HC Deb 06 December 2001 vol 376 cc459-61
13. Helen Jones (Warrington, North)

What recent discussions he has had with other Finance Ministers on progress towards a meeting the 2015 world development goals. [18696]

The Chancellor of the Exchequer(Mr. Gordon Brown)

I used recent international meetings to push for greater efforts to achieve the 2015 goals. We have proposed a $50 billion international development fund under a new compact between developed and developing countries, and I hope that our proposal will engender an all-party consensus in the House.

Helen Jones

I am grateful to my right hon. Friend for that reply and for the personal interest that he has taken in the matter—it is a refreshing change from the previous Administration. My right hon. Friend will accept that achieving many of those targets will depend on an increase in aid, among other things. Can he tell me when he expects this country's aid budget to reach the target of 0.7 per cent. of gross domestic product? That is something that many of my constituents, even in the poorest areas, would like to see, as a sign of our commitment to the worst-off people in the world.

Mr. Brown

I thank my hon. Friend. I know that she takes a tremendous personal interest in both the debt relief campaign and the work on international development led by churches and others in her constituency. When we came into power the development aid budget was 0.27 per cent. Under this spending round, it is rising to 0.33 per cent. In the pre-Budget statement, I said that we envisaged a substantial increase in overseas development in the next spending round and a rise in the proportion of aid in our national income. That is why we made the proposal for an international development fund involving $50 billion. Its aim would be to halve poverty between now and 2015; to cut infant mortality by two thirds; and to ensure that every child in the world enjoyed primary schooling by 2015, instead of the present situation in which, this morning, 120 million children were not able to attend school.

We are asking other countries to join us in that. Negotiations will take place in the run-up to the finance for development conference. That goes hand in hand with our proposals on debt relief, where 24 countries now enjoy up to $50 billion of debt relief.

Dr. Vincent Cable (Twickenham)

Does the Chancellor of the Exchequer support the views of the senior management of the International Monetary Fund, especially Ann Kruger, the vice-president, who argued last week that seriously indebted developing countries should enter the equivalent of bankruptcy proceedings to facilitate a rapid write-off of commercial and official debt? Do the British Government agree with her?

Mr. Brown

The hon. Gentleman is confusing two debates that are taking place. One is about whether, in our crisis prevention and crisis resolution measures, we as an international community look to a new system of international bankruptcy proceedings. The managing director of the IMF, Hans Kohler, has suggested that we need to consider that issue in far more detail because our crisis resolution measures are not good enough.

How we can help those countries that do not have a sustainable exit from debt relief is a separate issue. The answer is that other countries should follow what we have done, which is to provide 100 per cent. debt relief for debts that were incurred in the past, and that we do more through the international institutions to reduce debt. That is how we expect to proceed. Twenty-four countries now have debt relief. Perhaps another 10 could receive debt relief if they moved out of conflict. Under our proposals, it is possible for $100 billion in debt relief to be provided.

Mr. Andy Reed (Loughborough)

I welcome the Chancellor's commitment to reducing debt. However, is he aware of my concern and those of other debt campaigners that the problem for those countries that are currently going through the heavily indebted poor countries initiative, and those that would wish to do so in the near future, is that even the World Bank has suggested that their future economic sustainability may mean that they will not be able to meet their current targets? Will he ensure that that issue is raised in future discussions with other Finance Ministers? Will he use his influence with the IMF and the World Bank to ensure that those programmes work for the poorest?

Mr. Brown

I am grateful to my hon. Friend, who is chairman of the all-party committee on such matters. The work that has been done by all hon. Members is much appreciated. We agreed at Ottawa that there would be greater flexibility in the award of debt relief to countries, especially taking into account the fall in commodity prices that has affected Africa in particular. We therefore agreed that, at the point of completion, there will be more flexibility to enable countries to get a sustainable exit from the debts that they have incurred.

The fact of the matter is that four years ago only one country was likely to receive debt relief; now, as a result of a decision made on another African country last week, 24 have got debt relief. The next stage is for post-conflict countries to get the debt relief that they are due, which would mean that we would achieve our target of $100 billion in debt relief. I agree with my hon. Friend, however, that more will have to be done if we are to have

a virtuous circle of debt reduction, poverty reduction and sustainable development, and that is why the focus must now also be on the 2015 development targets.

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