HC Deb 27 March 2003 vol 402 cc433-5
2. Ms Bridget Prentice (Lewisham, East)

What proposals G7 Finance Ministers have for debt relief in Africa. [105151]

The Chancellor of the Exchequer (Mr. Gordon Brown)

At the 12 April meetings of the G7, the IMF and the World Bank, I plan to propose additional funding for the World Bank trust fund to finance African debt relief, call for special help for the post-conflict countries yet to enjoy debt relief, propose action to tackle vulture funds exploiting debt relief and push ahead with our initiative for an international finance facility that will offer additional African debt relief.

Ms Prentice

I am very grateful to my right hon. Friend for that response, but given changing world circumstances, is he still confident that we will be able to achieve the millennium development goals, such as giving every child a primary education, reducing paternal mortality rates and reducing the proportion of people living on less than a dollar a day by 2015?

Mr. Brown

When we came to power, only one country had the possibility of getting debt relief. Now, 26 countries are getting debt relief out of a possible 38. Almost all the other countries in Africa that are not getting debt relief are engaged in conflicts. We want to create a situation in which there is both an incentive for them to get out of conflict and special help for restructuring afterwards. This year, nine countries will complete their debt relief programmes. As a result of the actions that have been taken—I am pleased to say that they have had all-party support—it has been possible to release £62 billion of debt relief. That figure will rise to £100 billion if we can get the other countries in.

So the debt relief programme has moved forward, but I agree with my hon. Friend, who has taken an interest in these matters over a long period, that we will have to do more than provide debt relief if we are to meet the millennium development goals. It is precisely for those reasons that we have put forward the new proposal for an international finance facility that would release an extra £50 billion of aid each year. That would allow us to meet the development targets—every child in primary education, a two thirds cut in infant mortality and a halving of poverty. I hope that there is all-party support for those objectives.

Mr. Andrew Mackay (Bracknell)

While the whole House would support the Chancellor's effort to improve debt relief in Africa, does he agree that an exception should be made in the case of Zimbabwe due to the barbarous regime of Mugabe? Is he satisfied that his G7 partners are acting as he is in freezing the assets of the Mugabe regime and of those business men in Zimbabwe who are funding it?

Mr. Brown

The right hon. Gentleman will know that Zimbabwe is not one of the 38 countries and would not qualify for debt relief. It is not engaged in the programme, so no international resources going to the debt relief programme will go there. I hope that he will accept that assurance about Zimbabwe. It is, however, important to recognise that many countries surrounding Zimbabwe need our help and the debt relief—and that relief should be speedy.

Ms Julia Drown (South Swindon)

Today, the Jubilee Debt Campaign and the Mothers Union went to Buckingham palace to present a petition of 121,000 signatures from across the Commonwealth. Some of the Africans who signed the petition could not write, but because they want their countries to have enough money to educate their children, they signed it with their thumb-prints. Will the G7 be moving beyond the existing heavily indebted poor countries initiative, which has linked sustainability criteria to the proportion of debt related to exports, and instead consider linking debt relief to the millennium development goals so that the goal of primary education for those people's children can be delivered?

Mr. Brown

I applaud the work that my hon. Friend does on the all-party committee and equally her delegation this morning taking mothers to raise the case of debt relief. She is absolutely right; we have to go beyond what is called HIPC2, and that involves topping up, as we call it, at the end of the process. Where countries complete the debt relief process, they get extra money to make up for the loss of export earnings from commodities. We will be pressing for that at the 12 April meetings in Washington. Equally, she is of course right that debt relief is only part of the process; we must open up trade and investment and ensure that we can meet the millennium development goals.

Mr. Roy Beggs (East Antrim)

I welcome and fully support the Government's action to bring relief to the poorest countries in Africa and throughout the world. Will the Chancellor now congratulate the multinational companies that have forgiven debt in the poorest countries, and encourage others to follow their example?

Mr. Brown

I understand that two companies, Nestle and Booker plc, have recently forgiven the debts they are owed in those countries, and I welcome their decision. However, we have an additional problem with what are known as vulture funds: people are buying up the debts of the poorest countries and laying down conditions that it is very difficult for the international community to meet. I hope that all-party support will be given to our proposal of further action to give legal advice to countries hit by this problem, and a joint international approach to deal with creditors. It will be presented to the meeting in Washington on 12 April.