§ Colin BurgonTo ask the Chancellor of the Exchequer what his policy is on the cancellation of debt in the world's poorest countries. [173930]
§ John HealeyThe UK fully supports the cancellation of debt of the world's poorest countries through the Heavily Indebted Poor Countries (HIPC) Initiative. We were instrumental in securing international agreement to enhance the original Initiative in 1999, to ensure that as much debt relief as possible is granted to as many countries as possible. The UK continues to be a champion of the HIPC Initiative. We have provided commitments of £2.3 billion of debt relief to eligible countries and have pledged a total of US$474 million through multilateral institutions to support the Initiative further. The UK goes even further than is required under the Initiative, and is committed to providing 100 per cent. debt relief to eligible HIPC countries.
The HIPC Initiative is delivering real benefits to participating countries. It is providing over $70 billion of debt relief to the 27 counties that have reached Decision Point. We are committed to maintaining the momentum of the HIPC Initiative and continue to ensure that it is fully implemented. Ethiopia and Niger's exits from the Initiative in April mean that five countries have now reached Completion Point since September 2003 (Ethiopia, Guyana, Nicaragua, Niger and Senegal), bringing the total number to 13.
The HIPC Initiative is also helping increase annual social expenditures in countries receiving debt relief. Total social spending has increased by around $4 billion since 1999—equivalent to 2.7 per cent. of GDP. On average, health and education spending account for 65 per cent. of the use of HIPC debt relief.
However, debt relief alone is not sufficient. All HIPC countries will need additional aid to meet the Millennium Development Goals (MDGs). This is why 990W the UK has proposed an International Finance Facility (IFF), which could provide the much-needed substantial increase in aid—in the form of grants, concessional loans, or further debt relief—needed to attain the MDGs without threatening the long-term debt sustainability of the world's poorest countries.