§ 2. Mrs. Betty Williams (Conwy) (Lab)What assessment he has made of the benefit to developing countries of their nationals working in the United Kingdom and sending remittances home. [1144407]
§ The Secretary of State for International Development (Hilary Benn)In October. DFID, together with the World Bank, hosted the first international conference on migrant remittances, which are estimated by the World Bank to be worth $88 billion a year. Research, including that funded by DFID, shows that both migration and remittances help to reduce poverty in developing countries, with remittance transfers making up as much as 40 per cent. of the household budget for receiving families.
§ Mrs. WilliamsI thank my right hon. Friend for that answer. Remittances are clearly a very effective way of getting cash help through to developing countries. However, in view of the fact that much of that money goes through banks and significant costs are therefore involved, can my right hon. Friend tell the House how he hopes to bring down the cost of remittance transactions?
§ Hilary BennMy hon. Friend raises an important point about high costs, but the market is changing —and changing fast —so increased competition and new technology are helping to lower those costs. For example, the cost of sending remittances from the United States to Mexico has halved over the past four years; in Ecuador a bank has issued ATM cards to people who have no bank account, to enable them to access remittance funds from Spain; and similar developments are being considered in other countries. Lloyds bank has a pilot scheme that allows customers to send remittances to India cost-free. There is also the traditional hawala system, of which my hon. Friend will be aware. I hope that all those developments will help to address the question and will reduce the cost of that important support to developing countries.
§ Mr. Quentin Davies (Grantham and Stamford) (Con)Is not that response a little complacent? Is the Secretary of State aware that only the other day his Department gave evidence to the Select Committee that the individual transaction costs—the amount abstracted by banks and intermediaries—were between 13 and 20 per cent. of the money earned by hard-working, often poor people who are generously trying to support their families in poor countries? That 13 to 20 per cent. on total remittances of $80 billion amounts to more than twice the right hon. Gentleman's total aid programme. Would it not be a good idea to focus a bit more attention 1556 on the matter, and will he give the House a considered report about the overall position on the cost of remittances—the extent to which the costs are falling or rising and what can be done about them?
§ Hilary BennI do not accept that my answer was complacent. Indeed, I recognised that the issue raised by my hon. Friend the Member for Conwy (Mrs. Williams) and the hon. Gentleman is a real problem and that it needs to be addressed. I gave some examples of practical steps that are being taken, because the market is changing, to bring the costs down. If the hon. Gentleman is looking for a practical contribution, however, I can tell him that one of the things that the Department is doing is establishing a remittance taskforce with 15 donors in international agencies to look at what more we can do in the international community to bring those costs down because, as the hon. Gentleman is only too well aware, the benefit of that money to the recipients is enormous, not least, as he pointed out, because the amount is larger than all the aid that the rich world currently gives the poor world.