HC Deb 28 April 1983 vol 41 cc985-6
10. Mr. Skinner

asked the Chancellor of the Exchequer when he next intends to meet bankers to discuss the rescheduling of international debt; and if he will make a statement.

Mr. Ridley

My right hon. and learned Friend the Chancellor of the Exchequer regularly meets the Governor of the Bank of England and other bankers to discuss international debt problems. The subject will be considered further at a variety of international meetings in the coming month including the IMF/IBRD development committee today and tomorrow.

Mr. Skinner

As the Government have encouraged British banks and others to bail out Argentina by providing a giant second mortgage—and perhaps a third later on—and have allowed Argentina to buy weapons of war with that money, will the Financial Secretary confirm that the meeting that the Chancellor is presently attending will try to respond to yesterday's meeting between the Presidents of Brazil and Mexico, which have a giant £170 billion total debt to foreign banks? Indeed, 16 per cent. of Mexico's debt is to Britain. Will the right hon. Gentleman rule out the possibility of the Government allocating further money, in the form of debt rescheduling to British banks, thereby allowing those dictatorships to buy arms, to have lower interest rates and to dictate their own repayment terms?

Mr. Ridley

The hon. Gentleman has learnt nothing from past experience. Does he not remember that when the IMF had to bail out the Labour Government it imposed extremely strict conditions on the management of the economy? The strict conditions that are imposed on Argentina, or any other country for that matter, will prevent irresponsible economic policies and restrict the amount of money available for the purchase of arms.

Mr. J. Enoch Powell

What is the point of organising new loans to those countries which cannot or will not service their present loans?

Mr. Ridley

I should have thought that the right hon. Gentleman, of all people, would not have wished the Government to interfere in the private activities of private banks.

Mr. Higgins

Has my right hon. Friend read the rather under-publicised report of the Treasury and Civil Service Committee on international lending by banks? Will he give the House an assurance that the Government's response to the report will be given before the Williamsburg conference?

Mr. Ridley

I shall certainly draw that point to the attention of my right hon. and learned Friend the Chancellor of the Exchequer.