Written question asked by David Drew (Labour) on Tuesday, 14 July 2009, in the House of Commons. It was due for an answer on Thursday, 16 July 2009. It was answered by Gareth Thomas (Labour) on Tuesday, 21 July 2009 on behalf of the Department for International Development.

Developing Countries: Debts

Question: To ask the Secretary of State for International Development what recent representations he has received on (a) the effect of the operation of vulture funds on standards of living in the developing world and (b) the extent to which UK businesses participate in such funds.

Answer: The Department for International Development has received regular representations from members of the public and non-governmental organisations on the harmful impacts of 'vulture funds'. These representations usually stress that 'vulture funds' divert much-needed resources away from developing countries and exploit debt relief that was provided with the aim of relieving poverty. They also express concern at the use of UK courts to pursue legal claims. A survey by the International Monetary Fund and the World Bank in 2008 reported that 10 businesses based in the UK and UK overseas territories had brought legal action on debts owed by heavily indebted poor countries (HIPC), although creditors may litigate for a variety of reasons.The UK Government have already taken a range of actions to reduce the extent of the problem of 'vulture funds'. In addition, I am pleased that today my hon. Friend the Economic Secretary to the Treasury has launched a consultation on legislation that would restrict the proportion of past HIPC debts that a creditor could reclaim under UK laws. Copies have been placed in the Libraries of both Houses and are available on the Treasury's website:"http://www.hm-treasury.gov.uk/"

Secondary information