John Welcomes More Debt Cancellation

John Battle welcomed the latest Government commitment to cancel more international debt, as well as the moratorium on debt payments from countries hit by the tsunami.

“Britain has set a lead internationally in canceling the unpayable debts of the world’s poorest countries,” said Mr Battle, “and I asked a series of Parliamentary Questions about how we are going to keep going on it. I welcome this further Government commitment to canceling Britain’s share of the joint debt owed to the World Bank, straight away, and to working to persuade other nations to do likewise. We have a historic opportunity in 2005 to make a new breakthrough on dropping the debt – Britain has the chair of the G8 and the presidency of the EU and can set the international agenda.

“I was also very glad to see the detail that the Government are working to persuade the international community to agree to revalue the IMF’s gold to cover the cost of canceling debt to the IMF. For too long now the IMF have valued their stocks of gold at far less than they are actually worth; and if they take account of the real value they can afford to cancel a big chunk of debt. And that would save several hundred thousand lives at the stroke of a pen.”

John Battle is a patron of TIDAL, Trade Injustice and Debt Action Leeds, and Chair of the Parliamentary Friends of CAFOD.

“Cancelling debt makes a vital impact – governments are spending the extra money to abolish school fees so children from families with no money can get an education; they’re setting up immunization programmes that will save many lives; they’re building health clinics in areas that had none before, and training nurses to staff them.”

Full text of Parliamentary Questions:

Mr. Battle: To ask the Chancellor of the Exchequer (1) what representations he has made to (a) G8 and (b) Paris Club Nations on following the UK's lead in paying 10 per cent. of the debt service owed by highly indebted poor countries to the World Bank and African Development Bank; [204277]

(2) whether the UK will pay debt service on behalf of the world's poorest countries to the International Monetary Fund; and if he will make a statement; [204280]

(3) what representations he has made to (a) the International Monetary Fund, (b) the World Bank and (c) regional development banks to (i) cancel debt owed to them by the world's poorest countries and (ii) revalue gold reserves to finance cancellation. [204281]

Mr. Timms: The UK is proposing that the international community—including the G8, Paris Club and the EU—provide up to 100 per cent. relief on the debt owed by poor countries to the World Bank and African Development Bank. In order to avoid reducing aid elsewhere, or running down the resources of the international institutions, this should be funded through new commitments from all donors.

The UK is leading the way by paying its share of debt payments owed to the World Bank and African Development Bank, not just for HIPC countries but for all low income countries, as long as they can ensure debt relief is used for poverty reduction.

The UK will continue to call for the relief on debts owed to the IMF to be funded through more efficient use of IMF gold reserves.

©John Battle MP 12 January 2005