---

Debt Relief (Developing Countries) Bill

I beg to move, That the Bill be now read a Second time. I am delighted to move the Second Reading of a Bill which, though small, is enormously significant for people living at the sharp end of some of the most acute poverty in the world. I do so on behalf of my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who has been a great champion of debt relief. Unfortunately, he is unable to be here today owing to serious illness. He has done the cause of fighting world poverty a great service by making debt relief the subject of his private Member's Bill, and I am sure the whole House wishes him a speedy recovery. The Bill will hugely benefit some of the poorest people and countries in the world. It will prevent commercial creditors, some of them secretive private investment funds, from free-riding on the generosity of the British taxpayer. It will enable poor countries to concentrate funds on much needed new schools, hospitals and other direct services, instead of having to pay unsustainable levels of their Government revenues to service international debt. The Bill strengthens the UK's commitment to debt relief. This country can take pride in the pioneering role that our Government have played in developing the international initiative to end developing country debt. The Bill takes the logic of public sector debt cancellation into the private sector, and it sets out for the financial services industry some limits to the dealings in which the industry can engage in developing country debt. One of the results of the credit crunch is public anger about some of the activities of the financial services industry. Profiteering on the back of the debt of some of the poorest people in the world is perhaps the most objectionable activity of all. By passing the Bill, we as a Parliament and as a society will be setting boundaries and saying, "No further." There has been much speculation about the number of financial institutions that will be affected by the provisions of the Bill, and about whether it will cut across the rights of a wide range of investors. That is not the case. The financial institutions that are likely to be the most sharply affected are the so-called vulture funds—companies that buy up the sovereign debt of the poorest countries on the secondary markets, often at highly discounted prices, and then try to recover the full amount, plus costs and fees, through the courts—often, unfortunately, through the UK courts. Many of those funds do not participate in debt relief, and by litigating for full repayment of their debt, they reduce the effectiveness of the international debt relief programmes of the UK, our international partners and responsible commercial creditors, and make less effective the very large amounts that the Government and other donors provide in aid for developing countries.