Clause 2

Part of Debt Relief (Developing Countries) Bill – in a Public Bill Committee at 10:00 am on 9th March 2010.

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Photo of Tim Boswell Tim Boswell Conservative, Daventry 10:00 am, 9th March 2010

May I say what a pleasure it is to serve under your chairmanship, Mr. Chope? Without wanting to reopen the issues that have been amply rehearsed on clause 1, I too wish to echo my overall support for what is being achieved here. We have a balance not only in terms of the equity of the existing loans but the needs of the developing world, which are real. Even though we do not want to express it, we all probably feel a certain degree of distaste at having to go through the nitty-gritty of working out the balance of assets and liabilities, and I do not intend to add to that process. It occurred to me that my remarks might be interpreted as an attempt to qualify as the authentic Treasury nerd or, as I would prefer to call it, the anorak on the matter, but I have to admit that this particular anorak has not done his homework as well as he might have. If he had, he would have tabled an amendment, but as we are now on clause 2, looking at further definitions, I just want to probe the interaction of a couple of points relating to subsections (9) and (10). That is as near as one gets to scheduling it.

I want to pause on two words. The first is “external”. In subsection (10) it is clear enough to me that there is a presumption that a debt is an external one, unless someone proves the contrary, which is an interesting way of looking at it. I appreciate that UK rather than  international jurisdiction is involved, but I particularly want to rehearse the case of a country listed in the table in the explanatory notes having a currency other than its own, or using another country’s currency. That might define whether the debt is external. For example, although I have not visited the country, I think that Liberia uses the US dollar. I do not know whether that creates confusion—if it is the domestic currency it is also the external currency.

My second point is on creditors. I may have misunderstood this, as I claim to be no expert and certainly no advocate of vulture funds, but regarding the interaction of subsections (9) and (10), subsection (9) talks about “the creditor” as if there were only one within a particular line of debt. Presumably some of the debt is factored around, and may be owned by a number of creditors who may or may not be resident in the particular country, quite apart from the fact that the currency may or may not be a currency that goes from outside that country to another country. I am concerned to probe whether, if there are different categories of creditor, some of whom are clearly resident in the country and others of whom may not be, that affects the treatment of the overall debt, or means that individual debts would be treated differently, depending on whether the holder of the tranche of the debt was in one country or another.

I am sure that there are answers to those questions. Equally, I am sure that there need to be answers, because the trouble with all this, in trying to do something that is a real-world improvement, is that, when we get down to the difficult words in the small print, we might end up with unintended consequences or inequities that we would not wish to defend. I hope that the hon. Lady can satisfactorily explain that, or reflect on it. The last thing I want to do is distract the Committee from the important and substantial task of taking the Bill forward.