Third World Debt (Hansard, 12 March 1998)

§ 4. Mr. Purchase
What plans he has to reduce the debt burden of the poorest countries. [32496]

§ 18. Mr. Timms
What discussions he has had with Church leaders about the problems of highly indebted developing countries. [32510]

§ Mr. Gordon Brown
Since my Mauritius mandate statement to Commonwealth Finance Ministers last September, I have held a number of meetings with religious leaders, including the Archbishop of Canterbury, Cardinal Hume, the Moderator of the Church of Scotland and many others. The United Kingdom firmly supports debt relief for the poorest, most indebted countries and is seeking an early solution to many of the problems experienced by them—which includes finding a solution to the debt problems of Mozambique. The Government take their responsibilities in international debt reduction seriously.

§ Mr. Purchase
That is a very welcome statement that illustrates the clear difference between the approach of Labour, with its proper ethical policies, and the policies of the Conservatives, which have contributed considerably to the problems experienced by developing countries. I am sure that the Chancellor will recognise that it is equally important that we persist with policies that support continued and sustainable development. We must recognise that, historically, inappropriate technology has been applied in developing countries for the purpose of extracting profit, especially in agriculture. Cash cropping has drained many such economies. We must have world policies—to which I know my right hon. Friend will contribute and on which he will lead the charge—to avoid the continuing problem of mounting debt in those countries.

§ Madam Speaker
I did not hear a question. I remind the hon. Gentleman to ask a question in future.

§ Mr. Brown
I agree with my hon. Friend's comments. The Government established the Department for International Development, the first act of which was to make a shift in the budget towards poverty relief for Africa. The Government have introduced export credits conditional on not selling arms and taken a millennium initiative to ensure that countries are in the process of debt relief by 2000. The Government will work with other countries to ensure that there is effective debt reduction, particularly in Africa.

§ Mr. Timms
I am pleased to hear from my right hon. Friend that the Government are supporting the campaign, which has been backed by Church leaders and others, for a millennium-linked initiative on debt under the banner of the Jubilee 2000 campaign. Can my right hon. Friend tell the House what support he has gathered from other Governments for the welcome lead that he has taken on this issue?

§ Mr. Brown
I am pleased to say that, at the Commonwealth Finance Ministers conference last year, all countries in the Commonwealth supported our initiative. The G7 statement, issued only a few weeks ago 737 following discussions in London, expressed support for the idea that countries should be in the process of debt reduction by 2000.
I am grateful to religious leaders and to the Churches, not just in Britain but worldwide, for leading the campaign for action on this great moral issue by the millennium. I urge all right hon. and hon. Members to work with the Churches in their areas to ensure that there is strong public opinion in favour of action, which is already making a difference internationally and will help us to secure the necessary debt reductions.

§ Mr. Edward Davey
As more than 95 per cent. of debt owed by third-world countries to the United Kingdom is export credit debt, what plans does the Chancellor have to reduce it? Since 1 May, the Government have issued a military export licence to a company selling arms to Mozambique. How can the Government claim to support education, health and economic development in Mozambique when they encourage such exports?

§ Mr. Brown
The hon. Gentleman will be pleased to know that, at the September Commonwealth Finance Ministers conference, we made it very clear—via a statement from me and my right hon. Friends the Secretary of State for International Development and the President of the Board of Trade—that future export credits to the highly indebted countries will be conditional on exports not being arms. We have managed to secure that very big change in policy over the past few months. Bilaterally, about £1.2 billion in debt has been waived in the past 25 years. Britain has taken an important initiative over many years on that issue.
I hope that the Conservative Opposition will support the Churches in their efforts, instead of standing apart from them. We need international support for our efforts and we are seeking to gain it. Mozambique is the latest country that should be securing debt reduction—20 per cent. of its money is going in interest payments and only 4 per cent. is going on education and health—and I believe that we can make progress there in the next few weeks. As my hon. Friend may know, Britain has already put down its share of money to secure that debt reduction in the next few weeks.