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20 Jun 2007 : Column 457WH—continued

Many of the adults will be exploited. I was struck by some of the evidence given by trade unions to the Public Bill Committee on the UK Borders Bill about the fact that groups of Portuguese workers in this country are claiming to be Brazilian so that they can take jobs illegally, and the only jobs available to them will be at wages below the minimum wage. They know that no unscrupulous employer will employ them if they are Portuguese because they will then have rights.
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Therefore, they pretend to be here illegally when actually they are here legally. Clearly that is unsatisfactory. I am sure that the Minister will acknowledge that the Opposition supported the Government through the passage of the UK Borders Bill to tighten up regulations against unscrupulous employers.

We have heard many of the arguments for the amnesty and the financial argument put by the IPPR, which are plausible, but perhaps not overwhelmingly so. We heard about the need to stop people being exploited, with which of course we all agree. We heard also the argument that we must try to stop the rise of the extreme right. Again, everyone here approves of that. The question is whether this particular measure would help in any or all of those endeavours. In parenthesis, when discussing such issues, we must mind our language. I say gently to the Minister that she could have a word with some of her fellow Ministers, particularly the Minister for Industry and the Regions, who in recent weeks has not shown great care in her language and might have contributed to the inflammatory nature of some of the debate.

I shall get to the nub of the counter-arguments. The claim is that the proposal would be a one-off amnesty. I agree with the hon. Member for Taunton (Mr. Browne) that that is, of course, what any Government would say, and it has been said by other Governments. My hon. Friend the Member for Kettering (Mr. Hollobone) rightly mentioned the cases of Spain and Italy. Spain has had five amnesties and Italy has had six. France and Belgium have had two each. It would be entirely rational for anyone to think that if an amnesty comes once, that country has crossed a line and will grant amnesties in the future.

Although that would have a beneficial effect on those already here, of whom there are many, we must consider the effect on those not yet here, but who might be considering coming. We are not talking only about those who might be oppressed or wish to better themselves economically by moving to western Europe. We must think also about people traffickers, who are some of the nastiest and most evil criminals in the world. They wish to “help” those who desire to come here. We have all seen pictures of those small boats either coming across the Mediterranean or going across the Atlantic to the Canary islands. What we do not see are the tragedies of those boats that do not get there and the many hundreds, possibly thousands, killed in such endeavours.

If this country took a public policy step that made it easier for people traffickers to persuade some of the most wretched and poorest people in the world that it is worth their while taking a boat across the Mediterranean or Atlantic, we would be doing something immoral and foolish. That is one of the factors that we need to consider. I have heard the arguments put by my hon. Friend the Member for Ryedale about the Spanish case and how it does not act as a pull factor, but I shall wait to see the report in full before deciding whether that is the case.

It is clear that we need much better control of our borders. That is why Conservative Members advocate a specialist border police force. Clearly, if we have open borders, the argument that we are having in this debate is irrelevant, because many more people will come here illegally. A final point of detail is the point made by Keith Best that we can consider an amnesty more sensibly when the e-borders system is in operation.
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Unfortunately, it will not be fully operational until 2014—a long way in the future.

I agree that this is a difficult argument, because everyone wants to do the morally right thing, but acting morally does not mean that we should necessarily suspend our intellectual faculties. If the second-order effects of the proposal would be to encourage more illegal migration across the world, we could do more harm than good, so I am not convinced by the argument but, like everyone else, I am very grateful to the hon. Member for Dagenham for raising this important issue.

10.50 am

The Parliamentary Under-Secretary of State for the Home Department (Joan Ryan): Like other hon. Members, I congratulate my hon. Friend the Member for Dagenham (Jon Cruddas) on securing the debate. It is on an important subject and one that is very important to our constituents. Whether we can reach consensus on the way forward or not, it is crucial that we debate these issues.

I associate myself with the remarks made by many hon. Members in entirely rejecting the extremism of the British National party and any who align themselves with its views. That is linked to why I think that it is so important that we debate the issues. If we do not address people’s concerns and we leave a vacuum, and if we are not honest about debating the subject, that will open the door to people feeling that perhaps the only groups that are addressing their concerns are those such as the BNP, so it is our responsibility to discuss these things. Even if we do not reach consensus, I accept that everybody who has taken part in the debate has shown genuine care and concern about the problems and finding a way forward.

That said, I reject what the hon. Member for Ashford (Damian Green) said about my right hon. Friend the Minister for Industry and the Regions. I do not see her remarks as inflammatory. They were in the context of being honest and open in the debate and reflecting the concerns of her constituents in an open and honest way. She has the right to do just that. If we categorise those remarks, which were about something that concern her constituents—housing—as inflammatory, we are doing the BNP’s work for it by closing down our ability to address our constituents’ concerns honestly. Whether or not people agree with her conclusions, she has the right, and was right, to make those remarks.

My own view is that a fundamental British value—a value that really characterises British people—is fairness and the belief in fairness. Immigration and asylum issues go to the heart of our society. Our approach to those issues must reflect our values and therefore must be a fair approach, and our constituents must believe that we are dealing with the issues fairly. In addition, I see no point in having asylum and immigration legislation if we do not implement it.

For the Government, an effective and managed immigration system is fundamental to the interests of the United Kingdom. Migration has provided an economic gain for this society, as well as bringing diversity to us. I make no bones about the fact that controlled legal migration is critical for our security and our social and economic well-being.

I shall set out clearly the Government’s position on the proposal by the Strangers into Citizens campaign
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for a new pathway from illegal status through a work permit stage to settlement, as that was the crux of the argument advanced by my hon. Friend. I accept that there are other similar models. I need to be very straight with him. He would expect nothing less, and I do appreciate the way in which he put his arguments. However, for the following reasons, the Government do not accept that the proposed pathway to regularisation is either necessary or appropriate. Incidentally, I have some sympathy with the question asked by the hon. Gentleman: when is regularisation regularisation and when is it an amnesty? Even if it is partial and it depends on people having been here for a certain number of years illegally or whatever, it is still a partial amnesty, so I do not draw a particular distinction between those two terms.

The first reason for not accepting the proposal is that there is no legitimate argument that our labour market needs to be supplemented by regularising people from the illegal population. Our existing immigration rules provide clear and fair routes for people to come to the UK for employment and settlement, and they fully meet our needs. We are committed to a system of managed migration to ensure that economic migration routes are available to admit people selectively to maximise the economic benefit to the UK and are responsive to labour markets, skill needs and the interests of the UK.

In addition to the work force available as a result of freedom of movement within the EU, the introduction of the new points-based system will open up legal migration routes. Those who want to apply to come to work in the UK can do so on the basis of informed choice and with access to the rights and freedoms available to other workers. The points-based system will be further supported by increasing resources to increase enforcement capacity. To create a new route to regularisation for people here illegally would disrupt the transition arrangements for EU accession nationals.

Secondly, I simply do not accept the contention that the proposal would have a neutral impact on uncontrolled economic migration to the UK. Many hon. Members addressed that. It would send a message across the world that the UK legitimises illegal migrants. In effect, we would be throwing aside our immigration controls and ignoring our rules and managed systems. I do not think that that would strike anybody as fair. If we do it once, that will create a very real expectation that we will do it again—the rubicon will have been crossed.

I am aware that we have had amnesties in the past under previous Administrations. There is no evidence that that has resolved the problem, and hon. Members are again asking for regularisation. If one-off regularisations or amnesties worked, Spain would not have had five, Italy would not have had six and Belgium and France would not have had two. We have had the same situation and there is still a call for regularisation.

The figure of 500,000 was mentioned. We have been very honest about the fact that there is a backlog. The 500,000 relates to the number of cases. It could be lower than that, because people die, return home, or go through the system in another way and get the right to remain through a different route. The 500,000 figure refers to cases as opposed to individuals, and we have already started dealing with that backlog, which is a very good thing. It is important that it is being dealt with.

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Hon. Members will know that we are now dealing with initial claims for asylum within two months and we are seeking to complete claims within six. They will also know that we have the lowest level of asylum applications since 1993. We have hugely speeded up the system, which is important, and made it much more efficient. We have tightened up our borders. We have sent the right messages and we have therefore reduced the pull factor. The other side of the argument is that by increasing enforcement and bearing down on those who knowingly and deliberately employ illegal migrants, we cause harm to those migrants and put them at risk. I accept the arguments—

Mrs. Janet Dean (in the Chair): Order. We must now move to the next debate.

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Lending to Developing Nations

11 am

Ann McKechin (Glasgow, North) (Lab): There has been much talk over the past few weeks about the Prime Minister’s legacy from the past 10 years. With great justification, it can be claimed that the triumphs of the Prime Minister’s premiership, which benefit millions of people, include championing debt relief to the world’s poorest nations, winning what was at times a difficult battle to persuade the international community of the merits of debt relief and securing the multilateral debt relief initiative at Gleneagles, which, along with the existing heavily indebted poor countries initiative, has now cancelled the multilateral debts of 24 nations. As chair of the all-party group on debt, aid and trade, I, like many other colleagues in the House, welcome the Government’s strong commitment to debt cancellation, which builds on the considerable public and parliamentary pressure for progress that we have seen over the past 10 years.

Debt cancellation has been a successful element in the fight against global poverty and economic injustice. For example, an independent study in 2001 found that 10 African countries that had received debt relief through the HIPC initiative had increased spending on health care by 70 per cent. and spending on education by 40 per cent. in just four years. Meanwhile, military spending had remained static. An IMF working paper from 2006 found that reducing debt service for low-income countries had a significant impact on social spending. However, a number of concerns have been raised over recent months about progress on debt relief and particularly about prior debts and new lending. I therefore want to take this opportunity to raise those issues with my hon. Friend the Minister and to seek his assurances on a number of points.

My hon. Friend will be aware of the court judgment that was handed down in London in February in respect of a claim against Zambia by the US company Donegal International, which is owned by Michael Sheehan. The claim related to debts that that impoverished southern African nation incurred more than a decade ago, mainly as a result of buying agricultural machinery from Romania during the cold war. In 1999, Donegal bought the Zambian debt, which had a face value of about $40 million, from Romania for less than $4 million. Appropriately, companies such as Donegal are known as vulture funds because they seek to make a profit by buying up bad debt cheaply and then trying to recover the full amount, often by suing through the courts.

In this case, the courts were critical of the evidence provided by Donegal, but nevertheless found that there was a valid contract and awarded the company a reduced amount of about $15 million. This year, Zambia expects to save $40 million in debt relief through HIPC and other initiatives, but paying Donegal International $15 million will severely limit the impact of that relief. The people who will suffer will be the very poorest, who will be denied basic health and education services in a country where the average life expectancy is a shockingly low 34 years—less than the age of myself and my hon. Friend.

It is hard to know the full extent of such lawsuits because companies do not publicise their actions. As a recent report about the case on the BBC’s “Newsnight”
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showed, these people work in the shadows and do not welcome the light of publicity. However, the Jubilee debt campaign in the UK has identified at least 40 lawsuits, many of which are still outstanding, that commercial creditors have brought against heavily indebted poor countries which had reached decision point by September 2006. The debts known to be subject to litigation in those cases amount to a staggering $1.9 billion—more than the approximately $1.5 billion in commercial debt that those countries expect to be cancelled.

As I am sure my hon. Friend accepts, public and creditor confidence in debt cancellation rests on the understanding that the resources that are released will be used for poverty reduction, not to pay large sums to commercial creditors who seek to make substantial profits from some of the poorest countries in the world. The Chancellor has been openly critical of the operations of vulture funds—with reason—but it is essential that such criticism is matched by distinct action to combat the problem so that we can assure the thousands of people, including constituents, who have called for debt relief that it will continue to reach those most in need.

The Government are already providing legal advice to debtor countries to allow them properly to defend any court action, and that is welcome, but it is vital that such advice is available at the earliest opportunity. In the Zambian case, the negotiations with Donegal International took place over three years, and the Zambian Government probably made some mistakes in the early part of the negotiations in acknowledging the debt. Perhaps my hon. Friend can advise me, therefore, whether any thought has been given to setting up a rapid-response legal-technical facility that is independent of the Bretton Woods institutions and which can help low-income countries to pre-empt and avoid such lawsuits.

I urge the Government and other donor Governments to consider introducing legislation that requires the creditors of sovereign debtors to participate in collective action, whereby all creditors must provide comparable terms in respect of any rescheduling or relief that has been agreed by a majority of the creditors. That would be similar to the regulatory principles that already apply to individual debtors in the UK, which require all creditors, for example, to abide by any debt relief plan that is agreed by creditors representing 75 per cent. of the value of the debts. In addition, many potential law suits will be based on UK contract law, and I urge the Government to introduce legislation similar to that in the USA prohibiting the purchase of debts solely for purpose of litigation.

I would also be grateful if my hon. Friend indicated whether creditors have given consideration to refinancing the debt reduction facility—a fund based at the World Bank that allows International Development Association-only countries to repurchase commercial debt at a substantial discount. That would allow us to extend the facility to HIPC-eligible nations that have not yet reached decision point and ensure that it covers other categories of debt, such as debts owed to other low-income country creditors.

In the longer term, we all need to recognise that there are still unresolved issues from the current debt crisis, and if we do not tackle them properly, they could re-emerge to create a new crisis as new lending increases. In addition, many of the poorest nations possess
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considerable natural resources, which are increasingly attracting interest from a wide range of foreign investors. However, worries are building up that much of that investment will fail to benefit the poorest citizens unless it is properly regulated and the benefits are targeted at development.

Some have argued that vulture funds simply do what markets do best and that they are just another financial instrument providing a service to those who want to sell off unpaid bonds or securities and minimise their risk. That may be so, but an unregulated market will not protect the weakest, and such practices will certainly not benefit those who struggle to live on less than $1 a day.

One way to tackle such problems is to support and press for the development of, a just, independent, transparent and comprehensive system for working out international debt, perhaps through an international law on sovereign debt. Such a system would take account of the origins of debts, as well as of their current impact and sustainability, while placing the same moral and legal obligations on companies as it did on Governments. Anne Krueger, the former deputy managing director of the International Monetary Fund, has called for reforms based on principles common to corporate bankruptcy laws so that countries can be given legal protection from creditors and allowed time to negotiate proper restructuring.

Central to such issues is instilling the concept of responsible creditor and lender behaviour. Consideration of creditors’ shared responsibility for the creation of debts will help to indicate the principles that should govern new lending and the behaviour of existing creditors, as well as the proper extent to which outstanding debts should be cancelled. Responsible lending to sovereign borrowers, which should also take into account the granting of export credit guarantees, requires respect for the principles of public accountability, transparency and co-responsibility. To achieve that, lenders should reassure themselves that the borrowing Government are legitimate and accountable to their people in respect of the contracting and use of the loan, and clearly defined checks and balances, such as compulsory parliamentary scrutiny, should be in place. Both lender and borrower should be encouraged to report fully and transparently, ensuring public access to the amounts, terms, purposes, use and repayment of loans.

The lenders should assure themselves that the loan or credit is not for a clearly illegitimate purpose, such as for the purchase of arms to be used against civilian populations. Any loans to finance projects should require conformity to the relevant international labour, environmental and other standards, and be conditional on satisfactory impact assessments on social needs and environmental aspects.

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