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.)
I beg to move, That the clause be read a Second time.
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 Treasurys and, indeed, the Ministers 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 Acts 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 debtorsthe 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 UKs 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 Bills impact than we are this morning.
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.