IMF

David Mowat Excerpts

Monday 23rd April 2012 Commons Chamber

[Mr Osborne]

We are going to honour that 0.7%. That is in the aid budget. It is in the budget of the Department for International Development. We can talk about the merits of legislation, but we do not need a piece of legislation. The proof is whether the money is being provided, and this Government are providing the money. I for one am proud that we will be the first Government in British history to hit the 0.7% of international aid.

[David Mowat (Warrington South) (Con)]

The Chancellor has confirmed to the House that interest on this loan is payable in full. For the avoidance of doubt, will he confirm that the rate of interest that is payable is higher than the rate at which we will have to borrow?

[Mr Osborne]

The rate of interest would be set at the time the IMF called upon the loan, if it were to do so. It is only a contingent loan that will be available if the IMF needs it. The mechanism for setting the rate of interest for the IMF is well known. As I have said, countries do not lose money when they lend to the IMF—that is certainly Britain’s experience and that of other countries. Thanks to the actions the Government have taken, we are borrowing money at what is pretty much the lowest rate that anyone doing my job has ever borrowed money.