Economic Policy

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 17th July 1986.

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Photo of Mr Andrew Bennett Mr Andrew Bennett , Denton and Reddish 12:00 am, 17th July 1986

asked the Chancellor of the Exchequer when he next plans to meet his Group 5 colleagues to discuss the co-ordination of economic policies.

Photo of Mr Ian Stewart Mr Ian Stewart The Economic Secretary to the Treasury

The Finance Ministers of the Group of Five nations meet from time to time to discuss their economic policies and prospects.

Photo of Mr Andrew Bennett Mr Andrew Bennett , Denton and Reddish

Does the Minister accept that one of the major problems facing the world is that of Third world countries' debt repayment? What have the Government done to help with that problem in the past few years? Is there anything that the Government can claim that they have achieved in that area? What is the hon. Gentleman pressing the other five countries to do to ease the problems of the debt of Third world countries? Does he accept that until we find a solution, things such as Sport Aid and all the other assistance from the Western world are as naught compared to those debt problems?

Photo of Mr Ian Stewart Mr Ian Stewart The Economic Secretary to the Treasury

As the hon. Gentleman will know, these problems are more generally discussed through the forum of the International Monetary Fund and the World Bank rather than within the Group of Five. I am happy to respond to his question about the United Kingdom's contribution. Not only do we have a substantial overseas aid budget, but we have, in the case of several African countries, converted loans into outright grants. We have also taken part in discussions through international organisations which have led to the fulfilment of one of the aspects of the Baker plan, which has not perhaps received as much attention as it might, which is that the World Bank is now concentrating more of its resources, not on project lending, but on structural adjustment loans. Since the IMF meeting last year, $2·7 billion has been provided by that means in 10 loans to eight different countries.

Photo of Mr Piers Merchant Mr Piers Merchant , Newcastle upon Tyne Central

Is it not of greater significance that since the last G5 meeting the British economy has weathered the oil crisis elsewhere without any serious crisis, just as it weathered the miners' strike? Is this not a tribute to the underlying strength of the British economy and should that not be brought to the attention of the G5 nations?

Photo of Mr Ian Stewart Mr Ian Stewart The Economic Secretary to the Treasury

My hon. Friend is absolutly correct in that analysis. I am equally sure that other members of G5 recognise the importance of my right hon. Friend the Chancellor of the Exchequer following such sound and successful financial policies.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Does the Minister think that one day perhaps the Western taxpayer will pick up the bill and pay for the Third world debt?

Photo of Mr Ian Stewart Mr Ian Stewart The Economic Secretary to the Treasury

The Western taxpayer already makes extensive contributions through national Government programmes. I have no doubt that it is right that international institutions should be the route whereby the international debt problem is resolved. The right approach is to continue to consider these matters on a case-by-case basis, which has served us well so far.