Clause 3

Part of Debt Relief (Developing Countries) Bill – in a Public Bill Committee at 10:15 am on 9th March 2010.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 10:15 am, 9th March 2010

The first two clauses are about definitions. Clause 3(1) specifies the mechanism that will apply to reduce the amount of recoverable debt. The definition of the relevant proportion is covered by clause 4. One worry about the Bill relates to article 1 of the European convention on human rights. It may be argued that deprivation of possessions are involved or at the very least the control of use of possessions—essentially, property rights are affected. We have touched on the comparison with insolvency procedures and so on. As I said, it is a fair point. However, there is an interesting assessment of the European convention on human rights in the explanatory notes to the Bill. Clearly, it is a matter to which those who drafted and introduced the Bill have given some consideration.

The explanatory notes set out the argument that the measure is not about the deprivation of possessions, but the control of use, because the creditor still has the ability to recover the debt if it is only able to recover an element—not all—of it. That is therefore a control of use rather than deprivation. I do not know whether the hon. Lady can give the Committee further details on that. I do not in any way pretend to be an expert in such matters, but it is clearly an important part of the argument to say that the clause is not contrary to article 1 of the first protocol of the convention. That must be a strong argument.

The Bill is retrospective, and we have discussed the reasons for that. The explanatory notes state:

“Retrospective measures may in principle be compatible with A1P1, although the ECtHR has referred to the need for an ‘obvious and compelling public interest’ for retrospective measures”.

There is no argument about the obvious and compelling public interest in the Bill, although it would be helpful for future legal arguments for the Bill to be given proper scrutiny so that matters can be debated more fully.

One of the points made in response to the Bill and the Treasury consultation is that the compelling public interest applies because the measure will help developing countries. The argument made by some respondents is that such is the narrowness of the Bill that the benefit for developing countries—the sums concerned—is now so small that the compelling nature of the public interest has diminished.

It might be helpful to explore that issue. EMTA—the Emerging Markets Traders Association—has certainly argued that the only debt covered by the Bill is that relating to Liberia, on which there was a judgment at the end of last year, but that is about it. The Government’s impact assessment takes a different view, arguing that HIPCs and potentially eligible HIPCs will benefit by about £145 million in total. We should at least consider the scale of benefit to developing countries. Is it sufficient to say that there is an obvious and compelling public interest in introducing the Bill?