HC Deb 18 May 1990 vol 172 cc570-1W
Mr. Allen

To ask the Chancellor of the Exchequer if he will list the loans made by Her Majesty's Government and British financial institutions to(a) Poland and (b) Hungary which still need to be repaid, the terms of each of those loans and the date at which they will be cleared.

Mr. Ryder

The Government contributed $35 million to a bridging loan for Poland at the end of 1989 as part of an operation organised by the Bank of International Settlements. This loan has now been repaid. The United Kingdom Government's aid to Poland and Hungary has primarily taken the form of grants. A list of loans to specific countries by British financial institutions is not kept by the Bank of England or the Government. United Kingdom banks' claims on Poland and Hungary at the end of 1989 were $1,180 million and $518 million respectively. Repayments of 67.3 per cent. of Poland's debt to United Kingdom banks is due in five years and over, and 18.5 per cent. within the next year. Repayments of 11.6 per cent. of Hungary's debt to United Kingdom banks is due in five years and over, and 42.7 per cent. within the next year.

Mr. Allen

To ask the Chancellor of the Exchequer what lending by(a) Her Majesty's Government and (b) British financial institutions to the Third world is taking place currently; and what screening takes place to ensure that such lending is not used for questionable military purchase or white elephant public sector projects.

Mr. Ryder

In 1988—the latest date for which information is available—£134 million of United Kingdom bilateral aid was provided in the form of loans. No part of the official aid programme is used for military purposes. Detailed systems for project identification and appraisal ensure that all proposals for aid funding are very carefully scrutinised to ensure that they conform to the Government's objective of promoting sustainable economic and social progress and alleviating poverty. ECGD guaranteed loans of £1.4 billion in support of United Kingdom exports—both civil and military—in 1988.

A list of loans to the Third world by British financial institutions is not kept by the Bank of England or the Government. United Kingdom banks' claims on developing countries at the end of 1989 were $53 billion. Lending by the British banks is for their own commercial judgment.