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10 Oct 2005 : Column 54W—continued


Mr. Burstow: To ask the Secretary of State for International Development how many letters to his Department from hon. Members in session (a) 2004–05 and (b) 2005–06 remain unanswered, broken down by those which are (i) one month old, (ii) two months old, (iii) three months old, (iv) four months old and (v) over six months old. [13866]

Mr. Thomas: DFID has record of the following number of letters from Members of Parliament that remain unanswered since 2004, broken down as required:
One month old36
Two months old16
Three months old4
Four months old0
Five months old0
Over six months old0

The Cabinet Office, on an annual basis, publishes a report to Parliament on the performance of departments in replying to Members/Peers correspondence. The Report for 2004 was published on 6 April 2005, Official Report, columns 137–40WS.

Debt Relief (Less Developed Countries)

Mr. Fabian Hamilton: To ask the Secretary of State for International Development (1) whether poor
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countries which receive debt relief are expected to remove impediments to domestic and foreign private investment; [16047]

(2) whether poor countries which receive debt relief are expected to promote the development of their private sectors. [16050]

Hilary Benn: Debt relief is provided to enable countries to make faster progress towards the millennium development goals. In providing debt relief under agreements such as the heavily indebted poor countries (HIPC) initiative, the UK abides by the HIPC standards agreed internationally. The multilateral debt stock cancellation proposed by the G8 and recently agreed at the World Bank and International Monetary Fund annual meetings also uses these standards. Private sector, investment and trade regulation reforms are sometimes part of the above processes (for example, in a poverty reduction strategy or where derived from national plans and in-country debate), but such economic policy choices would not be imposed on countries.

Mr. Fabian Hamilton: To ask the Secretary of State for International Development whether the adjustment of gross assistance flows by poor countries is taken into account when granting debt relief to them. [16049]

Hilary Benn: In providing debt relief under agreements such as the heavily indebted poor countries (HIPC) initiative, the UK abides by the HIPC standards agreed internationally. The multilateral debt stock cancellation proposed by the G8 and recently agreed at the World Bank and International Monetary Fund annual meetings also uses these standards. To be eligible for such relief, a country's gross national income per capita, debt levels and national export revenues are taken into consideration, along with its macroeconomic management and commitment to poverty reduction. The level or adjustment of gross assistance flows is not considered.

Andrew George: To ask the Secretary of State for International Development (1) what announcements his Department has made in respect of funds (a) pledged, (b) committed and (c) actually spent or delivered to intermediaries for (i) debt relief and write off, (ii) aid programmes and (iii) other forms of financial assistance provided in support of Government policy for the assistance of less developed countries in each of the last eight years for which records are available; [15350]

(2) what the total amount of public funds is which has been (a) pledged, (b) committed and (c) spent for (i) debt relief and write-off, (ii) aid programmes and (iii)other forms of financial assistance for less developed countries since the commencement of the Highly Indebted Poor Countries Initiative; and when each pledge of new public funds was announced; [15351]

(3) how much (a) bilateral and (b) multilateral (i) aid and (ii) debt relief for developing countries the UK committed (A) before and (B) after the G7 Finance Ministers Summit in London on 10 and 11 June. [15373]

Hilary Benn: The annual Departmental Report for the Department for International Development sets out the Department's current spending plans and reports on expenditure for previous years. Each report's analysis of
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DFID expenditure covers: bilateral aid expenditure, including all forms of direct assistance; expenditure through multilateral institutions; DFID expenditure in support of the Heavily Indebted Poor Countries (HIPC) initiative and the multilateral debt relief initiative, for those years in which these initiatives have been in place. The reports outline DFID's expenditure plans and do not distinguish between pledges and commitments.

DFID's Departmental Report was first published in 1999. Copies of the report from 1999 to 2005 can be found in the Library of the House. Information on DFID expenditure is to be found in: Annex 1, Table 5 of the 1999 and 2000 reports; Annex 2, Table 10 of the 2001 report; Annex 1, Table 4 of the 2002 to 2005 reports.

DFID's Departmental Report 2005 sets out its expenditure plans for 2005–06 to 2007–08. The Department's total planned expenditure on bilateral aid programmes and through multilateral institutions for the period 2005–06 to 2007–08 is set out in Table 1. This excludes the UK's share of the EC aid budget which is set against DFID's budget. It also excludes most UK expenditure on debt relief, although DFID's contribution to the HIPC Trust Fund is included. This is because most of our internationally agreed debt relief is provided on bilateral (government to government) debts held by the Export Credits Guarantee Department (ECGD). Bilateral debt relief that goes beyond what is required by international agreements (such as our 100 per cent. bilateral cancellation policy for HIPC) is funded by DFID. So too is multilateral debt relief, such as under the new G8 proposal and the Multilateral Debt Relief Initiative (MDRI) for non-HIPCs.
Table 1: Expenditure plans
£ million

Bilateral Expenditure2,0622,1112,261
Multilateral Expenditure1,0851,2821,306

The HIPC initiative provides relief and cancellation of debts owed to multilateral institutions as well as debts to bilateral governments. To date, debt relief worth $56billion (£30 billion) in nominal terms has been agreed for 28 countries. Other countries are likely to enter the Initiative next year under its extended Sunset clause". The World Bank and International Monetary Fund (IMF) estimate that in recent years the HIPC Initiative has freed up around $1 billion a year from debt service payments for the 28 countries that have qualified under HIPC. The UK is the second largest contributor to the HIPC Trust Fund, which assists multilateral institutions with the costs of providing debt relief under HIPC. We have pledged a total of $436 million (£240 million) to the Trust Fund ($221 million, plus $88 million of the European Commission contribution in 2000, and a further $95 million, plus $32 million of an EC contribution in 2002). The UK also contributed US$43 million (£24 million) to assist the IMF with its costs of delivering HIPC debt relief.

On bilateral debt, the Government have cancelled the aid debts owed by the poorest countries (not just the HIPCs), worth some £1.2 billion since 1978. In 1999, theGovernment agreed to cancel 100 per cent. of bilateral debts owed by HIPC countries to the UK when these
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countries completed the HIPC process. Since most aid debts had already been cancelled, these were generally export credit guarantee debts. For HIPC countries, total UK debt written off so far (to August 2005) is around £1.2 billion; this includes traditional Paris Club debt treatment, as well as the application of our 100 per cent. bilateral cancellation policy under the HIPC Initiative.

In 2000, the Government announced that it would not benefit from debt service payments from HIPC countries, and that any payments received from December 2000 would be held in trust and reimbursed to the country once it had successfully completed the HIPC process.

In 2004 the Government proposed greater relief on debts owed by countries to international institutions. The Multilateral Debt Relief Initiative (MDRI) began on 1 January 2005, under which we committed to pay our share, 10 per cent., of qualifying countries' debt service payments to the International Development Association (IDA) of the World Bank and the African Development Fund (AfDF). We expect to spend about $46 million (£25 million) on qualifying countries this financial year.

In June 2005, the G8 Finance Ministers endorsed a proposal to cancel all the remaining debts of HIPCs to the IMF, IDA and the AfDF. When agreed by the international community, the deal will be worth about $55 billion (£30 billion) in debt stock cancellations for the current 38 HIPCs. Donors will provide about $49 billion of this over the next 40 years to IDA and AfDF to compensate for foregone reflows. The cost of debt relief at the IMF ($6.1 billion) will be financed from internal resources, although the donors have committed to provide additional resources if needed to ensure that the IMF's ability to assist poor countries is not diminished. Annual resources for poverty reduction freed up by the proposal will be around $1 billion in 2007, rising to around $1.7 billion in 2010.

The precise costs to the UK of the G8 proposal are yet to finalised, but are likely to be about $6 billion (£3.3 billion) over the whole 40-year period of implementation. The G8's proposal, when agreed, will supersede the MDRI for HIPCs, although the UK will continue to meet its obligations under the MDRI to qualifying non-HIPC countries. Assistance under the MDRI is likely to be worth $184 million (£100 million) over the period to 2015 for currently qualifying countries, and up to $463 million (£256 million) if all potentially eligible countries qualify.

G8 Finance Ministers also reiterated in June their continued commitment to the full implementation and financing of HIPC. The UK already exceeds its commitments under HIPC. Our commitment to HIPC and other bilateral debt cancellation policies continue and were not altered by the G8 Finance Ministers' decisions in June.

Andrew George: To ask the Secretary of State for International Development how many (a) press and (b) ministerial announcements his Department has released in each month of the last two years in which funds were (i) pledged and (ii) committed to contribute to (A) debt relief, (B) aid and (C) other programmes for
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less developed countries; and in which of these the Government committed itself to the spending of money not previously announced. [15352]

Hilary Benn: The table sets out the number of press releases issued by the Press Office of the Department for International Development for each month of the last two years in which the Department has pledged or committed funds to debt relief and other aid programmes. In all instances, this was the first time these commitments had been announced. Each ministerial announcement on allocation is normally supported by a press release.
Table: Number of press releases issued by DFID press office

Debt relief commitmentsOther aid commitments

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