Tories ruin debt relief Bill

On Friday, David Cameron’s MPs ruined the chances of a Private Member’s Bill on debt relief banning “vulture funds” passing.

On Friday, David Cameron’s MPs ruined the chances of a Private Member’s Bill on debt relief banning “vulture funds” passing. The three Conservative MPs, Christopher Chope, Andrew Robathan and Simon Burns – two of them Tory front benchers – then refused to admit which one had objected to the Bill.

Left Foot Forward is joining the Jubilee Debt Campaign in calling on Mr Cameron to come clean on whether this important Bill was stopped on his instructions. The Debt Relief (Developing Countries) Bill aimed to stop secretive off-shore investment funds from profiteering out of third world debt.

These “vulture funds” buy up the debts of poor countries, often at a fraction of their face value, and pursue them through the international courts, in many instances despite agreements by the UK and others to give the country debt relief. In one such case last year, Liberia lost a £13m case in London against two vulture funds – meaning that debt relief provided by UK taxpayers amongst others was taken away from reducing poverty into the pocket of tax havens.

If the Bill had passed, it would have help tackle this problem by protecting the existing debts of the 40 Heavily Indebted Poor Countries (HIPCs) which are eligible for relief under the internationally-agreed HIPC initiative. It would have prevented creditors holding these debts from recovering in excess of the rate of relief expected from all creditors under the initiative, and provided an incentive for debtors to co-operate in settling these debts on terms consistent with the Initiative.

The Tories had raised objections to the Bill from the start, in stark contrast to its unequivocal backing by Labour and the Liberal Democrats. On 27 February the Jubilee Debt Campaign reported that Conservative Treasury spokesman David Gauke had admitted to “outstanding concerns” and said his party “would not support the measure being rushed through the House”.

Tory politicians appeared to be prepared to make people in developing countries pay for the past actions of corrupt leaders. Christopher Chope MP argued in the debate on this bill that:

“For such countries that are essentially corrupt, we seem, in effect, to be saying that we should indulge that corruption by writing off these debts, even when they have been incurred as a result of commercial transactions.”

MEP Roger Helmer, meanwhile, was busy arguing that “debt relief can do more harm than good” on Conservative Home, claiming that, as a result of the Bill:

“British taxpayers will pick up the costs for the developing world’s continued reliance on aid.”

He obviously prefers that British taxpayers money be siphoned off instead by investment funds in the Caribbean. Then, just a day before it was being tabled, Philip Davies, Conservative MP for Shipley, tried to introduce an amendment to the Bill which would have prevented the bill reaching its third reading.

After it was pointed out that his objection (that the Bill should not apply to past judgements) had been agreed at committee stage, his objection was withdrawn. With Baroness Quinn agreeing to take it through the Houses of Lords, it seemed as if the Bill was set to pass before the general election.

At the very last minute on Friday, however, three Tory MPs were seen to huddle together on the benches before one shouted the word “object!” – which, under parliamentary procedure, effectively stopped the bill passing.

As The Guardian reported this morning, debt campaigners have reacted in fury and disbelief to the killing of the Bill. Sally Keeble MP accused the Conservatives of “duplicity” by pretending to back the legislation and then sabotaging it at the last minute:

“This action today gives the lie to the Tories’ pretence of supporting international development. This bill was a small, but significant step in helping the most impoverished countries deal with their debts. It also protected British taxpayers’ money.

“The Tories obviously think that developing countries are good enough to use as tax havens from which to get funding. But they are not prepared to protect the poorest developing countries from the most blatant profiteering.”

David Cameron has important questions to answer. He must own up if one of his team was responsible for scuppering this bill. Was it his deputy chief whip Andrew Robotham MP, the whip Simon Burns MP, or the chair of the bill committee, Christopher Chope? Was the bill stopped on his instructions? Will the Conservatives commit to re-introduce this bill within 12 months of the new Parliament if Mr Cameron forms a government?

International development secretary, Douglas Alexander, has sent a letter to the Tory leader demanding an explanation, which you can sign at //www.globalpovertypromise.com/letter

You can also join the Jubilee Debt Campaign’s call to Harriet Harman and Alistair Darling to make extra time for the Bill and to guarantee to re-introduce the legislation if their party wins the General Election.

39 Responses to “Tories ruin debt relief Bill”

  1. Gael Marks

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX

  2. James Cowley

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX

  3. Linda Marric

    RT @DavidTaylor85 "Tories ruin debt relief Bill": On Friday, David Cameron’s MPs ruined the chances of a Pri… //bit.ly/9mob6S #labour

  4. Linda Marric

    people who the tories have changed, put this in your pipe and smoke it. //bit.ly/9vsnX4

  5. Paul

    While I appreciate the anger at the moment, I think perhaps we can start to look at this as a cloud with a big silver lining, in that there is a pretty valid case for it becoming a government spoonsored bill in the next parliament, whoever has formed a government.
    This can give it greater media prominence than even Andrew Gwynne’s and Sally Keeble’s worthy efforts have been able to secure it to date, not least because the press may pick up not just on on Chope’s behaviour, and on the reasoning he has for objecting to the bill in the first place.

    These reasons to be that:
    a) the reputation of the English courts will be damaged, as though English law’s most important function is as an export market rather than, erm, laws passed by MPs delegated to do so by an electorate;
    b)developing countries will have more trouble finding loans if there is thought to be any likelihood of default via this mechanism (absurd in itself given the retrospective nature of your bill, but certainly an issue in that money is lent on the basis of perceived risk, not actual risk, and the herd mentality in ‘the markets’).
    This whole area is important to get out in the public sphere because, just as the bond markets are able to a great extent to hold our government hostage over deficit management with the threat of higher rates, so developing countries’ often nascent democracies are totally at the beck and call of those who hold their historic debt (often linked to corrupt past governments installed/maintained by Western government for strategic reasons).

  6. Linda Marric

    people who think the tories have changed, put this in your pipe and smoke it. //bit.ly/9vsnX4

  7. Matthew Taylor

    If Left Foot Forward is now doing straight political comment, rather than evidence based blogging, can we expect a piece on Kerry McCarthy killing the Contaminated Blood Bill?

    //bit.ly/d4EnBo

    Or does it not count since she did that at the behest of the Government?

    Interesting double standard if “the left” is now arguing we should nod through bills for debt relief to foreign nations, but debate – and thereby kill – bill to compensate British haemophiliacs injured by Government failings.

    By all means criticise the fact that the debt bill will be debated, but try and avoid craven hypocrisy while you’re at it.

  8. Adrian Hollister

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX – yet more shameful Tory practices

  9. Martin Johnston

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX #reasonsnottovotetory

  10. Peter Boyle

    will @ericpickles respond? #sameoldtories RT @leftfootfwd: Tories ruin debt relief Bill //bit.ly/9mob6S

  11. uberVU - social comments

    Social comments and analytics for this post…

    This post was mentioned on Twitter by leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX

  12. topsy_top20k_en

    Tories ruin debt relief Bill: //cli.gs/WAWhX

  13. Co-operative Party

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX

  14. Ben Cooper

    RT @LindaMarric: people who think the tories have changed, put this in your pipe and smoke it. //bit.ly/9vsnX4

  15. Sarah Duff

    RT @leftfootfwd: Tories ruin debt relief Bill: //cli.gs/WAWhX

  16. sheila scoular

    RT @LindaMarric: people who think the tories have changed, put this in your pipe and smoke it. //bit.ly/9vsnX4

  17. LCID

    Tories ruin debt relief Bill – @DavidTaylor85 for @leftfootfwd: //cli.gs/WAWhX

  18. David Carrington

    RT @LabourCID: Tories ruin debt relief Bill – @DavidTaylor85 for @leftfootfwd: //cli.gs/WAWhX

  19. David Taylor

    Tories ruin debt relief Bill – my latest piece for @leftfootfwd: //cli.gs/WAWhX

  20. paulstpancras

    RT @LabourCID: Tories ruin debt relief Bill – @DavidTaylor85 for @leftfootfwd: //cli.gs/WAWhX

  21. Tim Worstall

    There’s a huge difference between “loans made from this point forward will be different” and “loans already made under current law have had their terms changed”.

    This bill did the second and thus it’s excellent that it has been defeated.

    Or don’t you think that governments should uphold the rule of law?

  22. LabourguyUK

    Definitely worth a read! RT @DavidTaylor85: Tories ruin debt relief Bill – my latest piece for @leftfootfwd: //cli.gs/WAWhX

  23. Bob Wiley

    Tories ruin debt relief Bill | Left Foot Forward: On Friday, David Cameron's MPs ruined the chances of a Private M… //bit.ly/dyllPA

  24. John77

    I agree with Paul (don’t faint or your signpost might fall down) except that the bill needs to be properly drafted to block profits for vulture funds without penalising those banks that are aiding the Third World by providing finance when it is needed.
    Small point – it isn’t just “herd mentality”, more “if they’ve done this once how can we be sure they won’t do it again?” – so sanctioning default on past debts sharply increases the risk premium on current and future debts and projects that have a monetary return on investment of 10% (plus massive social benefits) become non-viable if the interest rate demanded to cover the risk of non-payment goes up to 11%.

  25. The Sliver Party

    RT @leftfootfwd Tories ruin debt relief Bill: //cli.gs/WAWhX

  26. Costello

    Those dastardly Tories – everyone knows that the one thing that will absolutely most definitely cure third world poverty is allowing the parasitic political classes to run up debts without any consequences.

  27. David Taylor

    @Costello – consequences for who? People living in poverty today because of corruption by leaders past? (Some of whom we in the West actually backed)

    @Tim Worstall – it depends on what the law is. Law is not immutable, otherwise we’d still be hanging people, selling slaves, and most of us would not be able to vote.

  28. LCID

    @dropthedebt – hope this is useful: Tories ruin debt relief Bill – @DavidTaylor85 for @leftfootfwd: //cli.gs/WAWhX

  29. Andrew Roche

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  30. kevinrye

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  31. stevie b

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  33. Tim Worstall

    “@Tim Worstall – it depends on what the law is. Law is not immutable, otherwise we’d still be hanging people, selling slaves, and most of us would not be able to vote.”

    The law as it applies to actions taken in the past damn well ought to be immutable. Now that we don’t have capital punishment should we go back and punish those who carried it out when it was legal? Did we punish those who had had slaves before 1833 after 1833? When the franchise was expanded did we go back and ask how would you have voted at the previous election?

    I have absolutely no problem at all with well considered attempts to improve the law as it applies to actions taken or not taken in the future. I have huge problems with changes made to the law on things that people have already done.

    The reason being that this is a very slippery slope indeed. It’s a breach of the whole idea of the rule of law. And a society without the rule of law is one that I absolutely do not want to see, thank you very much.

  34. Rob Holdsworth

    RT @leftfootfwd: Tories ruin debt relief Bill //bit.ly/9mob6S

  35. The ‘Vulture Fund’ bill: defending Christopher Chope « Though Cowards Flinch

    […] Christopher Chope March 16, 2010 paulinlancs Leave a comment Go to comments A number of people have provided good coverage of the ‘objection’ action on Friday 12 March by Tory MP Christopher […]

  36. Adamlapthorn

    RT @leftfootfwd: Tories ruin debt relief Bill //bit.ly/9mob6S

  37. Vote 2010: International development | Left Foot Forward

    […] up’ – the first a bill on debt relief targeting Vulture Funds (despite Tory attempts to ruin it), and the second the passing of anti-bribery legislation which creates a new offence of bribing a […]

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