HC Deb 12 December 2002 vol 396 cc389-91
9. Brian White (Milton Keynes, North-East)

If he will make a statement on how he monitors and measures the performance of the World Bank and IMF. [85256]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Through a British initiative, a new independent evaluation office, which monitors and measures the International Monetary Fund's performance was created last year. We also support the review of the poverty reduction strategies of the World Bank and the IMF. They replace the structural adjustment facility.

Brian White

I welcome those changes. However, does my right hon. Friend accept that much of people's distrust of international organisations such as the IMF is based on their past practices, which were not open to The public? Will he help to ensure that such organisations are much more open and that the work of the independent evaluation office is much more widely known in this country?

Mr. Brown

As my hon. Friend knows, when the IMF reported on the British economy, the reports were not normally published. All are now published, and I hope that every country will publish the reports that the IMF gives them. That is one method of increasing transparency and openness. It is also important to monitor the IMF to ascertain whether it is doing a good job. That is the purpose of the independent evaluation office.

It is also crucial that the IMF and the World Bank work well together. That is why the structural adjustment facility, which was unpopular and, as my hon. Friend said, played a large part in annoying the poorest countries, has been replaced by poverty reduction strategies, under which the IMF and the World Bank must work together.

Sir Peter Tapsell (Louth and Horncastle)

I should have thought that the Chancellor was far too busy monitoring the Prime Minister's performance to find time to monitor that of the IMF. However, the IMF is certainly monitoring his performance and becoming increasingly unhappy about it. Does he therefore believe that our Prime Minister will follow the example of his other friend, President Bush, and sack his Treasury Minister?

Mr. Brown

I do not know whether the hon. Gentleman, who takes an interest in such matters, read the IMF report. It states that our economic achievements are due, in no small measure, to the government's sound macroeconomic policies". It also states that the existing monetary framework has delivered impressive results. It goes on to praise the fiscal policy that the shadow Chancellor opposes.

Sir Peter Tapsell

Read on.

Mr. Brown

I would be happy to read on, but Mr. Speaker will not allow me to do that, as I have found on previous occasions.

The IMF and I agree that we must be vigilant about excessive and inflationary wage claims. People must show the necessary responsibility so that we can maintain the low inflation and interest rates that are important to the economy's stability and growth. I hope that hon. Members of all parties agree that we must not allow inflationary wage claims to affect inflation or interest rates.

Hugh Bayley (City of York)

What support have the World Bank and the IMF given to the Chancellor's proposal for an international financing facility? Are they talking to the United States Administration about whether any of the additional $5 billion that they are putting into aid would be a contribution to my right hon. Friend's proposed new fund?

Mr. Brown

I am grateful to my hon. Friend who has taken a long-standing interest in such matters. Important conversations, from the Government's point of view, about the new facility have taken place with the managing director of the IMF and the president of the World Bank. Both have given us a great deal of encouragement, but financing the facility depends on action by individual national Governments.

I am encouraged by the responses from European Finance Ministers and the interest of the US Administration. We are at an early stage, but I believe that, with the support of the churches, nongovernmental organisations, business organisations and all parties, the British initiative, on an all-party basis, can make enormous progress with other countries around the world.