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Heavily Indebted Poor Countries

3. Mr. Peter Pike (Burnley) (Lab): What proposals his Department has to ensure that heavily indebted poor countries—HIPC—have a robust and sustainable exit strategy from debt after completion of the HIPC programme. [204698]

The Secretary of State for International Development (Hilary Benn): The HIPC initiative has reduced the debts of 27 of the world's poorest countries by an average of two thirds, but many are now facing worsening debt ratios once again.That is why we intend to go further and pay the UK's share of the remaining debt service owed to the concessional lending arms of the World Bank and the African Development bank by all countries reaching completion point under HIPC and other low-income countries that can use those resources effectively to reduce poverty. We are encouraging other donors to follow our lead.
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Mr. Pike: I believe that this Government's international development record is first class, and it is important that we not only help such countries to get out of debt, but ensure a sustainable future and a way ahead for them in years to come. How do we ensure that the Governments of other countries follow this Labour Government's example in tackling this major problem?

Hilary Benn: I am grateful to my hon. Friend for his remarks. The first thing that we can do is to point to the benefit of the $70 billion-worth of debt relief that the HIPC scheme has delivered so far. Another very sound argument is that two thirds of the money saved—money that such countries no longer have to spend on servicing debt—has gone into increased health and education spending. Thirdly, we can point out that unless developing countries get more resources, they will be unable to progress towards the millennium development goals of reducing poverty and getting more children into schools. The best thing that we can do, however, is to lead by example, which is why we will be making these payments from 1 January. I hope that other countries will follow our lead so that developing countries can be given greater help on a more predictable basis, in order that they can turn their attention to helping their people and improving their lives.

Tony Baldry (Banbury) (Con): In a letter to the Jubilee Debt Campaign earlier this year, the President of Tanzania said:

Can the Secretary of State make it clear to the House what the Government's ambitions are on debt during our presidency of the G8 next year? Do we simply hope that other countries will follow our example, or are we actually going to challenge them to cancel third world debt?

Hilary Benn: Of course, Tanzania is one of the countries that will benefit from the new arrangement from 1 January, having reached completion point. The UK Government's first clear objective is to get other countries to support the new initiative on multilateral debt relief, because doing so would represent a real step forward. That can happen only if increased finance is set aside for development and for debt relief, something for which—as the hon. Gentleman knows only too well—debt relief campaigners have long campaigned. Such additional finance will enable additional progress on debt relief. We need to move the argument on from the question of the debt-to-export ratio—the foundation of the HIPC scheme—and consider the resources that developing countries need to make progress in achieving the millennium development goals in the next 10 years. If we can win those three arguments during our presidency of the G8 next year, we will have seen real progress.

Mr. Andy Reed (Loughborough) (Lab/Co-op): I congratulate the Secretary of State on his early response to the problems with the HIPC scheme. Although it has been a tremendous success in many countries, many others have not benefited as much as we
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would have liked, despite the enormous sums invested, and we need to take initiatives to ensure that they do. What assessment has he made of other leading G8 countries' willingness to sign up to the new initiative, and does he believe that that can be delivered in 2005? We have a great opportunity to make 2005 the year in which poverty becomes history.

Hilary Benn: First, overall, the HIPC scheme has not just produced $70 billion-worth of debt relief. It is expected that, as a result of it—when the figures finally come in for this period—debt servicing as a percentage of Government revenue in those countries will have declined from an average of more than a quarter in 1998 to below 15 per cent. in 2003. By any measure, that is a real benefit. A number of countries have expressed interest in the proposal that we have put on the table. A lot hinges on the extent to which we are successful next year in encouraging other countries to increase the resources they make available for development. Such additional money could then give rise to the political will to devote some of the money to supporting the debt relief proposals. Next year, the world will judge the G8 and the rest of the developed world on the extent to which we deliver on these commitments, and one important test will be what we do on debt relief.

Tom Brake (Carshalton and Wallington) (LD): Additional aid will be key to any robust and sustainable exit strategy for the HIPC countries. The international finance facility is the Chancellor's preferred method for delivering those additional funds, so will the Secretary of State update the House on what progress has been made on securing the support of the Americans for the IFF? If they continue to remain underwhelmed about those proposals, will it not be time to consider an alternative such as the Tobin tax?

Hilary Benn: No. The Tobin tax, as the hon. Gentleman knows, is a very interesting proposal, but it works only if all the countries in the world sign up to it. Is there a realistic prospect of every country in the world signing up to the Tobin tax? No, there is not. The great merit of the international finance facility, as proposed and strongly argued for by my right hon. Friend the Chancellor, is that all the countries in the world do not need to sign up to it for it to deliver additional resources.

We continue to be in discussions with the United States of America to persuade them of the advantages of the IFF. We have the support of France and, recently, Italy, and we hope to demonstrate in the near future the strength of the IFF model by working with the Global Alliance for Vaccines and Immunisation to increase the support that we can give for vaccinations. In the process, we shall seek to demonstrate the strength of the idea of the IFF as a way of raising the additional development finance that we need now.


4. Mr. Anthony D. Wright (Great Yarmouth) (Lab): How his Department's policy on vaccination is targeted. [204699]
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The Secretary of State for International Development (Hilary Benn): Vaccination saves people's lives, especially children's. We fund the World Health Organisation and UNICEF to work with poor countries to help their vaccination programmes, and we work with Governments to help build up their health services to make sure that vaccines get to poor people. We also fund the Global Alliance for Vaccines and Immunisation, as I mentioned a few moments ago, and we are planning the international finance facility for immunisation to ensure that more children get immunised more quickly.

Mr. Wright: I thank my right hon. Friend for that reply and I congratulate the Government on the investment that they are putting into new technology. They are helping scientists to take the technology forward and remove vaccinations from the cold chain. According to the World Health Organisation, under current budgets that will mean 10 million more vaccinations being made available in the world. Can my right hon. Friend give an assurance that the relevant budget will not be cut and that funds will be diverted to ensure that 10 million more vaccinations will be made available across the continents of the world?

Hilary Benn: I am happy to give my hon. Friend the assurance that if we can save expenditure on vaccines that is currently wasted because of failures within the refrigeration chain, those resources could be invested to provide more vaccinations. He refers to the research, which DFID helped to fund, which was undertaken by Cambridge Biostability Ltd. It helped to develop a way of storing vaccines—it will now go to trials—that does not involve refrigeration, representing potentially an enormous step forward for vaccination.

Secondly, we are working with GAVI through the international finance facility model, with the aim of creating a fund of $4 billion, which would enable much more vaccination to take place. We are now very close to eradicating polio, for example, with 2 billion children immunised across the world. An estimated 5 million children can walk normally today because of the progress made in vaccination against polio. That demonstrates the benefits of the world doing more to protect the lives of our children.

Michael Fabricant (Lichfield) (Con): What research does the Department undertake on the efficacy of vaccines in all instances when there may be alternative methods of protecting people from infection? In particular, I am thinking of malaria. The Secretary of State knows that his Department funds an immunisation programme, but in certain areas where transmissibility is not high—in South Africa, northern Kenya and Angola—it has been suggested that the money could be better spent on the provision of nets and other forms of prophylaxis. What research has been undertaken on that and will the Secretary of State consider the possibility of transferring money from the vaccination programme to that alternative if it is clear that it would provide a more effective way of protecting people's lives?

Hilary Benn: The hon. Gentleman makes an extremely important point. The honest answer to his question is that we need to do both and we are doing
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both. Where investment can, through the research programme, find new and more effective vaccines to protect children's lives, it is right to pursue that. This is one area of work that DFID's new chief scientific adviser, Professor Gordon Conway, who takes up the post in January, will be pursuing. However, we already fund a wide range of programmes to get bed nets to children. I was in Tanzania three weeks ago and President Mkapa was opening a new bed net factory. We have a big programme in that country. If we can get people—children in particular—across sub-Saharan Africa sleeping under insecticide-treated bed nets, we could save a lot of children's lives every year.

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