Clause 3

Part of Debt Relief (Developing Countries) Bill – in a Public Bill Committee at 10:30 am on 9th March 2010.

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Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills) 10:30 am, 9th March 2010

It is an important distinction in order to secure that the Bill is compatible with the Human Rights Act. The hon. Member for Daventry referred to compatibility with article 1 of the protocol to the European convention on human rights. The measure is proportionate for compelling public policy reasons. It promotes fairness among creditors and the development of poor countries. Creditors that enforce their debts for the full face value divert resources that are intended for development, including debt relief and international aid provided by the UK Government.

Is this worth doing and is it, ultimately, a substantial measure? Of course, it is true that, compared with overall financial flows, the amounts we are talking about are small. For the countries involved, however, they are significant. The case of Liberia has been mentioned, and the amount involved is reported to represent 5 per cent. of its Government’s annual revenue. That will have a huge impact on that country. The World Bank survey reports other active cases that are larger still. I think that every member of the Committee agrees that the threat of any resources being diverted to vulture funds, away from a country where almost half the population live on under a dollar a day, is very serious. That concern is shared on both sides of the Committee.