HC Deb 14 July 1999 vol 335 cc394-5
7. Mr. Andrew Reed (Loughborough)

What discussions she has had with the Chancellor of the Exchequer on measures to increase the priority given to poverty reduction within the heavily indebted poor countries initiative. [89758]

The Secretary of State for International Development (Clare Short)

The Chancellor of the Exchequer and I—good timing; my right hon. Friend has just arrived—strongly believe that the purpose of debt relief is to enable Governments to tackle poverty more effectively. We welcome the G7 Cologne statement that the central objective of the HIPC initiative is to release resources for programmes to reduce poverty. The second phase of that review is under way, and is examining ways in which the link between debt relief and poverty reduction can be strengthened. We have submitted our ideas to the review team and will push for a strong poverty link to be agreed at the annual meetings of the World Bank and International Monetary Fund in September.

Mr. Reed

I thank my right hon. Friend for that reply—and the Chancellor for coming to listen to my question. Does she agree that, in the past 11 months, we have made tremendous strides, and gone much further than many Labour Members would have dreamt possible? However, will she ensure that, while we are on that roll, we manage to push in the forthcoming negotiations for real change in the IMF structural adjustment programmes, so that they—unlike current programmes, which many believe push the poorest into increasing poverty—really make a difference to the world's poor?

Clare Short

My hon. Friend makes a very important point. Although we want deeper and quicker debt relief, we also want the general IMF conditionality to protect social spending benefiting the poor, and the economic policies that promote economic growth and will reduce poverty. We are currently working on that side of the equation. Although we have made good progress on deeper debt relief, we do not yet have all the funding for it that was agreed at Cologne; we need countries to come forward and make pledges. We hope to persuade the European Commission to make a considerable pledge, so that we can operate the improved formula agreed at Cologne.

Mr. William Cash (Stone)

Does the Secretary of State, who mentioned her close working relationship with the Chancellor of the Exchequer, accept that there is very deep disquiet about the relationship between gold sales and the reduction of third world debt? Does she accept that Mr. Bobby Godsell, the president of the Chamber of Mines of South Africa, and Mr. Motlatsi, the president of the South African National Union of Mineworkers, are in the United Kingdom precisely because there is such deep disquiet? Does she also accept that there is no point in selling gold if the effect of such sales is to depress the opportunities of people in South Africa, and in other parts of Africa and the rest of the world, to get jobs? Does she agree—I hope that she will answer this question—that there is no point in causing job losses that would cause even more poverty than that caused by debt?

Clare Short

I doubt whether the hon. Gentleman supported many of the previous Administration's policies, but he probably did support their policy of gold sales to fund debt relief—[Interruption.] Conservative Members supported gold sales to fund debt relief, and it is not a good idea for them suddenly, when the idea has become popular, to change their minds. Although we are all concerned about the people who work in South Africa's gold mines, there has been a long-term decline in the gold price. Around the world, banks are no longer using gold to back their currencies. The pretence that Britain's recent decision explains the recent decline in South African gold prices just does not hold up.

Mr. Peter L. Pike (Burnley)

Debt relief is of great importance to my right hon. Friend—as it is to the rest of the Labour Government—but she has always been noted for her fair and blunt speaking. Does she believe that the countries that we are trying to help through debt relief fully understand her message that we cannot tolerate corruption in those countries, and that debt relief is sometimes subject to their putting their own houses in order?

Clare Short

My hon. Friend makes a very important point. Some of the enthusiasts for debt relief say that it should be unconditional, but we have made it absolutely clear that it should not be unconditional, but must be designed to reduce poverty, and that the countries concerned will have to bear down on corruption. We are ensuring that, in the detail of the way in which debt relief is linked to poverty reduction, debt relief will not be used to support corrupt regimes that are simply wasting resources. My hon. Friend is absolutely right.

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