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Standard Conservative Party response on Mozambique odious loans

If you have received a reply from a Conservative MP, please forward it to our policy officer, Tim Jones at [email protected] Tim can then guide you in how to respond.

Below is some more detail on what Conservative MPs have been saying. You can see if your MP has signed the parliamentary motion here.

1) What Conservative MPs say: “Ultimately, the regulation of UK banks is a matter for the independent Financial Conduct Authority (FCA). The FCA has robust powers to investigate potential cases of misconduct and to enforce UK financial rules; this includes any issues around the lending practices of UK financial firms.”

What we think: This is misleading. The Financial Conduct Authority have told the Jubilee Debt Campaign that “The FCA does not have rules which require UK banks to publish disclosure of payments to governments” and have confirmed that It would require the UK government to introduce changes to ensure loans to governments, issued under English law, are publicly disclosed at the time they are given. It is not something the FCA can do.

The regulation of UK banks and loans issued under UK law are set by the UK parliament. The FCA implements these regulations. Given that no regulations currently exist to ensure that loans given to governments under UK law are publicly disclosed, we think they should be introduced.

2) What Conservative MPs say: “I can assure you that the UK continues to be at the forefront of international efforts to promote responsible lending and borrowing practices. This includes ongoing support for the IMF-World Bank Debt Sustainability Framework and OECD lending principles covering official export credits.”

What we think: This is largely irrelevant to this issue of loans by UK financial institutions, or loans owed under UK law. Neither the IMF-World Bank Debt Sustainability Framework nor the OECD lending principles on export credits place any responsibility on private companies lending to developing country governments (there are also other problems with these mechanisms, but getting into that would distract from the key issue).

We do not agree that the UK has been “at the forefront of international efforts to promote responsible lending and borrowing practises”. The UK has refused to sign-up to UN guidelines on responsible lending and borrowing, sought to water-down references to lending responsibilities in UN negotiations on finance for development, and was one of just six countries which voted against new UN guidelines on debt restructuring.

3) What Conservative MPs say: “The UK also supports the African Legal Support Facility, which provides legal advice to countries facing litigation, and the World Bank’s Debt Reduction Facility (DRF), which enables countries to buy back their commercial debt at a deep discount with donor backing. Since its inception, the DRF has played a significant role in extinguishing commercial external debt from the books of the public sector of low-income countries.”

What we think: Legal advice is useful, but it does not change the fact that private lenders can ignore internationally agreed debt relief and sue impoverished countries in UK courts. Legal advice does not help if the law is wrong.

Key point to make to Conservative MPs:

The Financial Conduct Authority have told the Jubilee Debt Campaign that “The FCA does not have rules which require UK banks to publish disclosure of payments to governments” and have confirmed that It would require the UK government to introduce changes to ensure loans to governments, issued under English law, are publicly disclosed at the time they are given.

The regulation of UK banks and loans issued under UK law are set by the UK parliament. The FCA implements these regulations. Given that the FCA have confirmed that they currently do not have the powers to ensure loans given by UK banks, or issued under UK, to governments are publicly disclosed, do you agree that such regulations should exist? If so, please will you sign Early Day Motion 158, or let me know what parliamentary action you can take on this issue? If not, please will you tell me why you think loans to governments, which are effectively loans to the people of the country concerned, should not have to be publicly disclosed?

If they are a government minister, they may say they cannot sign Early Day Motions. If so, please ask them to write to Treasury Minister Stephen Barclay, asking him to implement these two proposals.

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