HC Deb 29 January 2004 vol 417 cc369-72
1. Rob Marris (Wolverhampton, South-West) (Lab)

If he will raise measures to address world debt at the G7 meeting next month. [151542]

10. Mr. Mark Lazarowicz (Edinburgh, North and Leith) (Lab)

When he will next discuss the proposed international finance facility with his counterparts in the other G8 countries. [151551]

The Chancellor of the Exchequer (Mr. Gordon Brown)

I am pleased to say that next week in America the G7 group of Ministers will consider the issues of debt sustainability and the British proposal to tackle ill health, illiteracy and poverty, and to raise the necessary finance for aid and debt relief through the international finance facility. We will hold a conference on these issues with the Churches and non-governmental organisations on 16 February in London, and a Paris conference to heighten support for the facility, with more than 60 countries invited, will be held in April.

With your permission, Mr. Speaker, I can also inform the House that the date of the Budget statement will be 17 March.

Rob Marris

I thank my right hon. Friend for that answer and for the steps that he is taking to tackle world debt, particularly as I know that he has been very busy in recent days.

The HIV/AIDS epidemic is a human catastrophe worldwide, especially in Africa; it retards economic and social development and so contributes to world debt problems. Will my right hon. Friend outline what steps the United Kingdom Government are taking to support the global fund to fight AIDS, tuberculosis and malaria?

Mr. Brown

I am grateful to my hon. Friend; I know that he has taken a long-term interest in these matters. Twenty million people have already died from HIV/AIDS and 40 million people are infected with it. We are the second-biggest contributor to the global fund, which is investing not only in the prevention of AIDS, but also in tackling tuberculosis and malaria. We spent £270 million last year directly on fighting AIDS around the world. At the same time, we are a contributor to GAVI—the Global Alliance for Vaccines and Immunisation—which is a private-public partnership, with Bill Gates and the Gates Foundation in particular. I talked to him in London only this week about these matters. We shall continue to do more to tackle a scourge that requires extra resources, treatments at cheaper prices and the build-up of capacity in health care systems. We have spent £1.5 billion in all those areas since we came to power.

Mr. Lazarowicz

I welcome the steps that the Chancellor is taking to take the international financing facility further forward, but will he assure the House that that will not detract from the UK's continuing efforts to increase the percentage of our gross domestic product that we allocate to international aid? In the spending review this year, will he consider taking further steps to increase the percentage of UK GDP allocated in that way up to the 0.7 per cent. target called for by the United Nations?

Mr. Brown

This could be a very expensive Question Time indeed. I shall look into my hon. Friend's representations. He knows that we shall have increased the percentage of aid from 0.27 per cent., which is what we inherited, to 0.4 per cent. by 2006. He knows, too, that we are part of the Monterrey consensus, where the European Union has agreed that collectively the amounts of aid would be 0.39 per cent. by 2006 and where America has pledged an extra $5 billion to $7 billion to raise the amount of aid.

Because the issue of AIDS demands something in the order of £10 billion and because to get every child into education and meet the millennium development goals requires another £10 billion, there can be no solution to the problem purely as a result of a few countries raising the amount of development aid. In my view, the only way forward is for us, collectively, to bring our resources together in the international finance facility, as we have proposed, and I am pleased to say that we have received support from all parties in the House for that. We have support from the Churches in this country and, only a few days ago, the Vatican made a statement supporting our facility. The conference in Paris will bring together 60 countries.

Sir Peter Tapsell (Louth and Horncastle) (Con)

What will be the likely cost to British banks of the proposal to write off Iraqi debt, consequent on our invasion of that country?

Mr. Brown

This relates to question 4, which deals with the issue of Iraqi debt and I shall come to that when that question is called. I can tell the hon. Gentleman, however, that Iraqi debt is in the order of $120 billion and only about $1 billion of that is owed to Britain. Under the Paris Club terms, much of that would be written off. Iraq owes money mainly to Russia, Germany and France, not to Britain.

Mr. John Redwood (Wokingham) (Con)

In view of the great importance of this work to many sections of the House, would the Chancellor like to express his pleasure at the remarkable change in fortune this week of the Prime Minister, which means that, in all probability, the Chancellor will be able to stay in his present post for the rest of this Government in order to see it through?

Hon. Members

Silly question.

Mr. Brown

Absolutely. But is it not typical of the Opposition that when we are discussing world debt and the international finance facility, the right hon. Gentleman, who knows better, should reduce it purely to matters of personalities?

Mr. Peter Pike (Burnley) (Lab)

My right hon. Friend knows that I believe that the Labour Government's record on world debt has been excellent during his period as Chancellor of the Exchequer. Does he believe that we can now make real progress with the G7 in not only continuing what this country has been doing so positively, but tackling the issues of fair trade? It is very important indeed that we not only relieve debt but give those countries an opportunity to participate in fair trade in the world.

Mr. Brown

I am grateful to my hon. Friend. He, too, has taken a great interest in these matters in recent years. At the G7 meeting next week in Florida in America—where I understand the weather is a bit warmer—we shall be discussing not only debt and the international finance facility, but trade. It is imperative that the main developed countries relaunch the world trade talks. That is in the interests of Europe and America, and of the developing countries. It is imperative also that we clear away the difficulties that arose from what were called the Singapore clauses. It is imperative too that steps are taken to deal with agricultural protectionism. I shall press my G7 colleagues and propose that we take an initiative to show that we are serious in persuading people that these trade talks, which have been stalled for too long, should get going quickly; and I believe that I shall have all-party support for that.

Mr. Laurence Robertson (Tewkesbury) (Con)

I understand that to qualify for debt relief under the initiative it is necessary for third world countries to increase the amount that they spend on poverty reduction, so there is a bit of a paradox there. I understand that they get quite a bit of that money from donor countries, but I further understand from a written answer that the Chancellor gave me a few days ago that there is a shortage of supply in the money coming from those donor countries. What can he do to increase that supply?

Mr. Brown

For the heavily indebted poor countries initiative conditions to work, the debt that has to be paid must be reduced substantially. I believe that the average payment of debt by those countries was 27 per cent. before the HIPC initiative and it is now 11 per cent., so there is a huge reduction in the amount of debt interest payments that those countries have to pay, and obviously it is a result of $70 billion of debt being wiped out under the initiative. It is not a requirement but it is morally, economically and socially right that those countries direct the resources to education and health. Sixty-five per cent. of the money that is obtained as a result of reduced interest payments goes to education and health—the vast majority to education. Uganda, for example, can now say that every young child will get primary education and that there will be schools for them to go to.

I would therefore say to the hon. Gentleman that it is right that the amount of debt interest payments is reduced, but it is also morally, economically and socially right that the money does go to education and health, and to anti-poverty programmes that are part of the key to those countries' recovery.

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