Developing Countries: Debt Repayments (Hansard, 26 February 1992)

§ Lord Cavendish of Furness
My Lords, the total of debt repayments from developing countries to the UK Government during 1990 was £419.5 million, comprising £326.5 million of payments to the ECGD and approximately £93 million to the ODA. Figures for debt repayments to, and write-offs by, the commercial banks are not available.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that the Question results from a long series of questions to the noble Earl, Lord Caithness, who I 266 hope has not retired injured from the fray. I have been trying to encourage the Government to analyse for the House the balance between what is sent abroad from this country to the developing countries in the form of aid, private investment and so on, and what is received by this country. We still do not have those figures. It is only a fortnight since the noble Earl told us that the interest payments from developing countries to the United Kingdom were only £232 million. How does that figure compare with those that the noble Lord has just given to the House?

§ Lord Cavendish of Furness
My Lords, my noble friend Lord Caithness enjoys robust health. Neither he nor I are trying to conceal anything. If we could provide aggregate figures we certainly would. Details of individual developing countries' accounts are, of course, protected by banking confidentiality. Both the 1991 ODA annual review and British aid statistics for 1986–1990 provide figures that suggest that Britain received £2.5 billion more in 1990 than we paid out. The year 1990 is the first year for which the figure for total net financial flows has been negative, but the outward flows figure has been decreasing over recent years because of an increase in the volume of bank debt write-offs. The figure primarily due arises from the large negative net bank lending figure of £6.1 billion which overshadows other flows. When a bank writes off a debt it appears as a negative flow and looks as though the debt has been repaid.
It may help if I tell the noble Lord that the Bank of England will be collecting more data on bank write-offs for the overseas sector from 1993 and it will be easier to obtain those statistics.

§ Lord Williams of Elvel
My Lords, will the noble Lord consider the response that he gave on banking confidentiality? He rightly said that the Bank of England will collect statistics on provisions and write-offs on third world debt. Will he confirm that global figures for the banking system are not the subject of commercial confidentiality? Only individual banking figures would be the subject of that problem.
Furthermore, will he tell us exactly how write-offs —which means that the bank says, "We shall never get this loan back"—compare with provisions on which the bank says, "We may get this loan back in the future"?

§ Lord Cavendish of Furness
My Lords, I believe that the noble Lord, Lord Williams, is right about what banks may regard as confidential and not confidential. When in 1993 these statistics are collected they will not be able to identify developing countries individually.
I have no information on the second question raised by the noble Lord. I shall see—I cannot promise it—whether I am able to fill out that answer.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that during the exchanges with the noble Earl, Lord Caithness, I quoted figures by Christian Aid taken from the official figures of ODA. They indicated that the inflow to this country from developing countries exceeded the outflow by £2,493 million. I asked the noble Earl whether he could confirm or deny those figures. Today we still do not have an answer to 267 that question. The noble Earl spoke of figures being distorted by bank write-offs. Therefore, I naturally ask what those bank write-offs are so that we may attain a clear picture as to whether there are more resources coming into this country from developing countries than are going out from this country to developing countries. That is the crux of the issue. We still do not have an answer.

§ Lord Cavendish of Furness
My Lords, no, the noble Lord is absolutely right. In defence of my noble friend, he accepted the statistics proposed and their source and they remain true. I am unable to answer whether the figures after the distortions have been taken into account represent an outflow or an inflow. I am afraid that that information is not available.

§ Lord Harmar-Nicholls
My Lords, has my noble friend judged whether the Question asked by the noble Lord implies that the underdeveloped countries are making contributions towards the upkeep of the United Kingdom? Is that what he is saying?

§ Lord Cavendish of Furness
My Lords, I believe that there is a suggestion along those lines but until the noble Lord, Lord Hatch, is specific I am unable to help my noble friend.

§ Lord Hatch of Lusby
My Lords, I have been specific on two consecutive occasions in the past two weeks. I accept that the noble Lord cannot find the figures. Will he put it quite clearly to his department that those figures have been quoted from government sources? Will his department now break down those figures to show the real position with regard to inflow and outflow of resources between this country and the underdeveloped territories?

§ Lord Cavendish of Furness
My Lords, I implore the noble Lord to read my Answer. I gave the reasons why at present I am not in a position to give that information. No amount of searching by my department will reveal that information. It is hoped that better statistics will be available in the future as I have made clear.