Labour MP for Northfield

Richard Burden MP

7 September 2009

Effective debt relief for poor countries -

Lots of constituents have been in touch to let me know they support the campaign to 'End the vulture culture' led by the Jubilee Debt Campaign. The campaign is calling for regulation of vulture funds to prevent them buying up the defaulted debts of poor countries and then sueing those countries for full repayment plus costs.

It is internationally recognised that the debt burden of the poorest, most indebted countries has to be tackled if they are to set themselves on the path of sustainable growth, development and poverty reduction. The UK government has taken a lead role on debt relief over the last 12 years. It is important that the real progress that has been made goes towards reducing poverty in developing countries, not lost into the pockets of wealthy investors.

Earlier this year I signed a parliamentary motion calling on the government to regulate vulture funds and raised the issue directly with government ministers. Replying to my letter, the Treasury Minister Ian Pearson explained that the government is also concerned about these so-called vulture funds (read letter). He told me that the government thoroughly deplores the funds and has taken a leading role in combating the damage caused by their activities - by preventing debts from falling into the hands of such funds and helping countries to defend themselves.

Since then the government has carried out a consultation on possible legislation to limit the amount of debt lenders can reclaim and prevent them profiting from the debts of developing countries. You can find all the details below.

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Government consultation

The consultation was annouced in July and closed on 9th October. I would still be interested to know what you think about the proposals - you can let me know by filling in the form below.

Ensuring effective debt relief for poor countries: a consultation on legislation

The Government has led the international community in relieving the debts of Heavily Indebted Poor Countries. These have been highly successful, and over 0bn has been delivered or committed to debt relief that helps tackle poverty in the 40 eligible countries.  However, participation in debt relief is voluntary, and individual creditors seeking repayment of the full value of their debts can divert the resources provided by debt relief away from reducing poverty.  The Government is consulting on the possibility of complementing existing measures to address this problem with legislation that would limit the proportion of debts already contracted by a HIPC that a creditor could reclaim under UK laws.

• click here to access the consultation document at the HM Treasury website

Jubilee Debt Campaign: "Campaign breakthrough: Vultures law proposed"

Responding to the government's announcement Sarah Edwards from the Jubilee Debt Campaign commented: “We are delighted that the Government is taking seriously the issue of Vulture Funds. Companies which exist purely to profit from the suffering of some of the poorest countries in the world are surely one of the most repellent aspects of the financial system, and we need to take all possible action to stop these operations."

• click here to read their full response