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Debt Relief (Developing Countries) Bill

My point is that the Bill would disturb contractual rights, but the argument is that there are compelling reasons why it is right to do so. The hon. Gentleman articulately sets out that case. I am not disagreeing with him in any way, but merely stating that it is right that we examine the argument closely. I will come back to the essence of what he is saying in a moment, but he has led me to my second point, which Members on both sides of the House and the Government, in their role of developing the legislation, are keen to address. The central question is whether the measure will benefit developing countries. I am not arguing that it will not, but the argument that there would be certain spillover costs was put by a number of respondents to the Treasury consultation, and it is right to examine it. Essentially, the argument is that the Bill could create uncertainty. There may be a perception that further legislation will restrict creditors' ability to reclaim their debts from heavily indebted poor countries and other developing countries more generally. That would have the consequence either of reducing the number of creditors that are prepared to lend to developing countries, or at the very least of making borrowing more expensive. The Treasury is very conscious of that argument and acknowledges throughout the documents it has produced—the response to the consultation and so on—that debt relief measures could increase risk premiums and make it harder for developing countries to borrow responsibly. The counter-argument is that the Bill is carefully targeted and calibrated to prevent that in two ways. First, it focuses on historical debt, meaning debt contracted before commencement. No future debt will be affected, so when developing countries attempt to borrow in future, contracts will be unaffected, so there will be no risk premium. Secondly, the Bill is targeted at the public debts of the regimes of HIPCs, not those of all developing countries. We first need to debate the question whether those qualifications are the right ones. One could approach that in two ways. First, one could argue that the measure is unduly restrictive. Why apply it only to HIPCs?