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Clause 6 - Financial assistance

Part of International Development Bill [Lords] – in a Public Bill Committee at 11:30 am on 27th November 2001.

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Photo of Hilary Benn Hilary Benn The Parliamentary Under-Secretary of State for International Development 11:30 am, 27th November 2001

I am grateful to the hon. Member for Meriden for raising the question of debt relief by way of this probing amendment, and I acknowledge the spirit in which she spoke to it. The issue is important for developing countries, as hon. Members will know. It might help the Committee if I clarify the fact that the development aid given by the United Kingdom is almost always in the form of grant. Most of the debt that concerns the United Kingdom Government is in the form of Export Credits Guarantee Department loans. Clearly, however, the international financial institutions that we support, such as the International Monetary Fund and the World Bank, give support in part as loans.

As the hon. Member for North Norfolk (Norman Lamb) pointed out, the figure of 10 per cent. is arbitrary—and I understand that it was given for the purpose of stimulating debate. We mean to resist the amendment because it might place an artificial fetter on the Secretary of State in deciding the appropriate proportion of loan support.

On the principle of the matter, however, the hon. Member for Meriden is of course entirely right. This is a really big issue. Owing to the drive, effort and political will that my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for International Development have brought to the question of debt relief, real progress has been made in the international community. That is also in part a result of the highly indebted poor countries initiative. I, too, pay tribute to the contribution that Jubilee 2000 and many other campaigning organisations made to the achievement of that progress on debt relief, because without that campaign the Governments of the world would not have taken the decisions that they have. As the hon. Lady will be aware, 24 countries are part of the process, which will deliver for them debt relief worth $53 billion. That is by any measure substantial. I accept the point that she made about needing to keep the matter under review as, under current economic circumstances, concern is inevitably being raised about the impact of the state of the world economy on the continuing ability of those and other developing countries to deal with their debt problems.

We need to keep up the pressure on other developed countries and continue to encourage them. In addition to the extent of debt relief that HIPC provides, the Government have announced the writing off of all the debts owed to the United Kingdom by 41 of the world's poorest countries. That is one area in which we are giving a clear lead, and I am sure that all hon. Members welcome it. We want to encourage other countries to follow that example, as that would add further force and strength to the argument for debt relief.

I believe that we are at one on the principle that we are trying to achieve. Government policy is clear, and has enabled us to make good progress, with the support of all the parties represented in the House. I hope that we can sustain and develop that progress long into the future.