HC Deb 21 May 1997 vol 294 cc694-5
2. Mr. Mullin

To ask the Secretary of State for International Development what recent discussions she has had regarding the reduction of third-world debt; and if she will make a statement. [311]

Clare Short

I had an encouraging meeting with the president of the World bank last week. The Government strongly support the heavily indebted poor countries initiative and are pressing for its speedy implementation. Our aim is to produce tangible results quickly for the most needy countries and to bring about a once and for all exit from their debt problems.

Mr. Mullin

I welcome my right hon. Friend to one of the best jobs in the Government and I am sure that she will do it well. Has she given consideration to persuading her colleagues at the Treasury unilaterally to remit some of the debt owed to the Export Credits Guarantee Department by some of the most indebted countries, and will she make any relaxation of indebtedness conditional upon respect for human rights?

Clare Short

I am grateful to my hon. Friend. To be fair, the previous Administration worked hard in their later years to achieve success on debt cancellation. Britain's record on cancelling debt owed bilaterally is very good, but we cannot make further progress without getting partnerships across the international community. It is important that we get momentum behind the initiative and start to make progress.

Uganda has been named as the first candidate to exit from debt, and Britain has volunteered to make an extra payment to make up for the fact that the African development bank is not in a position to make its payment. The previous Administration made that clear, and we are standing by that commitment. We hope that other Governments will work similarly. Once we get progress and success, I believe that the initiative can be built upon and that we can begin to give some of the neediest countries in the world the chance to work their way out of poverty.

Mr. Menzies Campbell

I, too, offer my congratulations to the right hon. Lady. She has a warm heart and an independent spirit. I suspect that she will need both qualities, not least in dealing with the Chancellor of the Exchequer. Does she agree that it is disappointing that only Uganda has entered the framework set down for the highly indebted poor countries by the International Monetary Fund and the World bank last year, and that Uganda will be eligible for debt relief only in 1998? What practical steps can be taken to maintain the momentum to which the right hon. Lady referred? Is she satisfied that the criteria laid down in the heavily indebted poor countries initiative are wide enough to allow the most rapid entry of as many countries as possible into its framework?

Clare Short

I am grateful to the hon. and learned Gentleman for his kind remarks. He is right that we should like more rapid progress, but we have to take partner countries with us. Not all countries are as persuaded of the need to make progress as Britain is. Uganda has been named, and there is preliminary agreement on the eligibility of three other countries—Bolivia, Burkina Faso and Cite d'Ivoire.

I have discussed the matter with my right hon. Friend the Chancellor of the Exchequer, who is anxious to show what a warm heart he has on this matter, and we shall do everything in our power to ensure that rapid progress is made. Any support, suggestions or help from any part of the House on ways in which we can achieve that outcome will be welcome.

Dr. Fox

I, too, unreservedly welcome the right hon. Lady to her post. We should pay tribute to the Leader of the Opposition and the shadow Chancellor of the Exchequer for their work on debt reduction. I was pleased to hear the right hon. Lady's fine words on the heavily indebted poor countries initiative and to know that the Chancellor of the Exchequer has a warm heart on the matter. However, a warm heart will not reduce debt. How much do the Government intend to make available for the initiative? They said that they would make money available when they were in opposition.

Clare Short

I am grateful to the hon. Gentleman for his kind remarks. I have already paid unreserved tribute to the former Chancellor of the Exchequer. As the hon. Gentleman knows, Uganda is first and Britain is committed to making additional payments because the African development bank is not in a position to pay its share. We cannot say exactly what the amount will be until the calculations are made, but Britain is in advance of other countries. We are determined to make progress on Uganda and very keen for our partners to make the same sort of commitments. We shall do all in our power to make fast progress.

It is in the interests of justice, and of the whole world, that we should deal with the desperate poverty entrenched by debt. In sub-Saharan Africa, 40 per cent. of people live in poverty. We shall make no progress until we deal with debt.

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