IMF and World Bank: UK Contributions (Hansard, 27 October 1994)

§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)
My Lords, the Government are accountable to Parliament for payments made to the World Bank and IMF as part of the overseas aid programme. Both institutions have key roles to play in supporting economic reform efforts in developing countries. The World Bank's other main objectives are poverty reduction and environmentally sustainable development. All those aims are fully compatible with the objectives of our aid programme.

§ The Lord Bishop of Oxford
My Lords, I thank the Minister for his reply. I was glad to learn that the IMF and the World Bank are accountable to Parliament, as indeed they ought to be. However, will the Minister agree that it will be important to have an annual report from the World Bank and the IMF to Parliament and an annual debate on the subject in Parliament? The Minister will know that there is great anguish in the poorer countries of the world about the effect of the structural adjustment programmes. Because every household in Britain gives £10 per annum of taxpayers' money to support the World Bank and the IMF, is it not particularly important that Parliament should have a proper chance to scrutinise the way in which the money is being spent?

§ Lord Henley
My Lords, as regards the first point made by the right reverend Prelate, I am sure that it has been taken on board by the usual channels. I am certain that he and others will find means by which they can ensure that those matters are debated.
As regards the general query about a need for greater openness by the World Bank, I can assure the right reverend Prelate that last year the World Bank's board decided that substantially more information should be made publicly available about the Bank's operations. The main features are regularly updated information about all projects in the pipeline, the release of project 634 appraisal reports after board approval, and routine release of country economic reports, policy papers, environmental assessments and evaluation summaries.

§ Baroness Elles
My Lords, following the right reverend Prelate's Question, can my noble friend inform the House of the success of the efforts of my right honourable friend the Prime Minister in relation to the Trinidad terms and relieving the debt position of the poorer countries of the world, as well as the efforts of my right honourable friend the Chancellor of the Exchequer at the recent G7 meeting in regard to the same matter?

§ Lord Henley
My Lords, I can assure my noble friend that Her Majesty's Government have done a great deal as far as debt relief goes. We have led the way. We launched the Trinidad terms in 1990. Twenty-two countries, of which 17 are in Africa, have benefited so far. We have also relieved developing countries of over £1 billion aid debt burden.
As my noble friend correctly pointed out, my right honourable friend the Chancellor of the Exchequer recently, at Madrid, launched an initiative on multilateral debt relief. I refer the House to the Written Answer on 19th October in another place from my right honourable friend the Chancellor of the Exchequer in which he reported on the Madrid conclusions.

§ Viscount Waverley
My Lords, to what extent does the European Union's aid programme meet the overall objectives of the ODA?

§ Lord Henley
My Lords, the overall objectives of EC development co-operation are set out in Articles 130u to 130y of the Maastricht Treaty. They are very similar to the ODA's seven specific objectives which are set out in the ODA's annual report. I do not think it is necessary for me to repeat them today. They include specifically: sustainable economic and social development, the campaign against poverty and contributing to democracy, the rule of law and human rights.

§ Lord Ennals
My Lords, I warmly support the proposal made by the right reverend Prelate that more opportunities should be found for debating the accountability of the World Bank and the IMF. Will the Minister agree that sometimes money that has been made available by the World Bank has not been effectively used? Can he say a word about the protest which his right honourable friend the Foreign Secretary made very satisfactorily in Brazil that moneys that had been made available by the World Bank are lying unused, to the detriment of the indigenous people?

§ Lord Henley
My Lords, I can confirm that the World Bank itself reported and I think that the noble Lord will be aware of the report by the World Bank in 1992 in which it examined the success and failure of a number of its projects. It acknowledged that some had not done as well as they might and some had failed. I can also confirm—and Her Majesty's Government support this—that last year the Bank's board endorsed an action plan to address the weaknesses identified in the report. The Bank is reporting regularly on progress in implementing the action plan, most recently in 635 August. The report has been published and I can give an assurance that Her Majesty's Government will continue to monitor progress carefully.
As regards the first point which the noble Lord made when he endorsed the right reverend Prelate's request for more regular debates on such matters, I can only say that I am sure that the usual channels and those who decide matters will have noted what the noble Lord said.

Lord Bruce of Donington
My Lords, will the noble Lord give the House the assurance that the Question asked by the right reverend Prelate could be raised in any debate that takes place on the Government's expenditure plans? We sincerely hope that the debates will take place. Will the Minister confirm that on such an occasion the Government's spokesmen will be adequately briefed to deal with any specific question raised by the right reverend Prelate?

§ Lord Henley
My Lords, I am sure that the noble Lord's ingenuity will allow him to find means of raising the subjects as and when he wishes. No doubt he will raise them on the occasion which he mentions. I can also assure noble Lords that, as on all occasions, those who speak for Her Majesty's Government from the Dispatch Box will be appropriately briefed.

§ Lord Beaumont of Whitley
My Lords, do the Government believe that there is any virtue in the possible division of the executive directors' responsibilities for the World Bank and the IMF? That will allow the ODA to exert rather more influence on the British director of the World Bank.

§ Lord Henley
My Lords, the United Kingdom director, as I understand it, is a senior official in the Treasury. I think we can exert whatever appropriate influence we wish on those who are senior officials in Her Majesty's Treasury.
As regards whether there should be some greater division of responsibilities, as the noble Lord suggests, I shall pass that on to my noble friend.

§ Lord Judd
My Lords, will the noble Lord accept that decisions of the World Bank have the most far-reaching implications for development in the third world? It is important that Parliament should be able to know how our executive directors are voting and what they are saying about the propositions before the board of the bank. Can the Minister look again at the issue of whether there is adequate scrutiny in Parliament? In particular, will he look at the issue of structural adjustment and how far we are ensuring that there is a social audit before any programme is agreed, to ensure that the poor are not suffering as a result of structural adjustment?

§ Lord Henley
My Lords, I can certainly give an assurance that these matters will be looked at. As regards the first point that the noble Lord made—which was substantially on whether we can have further debates on this matter—I can only refer the noble Lord back to my earlier answers that this is a matter for the usual channels, and I am sure that they noted what the noble Lord had to say.