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Debt Relief (Developing Countries) Bill

I shall not divide the House on Second Reading, but I would like to put on record some of my reservations and concerns about the Bill. I do not think that the Minister has adequately addressed the concerns expressed by investment managers about the Bill's impact on the ability of countries suffering from substantial indebtedness to be able to obtain commercial support in the form of loans in future. One example, which has already been cited, is what happened in Zambia. The Romanians supplied agricultural equipment to the Zambians and expected them to pay for it. I imagine that the Zambians would have had resources from grant moneys and overseas aid from other countries to enable them to purchase that agricultural equipment, but they defaulted on the debt. Ultimately, the entitlement to the debt was transferred to another organisation, which then sought to obtain a judgment against the Zambian Government. If the Zambian Government are to be allowed to get that equipment without paying anything for it, it surely defies common sense to suggest that, with no effective guarantee that the loans would ever be repaid, many people across the world would in future queue up to provide agricultural equipment backed by commercial loans to countries such as Zambia. That is one of the fundamental problems with this well intentioned Bill. I am also very concerned about the retrospective nature of the Bill. We are talking about organisations that have obtained judgments in our courts, only to find that Parliament, at the behest of the Government, is seeking to intervene to prevent those judgments from being enforced either in whole or in part against the judgment debtor. That can be justified only in the most extreme circumstances, and I do not think that the Government have set out those extreme circumstances. Consequences flow from that. First, there must be a big question mark over whether the Bill's provisions are compliant with the relevant articles of the European convention on human rights. We know from the background material that leading counsel opinion is that the existing provisions would be contrary to the ECHR. The Minister has not been able to assure us that the concerns of leading counsel in that respect have now been allayed as a result of anything the Government have done, so I regard that issue as still very much at large, and think that it is highly debatable whether the Bill is compliant with the ECHR for the reasons I have set out. If the Government's argument is that there are compelling reasons justifying the unusual stance that has been taken, my argument would be that those reasons are less compelling in respect of retrospection, where judgment has already been obtained for the debts. If we take a look at the detail, we see that this legislation could be applied in various ways. The Government have chosen the most wide-ranging interpretation—and therefore, in my view, the most oppressive interpretation. It is also potentially the most inimical to the British system of justice, because the following is bound to happen: whereas at present many of these international contracts are drawn up in accordance with the provisions of English law and then are justiciable in the British courts, if we are unable in future to demonstrate some consistency in how we organise our legal affairs in this country, potential creditors will engage in forum shopping and make sure that the contracts are drawn up in law other than English law and that the forum where they are determined are courts other than the British courts. That would undermine our system of justice. As a result of history, we have, in London in particular, an international forum for resolving international disputes by both arbitration and litigation, and that provides employment to a lot of people. Anything that is done that, unwittingly or otherwise, has the consequence of undermining that very important part of the British economy can only be bad news. I therefore have strong reservations about the Bill on the basis of human rights and because I think the law of unintended consequences could apply. At a time when our country is teetering on the brink of losing its triple A rating as a result of the extraordinarily reckless way in which the Government have managed our national finances over the past few years, it ill behoves us to start saying that we do not think people who have incurred debts as a result of commercial transactions should be liable for them. Government-to-Government lending is a completely different issue; that is a matter, ultimately, for the taxpayers of the Government who have been doing the lending and who decide not to pursue the repayments. However, in terms of commercial loans in the private sector, the consequences of the Bill's measures will be dire in the extreme, and will ultimately prove to be to the detriment of third world countries. My heart goes out to the people of heavily indebted poor countries. They are heavily indebted because, for the most part, their leaders have been corrupt. We need only take a look at the leaders of Liberia and other countries. Many of them have substantial funds in, for instance, Swiss bank accounts. For such countries that are essentially corrupt, we seem, in effect, to be saying that we should indulge that corruption by writing off these debts, even when they have been incurred as a result of commercial transactions. I hope that this matter is looked at in much greater detail in Committee. There must not be a knee-jerk reaction, when people say, "Well, this sounds like a good idea; let's go ahead with it." Instead, we should take a careful look at the consequences that would flow from the Bill in its current form.