Debt Relief

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 15th April 1999.

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Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East 12:00 am, 15th April 1999

What representations he has received from children with regard to debt relief. [79455]

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The Treasury has received around 2,000 letters and postcards from children on the vital question of debt relief. The Government welcome the strong interest shown by many young people in debt relief and the poverty relief that can be made possible by it. Our plan for 2000 is to cut the debt, increase the aid to the poorest countries, sell International Monetary Fund gold to make that possible and increase giving by individuals and companies.

Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East

I thank my right hon. Friend for his answer and draw his attention to a letter that I received recently from one of my constituents, seven-year-old Joshua Deegan. Joshua's message is quite straightforward: "Help cancel the debt". For Joshua's sake, but more particularly for the sake of the millions of young children who live in the poorest, most indebted countries, will my right hon. Friend continue to press at every point to ensure that that noble aspiration can be turned into a practical reality in the new millennium?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I thank my hon. Friend for bringing to the attention of the House the concerns of one child, which are also the concerns of thousands of children who have taken up the issue. I applaud the work of the Churches and other voluntary organisations that have taken a lead in pressing for the millennium year to be remembered for the debt relief that is made possible.

I can assure my hon. Friend that, when it comes to the IMF and World bank meetings in the next few days, we shall be pressing our colleagues in other countries to join us in trying to secure in 2000 a debt reduction of $50 billion as a minimum, and an increase in aid to the poorest countries so that they receive $60 billion in 2000. To do that, we want initially to sell $1 billion of IMF gold. I hope that my hon. Friend will join me, as will other hon. Members of all parties, in encouraging individuals in our community to sign up to millennium gift aid, under which the Government and the Treasury will match donations that are given by individuals throughout Britain.

Photo of Mr Nick St Aubyn Mr Nick St Aubyn Conservative, Guildford

I am sure that it was only an oversight on the part of the Chancellor not to pay tribute to the previous Conservative Government's role in promoting debt relief. The idea of selling IMF gold was particularly promoted by the previous Conservative Chancellor, and many children in Britain supported the Conservative Government's actions in that regard. But may I ask the Chancellor about a quite different form of debt relief which is in the offing? What calculation has the Treasury made of the savings on debt interest which will be given to companies as a result of an EU withholding tax, and of the costs that will be imposed on British pension funds if such a tax goes through?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I have already answered the question about the withholding tax and what the Government are doing, and I do not think that it is covered by this issue of debt relief. I am sorry that, on an issue for which there should be all-party support, the hon. Gentleman chooses to turn a question on overseas aid and international debt relief into an obsession with the Conservative party's policies on Europe. I did praise, and have on previous occasions praised, the work of the former Chancellor of the Exchequer, although he seemed to get small thanks from the Conservative party for the work that he did. At the same time, there is an urgency about what we have to do over the next year; and I hope that Opposition Front Benchers will join us in pressing everybody in the country to take part in the campaign to secure international debt relief and make 2000 a year when debt relief is converted into poverty relief too.

Photo of Ms Tess Kingham Ms Tess Kingham Labour, Gloucester

For many years, the United Kingdom Government have been at the forefront of pressing to persuade the IMF to sell off gold stocks to finance debt relief in developing countries. If today's media reports are to be believed, that campaign has achieved a measure of success and I congratulate my right hon. Friend on his staunch and unending work in this area over the past couple of years. Will he elaborate on the details of today's media reports? What will the time scale for selling the gold stocks be? How much will be sold, and how will this be implemented?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am grateful to my hon. Friend for that and for the work that she and others have done in pressing the cause of debt relief. We put the proposal to sell IMF gold to the G7 Finance Ministers' meeting a few weeks ago, as we have done on previous occasions. The American Government have said that they will support the proposal and the German Government, who have resisted in the past, are now in a position to support the proposal. I confidently expect that all G7 members will now support the sale of gold, so the IMF will go ahead with the proposal later this year. We have initially proposed the sale of $1 billion of gold. That is an initial sale that can take place, but there is pressure for more to happen.