§ Mrs. Spelman
To ask the Secretary of State for International Development what impact the additional funding for reconstruction of Iraq announced on 14 October will have on his Department's projects for middle income countries. 
§ Hilary Benn
[holding answer 27 October 2003]: Funding for the reconstruction of Iraq will not affect programmes for middle income countries in this financial year. However, in the light of the needs in Iraq and our commitment to increase the proportion of our direct assistance to low-income countries to 90 per cent. by 2005–06 we will make reductions beyond those currently planned, to other middle income country programmes over the next two years, particularly in 2005–06.
Final decisions have not yet been taken on where reallocation will occur, However, in order to protect funding for the poorest countries they are likely to involve reductions in planned spending of around £100 million for middle income countries, other than Iraq, over the two years 2004–06. This includes the reallocation of £50 million for Iraq. As a consequence of the temporary increase in funding for Iraq, which we expect to return to middle income status soon, we will also need to move a further estimated £50 million from planned middle income country programmes to low income country programmes. This in line with our commitment to the 90 per cent. target. The reallocations of planned expenditure should be viewed in the context of a development assistance budget that will increase by £900 million over the current spending review period 2003–06.