House of Commons · Westminster Hall
06 February 2025 · 9 other contributors · 10,622 words
Opened by Bambos Charalambous Lab Southgate and Wood Green
Responding minister: Emma Reynolds
Summarised by AI from the official record, so it can contain mistakes.
Bambos Charalambous raised concerns about low-income countries: debt cancellation in Westminster Hall. A government minister responded.
Key points
Key requests to Government
The Government needs to compel private creditors to agree to debt relief arrangements similar to those with multilateral and bilateral creditors. Urgent legislation is required to address this issue.
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The World Bank’s latest report stated that developing countries spent a record $1.4 trillion on servicing foreign debts, with interest payments alone soaring to $406 billion. The poorest and most vulnerable countries paid $96.2 billion in debt service costs last year, including $34.6 billion in interest, marking a fourfold increase over the past decade.
He commended Bambos Charalambous for securing the debate and expressed hope that it would lead to unifying solutions. He emphasised the importance of helping developing nations help themselves, and advocated against focusing on colonialism as a divisive issue. Highlighted the belt and road initiative from China, creating debt dependency in many sovereign nations around the world. Asked how the UK can counterbalance Beijing’s influence and provide a credible alternative to Chinese financing.
Welcomed the Minister’s responses on financial institutions and reforming the IMF, representation, how we look at debt, transparency. Disagreed with her on legislation in relation to private creditors.
The hon. Member called for reparative justice addressing structural inequalities created by colonialism, impacting debt and climate change vulnerabilities in former colonies. She argued that addressing past wrongs such as colonialism is not divisive but necessary for moving forward, and stressed the importance of recognition and recompense. Raised crucial points about the situation that low-income countries vulnerable to climate change impacts find themselves in.
The hon. Member supported the debate on the debt crisis, highlighting that more than 3.3 billion people live in countries spending more on debt servicing than on public services. He advocated for restoring international aid to 0.7% of GNI.
Asked whether private sector operators should profit when countries like the UK forgive sovereign debt, agreeing that such creditors must follow this country’s lead in offering debt relief. The hon. Member agreed with her colleague's points about increased migration due to lack of economic opportunities in African countries and the extraction of value by private creditors.
Discussed the impact of global factors on African nations' debt crisis, leading to poverty and hunger. Suggested mandating private lenders to accept outcomes of debt negotiations.
Responded to Jim Shannon, noting that this idea is not currently being considered but would be looked into further.
Mr. Shannon commended the lead MP for his debate and noted UK involvement in debt relief initiatives. He also mentioned Northern Ireland's generous charitable giving record. Asked for recognition to be given to charities and groups that contribute to alleviating poverty. Proposed that countries facing debt challenges could supply goods to the UK as a repayment method.
Liberal Democrats advocate for faster and stronger action on the global debt crisis, calling for immediate relief that allows governments to prioritise social investment and long-term economic growth.
Government Response
Emma ReynoldsThe Economic Secretary to the Treasury
Acknowledged concerns raised by hon. Members and outlined three key ways the Government are addressing debt challenges: addressing liquidity challenges, ensuring effective debt restructurings, and promoting debt resilience through the G20 common framework. Emphasised the UK's role in promoting debt resilience through contractual innovations, including climate resilient debt clauses and majority voting provisions. Mentioned the development of new debt restructuring tools and ongoing work to improve debt transparency. Responded to questions on sound economic policy and preventing corruption; scale of debt treatments is set under the IMF’s debt sustainability analysis. UK committed to acting in an open and transparent way, publishing self-assessment against G20 guidelines. Emphasised working multilaterally with all international partners for sustainable solutions.