Overseas Development

Part of Prayers – in the House of Commons at 11:46 pm on 14th December 1990.

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Photo of Mr David Steel Mr David Steel , Tweeddale, Ettrick and Lauderdale 11:46 pm, 14th December 1990

The hon. Gentleman is agreeing with my point.

I want, at the same time, to compliment the Government, and I can do that by agreeing with what the hon. Member for Hertford and Stortford said about debt. The Government's record on official debt has been good.

The decision to write off £16 billion for 22 or 23 countries has been generous and imaginative, and they are to be congratulated on it.

I now ask the Minister to go further by bringing pressure to bear on the private sector banks. The hon. Member for Hertford and Stortford spoke about institutional lending, and I agreed with him. But there is also a great deal of bank debt owed to this and other countries. The banks lent on an irresponsible scale at a time when interest rates were lower than they are now. Many countries which borrowed are in great difficulty now because of the increase in world interest rates and the lack of success of their economies.

Whereas a few years ago when one made this type of suggestion the banks wrung their hands and said, "We must be careful not to set off a banking crisis," they have since set aside, and organised their structural internal funds to cope with, bad debts. Instead of allowing those funds to lie fallow, waiting for bad debts to happen, the Government should, in a dialogue with the banks, urge them to follow the Government's example and write off some of the longstanding debts of the poorest countries.

We have seen a few welcome changes of attitude from the Government since the change of Prime Minister. We note the decision, for example, on compensation to haemophiliacs. There is another change of attitude which I hope the new Prime Minister will introduce, and that is to reverse the disastrous and hasty decision that was made when the Conservatives took office in 1979 to charge increased fees for overseas students. Not only was that policy short-sighted from the point of view of the needs of the developing world, but it was lamentably short-sighted from the point of view of Britain's national interest and influence in the world.

It would not be costly to reverse that decision. I urge the Minister to get back at the Treasury and, in particular, to bite hard on the ear of the new Prime Minister and say, "Here is another gesture which would make a big difference to Britain's standing in the world at relatively little cost." I urge her to take that action.