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The Chancellor of the Exchequer (Mr. Gordon Brown): Last month, Sierra Leone reached decision point, qualifying for nearly $1 billion of debt relief from the international community, including the United Kingdom writing off 100 per cent. of all its debt owed. That means that 26 countries22 from Africa and four from Latin Americawill benefit from $62 billion in debt relief, with potentially $100 billion in prospect. Last month, the Monterrey conference moved forward the millennium development goals. Last month, to mark the Queen's golden jubilee, the Government launched the
Phil Sawford: I thank my right hon. Friend for that answer and congratulate him on the work that he has done, but I am sure he agrees that a tremendous amount still needs to be done to alleviate crippling poverty in those countries. Many are experiencing AIDS epidemics and lack education opportunity, proper health care and the basic necessities of life. I urge my right hon. Friend to continue to take a lead on those matters. Will he put as much pressure as possible on the international community to address those very serious issues?
Mr. Brown: I thank my hon. Friend for the work that he has done in Kettering to publicise the case for debt relief. Many Members on both sides of the House have done the same in their own constituencies. There are now 26 countries getting debt relief, which means that money is going to health and education. Taking the case of Uganda, it is now possible to say that every child will be in primary education over a period of time as a result of the debt relief provided by the international community. However, we must do more and, as my hon. Friend rightly says, we must now build on what we achieved at Monterrey. Next weekend, I shall go to Washington for IMF and World Bank meetings, where we shall discuss the next stage of moving debt relief forward and meeting the millennium development goals, which include every child receiving primary education.
Mrs. Betty Williams: May I, too, thank the Chancellor for his record and that of the Secretary of State for International Development? We have reason to be proud of what the Government are doing on the international scene.
Mr. Brown: We shall, indeed. I thank my hon. Friend, too, for the work that she has done in her constituency in Wales to promote those issues. We shall match pound for pound the money raised by Comic Relief's sports day, which will go directly to education projects run by non-governmental organisations, particularly in Commonwealth countries in Africa. Equally, in the Queen's jubilee year we shall match pound for pound money raised by businesses through corporate donations to help promote education in Africa and elsewhere. We shall thus be able to move further and faster towards good economic policy, which is also desirable for social opportunity, so that every child gets the chance of primary education. In the Commonwealth today, 75 million children are not going to school. We owe it to them to move faster to ensure that there is a school for every one of them and that there are teachers who can give them the education that they need.
Has the Chancellor had a chance to look seriously at the proposals for an international bankruptcy procedure that have been put forward by Jubilee Plus and strongly supported by the UN Secretary-General and by the champion of free markets, Professor Jeffrey Sachs? That procedure would bring some order to those issues in the poorest countries of the world, and would enable them to continue trading without serious damage to their social infrastructure.
Mr. Brown: I am grateful to the hon. Gentleman. If this country could achieve all-party consensus on this matter and move as one in the international community to press for more to be done, I would welcome that, and I hope that all hon. Members would support it. I acknowledge the work carried out by the previous Chancellor in terms of the debt relief proposals put forward before 1997.
On the hon. Gentleman's question about an international bankruptcy court, he may know that the International Monetary Fund is looking at those very matters. Such a court would have to be part of a large restructuring of the way in which the IMF and other international organisations deal with the bankruptcy, insolvency and illiquidity of countries faced with those difficulties.
In my view, the procedure is probably more relevant to emerging market economies than to African economies. The best way to help economies that are in debt is, first, to get rid of unpayable debt so that we can build afresh; secondly, to insist on corruption-free policies, allowing stability to be pursued by monetary and fiscal transparency; and, thirdly, to open up investment and trade. That must be backed with the offer to provide substantial additional resources if those steps are taken. That is why I say that it should be the international community's aim to provide $50 billion a year extra in international development aid to back up that new deal for the poorest countries in the world.
Dr. Vincent Cable (Twickenham): While I acknowledge the Chancellor's considerable efforts in this area, does he agree that there is growing disillusionment among many debtor countries with the extreme rigidities of the present scheme? Does he acknowledge, for example, that there is no low-cost mechanism to help debtor countries cope with new shocks, such as rising oil prices and no specific mechanism for post-conflict countries? Without radical reform, the HIPC scheme is in danger of producing debt reduction that is not sustainable in the long term.
Mr. Brown: It is true that the IMF and other international organisations are looking at how we can deal with shocks to the international system. We said in the last G7 communiquéindeed, in the IMF communiquéthat there must be greater flexibility in the operation of the HIPC programme.
I paid tribute to the previous Chancellor, but it is true that by 1997 only one country was likely to go through the debt relief process, whereas now there are 26. It surprises many people that we have managed to get so
The problem is not simply one of flexibility to respond to shocks. There must be a new relationship between the richer and the poorer countries, whereby we are prepared to give poor countries additional aid in return for their adopting policies that are in their interests, such as poverty reduction plans on which they consult their communities. Flexibility is one factor, but a far greater change is required. I hope that we can make progress at the April meeting of the IMF.
The Chancellor of the Exchequer (Mr. Gordon Brown): My statement to the House on 14 March made clear the Competition Commission's conclusion that competition in the market for banking services to small and medium-sized enterprises is not working properly. The Competition Commission's recommendations, which the Government have accepted in full, will bring competition into the market for banking services to small businesses.
Mrs. Curtis-Thomas: I thank my right hon. Friend for that answer. When he announced in the House several weeks ago the results of the Competition Commission's inquiry into banking services for SMEs, many hon. Members were delighted to hear that the liberalisation of banks would lead to £500 million being sent back to small and medium-sized enterprises. What further initiatives can those companies expect in the forthcoming Budget to ensure that they reap the rewards of their ventures?
Mr. Brown: It might be more comfortable to announce the Budget in the House when there is a far more friendlier atmosphere than I will perhaps find next week, but I hope that my hon. Friend will forgive me if I hold the Budget announcements for the appropriate timenext Wednesday.
As for banks and small businesses and what more we can do to back them up, competition grounds led me to support the Competition Commission's report on banking for small businesses. We want to see competition in that sector, because for too long there have been only a few big players and the service has undoubtedly not been as good as small businesses want. My hon. Friend will know that we have also announced that we want to do more to simplify VAT and to help small businesses starting up. We also want to help small, high-tech businesses, and I hope that we can build on that over the next few months.
Mr. David Ruffley (Bury St. Edmunds): The Chancellor will recall being advised by Mr. Ed Balls on post-neoclassical endogenous growth theory. We now read that Mr. Balls has a new big idea called progressive
Mr. Brown: By helping all banks and those who have suffered most as a result of the operation of a monopoly in the banking market. It is a universal requirement that all banks be given good service, but the small business community, which has suffered most, must have the redress that we have proposed and that the Competition Commission had originally recommended. It would repay the hon. Gentleman to read all Mr. Balls's speeches.
Roger Casale (Wimbledon): What direct representations has my right hon. Friend received from small and medium-sized enterprises on the steps that he is taking to increase competitiveness? Many SMEs in my constituency recognise that the Government are on the side of business; that we shall continue to take appropriate measures to increase profitability; and that we want small businesses to succeed. Is it not the case that, as well as providing secure economic stability and promoting enterprise, we consult small businesses almost daily through the Small Business Council? By contrast, the Conservative party never listened to business and was not aware of its needs. The last Conservative Government will probably go down as the Government most inimical to the interests of business in recent years.
Mr. Brown: Most Members have between 3,000 and 5,000 small businesses in our constituencies, so the reaction of small businesses and the importance that we attach to them is vital to us. I was gratified that the Federation of Small Businesses welcomed the decision that was made on the Competition Commission. It said that we had made the "right and proper decision". The British Chambers of Commerce welcomed the help for small businesses that would come from the Competition Commission's recommendations. The Institute of Directors, which is not known for always supporting what the Government do, said: