[back to previous text]

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 7

Exception 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 8

Saving
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 9

Commencement, 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 1

Treasury 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.
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 2

Duration 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.
 
Previous Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2010
Prepared 10 March 2010