Britain puffs out aid budget with 'made up money'
Britain has been accused of padding its aid budget with "made up money" so it can claim to have met its millennium promise of increasing the amount it donates to the world's poorest people.
The British Department for International Development, headed by Andrew Mitchell, has confirmed that cancelling the debts of some of the world's poorest countries will count towards the aid total, helping the UK to achieve its millennium target of spending 0.7pc of national income on overseas aid by 2014.
One of the most controversial debts is the millions that the Sudanese nominally owe for weapons purchased during the Cold War. The money was loaned in the late-1970s by an agency of what is now the Department for Business, at interest rates of 10-12pc per year, which have added £405m to the original £173m loan, bringing it to £578m (€687m).
The UK government is no longer able to say what this money was used to buy. Earlier this year, the Labour MP Lisa Nandy asked questions in parliament about what the original loans were for, and was told the records have been lost.
But in the late-1970s, the west was arming Sudan as a counterweight to the Marxist regime in neighbouring Ethiopia, which was backed by the Soviet Union, because of fears that communist influence in the Horn of Africa could threaten oil supplies.
Tim Jones, the senior policy officer at the Jubilee Debt Campaign, said: "The debt comes from loans to win business for Britain in the Cold War. Most of the debt is made-up money based on ridiculously high interest rates. It should be cancelled because it is unjust and unpayable, not used to meet targets and massage figures."