§ Mr. HoyleTo ask the Chancellor of the Exchequer what steps he is taking towards the cancellation of debt in the world's poorest countries.[179524]
§ John HealeyThe UK is fully committed to the cancellation of debt in the world's poorest countries through the Heavily Indebted Poor Countries (HIPC) Initiative.
The UK has provided commitments of £2.3 billion of debt relief to eligible countries and has pledged a total of US$474 million through multilateral institutions to provide further support for debt relief to the world's poorest countries. The UK goes even further than is required under the HIPC 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. Debt relief of over $70 billion has already been agreed for 27 countries under the Initiative. Total social spending has increased by around $4 billion since 1999—equivalent to 2.7 per cent. of GDP.
However, the Government also recognises that we need to do more if we are to deliver a long-term exit from unsustainable debt for HIPCs. Last week, G8 Heads of State discussed proposals to enhance debt relief for the world's poorest countries. The UK successfully pushed for the extension of the HIPC Initiative by another two years, potentially allowing 10 more countries to benefit from debt relief in excess of $30 billion.
Heads of State also tasked Finance Ministers to consider further both reforms to the HIPC Initiative, and new and innovative mechanisms to deliver a longterm exit from unsustainable debt for the world's poorest countries. The UK will push for the granting of additional assistance (topping up) for all countries whose debt profiles have worsened after Decision Point as a result of factors beyond their control. We will also continue to press for additional bilateral assistance to be excluded from the calculation of this topping-up assistance at Completion Point, to ensure that every dollar benefits the recipient. The UK will also seek a firm commitment on financing the G7's share of costs for the HIPC Trust Fund, which we estimate at up to $1 billion.