 29th April 2004.

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Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation 4:37 pm, 29th April 2004

I shall seek to make progress. I am one of only two members of the Select Committee who visited the Palestinian territories and I wish to explain some of the things that we learned during that visit.

It is incoherent for UNRWA to spend money on micro-credit schemes, seeking to provide business opportunities for Palestinians, while spending hundreds of millions of dollars on buying food from non-Palestinians.

Finally, I shall pick up on the comments made by the hon. Member for Banbury about trade. That is the one substantive part of the Select Committee's recommendations with which the Government did not agree. The European Union has similar trade agreements with Israel and the Palestinian Authority. The latter agreement has the potential to help to reconstruct the Palestinian economy, which, to all intents and purposes, has collapsed since the second intifada. Gross national income has fallen by between a third and a half, there has been a huge increase in unemployment, and investment has fallen by about 90 per cent. Without trade, the economic prospects of the Palestinians will not significantly change. The World Bank estimated that a doubling of aid would reduce the proportion of Palestinians living in poverty—on less than $2.1 a day—by only 7 per cent. The removal of access controls in the occupied territories by the Israeli Government would reduce the number by about twice as much.

The trade agreement with the Palestinian Authority does not work. The Palestinian port and airport in Gaza have been destroyed by the state of Israel and access to Israeli ports and airports is limited by the access restrictions. Our Government say that now is not the time to use the leverage of our trade agreement with the state of Israel to enable Palestinian businesses to trade. If the Government believe that constructive engagement with Israel is the best way to exert influence, they should set a timetable over which it will seek to negotiate with the state of Israel and exercise that constructive influence. If it does not work, they must take action because the fundamental basis of every trade agreement is reciprocity. One needs to treat all parties equally, and at the moment the trade agreement is delivering for the European Union and Israel but it is not delivering for the European Union and the Palestinians.