§ Mr. RobathanTo ask the President of the Board of Trade what progress has been made on the implementation of Naples terms by the Paris Club; and if he will make a statement about how debts forgiven or abandoned are to be treated in the trading accounts of the Export Credits Guarantee Department. [3070]
§ Mr. NelsonIn December 1994 the Paris Club— representing leading creditor Governments—agreed to implement write-offs of up to 67 per cent. of official bilateral debt owned by the world's poorest, most indebted countries. This agreement—known as Naples terms—represented the culmination of very substantial efforts by the UK, beginning with the Prime Minister's announcement of his Trinidad terms initiative in 1990, to reduce the debt service obligations of the world's poorest countries to manageable levels. Official creditors have been implementing Naples terms since the beginning of the year. So far 10 countries have had agreements from the Paris Club incorporating debt reduction up to 67 per cent; one of these—Uganda—has been given debt reduction in respect of all its eligible debt to official Paris Club creditors.
In order to put ECGD's trading accounts on to a more realistic footing, the amounts shown in the accounts as owing to the Consolidated Fund, in respect of account 1, will be reduced in line with the extent that debts are forgiven or abandoned; this will apply to both debt forgiveness under Paris Club arrangements, including debt forgiveness for Poland and Egypt, and debts on which recovery is to be abandoned because their further pursuit is no longer justified on grounds of value for money. This has resulted in a reduction of £1,030 million in the balance owed to the Consolidated Fund as at 31 March 1995. Further details are given in ECGD's 1994–95 annual report and trading accounts which are being published on 30 November.