The
Chairman: Order. I am afraid that we are moving away from
the delegated legislation that is before
us.
Mr.
Skinner: I will get back to it—don’t worry
about that. I know that people on statutory instruments Committees in
this place—I have been on many in my time—want to talk
about the minutiae. The order is about real money, and it is coming
from your
constituents, Mr. Caton, as well as mine. Theywould like to
know why we are able to send an extra £591 million. My
constituents and yours, the people who send us here, are making a
contribution to the third world—not to all of it, but to many
LDCs and other places as well. That is important. That is why we are
here. We are here to take account of where the money comes from and
where it goes. The
only thing I am explaining is that we have additional money because
more people in our constituencies are making a bigger contribution.
That is because they are in work and not on benefits. That is the nub
of it. I have been here long enough to remember when, especially in the
1970s, 1980s and 1990s, we needed money to help people in this country
who were losing the roofs over their heads and all the rest of it. That
is the contrast that I am trying to draw. It may be something that some
Committee members do not want to address.
When we discuss handing over
money, we should remember where it comes from. It comes out of the
pockets of some of the 50-odd million people in this country, and it is
important that we let them know. They hear so much about the third
world. They have heard from the Tories already. I know that the Clerk
is whispering in your ear, Mr. Caton, but I want to pick up what the
Tory said about monitoring. That is the usual mantra from the Tories. I
have spotted it already. It is already a policy statement. I do not
know whether you are interested in that, Mr. Caton, but I am. I have
heard a policy statement from the Tories today—we now know it is
chocolate oranges, kids’ clothes and monitoring aid to the third
world. That word, in my view, is very sinister. [Interruption.]
I am going to shut up. Do not worry. Do not get too excited. I know
that you are a bit worried, Mr. Caton. Some people do not like the
rough end of politics at this time in the
morning—
Mr.
Skinner: Yes, you can have a
go.
Mark
Simmonds: Surely the hon. Gentleman is not suggesting that
it is inappropriate for us in this House to be concerned about where
British taxpayers’ money is going. My constituents, who are
contributing just like his, want to make sure that the maximum is
achieved with their money. It is rather odd to suggest that monitoring
is somehow a sinister policy. He should be making sure that the taxes
paid by people in work and by his constituents are used
beneficially.
Mr.
Skinner: Yes, but is it not rather strange that the Tories
want to monitor only certain moneys? Lots of money goes to consultants
that Tories work for, and anyone who looks in the Register of
Members’ Interests will see the names of all the Tory MPs who
make a small fortune moonlighting as consultants and lobbyists. I would
like to monitor the money thatis going to all those
people— [Interruption.] I am answering the
hon. Member for Boston and Skegness, and he does not like
it.
The
Chairman: Order. Mr. Skinner, you have answered the hon.
Gentleman very effectively. I call Gareth
Thomas.
Mr.
Skinner: Very good. Thank you very much,Mr.
Caton. I have answered the hon. Gentleman and I now request that my
hon. Friend the Minister answers the point,
too.
The
Chairman: Order. I call Gareth
Thomas.
Mr.
Skinner: Oh dear, oh dear, oh dear. It is a really sad
affair that the Chair cannot stand politics at this time in the
morning.
Hon. Members:
Oh! 9.21
am
Mr.
Thomas: My hon. Friend the Member for Bolsover (Mr.
Skinner) displayed his customary skill in reminding us why we are in
the position of being able to agree further sums for debt relief. His
essential point was that the right political decisions are required to
make the economy strong and to free up additional resources so that we
can invest in tackling poverty. I profoundly agree, and I am sure that
hon. Members on both sides of the Committee would endorse, although
perhaps to different degrees, the fundamental truth of his
point. Let me try to
answer the questions raised by the hon. Members for Boston and Skegness
and for Richmond Park (Susan Kramer). The hon. Member for Boston and
Skegness began by asking whether all G8 countries will contribute to
the initiative, and they will. They will give 70 per cent. of the
resources that are needed for this multilateral debt relief, in line
with their share of the contributions to the 13th replenishment of the
International Development Association. Countries that are not members
of the G8 will contribute the other 30 per cent.
The hon. Gentleman asked how
the calculations are made. The debt repayment schedules are worked out
with countries and are used to estimate the amounts that they will have
to pay overall. The UK’s contribution—the £591.57
million that we are talking about—is the maximum amount that is
likely to be necessary, and the hon. Member for Richmond Park referred
to that. The amount can be adjusted downwards if things change, but we
obviously hope that the maximum amount will be needed, because that
would mean that the HIPC countries’ governance situation and
commitment to macro-economic stability and good economic growth had
been maintained and that we were able to grant the debt relief that we
wanted to grant.
The hon.
Gentleman asked whether the House will need to return to these issues
before 2016. We will not need to return to the multilateral debt relief
initiative before then, although I am sure that, in 2016, we will look
at the progress that has been made and at the likely cost to the UK
taxpayer in the following period. However, the House will
return—through the statutory instrument process and, I am sure,
in debates on the Floor of the House—to the performance of World
Bank more generally. We will no doubt consider further replenishments
of
the World Bank in the way that we normally do. We have considered the
13th and 14th replenishments, and if there are 15th and 16th
replenishments, I am sure that the House will look at those, too. There
will be an opportunity at that point to consider how debt relief
contributions are made. As my hon. Friend the Member
for Bolsover reminded us, the hon. Member for Boston and Skegness asked
about the monitoring of debt relief savings. As I indicated in my
opening remarks, the HIPC process requires countries to demonstrate an
ongoing commitment to poverty reduction and ongoing sound
macro-economic and public financial management
processes. The hon.
Member for Richmond Park asked about the comparisons between the World
Bank and the IMF. Under the HIPC process, various organisations work in
close symmetry. The IMF works with the World Bank and the regional
development banks. The HIPC process is a package across the
international financial institutions. We use information from
in-country monitoring and other work by the IMF to tell us whether debt
relief savings are being used
appropriately. The
hon. Member for Boston and Skegness referred to a recent report from
the World Bank and the IMF. He may not be aware that the bank has
recently implemented measures strengthening its monitoring framework
for countries’ public finance and management systems, precisely
because of the concerns that he outlined. The measures include
monitoring poverty-reducing expenditures and whether commitments made
to the IMF in Government budgets are being adhered to, so that we can
demonstrate with confidence to our constituents that more money is
going into health and education systems and other direct
poverty-reducing expenditure.
The hon. Gentleman rightly
referred to the need to continue to ensure progress in governance and
asked how additional resources are allocated under the multilateral
debt relief initiative. He will know from previous discussions about
the operation of the World Bank and its replenishment process that
resources are allocated using indicators under the performance-based
allocation system, which include governance indicators and enable us to
track the improvement in governance. A partnership must be created
between the developing country’s Government and the
international community that provides resources.
We accept that we have a
responsibility to provide additional resources. We have also
demonstrated that the countries in question—and many African
countries signed up to this as part of the Commission for
Africa—need to continue to work in improving their governance
arrangements. Many of those countries are, indeed, through the Africa
peer review mechanism, beginning a process separate from the one that
we are discussing, with respect to many governance arrangements. I
welcome that. As to
the process being undertaken under the multilateral debt relief
initiative, countries will as part of the monitoring arrangements
discuss a series of reforms with the World Bank. Issues will include
whether anti-corruption measures are being taken and
whether further effort is required to improve the transparency of
accounts. Specific audits may take place of sections of a
country’s budget, if necessary. Cameroon and Congo, for example,
have undergone reforms and audits—in Cameroon’s case with
respect to its control of its natural resources budgets. The hon. Gentleman asked other
questions about the progress of the second tier of countries: those
receiving interim relief. We expect three of those to reach completion
point in 2006. They are Malawi, Sao Tome and Principe and Sierra Leone.
Good progress is being made and when they reach completion point they
will qualify for a 100 per cent. debt stock
cancellation. As to
why Mauritania has not made as much progress as we should like, the
hon. Gentleman may or may not be aware that there was a military coup
there—hardly the demonstration of good governance that we should
want—and there have been problems with keeping accounts there.
Discussions have taken place between the IMF, the World Bank and the
authorities in Mauritania. Its representatives have agreed to actions
to improve the way in which they operate. We hope that they will get
back on track. I
hope that I have answered most of the hon. Gentleman’s
questions. He asked, too, about the indebtedness of many Latin American
countries. He will know of the Inter-American Development Bank. A
discussion is taking place there at the moment about the scope for debt
stock cancellation and a similar initiative. I am not in a position to
give him a sense of whether that will come to fruition. We are one of
the smallest shareholders in the bank. However, I know of his interest
in Latin America, and that of Labour Members. If there is positive
progress, I will ensure that he and other members of the all-party
group on Latin America are kept
informed. The hon.
Gentleman is right to make it clear that we must continue to work with
developing countries to ensure that the process that got them into debt
is not repeated. In a sense, the prime responsibility for that rests
with the relevant developing country, but there are many ways in which
we, as an international community, can support that process. Through
the World Bank and IMF, there is a—wonderfully named—debt
sustainability framework which helps to track countries’
performances on debt, and provides support and analysis to developing
countries to help them to deal with debt issues. The framework helps
the international community to check the level of indebtedness of those
countries, and helps us to identify countries that might be getting
close to the point at which the level of debt is
unsustainable. The
hon. Gentleman will know from previous discussions in the House that,
as well as having multilateral debt and debt to the international
community, many developing countries have borrowed substantial
commercial debt, which is often the cause of their degree of
indebtedness. Caribbean countries have a particular problem in that
respect. Through our bilateral programme, we work closely with such
countries to provide debt relief advice. We bring in specialist debt
management consultants to help them to reschedule their debts, so that
more money can be freed up to put into poverty-reducing expenditure
without affecting the way in which the international markets view their
performance.
I hope that I have answered the
questions of all hon. Members on both sides of the Committee, and that
the draft order can
progress. Question
put and agreed
to. Resolved,
That the Committee has
considered the draft International Development Association
(Multilateral Debt Relief Initiative) Order
2006. Committee
rose at twenty-eight minutes to Ten
o’clock.
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