Ms
Keeble: All the points have been well covered. As I have
said, the main point is to have consistency and to deal with different
types of debt equally and fairly. To exclude judgment debt would be to
give status to a particular type of debt, which would not be consistent
with the orderly management of the debts of the country in question. It
is very important, therefore, that clause 5 remain part of the
Bill. Question
put and agreed
to. Clause
5 accordingly ordered to stand part of the
Bill. Clause
6 ordered to stand part of the
Bill.
Clause
7Exception
for overriding EU or international obligations
Question
proposed, That the clause stand part of the
Bill.
Mr.
Gauke: I would be grateful if the Minister or the hon.
Lady set out the types of judgment that override EU or international
obligations, and that could provide an exception to what the Bill sets
out
generally.
Mr.
Timms: I support the clause because it is necessary for
the UK to fulfil some European and international obligations. Where we
are entitled to refuse to enforce foreign judgments in full—for
example if they go against UK public policy—it is consistent
with the aims of the Bill to do so. None the less, there are some kinds
of judgments and arbitration awards which the UK is obliged to enforce
in full. It is right that the Bill should not apply to those, and
clause 7 provides
accordingly.
Ms
Keeble: The only thing I would add is that the exceptions
are set out in clause 7(2).
Question
put and agreed
to. Clause
7 accordingly ordered to stand part of the
Bill.
Clause
8Saving Question
proposed, That the clause stand part of the
Bill.
Peter
Bottomley: What does clause 8
mean?
Ms
Keeble: I had hoped you would call the Minister first,
Mr. Chope. When claims have already been settled they should
not be reopened, because it would cause many difficulties and would be
of questionable
benefit. Question
put and agreed
to. Clause
8 accordingly ordered to stand part of the
Bill.
Clause
9Commencement,
extent and short
title Question
proposed, That the clause stand part of the
Bill.
Mr.
Gauke: I do not know whether I can match the brevity of my
hon. Friend the Member for Worthing, West. I simply ask why there is
two months between the passing of the Bill and its commencement. Why
not commence it
immediately?
Ms
Keeble: I understand that that is
standard.
Sir
Gerald Kaufman: If it is in order, Mr. Chope,
will you allow me to say how sorry I am that my hon. Friend the Member
for Denton and Reddish (Andrew Gwynne) is not here today owing to
serious illness, and how grateful we are to him for carrying on the
Bill after my hon. Friend the Member for Northampton, North initiated
it? I pay great tribute to my hon. Friend for the knowledge,
persistence and dedication she has shown in bringing the Bill forward
and getting it to this stage.
The
Chair: Obviously, what the right hon. Gentleman has said
is in order, but it is slightly premature because we still have two new
clauses to deal
with. Question
put and agreed
to. Clause
9 accordingly ordered to stand part of the
Bill.
New
Clause
1Treasury
duty to report on
impacts ‘The Treasury shall
within 12 months of the commencement of this Act publish and lay before
Parliament a report setting out its assessment of the following
matters— (a) the impact
of the Act on the availability and cost of lending to countries to
which the Initiative
applies, (b) the impact of the
Act on the availability and cost of lending to other developing
countries including potentially eligible initiative
countries, (c) the monetised
value of the transfer from creditors to debtors as a consequence of the
Act, and (d) the impact of the
Act in determining the choice of law or choice of jurisdiction for
financial contracts.’.—(Mr.
Gauke.) Brought
up, and read the First time.
Mr.
Gauke: I beg to move, That the clause be read a Second
time. May
I echo the words of the right hon. Member for Manchester, Gorton? He
perhaps rushed in a little early with his comments. Perhaps that can be
put down to his newness in this place—or perhaps
not. I
have tabled new clause 1 because in an ideal world, we would have
followed a slightly different process. Concerns exist outside this
place about the impact that the Bill will have. Some people argue that
it goes too far and some, as I said earlier, argue that it does not
go
far enough. The hon. Member for Linlithgow and East Falkirk has made the
case that we should build on it. Others would argue that that is a
potentially dangerous argument and undermines confidence. I am not
taking a position on
that. In
an ideal world we would have followed the proceedings that the
Government have brought in in recent years whereby we have witness
sessions. Value would have thereby been added to the Bill and to this
process. We could have examined and scrutinised the arguments for going
further. We could have addressed the concern that the Bill may damage
lending to developing countries. It would have been a helpful process.
We all realise where we are in the parliamentary timetable. As a party,
we have been keen to assist the process and move as swiftly as
possible, consistent with our having Committee stage as early as
possible to move the Bill forward as quickly as possible. As I said, in
an ideal world we would have gone through a lengthier scrutiny process.
The witness process, which is a welcome development of proceedings in
this place, would have been useful in these circumstances.
A fair degree
of uncertainty exists. It is to the Treasury’s and, indeed, the
Minister’s credit that they acknowledge in the response to the
consultation process that sometimes there is uncertainty in such
matters. It would be helpful to consider the matter again to see what
has actually happened. Will some of the concerns turn out to be
overblown? Will there be a detrimental impact? What will be
the benefit to developing countries in terms of the debt that is not
pursued? How many cases will be dropped? How much will the amount to be
recovered be reduced by as a consequence of the judgment, and
so on?
We all
recognise that there is some uncertainty about a lot of these issues,
and there are two alternative ways of addressing that uncertainty. I do
not intend to press new clause 1 to a vote, but one way of addressing
that uncertainty is to issue within 12 months of the Act’s
commencement a report that assesses the various issues that have been
raised today.
First, we
should consider the impact on the availability and cost of lending to
countries to which the initiative applies, which is at the heart of
what we are doing. Secondly, we should consider how the initiative
applies more generally to other developing countries, including,
potentially, eligible initiative countries. There is the question of
the impact, in terms of the monetised value, of going from the
creditors to the debtors—the relevant developing countries. As
the Minister acknowledged, there is a fair degree of uncertainty about
that. Finally, there is the question of the impact of determining the
choice of law or the choice of jurisdiction for financial contracts. We
have not particularly debated that issue today and it is not at the
heart of the Bill; nevertheless, the Minister is certainly aware of
concerns that this initiative might have an adverse impact on the
UK’s position as a place to do business. Even if we put those
concerns to one side, there is a worry that contracts will be pursued
in other jurisdictions and that this initiative will have no great
effect in the grand scheme of things, simply because other
jurisdictions will be used.
The hope, as
expressed by the Treasury and the hon. Member for Northampton, North,
is that we will lead the way and that other jurisdictions will follow
suit. On Second Reading, we debated the fact that in the US a similar
measure attempts to do the same thing. I do not
know what the likelihood is of such a measure ever reaching the statute
book. None the less, it would be helpful for us to look at these
matters again. Uncertainties exist now, when we are passing this Bill,
and the parliamentary timetable has meant that we have been unable to
question and scrutinise in Committee those who have raised concerns
about the Bill. Looking at the Treasury response to the consultation
process, it is clear that plenty of people have raised such concerns.
Given all that, an opportunity to look again at this measure would be a
good thing. In a moment,
I will say a little about new clause 2 and the alternative means it
proposes to address the uncertainty that exists. However, if new clause
1 were accepted, the Treasury would produce a report and respond to
these concerns, and we would therefore be in a better position to
assess the Bill’s impact than we are this
morning.
John
Hemming: I understand that we are very short of time. New
clause 1 has merit; new clause 2 does not.
Mr.
Timms: I, too, shall be very brief. Let me simply assure
the Committee that we keep all legislation under review. We would
certainly do so in this case, without the need for the proposed duty to
do so. I am grateful to the hon. Member for South-West Hertfordshire
for saying that he does not intend to push new clause 1 to a vote. As I
have given that reassurance, I hope it will not be necessary for him or
other Members to do
so.
Mr.
Gauke: I am grateful for the remarks from hon.
Members.
I beg to ask
leave to withdraw the motion.
Clause,
by leave,
withdrawn.
New
Clause
2Duration
of
Act ‘(1)
This Act expires at the end of the period of one year begining with
commencement; but this is subject to subsections (2) and
(3). (2) The Treasury
may by order provide that this Act (instead of expiring at the time it
would otherwise expire) expires at the end of the period of one year
from that time. (3)
The Treasury may by order provide that this Act has permanent
effect. (4) An order
under this section is to be made by statutory
instrument. (5) An
order under this section may be made only if a draft of the statutory
instrument containing it has been laid before, and appoved by a
resolution of, each House of
Parliament. (6) If this Act
expires by virtue of this
section— (a) the Act is
to be treated as never having been in force,
and (b) accordingly,
where— (i)
a judgement was given, or order or arbitration award
made, on a relevant claim (as defined by sectio 5(2)) while the Act was
in force, and (ii)
the amount of the judgement, order or award is, as a
result of section 3, less than it would be if that section had not
applied in relation to the claim, the amount of the judgement, order or
award is to be treated as equal to the amount it would be if the
section had not applied in relation to the
claim.’.—(Mr.
Gauke.) Brought
up, and read the First
time.
11.15
am
Mr.
Gauke: I beg to move, That the clause be read a Second
time. I
do not need to run through the various arguments about the current
uncertainty again, but my view is that it would be helpful to revisit
the matter. It is worth quoting the Treasury’s response to the
consultation. Paragraph 2.30 notes
that “Predicting
the scale of any negative spillovers from legislation is very difficult
in advance of
legislation.” New
clause 2 is essentially a sunset clause. It means that we could proceed
with the Bill as drafted, and then assess what happens over the next 12
months—whether there has been a risk premium, and what the
benefit to developing countries has been. At the very least, the new
clause would stop the pursuit of outstanding debts under the HIPC
regime over the course of those 12 months, and would provide
immediate relief for developing countries that are in the
scheme. After
12 months we would make another assessment—I propose doing so
through secondary legislation to ensure that we do not have huge
difficulties with parliamentary time—and take a view on whether
the concerns raised have proved immaterial or not. We could then
proceed to place the Bill on the statute book on a permanent basis.
Alternatively, we could say, “So far, so good, but we
don’t have all the evidence,” and we could extend the
measures by a further year. There is also a risk—I do not think
that this is likely—that the Bill will have an impact on the
risk premium. If that happened, we would not proceed with it any
further, and it would
lapse. The
underlying point is that it is vital that we tread carefully in this
area. In that interim 12 months, I hope that we would have a proper
opportunity to scrutinise the provisions further. It is not for this
Committee to direct the International Development Committee, but this
would be a useful area for it to examine. It could dig into
the evidence on the basis that the Bill was on the statute book. We
could then see what the Bill’s impact was, and would have the
opportunity to return to the
issue. The
legislation is somewhat rushed, and we are doing what we can to provide
a fair wind. I thank the Treasury Ministers, and the parliamentary
draftsmen who assisted with the drafting of the new clause. There has
been cross-party co-operation, and I take responsibility for the
spelling mistake in the first line. The new clause would be a good way
of ensuring that we can proceed with the Bill while addressing existing
concerns, so that we can ensure that the legislation actually helps
developing countries. We would then be able to legislate from a
position of understanding, and with knowledge of the Bill’s
implications, rather than having to rely too much on guesswork, as I
suspect is currently the case in some
respects.
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