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Debt Relief (Developing Countries) Bill

We are pleased that the Government have found time to bring the Bill back to the House on Report and that we have an opportunity to complete its remaining stages. I thank the hon. Member for Northampton, North (Ms Keeble) for her remarks about the cross-party co-operation on the Bill. I hope we can maintain that spirit for the rest of the afternoon. In addressing the amendments, it may help my hon. Friends if I explain the thinking behind clause 9, which, as the hon. Lady pointed out, was an amendment we proposed in Committee. It was drawn up in conjunction with the parliamentary draftsman and there was cross-party co-operation. The thinking behind the provision is as follows. We all want to help developing countries. We are all concerned about the activities of vulture funds, but it is recognised by the hon. Lady—the Bill's sponsor—the Government and the Opposition that we need to get the measure right. It is important that its provisions are carefully calibrated, because if we prevent creditors from enforcing debts against developing countries, there is a risk that they will not lend to developing countries in future. The law of unintended consequences could apply and we could make things worse for developing countries. Nobody wants to do that, which is why the Bill is carefully calibrated to apply only to heavily indebted poor countries. It relates only to past debt and not to future contracts. Future lending agreements can be enforced unaffected by the Bill. Concern was frequently expressed by industry bodies during the Treasury consultation that the Bill might send the message that creditors in the UK could not enforce debts against developing countries and that that could be applied more broadly. As part of the consultation, it was pointed out that those possible spill-over costs would be difficult to assess. For example, would a risk premium be applied to developing countries that would make it harder for them to obtain credit? The solution to the problem that we proposed, which the Government and the hon. Member for Northampton, North accepted in Committee, was clause 9, which is essentially a sunset clause. The thinking behind the clause is that we should accept the Bill. However, although it has been given sufficient time to proceed in this House, it will not get the full scrutiny in the other place that such a Bill might otherwise receive. Even if it did receive such scrutiny, however, some things would not become clear until it came into force, so we proposed a mechanism that would make it possible in the 12 months following enactment to assess the Act's effect on the risk premium paid by developing countries and the number of debts—again, there is uncertainty and disagreement on this point—that could not be enforced at their full amount.