Westminster Hall

Thursday 6th February 2025 Westminster Hall

Thursday 6 February 2025

[Mrs Emma Lewell-Buck in the Chair]

Backbench Business

Rail Services: Open Access Operators

Thursday 6th February 2025 Westminster Hall

13:30

[Martin Vickers (Brigg and Immingham) (Con)]

I beg to move,

That this House has considered open access operators for rail services.

It is a pleasure to see you in the Chair this afternoon, Mrs Lewell-Buck. I am sure you will witness a stimulating debate.

I start by drawing attention to the progress made on the east coast main line, where today three privately owned open access inter-city operators compete with the Government-run LNER. This successful and mature model is now 25 years old and sees open access operators connect towns and cities across the north that were traditionally not served, or that endured poor inter-city connections. Open access is a great success. The statistics reflect that on many fronts, and I will come on to the detail.

One group of towns that open access has not yet reached consists of Grimsby, Cleethorpes and the intermediate stations. I am determined that the Brigg and Immingham constituency and the wider northern Lincolnshire area enjoy more direct and fast trains connecting with London and other key cities. I have been campaigning for such a service since 2011 and remain committed to delivering this key and long overdue connection. I hope Members will indulge me if I focus on this constituency matter for a few minutes before moving on to the wider arguments.

From a Grimsby point of view, it matters not whether the service leaves the main line at Newark and runs via Lincoln, or whether it leaves at Doncaster and takes the route through Scunthorpe. Either route will also serve Grimsby, Cleethorpes, Barnetby and Habrough. Habrough is just two miles from the country’s largest port, Immingham. For that reason alone, it surely deserves a direct service to the capital.

Some years ago, Grand Central submitted an application to run services via Doncaster, which was turned down by the regulator. I have been raising this issue with successive Ministers for many years, and I have been given no end of reasons why it cannot happen. First, there was the question of capacity on the main line. That is not a problem if the existing services to Lincoln are extended to Cleethorpes, however, because they already have a path from King’s Cross through to Newark. LNER ran a trial of their Azuma units through to Cleethorpes and found no serious issues, other than at Market Rasen, which requires a new footbridge and some work on the platform. My right hon. Friend the Member for Gainsborough (Sir Edward Leigh) may have something to say on that during the debate.

It now appears that the problems at Market Rasen are being put forward as the reason why services cannot go ahead. If the reported costs of between £15 million and £20 million for the work at Market Rasen are to be believed, Network Rail needs to improve its procurement process and find new contractors. Quite simply, those figures are ridiculous, and it sounds more like a tactic to convince Ministers not to go ahead. I trust that the Minister will address that point in his response.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this debate, and I am very pleased to support him in it. He has been a long-standing campaigner on this issue. On the point about platform improvements at Market Rasen, is he aware of other areas in the country that are getting modular platform extensions, which are proving to be much cheaper than the price he mentioned?

[Martin Vickers]

My Member of Parliament makes an excellent point. There are indeed other examples, up and down the country, where modest improvements have been made at minimal cost. It needs the Secretary of State to realise the economic benefits to the area, and she will surely see that this is an easy win to deliver on the Government’s growth agenda.

The establishment of Great British Railways represents the biggest change in the way we run the railways since privatisation 30 years ago. We must keep and improve what clearly works, and we must not weaken or undermine key roles, such as that of the rail regulator, so that we can make GBR fit for purpose, alongside open access, and deliver the best services for passengers across the country.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend is speaking very well about the usefulness and benefit of having a good rail system. He will be aware of the new timetable that the national rail operators are proposing. For my constituency, Berwick-upon-Tweed is the most important station, although it is in England. It will be losing services to London, and the journey time will be increased to allow greater capacity for links to Edinburgh and Newcastle. Does he agree that we need to ensure that small towns across the UK do not lose rail connectivity for the benefit of larger hubs?

[Martin Vickers]

My hon. Friend is absolutely right. That is one of the key arguments in favour of introducing more open access operators, which have widened the number of destinations served.

If we drill into the latest passenger and financial figures, we see that there is a key lesson for those who are designing and planning GBR. We can all agree that we need better trains serving more places, with more reliability and competitive fares. But there is a huge caveat. This hinges on Ministers choosing to copy the east coast operating model, which, as I mentioned, has proven such a success; there are evidence-based statistics to show that. The Chancellor and the new Transport Secretary must take note of that model if they want to avoid a future of soaring subsidies and flatlining passenger numbers. It should now be encouraged and rolled out across Britain’s railway network, including, of course, northern Lincolnshire. Office of Rail and Road statistics show that where inter-city trains do not compete for passengers, services are expensive, require big subsidies, have struggled to get their finances and passengers back since covid, and endure poor passenger satisfaction. Importantly, the east coast main line has seen the fastest post-pandemic recovery on the network, enjoys the highest passenger satisfaction as LNER’s subsidy continues to fall, and could soon be subsidy-free.

The Minister will know personally about the benefits of open access competition, because Grand Central connects Wakefield with London, in competition with LNER. Those services provide valuable choice and competition for his constituents, who can choose between operators when they travel. The services also help to deliver inward investment, growth and regeneration, as direct rail services are invaluable when investors look at locations outside London.

[Robbie Moore (Keighley and Ilkley) (Con)]

We all agree that better choice and more services—in particular, direct services—are an objective that we all want. Unfortunately, in Keighley, we do not have any open access provision at the moment. Does my hon. Friend agree that if we achieved a direct link between Skipton and London or Ilkley and London, with more opportunities through open access, it would not only be better for the commuter, but deliver better economic growth in my constituency and lead to cheaper rail prices for commuters in my constituency?

[Martin Vickers]

My hon. Friend makes an excellent point and highlights yet another group of provincial towns that would see benefits for their local economy and for leisure.

I hope that open access rail policy features among the Chancellor’s new tests on how to deliver growth across the country. As a Yorkshire MP, the Minister will know of the clear benefits so far across the county—whether it be in Hull, Bradford, York, Doncaster or Selby—where open access has established and grown large rail markets. The new evidence shows that rail competition delivers not just growth on a significant scale, but a critical competitive discipline whereby all passengers enjoy choice and more routes. In 2016, the Competition and Markets Authority produced a 200-page report on passenger train competition and reached that very conclusion. I would not normally urge the Government to look to Europe for good practice, but Italy and Austria are two countries where the benefits of open access can be clearly seen.

Replicating the east coast model could help to prevent any risk of GBR sliding into financial and sector decline, which should be a huge concern for the Treasury. Crucially, open access is also a key component for British train building. Just before Christmas, the Prime Minister welcomed a significant £500 million investment in new train build at Hitachi’s Newton Aycliffe plant, but it is important to consider that that private sector order was for new trains to serve existing and new open access routes. An option on a follow-up order worth a further £500 million depends, I understand, on more open access routes being awarded by the regulator.

[Melanie Onn]

The hon. Gentleman is being very generous with his time, and I am pleased that he has mentioned the Italian rail system. Obviously, Italy is very similar to Grimsby, and we would certainly benefit from the kind of rail system that operates in Italy, which is very smooth and good value for customers. Italy has good stock as well.

If we are to achieve a direct rail service from Cleethorpes to King’s Cross, for which the hon. Gentleman has campaigned for many years, open access operators need quick decision making in order to be able to place their stock orders with manufacturers to make sure that they can get services up and running for passengers quickly. Does he agree that the Minister should look very closely at these things and make decisions as quickly as he can?

[Martin Vickers]

I agree that Italy and Grimsby are very similar. I will come to the hon. Lady’s point about the speed of the regulator’s decision making, which is absolutely crucial.

In addition to my desire and ambition for direct services to my constituency, it is vital that the significance of open access is fully acknowledged, and that nothing is done to weaken or undermine it. Why would the Government not want more unsubsidised, direct and fast rail connections across the country? Why would they not want to secure hundreds of millions of pounds of investment in forward orders for new trains to be built in Britain? Why would they not want GBR to face robust and innovative competition on key routes, which would inevitably see standards rise, and fares and subsidies decline?

Passengers in York, Hull, Wakefield, Bradford, Doncaster, Sunderland, Newcastle and Edinburgh all now enjoy up to three competing high-speed train services to London, where open access services compete with Government-run LNER. A plan to introduce a new and fast open access service to connect Sheffield and Worksop with King’s Cross is awaiting the green light, as is one to connect Rochdale with London Euston, and one to connect Cardiff with Edinburgh. Hopefully, the plans will be swiftly approved so that passengers can enjoy more direct fast trains and real fare competition, and they will all help those cities’ respective leaders to make their case for inward investment. Sheffield has not enjoyed a direct service to King’s Cross since 1968, and a new service would rival the existing East Midlands service between the city and London St Pancras.

In debates and at Transport questions, we frequently hear tales of woe about Avanti and the services that it offers travellers on the west coast main line. That could change if we took the east coast main line as a model, and I urge Ministers to get on with it. New economic analysis from Arup shows what can be achieved. Hull Trains’ open access service, which connects Beverley, Hull, Selby and Doncaster with London, has delivered between £185 million and £380 million in extra local benefits since it was approved by Tony Blair’s Government in 2000, and those figures are expected to grow to between £325 million and £700 million by 2032. Prior to Hull Trains’ operations, there was just one direct daily train in each direction between London and Hull. Similarly, the Blair Government oversaw the approval of new and fast Grand Central services to the north-east and Yorkshire in the mid and late 2000s.

On average, Hull Trains’ fares are 30% cheaper than those for traditional services. As I said when I met representatives of Hull Trains a couple of weeks ago, they could do for the south bank of the Humber what they have done for the north bank. Direct rail links have boosted inward investment and done more for levelling up and regeneration than a host of Whitehall schemes. There are also significant environmental benefits, as more people abandon the car and coach, and instead use the well-priced high-speed trains. The popular and fast Lumo open access service between London, Newcastle and Edinburgh continues to eat into the aviation market and delivers a crucial modal shift from air to rail.

I welcome the fact that many colleagues wish to speak in this debate, and I make the point that the Office of Rail and Road has recently approved new long-distance open access services up to Stirling on the west coast main line, and between London Paddington and south Wales on the Great Western line. The Go-op application to run new open access services between Weston-super-Mare, Taunton and Swindon has also been approved. We need to speed up track access applications for operators, as the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) said, because they can take up to five years. That is another example of where the Government could boost their growth agenda. The last thing that is needed is more barriers to open access. Let us speed up the process and get Britain moving.

A recent survey conducted by Virgin showed that around two thirds of all passengers welcomed competition between train operators on price and quality. That is encouraging, and it shows how an independent regulator can deliver good decisions in the national interest. A key question for the Minister will be: is more open access to be encouraged and approved, and will an independent regulator retain powers over this critical area after GBR is established? If decisions on open access are subsumed into GBR and taken off the regulator, many of us will be concerned that the hand of civil servants and other rail planners who have been proven wrong in the past in their opposition to open access will stifle and weaken this valuable part of the railway sector. If GBR is to be genuinely at arm’s length of Whitehall, as Ministers pledge, the future of the regulator and open access will be a key test.

I look forward to Ministers’ working with me and colleagues across the House to encourage and deliver new open access inter-city services to northern Lincolnshire and destinations across the country.

13:45

[Alison Hume (Scarborough and Whitby) (Lab)]

It is a pleasure to serve under your chairship, Mrs Lewell-Buck. I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this important debate on open access operators.

Rail transport in the north has suffered long-term neglect, with new plans left to gather dust. From George Osborne’s northern powerhouse speech in 2014 onwards, they have essentially been an unfunded wish list passed from one Government to the other. But under our new Government we have Great British Railways on the table, and I look forward to hearing from the Minister about how we will incorporate open access operators into our plans, because the north-south divide is real.

Total Treasury spending on rail in Yorkshire and the Humber last year was £1.25 billion, compared with £9.3 billion for London and £3.1 billion for the south-east. The current funding structure for transforming regional transport also makes it very difficult for areas such as the one that I represent in Scarborough and Whitby, incorporated into the York and North Yorkshire combined authority, to address the desperate lack of connectivity that exists. The main funding scheme that the Government inherited is the city region sustainable transport funding settlement, but combined authorities like ours do not qualify as they are not a city region. That funding gap has left York and North Yorkshire struggling to even plan a transport strategy. I hope that the Government will address that in the spending review.

Open access operators could step in to help. Coastal communities such as Scarborough have suffered for too long from poor rail services, and that has had a major impact on our economies. I have been campaigning for a half-hourly service between Scarborough and York, which would be taken for granted in other areas, but it seems an impossibility. The line was opened in July 1845. It took just one year and three days to complete the 45-mile route, but TransPennine Express, which now runs services on the line, today appears to have little of that urgency about it.

Scarborough is, of course, our first coastal seaside resort and is beautiful. We also have the North York Moors national park on our doorstep. The growth of staycations and holidays means there is real potential for visitors, as well as for the residents who are crying out for a better service. With the creation of Great British Railways, we have the chance to have one body responsible for the strategic direction of our railways, ensuring, as the hon. Member for Brigg and Immingham said, that infrastructure and services work together and drive regional growth. I urge the Government to look at open access operators, because although they currently account for only 0.6% of total passenger journeys, they have massive potential to open up new routes, such as the Scarborough to London via York route. Look at the success of Hull Trains: in 1999 there was only one train a day between Hull and London, and now there are seven each weekday and six at weekends. As the hon. Member for Brigg and Immingham said, new direct services are being approved and opened all the time.

I appreciate that there is a question whether open access services put extra pressure on network capacity and I look forward to the Minister’s response. However, unless we look at how we serve coastal communities such as mine, given the poor connections we will not move forward. If any operators are listening, I would love to see a direct service between Scarborough and London.

[Helen Morgan (North Shropshire) (LD)]

The hon. Member is making a really important point about coastal communities. Rural communities find themselves in a similar situation, where they may have lost a direct service. Wrexham, Shropshire and Midlands Railway has an excellent plan to run a direct-to-London service through Wrexham, Shropshire and the Midlands but it is taking an inordinately long amount of time for it to get through the Office of Rail and Road. Does the hon. Member agree that we need not just keen operators but to process their applications quickly, to give the people the service they deserve?

[Alison Hume]

I thank the hon. Member for that intervention. She makes an important point about time. Time is of the essence as we strive to deliver better rail services. Perhaps we need a little of the spirit of the 19th century’s rail pioneers to fully connect coastal communities at last.

13:51

[Sir Edward Leigh (Gainsborough) (Con)]

I thank my constituency neighbour, my hon. Friend the Member for Brigg and Immingham (Martin Vickers), for securing this important debate and for emphasising the national importance of open access. His point about Hull Trains and the opportunity it has given us is very powerful. I want to speak about our little local problem, to which he and the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) alluded.

Originally, there were two trains every day going up and down to London via Lincoln and Market Rasen, ending up in Grimsby. That was then cut to one train and we were given a solemn promise that that train would never be taken away, but decades ago it was taken away. I have been campaigning for decades to get that service up and running again. We are talking about a catchment area of a quarter of a million people with no direct train to London. I cannot think of any other country in Europe that would have such a situation for huge conurbations like Grimsby and Cleethorpes and a place like Market Rasen—which is a small station but serves a vast rural area, perhaps 20 miles in every direction, going all the way to Louth. Yet every time we have been to see Ministers with campaigns, over many years, we get fobbed off with every single excuse. I cannot count the number of times we went to see the Transport Minister in the last Government; now I am boring this Minister instead, but I will go on boring him and we will go on making this point.

As my hon. Friend the Member for Brigg and Immingham said, we were first fobbed off with the view that there was no capacity on the main line. Yet the Azuma train runs perfectly well to Lincoln and it would make no difference to capacity on the main line if that train carried on to Grimsby via Market Rasen, so that point does not hold. We made some progress eventually and I thought that we finally had a commitment that this train would happen. Indeed, we had a test run in June 2023. I was there—I saw it. Everything worked perfectly smoothly. The train arrived from Grimsby, there was no problem, we had our photograph taken, everybody was very happy, but we have still had no progress.

Now we have had this bolt from the blue: it is no longer the capacity point, but apparently we cannot have this train because the platform in Market Rasen is too short and there is no bridge. That is an absurd point. I go all over the country and I see trains stop at short platforms, and they announce, “Will you please go to the first four carriages because it’s a short platform?”

Then we got the excuse that if the Azuma train stopped at Market Rasen, it would somehow cover the pedestrian crossing, which is apparently unacceptable. Is somebody going to try to go across the railway line and climb underneath the train to get to it, stopped at the platform? It is ridiculous. I am not sure that it is even possible to climb underneath a train. Are people going to sprint down the track, leaving the platform altogether, to get round the back of the train? This is all just ludicrous. There is absolutely no reason why the train could not stop there, blocking the existing pedestrian access. Perhaps once in 100 years there might be some sort of injury; in fact I doubt whether there would ever be any injury. So, why are we stopping the whole service because, apparently, the existing pedestrian access could be blocked?

It is funny—the operators never give an explanation. They say, “Oh, we now have a problem with the disabled access and it must be in a certain part of the train.” But surely there are solutions. This is a sort of not-can-do attitude, which is driving the country crazy.

Whenever we write to bodies such as Network Rail, instead of their having the attitude of, “Let’s work together, let’s make this work,” once again we get fobbed off with ridiculous excuses and they never actually explain their actions. Then they say, “We have got to build a bridge.” All right, they build a bridge. Then they have come up with a ridiculous figure of £24 million. How could it cost £24 million to build a bridge? This is only a small country station with just one footbridge. My hon. Friend the Member for Brigg and Immingham campaigned for years for a bridge, did he not? And he got it for far less—£1 million, was it not?

[Martin Vickers]

My right hon. Friend will remember from the last Parliament that I campaigned for a footbridge over Suggitts Lane in Cleethorpes. Thankfully, I was supported by the then Prime Minister—Boris Johnson—who on one famous occasion at Prime Minister’s questions said:

“Suggitt’s Lane is never far from my thoughts”. —[Official Report, 23 October 2019; Vol. 666, c. 963.]

I hope that the Market Rasen situation will not be far from the Minister’s thoughts.

[Sir Edward Leigh]

I am very grateful to my hon. Friend for that intervention. This is a serious issue. There is absolutely no reason why the great conurbation of Grimsby and Cleethorpes should not have a direct train to London, and there is no reason why the good people who live in the rural areas around Market Rasen should not have a direct train.

What has actually happened—one might argue that this is not really LNER’s fault—is that since we have had the Azuma train going directly from London to Lincoln, our indirect service has got worse. There are more delays and there is a reduced service. It really is hard work to get from that part of my constituency to London.

So, enough of excuses. We had a tremendous relationship with the Transport Minister in the last Government and we look forward to our relationship with this Minister in this Government. There is nothing party political about this matter. What we are doing—the hon. Member for Great Grimsby and Cleethorpes, my hon. Friend the Member for Brigg and Immingham and I—is begging the Minister to please intervene to knock some heads together to get this train going and stopping. That is all we ask.

13:57

[Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)]

It is an honour to speak in this debate under your chairmanship, Mrs Lewell-Buck.

I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this Backbench Business debate and I thank our colleagues on the Backbench Business Committee for granting it. Along with other colleagues here in Westminster Hall today, the hon. Gentleman has made such a good case for increasing open access services to his constituency and beyond.

In my contribution today, I will celebrate the successes of an open access agreement that benefits my constituents in Newcastle upon Tyne East and Wallsend. So, I am showing off a bit, but I make no excuse for doing so. First, however, I reaffirm my support for the Government’s legislative action on public ownership since taking office. I supported the overhaul of our broken rail system in the voting Lobby and I still support it today.

Open access was left out of the scope of the Passenger Railway Services (Public Ownership) Act 2024. It is worth noting that in the year 2022-23, domestic open access passenger services accounted for only 0.6% of passenger journeys and 2.4% of passenger operator revenues. Throughout the legislative process, Ministers advised that they saw a continuing role for such arrangements where they add value and capacity to the network and, during a statement on railway performance in November, the previous Secretary of State, my right hon. Friend the Member for Sheffield Heeley (Louise Haigh), cited FirstGroup’s Lumo as a successful example.

The Lumo service runs between Edinburgh and London via Newcastle. Of course, Members know that most trains running to and from King’s Cross on the east coast main line are operated by LNER. However, Arup estimates that at least £480 million of economic benefits have been realised since FirstGroup’s Lumo launched in 2021. Lumo has built capacity as a complementary service on a core route in the UK, running five services a day. It has given my constituents additional choice by increasing the number of trains to the capital, for instance adding a new option for travellers between Newcastle and London to leave before 6 am and arrive in London at about 8.30 am.

Open access arrangements, if done properly, should drive up the number of journeys on our rail and not abstract value from existing services. According to FirstGroup, Lumo has helped to generate 6.2 million additional journeys, with 3.9 million of those taking place on Lumo services. Overall usage of the east coast main line rose by 18% in the 12 months to September last year compared with the year 2018-19, including an 11% growth in the usage of LNER services.

Modal shift will play a critical role in our journey to net zero. Decarbonising the grid, which this Labour Government have taken firm action on, is a sizeable part of that journey. Encouraging behavioural change in the transport sector represents some of the other hard yards that we must cover.

I support the Secretary of State’s ambition to ensure the benefits provided by open access operators outweigh the impact they have on taxpayers, and to ensure the ability to operate the network efficiently. I have sought today to advocate for a successful example of open access, which has benefited my constituents and the broader region.

On that broader region, I thank FirstGroup for the investment of £500 million into new British-built trains by Hitachi at Newton Aycliffe and congratulate my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) on his part in securing that successful investment. I hope FirstGroup can gain approval from the regulator to serve more destinations, as that would lead to a £460 million follow-on order for new trains.

The most efficient use of our east coast main line is deeply important for me and all other north-east Members of Parliament. Growth and productivity in the north-east of England have been held back by our infrastructure. In closing, therefore, I seize this opportunity to lobby the Minister for the reopening of the Leamside line, which would be a game changer for the north-east, freeing up capacity for more LNER and Lumo trains to operate on our busy east coast main line.

14:02

[Mr Paul Kohler (Wimbledon) (LD)]

It is a pleasure to serve under your chairship, Mrs Lewell-Buck. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate and the Backbench Business Committee for granting it. We have heard lively contributions from across the House, and underlying all of them is a simple truth: in the UK, open access rail operators have a clear track record of improving services, increasing access and driving economic growth.

However, the recent letter from the Secretary of State to the Office of Rail and Road makes it very clear that the future of open access services in this country is at risk. Although the Government’s position is just one of the issues that the ORR has a statutory duty to consider, the fact that the Government are asking the ORR to take a more cautious approach is clearly a concern. I would be grateful to hear the Minister’s views on that point and any assurances that he can give.

Although the Secretary of State might have legitimate concerns regarding capacity and abstraction, I fear there is an ideological element to her intervention. The Government are in danger of being led by doctrine rather than facts. Again, an assurance would be gratefully received.

As we heard from the hon. Member for Brigg and Immingham, the record of three open access operators—Lumo, Grand Central and Hull Trains—competing against the Government-owned franchise LNER on the east coast main line has shown how competition for passengers drives down fares and drives up passenger numbers. Research has shown new open access operators competing on the same routes as incumbents typically offer fare reductions of 20% to 60% in the long term.

At a time when fares are sky high, competition helping to drive down costs for passengers should be encouraged, particularly when it is compensated for by a commensurate increase in passenger numbers to more than cover the revenue lost per customer. On the east coast main line, passenger numbers bounced back faster than in any other area after covid, due in no small part to the competition on that part of the network.

Open access is not only good for passengers, but good for the planet. Cheaper tickets and better access to services, since Lumo has been running services from London to Edinburgh, have meant that rail’s market share, compared with air travel, grew from 35% in 2019 to 57% in 2022.

That is not just a UK phenomenon. Unlike the hon. Member for Brigg and Immingham, I am delighted to look to Europe for inspiration. In Italy, competition between the open access operator Italo Treno and the Italian state operator has driven a 90% increase in passenger numbers between Rome and Milan, while in Spain competition between Ouigo and Iryo on the Madrid-to-Valencia route has resulted in fares 50% lower than on routes with no competition. It is somewhat ironic that, while Europe is liberalising its railways and seeing positive results, we are potentially moving in the opposite direction.

Open access rail can also play a vital part in increasing services to many of our other underserved communities. As we have heard from the hon. Members for Great Grimsby and Cleethorpes (Melanie Onn) and for Brigg and Immingham about Cleethorpes, from the hon. Member for Keighley and Ilkley (Robbie Moore) about Skipton, and from the hon. Member for Scarborough and Whitby (Alison Hume) about Scarborough, there are many towns and regions in this country where open access can make a real contribution to improving connectivity across the country. With an eye to revenue, private companies have found gaps in the timetable and delivered for residents where the Government have not.

As we have seen in this debate, any changes to open access arrangements by the Government are likely to provoke ire from their Back Bench colleagues in Hull, Sunderland and elsewhere. The hon. Members for Newcastle upon Tyne East and Wallsend (Mary Glindon), for Great Grimsby and Cleethorpes, and for Scarborough and Whitby know the value of open access, and I am sure they will keep the Minister’s mind concentrated on its importance.

The same will be true of MPs representing areas where open access is still in its infancy or gestation. In Somerset and Wiltshire, concerned residents are taking the lack of rail provision into their own hands, with the formation of Go-op, the first ever co-operatively owned railway operator, which plans to increase vital regional services in an often neglected area. Meanwhile, in north Wales, the proposed Wrexham, Shropshire & Midlands Railway will bring back direct services from London to Wrexham, helping to bring passengers and further growth to a town already on the up—although, as my hon. Friend the Member for North Shropshire (Helen Morgan) noted, it has taken far too long to get through the bureaucracy and get the service approved.

While we will hear from the Minister about concerns regarding capacity on the network, there are definitely areas with capacity for a greater number of services. Take the channel tunnel, for example: the French owners of the tunnel, Getlink, have said that it was designed for double the capacity, and an application for a new open access operator on the line to compete with Eurostar is with the regulator. Introducing welcome competition on the line will help to grow international train services to and from the UK and to reduce ticket prices.

It is clear, therefore, that open access should have a part to play in the future of the rail network. While my party and I are agnostic regarding rail nationalisation, the Liberal Democrats firmly believe that the private sector should play a part where there are clear benefits for passengers. We should be led by evidence, which shows that open access operators have made a positive addition to the network, and that the regulator has been successful in addressing concerns about abstraction. The Government, in their upcoming Rail Reform Bill, must therefore ensure that a fully functioning, properly resourced regulator is maintained.

As we move to a model where 75% of rail activity is under public ownership, we must ensure that that near-monopoly does not crowd out others, such as freight and open access. Not only is maintaining a competitive element on the railway good for passengers, but it will help the Government to guarantee that GBR is delivering the best outcomes, and—of course—grow the economy.

14:09

[Gregory Stafford (Farnham and Bordon) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Lewell-Buck, especially because it is my first speech from the Front Bench. I am told that you never forget your first time, but I do hope the Minister is gentle on me.

I thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) for securing this debate. He has been a strong advocate for open access rail services, and I welcome his contributions today. He rightly highlights the importance of these services to regions across the country. I am told that in 2013 he was among a group of MPs who wrote to the Office of Rail and Road in support of expanding long-distance open access services. While I think we would all agree that more progress would have been welcome, it remains vital that Members like my hon. Friend across the House ensure that regulators are doing everything they can to encourage competition.

This year marks the 25th anniversary of open access intercity train competition on the east coast main line, connecting London, the north-east and Scotland. The benefits are clear: lower fares, more choices, more routes, increased innovation and higher passenger satisfaction. This proven model should be used as a blueprint in shaping Great British Railways and the upcoming railways Bill. It remains frustrating that, despite its success, the model has not been replicated on other intercity main lines.

As a Conservative, I value competition. When opportunities arise to introduce it into our transportation systems, we should take them. The evidence is clear: open access services create new travel opportunities, especially for underserved or more rural communities, such as my Farnham and Bordon constituency. These services support economic growth and encourage a shift to greener transport. That is why it is encouraging that new services were approved in 2024, including two entirely new routes on the west coast main line and the great western main line, along with eight approvals for smaller-scale improvements.

Recently, the Prime Minister and the Transport Secretary visited the Hitachi factory in Newton Aycliffe to celebrate FirstGroup’s £500 million order for 14 new Class 80X units, which will be a key part of their open access plans. Those units will operate on Lumo’s east coast main line services, as passionately described by the hon. Member for Newcastle upon Tyne East and Wallsend (Mary Glindon), and on the newly secured London Paddington to Carmarthen service, launching in December 2027. Crucially, the expansion of services means more British train orders, boosting domestic industry. I urge the Minister and his Department to continue supporting further applications to sustain that investment.

A regulatory framework that supports the sector’s investing in UK-built rolling stock and improving passenger services ultimately benefits both fare-paying passengers and the wider economy, as my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) mentioned. The Government must ensure that they facilitate services that serve the public interest. Like my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), I will also focus on a couple of local issues—he has said that he bores on, but if anyone has the right to bore on, it is the Father of the House, and long may he continue to do so.

Southwestern Railway has been chosen as the first service to be nationalised this year, but the Government remain unclear about the impact that will have on open access services. My constituents in Farnham and Bordon rely on regular and reliable trains from Farnham, Liphook, and Haslemere stations to commute into London. As it stands, those services are frequently disrupted by strike action from the Labour party’s largest donors. While the fate of Southwestern Railway may be sealed, the potential Guildford to Heathrow terminal five connection, which would greatly benefit my constituents travelling to the airport, is under threat if open access services are restricted. I hope the Minister can reassure my constituents that nationalisation will not stifle open access operators, which play an important part in filling gaps in the delivery of rail services.

As my hon. Friend the Member for Brigg and Immingham said, the Minister’s own Wakefield constituency benefits from popular open access intercity services, which have led to lower fares, greater choice, and better connectivity with London and the wider region. Furthermore, the open access operator at Wakefield has invested in station facilities. Despite that, the Government’s overall approach to rail has marched towards centralisation and nationalisation. While the merits of that direction are a debate for another time, it is worth noting that the Government, both before and after the election, have recognised the value of open access services. The key question is whether that recognition will translate into tangible support for expansion.

In September 2024, the former Transport Secretary, the right hon. Member for Sheffield Heeley (Louise Haigh) clearly stated in a written statement to the House:

“Open access operators have a proven track record in driving competition and better passenger outcomes, and where there is a case that open access operators can add value and capacity to the network, they will be able to.”

Does that position still hold with the new Secretary of State and her Ministers? A clear reaffirmation would provide much-needed confidence to the businesses ready to invest.

Open access operators not only add financial value but improve accessibility and convenience. In my own constituency, there is a strong case for reopening the Bordon line and the station, or at least for a rail-bus link from Bordon to Liphook to enhance connectivity and increase train usage. We should remain open to innovative transport solutions that improve infrastructure just as we do with open access. However, despite positive statements in the past, the Secretary of State’s letter to the ORR in January raised concerns, signalling a shift in tone from the earlier commitments. Furthermore, some troubling rhetoric has emerged.

Last year, a rail union leader described open access firms as parasitical during testimony to the Transport Committee. The RMT has also explicitly campaigned for Great British Railways to absorb open access operations and rail freight. The hon. Member for Scarborough and Whitby (Alison Hume), in her usual BAFTA-nominated style, referred to the spirit of the 17th century, but the danger with these unions is that they will take us back to the 1970s, and I am sure none of us wants to go there. Given the Government’s previous concessions to the rail unions, it is fair to question whether open access services could be curtailed in future negotiations. Can the Minister assure us that these services will not be sacrificed in such discussions?

Another concern is that while the UK seems to be moving towards greater state control, as has been mentioned, Europe is heading in the opposite direction, embracing private sector involvement in rail. A European Commission report published in September last year highlighted that open access competition led to a 31% reduction in ticket prices in Italy and a 41% increase in service frequency in Austria. The report’s conclusion was clear that open access competition,

“across a variety of different cases, both decreased ticket prices and improved the quality of the service as compared to the situation prior to the start of competition.”

The Government have now raised concerns about the impact of open access on overall rail revenue, as we heard mention of today. However, the ORR has conducted thorough cost-benefit analyses, including cost consultations, on the monetised impacts. If the new Secretary of State is questioning these findings, is it because the Government believe that the ORR has made errors in awarding the contracts, or is this part of a broader policy shift?

The future and independence of the regulator is critical. Under plans for Great British Railways, will the ORR retain its authority over open access applications? Any move to transfer these decisions to Great British Railways or to the Department would undermine transparency, accountability, and independence, and the Opposition would strongly oppose such a change. The Government’s position, I am afraid, remains unclear. Are they a genuine supporter of open access operators, or do they merely tolerate them as a costly inconvenience? We need clarity.

With the ORR currently considering 13 applications, can the Minister confirm whether new guidance is forthcoming? More importantly, can he reassure the sector that any new guidance will not obstruct the growth of successful rail businesses that offer more choice and lower fares for passengers? The Government face a choice: embrace the benefits of competition and build on a proven success story, or retreat into centralisation at the expense of passengers. I urge Ministers to choose the former.

14:18

[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

It is an absolute pleasure to see a fellow sand dancer in the Chair today, Mrs Lewell-Buck. I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this debate on open access—a matter of importance to many in this House and their constituents. I also welcome the hon. Member for Farnham and Bordon (Gregory Stafford) to his place on the Opposition Front Bench. I look forward to our sparring in future debates.

Open access can open up new markets. We only need to look at Hull Trains, where the private sector identified opportunities that the Government had missed, to see how open access can benefit passengers and grow the market. However, it is also true that parts of our rail network are growing increasingly congested and, although open access operators can generate new income from the network, they can also abstract revenue from existing operators, including those funded by the taxpayer. We therefore need to ensure that there is a balance when we consider new open access applications. The Secretary of State was clear about that when she wrote to the Office of Rail and Road on 6 January.

Some Members have raised concerns over the Secretary of State’s letter, so let me be clear: the letter did not signal that the door had been closed on open access. Indeed, the letter makes it clear that there remains a role for open access, but new applications will have to demonstrate that their benefits are sufficient to justify any money they abstract from Government-funded services or the negative impact that they could have on publicly funded infrastructure projects. They must also demonstrate that they will not damage performance by increasing the complexity of the running of the network. I am aware also that the Secretary of State’s letter caused some concern with freight operators, so let me again be clear that the letter related only to passenger open access.

The benefits of open access to passengers on the east coast main line have been highlighted by hon. Members. I have already mentioned Hull Trains, but it would be remiss of me not to mention both Grand Central and Lumo, which also run on the east coast main line. Both those operators have increased choice for passengers. For example, Lumo now offers choice between short-haul flights and rail with its fast services between London and Edinburgh.

Open access services will increase choice and provide benefits for passengers on other parts of the network. Services have already been approved to operate from London to Stirling on the west coast main line from later in 2025, and between London and Carmarthen from 2027. We are also aware of, and considering, a range of new applications that have been submitted by open access operators. These include proposals on the east coast main line and also more broadly across the country, including on the west coast main line. Whether these applications are successful is currently a matter for the Office of Rail and Road in its role as an independent regulator. Alongside a range of other stakeholders, the Department will provide views. The Office of Rail and Road will consider them alongside its statutory duties and will make decisions in due course.

Both open access operators and the operators contracted by the Department deliver services to passengers, but there are key differences. Open access operators are not bound by public service obligations. Whereas an operator delivering services for the Department will be required to serve all stations on a particular route, an open access operator can choose which stations to serve. For that reason, it is not possible to simply replace the Department’s operators with open access operators. Were we to try to do so, we would risk depriving certain communities of any rail service at all.

Although constrained to a degree by the availability and capacity on the network, the lack of public service obligations means that open access operators can design their timetables to maximise commercial opportunities. That means that open access operators can choose within wider operational constraints what time they wish to run their trains and at which stations their trains will stop. That freedom means that they can be more challenging for Network Rail in setting the timetable. We have seen delays in agreeing the timetable for the east coast main line precisely because there were so many competing demands, including open access operations.

It is not just timetabling that is more complex. When Network Rail wants to undertake engineering works, it needs to ensure that the views of all operators are factored in. Obviously, where there are multiple operators with different operating models—for example, there are those with a greater focus on weekend and leisure travel rather than commuting—Network Rail will find it harder to keep everybody happy. That can reduce efficiency and increase journey costs, as Network Rail may have to close the network over a number of weekends and nights, rather than for a single block, to ensure that all operators are treated fairly.

I have talked about possible operational challenges. I want to be clear: we expect, as does the regulator, that Network Rail will make all efforts to manage the network in the most efficient manner and in a way that will accommodate the optimum number of Government-funded services. Although open access operators can drive new revenue to Government-funded services, they can also abstract revenue. The Office of Rail and Road recognises this through its “not primarily abstractive” test. The test is not binary and failing it does not mean that open access operators will not get access to the network, but it does highlight the potential impact on the taxpayer.

We have a responsibility to the taxpayer to move the railways on to a financially sustainable footing. Therefore, if we see applications that will abstract a significant amount from the Government’s operators, we need to carefully consider whether, when providing the Government’s view, we can support the application. Where there are wider socioeconomic benefits that arise from open access applications, we will, when we provide our views to the Office of Rail and Road, balance these against the abstraction, but we have to be honest about the financial pressures the railways face and factor them into our considerations.

I appreciate that I have just talked at length about the challenges that open access can create as well as the benefits it can bring. I highlight the challenges not to say that open access is bad—there can be real benefits—but as a Government, we need to be mindful of the full implications of each new open access application.

People have said that the move to public ownership means that the Government will seek to take open access off the network. I can categorically say that we have no intention to remove open access operators from the network. We were clear during the passage of the Passenger Railway Services (Public Ownership) Act 2024 that it only applied to operators contracted by the Government. I know that there has been speculation that we would look to bring open access operators into public ownership when their existing rights expire. Again, I reiterate that that is not our intention. Regarding our future plans for access to the network, we intend to bring forward a consultation on our proposed railways Bill shortly. That will provide Members with the opportunity to review, consider and respond to our proposals. I cannot pre-empt the consultation, and ask for Members’ understanding in this matter.

I will now address some of the specific issues raised by Members today. We have talked about the complexity of timetable challenges. Obviously, open access can and does make that a little bit more complex and challenging at times. Regarding passenger growth on the east coast main line, although open access operators have opened up markets on that line, they are by no means the sole reason for passenger growth. The Department has invested heavily in infrastructure, leading to improvements in resilience and reliability, and has taken the lead on fare trials on LNER to simplify the passenger offer. Underpinning all that is the fact that demand was already present on the east coast main line, even before the intervention of either Government or open access operators. On charges, open access operators pay variable access charges, but do not fully cover the costs of fixed- track access charges towards long-term maintenance of the network.

International comparisons were raised by my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn). Although there are examples of open access competing with state-backed operators to offer choice to passengers in Europe, it needs to be noted that there are many differences between the British network and the rail networks in other countries. That makes it really difficult to make direct comparisons. For example, some countries operate completely separate rail networks for inner city and local services, creating a totally different environment for comparison than that here in Britain.

In terms of additional services in her constituency, my hon. Friend the Member for Scarborough and Whitby (Alison Hume) talked about the potential for open access to step in. We are clear that where there are gaps and it can be accommodated, we will consider that positively. GBR will look at the entire network to ensure it is used as fully as possible.

I am sure the Rail Minister will have heard the message from my hon. Friend the Member for Newcastle upon Tyne East and Wallsend (Mary Glindon) on the Leamside line. If not, I will make sure that I mention it to him. I thank her for her enthusiasm for public ownership and GBR. GBR will ensure the highest level of customer standards and operational performance as a directing mind for our railways. It will have a relentless focus on delivering for our passengers and, crucially, for freight as well.

Some Members raised, quite rightly, the speed at which the ORR is making decisions. We recognise that it can take too long for decisions to be made by the ORR, and we are working with operators, including open access and Network Rail, and the regulator to improve that. I believe it was the Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), who raised new services for Cleethorpes and Grimsby. We are working with industry to understand the timetabling, financial, operational and infrastructure issues that need to be resolved. I recognise the frustration, but we are actively considering what can be done.

Open access plays an important role on the network and it will continue to play an important role on the network. We look forward to considering and providing our views on new applications and to our continued work with open access operators. However, we must and will balance the benefits of new applications with the impacts that they have on both the taxpayer and the operational efficiency of the network, in line with the letter that the Secretary of State sent to the regulator. I am incredibly grateful to all hon. Members here for their contributions. They have given us further food for thought and a useful insight into the benefits of open access to their constituents.

14:30

[Martin Vickers]

I thank all the hon. Members who have taken part in what has been a very worthwhile debate. This is the shadow Minister’s first time on the Front Bench, and I am sure he will go far. I emphasise that the demand for a direct service to Grimsby and Cleethorpes also has widespread support in the business sector. The Hull and Humber chamber of commerce did a survey some time ago and there is overwhelming interest.

The Minister mentioned the problems with abstraction from the main operator, and that was one of the reasons the Grand Central Rail application was turned down eight to 10 years ago. He talked about the impact on the taxpayer of the subsidy, but with LNER the subsidy is going down at the same time that there is greater competition, so I urge him to bear that in mind. It is, as I say, an easy win for the Government’s economic growth strategy.

I thank everyone for their presence. I will now rush off to King’s Cross to catch the train, but unfortunately I will have to change at Doncaster. The one advantage of changing at Doncaster—a station I know very well—is that the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) and I often exchange interesting gossip about life at Westminster there.

Question put and agreed to.

Resolved,

That this House has considered open access operators for rail services.

14:33

Sitting suspended.

Low-income Countries: Debt Cancellation

Thursday 6th February 2025 Westminster Hall

[Esther McVey in the Chair]

15:00

[Bambos Charalambous (Southgate and Wood Green) (Lab) [R]]

I beg to move,

That this House has considered debt cancellation for low-income countries.

It is a pleasure to serve under your chairmanship, Ms McVey. In the late 1990s and early 2000s, the momentous Jubilee 2000 debt campaign brought together people from all walks of life, trade unions, churches, community groups, and even the odd rock star and celebrity, with the sole purpose of demanding debt relief for the world’s poorest countries, which are suffering extreme poverty caused by debt payments. The campaign was a resounding success and resulted in more than $130 billion of debt cancellation for 36 low-income countries, equating to an average 75% debt reduction for each country, allowing them to invest in health, education systems and other public services.

Although the Jubilee 2000 campaign was widely celebrated, and world leaders felt that some good had been achieved, it later became clear that the symptom had been dealt with but not the cause. The current state of affairs is alarming. The World Bank’s latest international debt report stated that developing countries spent a record $1.4 trillion to service foreign debts, and that interest payments alone have soared by nearly a third to $406 billion, leaving many developing countries having to cut vital services, such as health, education and environmental programmes. The pressures are felt most greatly by the poorest and most vulnerable countries, which paid a record $96.2 billion to service their debt in 2023. Of that, $34.6 billion was in interest alone—a staggering fourfold increase on the figure a decade ago. Indermit Gill, the World Bank Group’s chief economist, said:

“In highly indebted poor countries, multilateral development banks are now acting as a lender of last resort, a role they were not designed to serve. That reflects a dysfunctional financing system”.

According to a report on the global debt crisis published recently by the Catholic Agency for Overseas Development, 3.3 billion people now live in countries that spend more on debt servicing than on health and education, and the most food-insecure countries have seen the highest increases. Debt servicing is expected to consume 55% of low-income countries’ budgets in sub-Saharan Africa by 2025.

A definition of insanity is doing the same thing over and over again, expecting a different result. When countries such as Ghana and Sri Lanka end up having to receive a 17th International Monetary Fund bail-out package, it is clear that things have to change.

A complicating factor in dealing with debt relief is the role of private creditors, which have exploded on to the international debt scene since the success of the Jubilee 2000 campaign. Today, 61% of global sovereign debt is owed to private creditors such as hedge funds, asset managers and investment banks. Private lenders’ terms and conditions are often far more onerous than those of multilateral lenders, leaving low-income countries at the mercy of exorbitant interest rates and quick repayment schemes.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

I thank my hon. Friend for the work he has done in this incredibly important area over a long time. He talks about the impact of rising interest rates on low-income countries, to which could be added the impact of covid and dealing with climate change, and the private sector operators. Does he agree that when countries such as the UK choose to forgive sovereign debt, speculators and private sector operators should not profit from that but should follow this country’s lead?

[Bambos Charalambous]

My hon. Friend makes an excellent point. I will come to that later in my speech, but she is absolutely right. We need to treat private creditors in the same way we treat bilateral and multilateral creditors.

Private credit schemes are proving to be very lucrative deals for private creditors. In 2023 alone, private creditors received $68 billion more in interest and repayments from low-income countries than they had actually lent to them. That in itself is bad enough; what is worse is that when a defaulting country seeks debt relief there is nothing to compel private creditors to agree to be bound by any agreement reached by multilateral and bilateral creditors. In fact, there is no obligation to compel them to act in good faith or at all.

One stark example is the case of Sri Lanka. In 2022, Sri Lanka defaulted on its sovereign debt, which led to the most serious economic crisis in the country’s history. Sri Lanka sought debt relief from its creditors, with 47% of it owned by private creditors. Despite reaching an agreement with its bilateral creditors, the private creditors refused to accept any debt relief and sued Sri Lanka in the US courts to prioritise their debts. As a result, the private creditors will receive 30% more in debt repayments than the bilateral creditors, while Sri Lanka had to seek a bailout from the IMF. Sri Lanka will have to slash its public sector spending and spend 30% of its Government revenue on debt repayments, which the IMF regards as unsustainable. It is morally repugnant that private creditors behave in such a way, deliberately hampering the ability of a low-income country to get back on its feet at a time of crisis.

Sri Lanka is not alone in its experience at the hands of private lenders. Following the covid pandemic the G20, realising that international debt needed to be urgently dealt with, set up its common framework for debt treatments as the main global framework for dealing with resolving debt crises. The expectation was that all creditors would co-operate in collectively agreeing debt relief for countries that sought relief under the framework. Despite progress being made with bilateral and multilateral creditors, Chad and Zambia, which both sought debt relief under the framework, found that their private creditors would either drag negotiations out or offer debt relief that was significantly less than what was agreed with the bilateral or multilateral creditors.

Chad failed to get any debt relief from its main private creditor, the UK-based company Glencore, and Glencore will be repaid 50% more than Government creditors. Zambia had been negotiating a debt relief agreement for more than four years when it finally reached agreement with bondholders. One of the private companies was paid 13% more than Governments, including the UK, while other private lenders, including UK-based Standard Chartered and Investec, are still to agree debt relief with Zambia. Ethiopia and Ghana have experienced similar behaviour from private creditors.

The behaviour of private creditors is contrary to the spirit of the framework and has resulted in a loss of confidence in the framework’s efficacy among other debtor countries. To date, only four countries have sought relief under the framework. The truth is that private creditors have no incentive to agree to debt relief, because if they hold out, they get the interest payments and principal repayments as agreed. If there is a default, they can sue in the UK or US courts for enforcement action against the defaulting country, which will also be lucrative for them.

For private creditors, it is a win-win situation; for low-income countries, it is lose-lose. Expecting private creditors to voluntarily enter into debt relief arrangements is like telling an alcoholic not to have a drink. Urgent legislation is required to compel private creditors to enter into and be bound by debt relief agreements.

I have talked a lot so far about sums of money, but we must remember the human cost of investment not going to low-income countries as a result of debt re-servicing—for example, the rise in infant mortality due to cuts in health spending. UNICEF has stated that if a country has defaulted on debt repayments that remain unresolved for more than three years, the infant mortality level rises by 11.4% over that same period. Chronic under-investment in education leads to a less skilled, less healthy and less productive workforce, resulting in a lost generation, making it harder for them to escape poverty.

So what needs to be done to resolve the debt crisis? In its excellent 2023 report entitled “Debt relief in low-income countries”, the International Development Committee came up with some recommendations. The first such measure would be the reform of the governance of financial institutions that control international debt, such as the IMF. The conditions imposed by the IMF on debt bail-outs often have dire effects and make things worse for the debtor country by placing more emphasis on the short-term repayment of debt, rather than on the long-term infrastructure development of a country that could provide it with lasting security and protection from indebtedness.

Secondly, there is a need to create a level playing field by passing legislation to compel private creditors to actively participate in the debt relief process by preventing them from suing for more money than they would get if they accepted debt relief on the same terms as other lenders. In 2010, the Labour Government passed the Debt Relief (Developing Countries) Act, which did exactly that for debt that was owed prior to 2004. My ten-minute rule Bill is an updated version of the 2010 Act. As more than 90% of bonds owed by countries eligible for debt relief are issued in the UK, it would have a significant impact on low-income countries and could be transformative in allowing money spent on servicing debt to go into health and education systems and to be spent on the environment. It would cost the Treasury nothing and, at a time when aid spending is seeing little if any increase, it would be a sure way of getting money to the most vulnerable countries. There is no justification for treating private creditors differently from other lenders.

Thirdly, there needs to be a public global debt register to record the details of all global sovereign debt. The need for transparency is urgent, and it would help populations in debtor countries to hold their Governments to account over entering agreements with predatory private creditors.

Fourthly, there should be a framework for the automatic cancellation of debt servicing when highly indebted countries are hit by catastrophic events such as climate-related disasters like Storm Beryl. It cannot be right that while a climate-vulnerable country is struggling to get back on its feet, it is forced to make debt-servicing payments. Instead of making these countries apply to international institutions for debt cancellation, debt cancellation should be automatic. Given that in 2024 the total external debt serviced by all African countries was $104 billion, of which $47 billion was owed to private creditors, and the entire UK aid budget to Africa was £993 million, something needs to change; otherwise we are just servicing the debt owed to private creditors.

[Chi Onwurah]

I thank my hon. Friend for his generosity in giving way, as well as the excellent points he is making. As the chair of the all-party parliamentary group for Africa, I have noted with concern the language around the increased migration that we have seen over the last few years, and we are all concerned to see the way in which criminal gangs exploit vulnerable migrants. Does my hon. Friend agree with me that by allowing the extraction of so much value from countries in Africa, we are not aiding and supporting economic opportunities for Africans in their own countries and are therefore contributing towards increased migration?

[Bambos Charalambous]

Again, my hon. Friend makes an excellent point. The lack of investment as a result of debt servicing leads to people seeking opportunities that are not available in their own country, so I totally agree with my hon. Friend on that point.

Before I conclude, I thank CAFOD, Christian Aid, Debt Justice, UNICEF and Save the Children for their excellent briefings ahead of this debate, and for their support in relation to debt cancellation. I conclude with these questions for the Minister. Will the Government support my ten-minute rule Bill to prevent private creditors from being able to sue for enforcement in the UK courts for more than has been agreed in relation to debt relief with bilateral and multilateral lenders? Does the Minister agree that there should be comparable treatment for all creditors? Also, do the Government support a public global debt register for transparency? Does the Minister support the reform of the governance of the institutions, such as the IMF, that set the terms and conditions of bail-outs?

The UK has a unique position in being able to use its global reputation to bring about change on the international stage in relation to debt cancellation, as it did 25 years ago. We led the way then, and it is time to do so again. We cannot afford not to. The global south is looking to us for action, and it is time for us to act.

[Esther McVey (in the Chair)]

I remind Members that they should bob if they wish to be called.

15:15

[Jim Shannon (Strangford) (DUP)]

What a pleasure it is to serve under your chairmanship again, Ms McVey. I commend the hon. Member for Southgate and Wood Green (Bambos Charalambous) for leading the debate. I spoke to him beforehand, and he told me that he led a debate in this Chamber two weeks ago. I had the debate last Thursday, he has the debate this Thursday, and I have the debate next Thursday in the same time slot—I think he and I are competing for the graveyard shift on a Thursday afternoon. I think that is two each. Maybe it will be exceeded—I am not sure—but well done to him, because this is a subject that we are all interested in, and that is why we are all here.

It is a pleasure to see the Minister in her place. I wish her well in her new role, and we look forward to her response on a matter that I know is close to her heart. I am confident that she will do her best to encourage us all. I also give my well wishes to the shadow Minister, the hon. Member for Romford (Andrew Rosindell). I suspect he is newly appointed—I hope I am right about that—and I wish him well in the role.

The United Kingdom has been involved in various initiatives aimed at providing debt relief to low-income countries over the years, including in Africa, Asia and the Caribbean. We continue as a country to work alongside LICs to ease pressure, which is something we should be proud of. Many will know that we are known for our generosity to other countries. We will always do our best to support, and it is a real pleasure to discuss that. Indeed, Northern Ireland—you will probably know this, Ms McVey—is one of the most charitable regions. I am not saying we are better than anybody else, but we are generous when it comes to charitable giving, and I just wanted to put that on the record.

In December 2024, the World Bank warned that developing countries spent a record £1.4 trillion—my goodness, that slipped off my tongue quite easily, but it is an astronomical figure—to service their foreign debts in 2023, and that interest rates had risen to a 20-year high. It concluded that 38 low-income countries, most of them in Africa and Asia, are in debt distress.

Debt cancellation is a reserved UK-wide policy, but Northern Ireland, Scotland and Wales contribute to the UK’s foreign aid and international development budget, which largely includes the debt relief initiatives for the LICs. The Northern Ireland Anti-Poverty Network has long advocated for the UK’s involvement in providing debt relief to countries struggling with high financial burdens. Has the Minister had the opportunity to hold any discussions with the Northern Ireland Anti-Poverty Network? It is a good organisation that does great work, and it is always encouraging for such organisations to have engagement with Ministers.

It is interesting to look at the at the root cause of the debt. The sad reality is that for many countries, such as those in Africa, it is poverty. It is as simple as that, as graphic as that and as real as that. Poverty in Africa is a long-term and complex issue that impacts millions of lives every day. Political instability, uneven distribution of natural and Government resources, sometimes corruption, and climate change all contribute to this issue. Those who are most affected are often those in rural and remote areas.

There are incredible charities out there, and the hon. Member for Southgate and Wood Green mentioned some of those that contribute regularly. I want to talk about some of the church groups that contribute through their missions. I think first of Eden missions. Every year, I am fortunate to have engagement with those from Swaziland. A young people’s choir comes over and they do some fundraising when they are in our constituency. We do our best to help and support them in every way we can. Every one of the children in that choir has AIDS, because their parents passed it on to them. They are fortunate to have the drugs that help them. Even with those disabilities, their voices are something special.

I think of the Elim church missions. In the Strangford constituency, there are so many—the best thing might be just to name all the churches. There is the Church of Ireland, the Presbyterian Church, the Methodist Church, the Roman Catholic Church and Baptist churches as well. Then there are the independent churches, which contribute greatly. We see massive Christian faith-based volunteerism and energy to support projects in Africa.

I think in particular of Elim, because I engage with it every year whenever it comes to Northern Ireland. It provides schooling, health and work initiatives. That charity does so much. It prepares people for life and for jobs, whether on the farm, as a doctor or teacher, or whatever it may be. It gives people the opportunity to know how to sow the seeds and reap the crops, so that they can live. When they come to Northern Ireland, we see their smiles and we cannot help being lifted individually.

Those are just some of the people who do this work, along with all the other charities and more that the hon. Member for Southgate and Wood Green spoke about, and that others will speak of as well. I have no doubt that every one of us could name groups that work beyond belief to provide aid and support to these communities at a local level. In the conversation about debt relief, however, the policies come straight from the Government. These groups do their work outside of Government, but the Government and the policymakers in this House are of massive importance at international level.

The UK has worked incredibly hard to introduce schemes that ultimately write off or suspend large debt from certain countries. I will give four countries as examples— I think the hon. Member for Southgate and Wood Green mentioned them too. Zambia, Ghana, Chad and Ethiopia have applied to the common framework, which followed on from the debt service suspension initiative that was introduced in 2020. Thus far, an incredible $12.9 million in payments have been suspended, which will go a massive way to easing pressure and providing a little more financial security for those countries. They are struggling—and, as I said, more often than not the reason is poverty. When it comes to Governments repaying debt, where is the tax coming from if people are on the poverty line to such an extent that they cannot pay it?

From 2001 to 2010, at least 49 low-income countries owing debts to the UK had all or part of their debts forgiven. The total amount of debt owed to the UK is now $1.8 billion. There are calls for the UK to strengthen legislation on debt repayments. I know the Minister will give us some thoughts on how the Government can help when it comes to debt repayments. Compelling private creditors to be involved in debt relief schemes is one of the options.

The International Development Committee said that the United Kingdom of Great Britain and Northern Ireland is “uniquely placed”—that is the Committee’s opinion, and it is mine, too—to legislate, because 45% of sovereign debts, a large amount, are governed under English law. Is that the Minister’s intention? If we have the ability to legislate, as I understand we do, I suggest, very respectfully, humbly and kindly, that we should.

The scale of debt that is owed is huge. We have done our bit recently to ensure fairness to other countries. I thank the Minister and the Labour Government, and the Conservative Government beforehand, for all that they have done. Debt has a huge impact on the development of LICs. We must take that into consideration without forgetting that there are other means through which we can receive payments back. For example, would it be an option for countries to give us something back in kind? I look forward to hearing the Minister’s plan to ensure that we protect LICs without putting the development of our own country at risk.

15:25

[Dr Jeevun Sandher (Loughborough) (Lab)]

I thank my hon. Friend the Member for Southgate and Wood Green (Bambos Charalambous) for securing this debate.

African nations face a debt crisis caused by global factors—a debt crisis that is leading to more poverty, more hunger and war. They cannot renegotiate the debt, because it is held by private lenders, each of whom, through no fault of their own, has only one incentive: to hold out for a better deal in their fiduciary duty to their shareholders. As the debt is issued in London, we can help private lenders break out of that trap by mandating that all of them must accept the outcome of debt negotiations. That will help us to end the African debt crisis, build functioning states and reduce extreme poverty, all without spending a penny.

Before being elected to this place, I worked as an economist in the Finance Ministry of Somaliland, one of the poorest places on Earth. I helped to write its budgets, its economic policy and its national development plan, and I saw that ending extreme poverty requires an effective Government, as we have seen in India and South Korea. A Government who raise their own revenue are far more effective than a Government who receive it in international aid, because with taxation comes representation.

African nations are stuck, unable to reduce poverty because they are spending one fifth of their revenue—more than they spend on healthcare—paying down debts. They are trapped in that debt because of global factors: post-covid supply shocks, Putin’s invasion of Ukraine and rising global interest rates. Debt repayments are up by 30% since 2019, and have more than tripled since 2010.

African nations, like any debtor, need to renegotiate their debt. If that debt was owed solely to other nations, that would be relatively simple, but it is not; it is owed to an unknown multitude of private creditors. Each of those creditors has a fiduciary duty to gain the highest return for its shareholders. Each individual private lender is trapped. They have to hold out, let others take the haircut and try to get the full amount for themselves. They are not bad people and they are not evil, but they are trapped within a system that no individual has the power to break out of.

Today, we can give them that power, because 90% of African debt governed by the common framework is issued under England’s legal jurisdiction. We can help to end the debt crisis without spending a penny by changing British law so that private lenders have to abide by the outcome of debt negotiations. Where before, private lenders were trapped, damned if they did forgive and damned if they did not, they would be free to implement sensible debt renegotiations.

I know that some will disagree, and I will take their arguments head on. Some will say that the status quo—things like collective action clauses—is sufficient. That view is wrong. Ghana and Zambia have been waiting 12 months for private lenders to come to the table. They are still waiting. Chadian private debt is not owed in bonds, which means it is not governed by CACs. The current system is not fit for purpose.

Others will say that the proposed reforms would mean that debt would no longer be issued in London. If that were true, it should have happened after we passed the Debt Relief (Developing Countries) Act 2010. It did not. Nations lend here and seek to have their borrowing issued here not because we have weak legal protections, but because we have the strongest and deepest legal system in the world, with centuries of case law. That is why, as my right hon. Friend the Member for Oxford East (Anneliese Dodds) pointed out this week, 95% of African bonds are issued in England and Wales. This solution can work, and that is why the IMF and the World Bank support it.

I was an economist working in one of the poorest nations on earth during its worst drought in living memory. Yes, I saw people starve, but I also saw a nation being built from its own revenues, making budgets and implementing policies. A state that could end extreme poverty was and is in the making in Somaliland. That nation saw its economy grow by 16% in real terms between 2012 and 2020, despite a global pandemic. That reduction in poverty is about more than numbers—it is fewer people scratching around in the dirt desperately hoping that something will grow so that they can feed their children. That is what ending extreme poverty means.

We can end extreme poverty. When my father was born into rural poverty in India, he had a one in four chance of dying before his fifth birthday, while 70% of the world’s population lived in extreme poverty. Today, a child born in the same place is 10 times less likely to die, and only one in 10 of the world’s people now live in extreme poverty. We can end extreme poverty in the years to come by changing British law to end this debt crisis.

We can live up to and indeed continue the legacy of the former Members for Sedgefield and for Dunfermline East, who helped to cancel £30 billion of debt in 2005. Giving African nations the ability to use their own revenues, build their own Governments and create nations can end poverty. By making sure that private lenders can and must participate in debt renegotiations, we in this place can help to end extreme poverty for free.

15:31

[Brian Mathew (Melksham and Devizes) (LD)]

I commend the hon. Member for Southgate and Wood Green (Bambos Charalambous) for organising this debate on a vital and extremely timely topic. As all hon. Members present are likely aware, we face the most acute debt crisis in history. According to CAFOD, more than 3.3 billion people are living in countries where they are forced to spend more on debt servicing than on providing for their citizens. Such high debt-servicing costs prevent those countries from spending on vital public services such as education and health, and investing in sustainable development goals.

Private lenders make up the largest group of creditors, with many based in the UK and 90% of their contracts governed by English law. Many hon. Members will also be aware that 2025 has been declared a jubilee year by Pope Francis. It is 25 years since the last jubilee debt forgiveness, known as Jubilee 2000, when 40 countries called for the cancellation of third-world debt. Biblically, an important part of the jubilee celebration was the cancellation of debt to give those in need a fresh start. We are told in the Bible not to be hard-hearted or tight-fisted towards others, but instead to be open-hearted and freely give what is needed.

For this jubilee year, Pope Francis has made debt cancellation a priority, stating:

“More than a question of generosity, this is a matter of justice.”

We must act now to end the vicious cycle that these countries are trapped in. Without being able to invest in development, countries are unable to grow their economies or fully escape debt. Furthermore, while in debt distress, countries may look to quick solutions that involve exploiting or exporting their natural resources to do so—extracting fossil fuels, mining or logging—and, in the process, worsening climate change. That disproportionately affects those in the global south, but also affects us here at home.

The UK has a significant role to play in solving this problem. As we have heard, 45% of all foreign sovereign debt is governed under English law. The Government have promised to tackle unsustainable debt and must hold private lenders and creditors accountable for that. Furthermore, the previous Government cut international aid from 0.7% to 0.5% of gross national income—an act that withheld billions of pounds from those most in need. We must restore our aid spending to what it was before, and restore our leadership in the field of international development; in doing so, we will restore our reputation as a kind and generous nation.

15:35

[Bell Ribeiro-Addy (Clapham and Brixton Hill) (Lab)]

It is a pleasure to serve under your chairpersonship, Ms McVey. I start by commending my hon. Friend the Member for Southgate and Wood Green (Bambos Charalambous) for bringing forward this crucial debate, and for his continuous campaigning on this matter.

I chair the APPG for Afrikan Reparations and I have long called on the UK Government to engage in discussions around reparative justice. I have said time and again that reparative justice is about just that—justice. It is about more than handing over money; it is about addressing the structural inequalities that colonialism created and still perpetuates, and changing those global structures that keep the global south in its situation. Those inequalities have been instrumental in creating the debt that we are discussing today.

Reparative justice is about addressing disparities that are starkly evident in the fight against climate change, particularly in the context of our international financial system, which is, quite frankly, a relic of the 20th century. Worsening droughts in east Africa, tropical hurricanes in the Caribbean, and tsunamis in Asia show how Britain’s former colonies remain disproportionately vulnerable to the frontline effects of crises that they did little to cause. Not only did we engage in colonial crimes, but we remain a leading historical emitter.

The UK could take responsibility by reframing reparative justice within the context of climate justice. We could fund large-scale restoration projects, compensate for biodiversity loss, and help nations to adapt to climate change. That form of reparative justice could remove the burden of debt that is preventing those countries from fighting the climate emergency themselves, by building infrastructure to defend against some of the environmental challenges that, if we do not get our act together, will be permanent.

Some of the world’s poorest and most climate-vulnerable countries are seeing their debt payments grow twice as fast as their climate support—they do not stand a chance. When faced with extreme weather conditions every year, such as deathly floods and droughts, they are forced to borrow more and more to support their people and rebuild their infrastructure—adding to their already insurmountable debt.

In 2022, I joined a parliamentary delegation to Kenya with CAFOD and saw at first hand the impact of famine and drought on the people living in Marsabit County. Their agriculture and their livestock had been decimated—the country had been decimated—by one of the worst droughts in living memory. The situation that we all saw on the ground in Kenya brought home the devastating ramifications of the climate crisis, and the inequities that it is rooted in—inequities that we benefited from and have sustained since.

Kenya is not a notable emitter of carbon dioxide and does not drastically contribute to climate destruction. In fact, it is responsible for just 0.03% of global carbon dioxide emissions to date—around 160 times less than the United Kingdom. Yet man-made climate change, for which the UK has historical responsibility, is causing untold levels of destruction in that nation, and its debt crisis means that, like many other countries mentioned today, it is unable to take meaningful steps to address it. In 2021, its debt repayments were more than five times the amount of money the Government were spending on measures to tackle the climate crisis. Like many other countries, it is fighting this crisis with both hands tied behind its back.

Countries in the global south will face an estimated $290 billion to $580 billion in climate-related loss and damage ever year by 2030—every single year. At the start of the covid-19 pandemic, the G20 agreed a scheme to suspend debt payments for over 70 countries, but because private lenders were not made to participate on equal terms, countries that applied to the scheme had under a quarter of external debt payments suspended.

As hon. Members have mentioned, over 90% of the bonds owned by countries eligible for debt relief, under G20 schemes, are governed by English law. That means that they are under our control, and we can actually do something about them. The UK could play a leading role in addressing the debt crisis, instead of standing by as private creditors are bailed out. The Government should be supporting efforts to cancel debts for all climate-vulnerable countries with unsustainable debts by expanding the G20 common framework to include middle-income nations, and strengthen it to ensure that private creditors participate. To be frank, we know that the situation for the average person in some so-called middle-income nations is still dire.

I call on the Government to enhance the UK’s commitment on international climate finance overall and to encourage other countries to do the same. That should be done through a comprehensive financing facility to offer unconditional grants, not more debt, to countries facing climate disaster, to push for automatic debt payment suspension and relief for countries in the event of a climate-related disaster, and to introduce legislation to stop private creditors from suing those same climate-vulnerable countries. The UK’s role as a major historical emitter, a former colonial power and a current global leader places a special obligation on us to put climate justice at the heart of the global response to the disaster we now face.

Some people ask: why reparative justice and not simply aid? That is because aid has not worked, and when a duty is put on people to do something, and when they understand that they owe somebody something as a matter of justice, they are more likely to do it. Aid has become an industry. Aid itself is subject to supply and demand, and so many countries are not benefiting from it in the way that they should be. We need to look at this issue as one of reparative justice, and we the UK have to pay what we owe.

15:41

[Monica Harding (Esher and Walton) (LD)]

It is a pleasure to serve under your chairmanship, Ms McVey. I thank the hon. Member for Southgate and Wood Green (Bambos Charalambous) for bringing this important issue to the House, and I praise his work on raising awareness of it.

For decades many low-income nations have struggled under the weight of unsustainable debt, spending billions servicing debt that prevents them from addressing the needs of their people or responding to the climate emergency, threatening a wave of political instability. It also prevents them from long-term investment in healthcare, education and infrastructure—the essential pillars of progress and stability.

Lower-income countries have been facing increasingly unsustainable debts since the 2008 financial crisis, with debt payments increasing by over 200% between 2010 and 2025—reaching the highest level since the mid-1990s. That is no surprise when we consider the combination of the covid-19 pandemic, the war in Ukraine and the global monetary tightening that has exposed vulnerable economies to insurmountable debt challenges, as private capital inflow stopped and sovereign defaults ensued for already vulnerable frontier communities.

The Liberal Democrats were the first to call for debt cancellation and have been calling for faster and stronger action on the global debt crisis ever since, because the case for debt cancellation is clear. It provides immediate relief, allows Governments to prioritise social investment and fosters long-term economic growth. Over the long term, it allows those countries to become less reliant on overseas development assistance from countries such as the UK. History shows that when debt relief is granted, countries are able to improve public services, reduce poverty and achieve sustainable development goals. When countries are crushed by debt, however, that leads to instability, mass migration crises that end up in the UK, and economic stagnation that affects us all.

Faster and stronger action on the debt crisis is particularly important in Africa. In 2023, African countries spent over 50 times more on external debt than they received in aid from the UK, and 50% more than the total aid to the region. That is why we are clear in our support of aligning the UK with the African Union’s push for full debt cancellation.

The current mechanism for debt cancellation, via the common framework, has been too slow in its progress on cases, with only four countries having applied and only three reaching agreement—Zambia, Ghana and Chad, with Ethiopia still in talks. Clearly, the Government must improve those mechanisms, and I note that the International Development Committee 2023 report on debt cancellation for low-income countries made recommendations for the previous Government. Many of those remain outstanding, so I hope the Minister will address that today.

I hope that the Foreign, Commonwealth and Development Office’s upcoming development review will focus closely on the critical interplay between debt and development in its strategy. That is essential, because this Labour Government have presided over a further real-terms cut to the official development assistance budget, making it even lower than it was under the last Conservative Administration. Under this Government, there has been an absolute cut in the level of support being provided to the world’s poorest people.

Low-income countries have been put between a rock and a hard place for too long, forced to service ever-increasing debts with less and less overseas development assistance from the likes of the UK and now, of course, the US. That has compelled such countries to service debt rather than helping their most vulnerable people, plunging those nations into further poverty.

I sincerely hope the Minister can reassure us today that the Government will return to spending 0.7% of GNI on ODA. I hope that the news that there will be no new funding at the Nutrition for Growth summit this month is not a harbinger of the trajectory of the Government’s spend on international aid, and that the UK will return to its role leading on international development, particularly given the USA’s apparent retreat. I look forward to hearing what she has to say shortly.

I draw to a close by re-emphasising that although the UK’s ability to act independently is limited by international agreements, it has significant influence over debt restructuring, with 45% of all sovereign debts governed by English law. I look forward to hearing how the Government intend to strengthen the common framework and address the root causes of debt accumulation, including unfair trade policies, exploitative lending practices and lack of financial transparency. It is time for a new financial framework that stops the cycle of debt dependency, and it is time for Britain to restate its commitment to the world’s poorest.

15:46

[Andrew Rosindell (Romford) (Con)]

It is a pleasure to serve under your chairmanship, Ms McVey, for the first time as a shadow Minister.

I commend the hon. Member for Southgate and Wood Green (Bambos Charalambous) for securing this debate. Constituency names have changed; I have always known him as the hon. Member for Enfield Southgate. He spoke with real passion today, and he brings with him knowledge and expertise about a topic that we must all focus on more carefully. It is a sensitive issue, and we must ensure we get it right. It should not be a party political issue; we should be looking for solutions. I think that today’s debate has contributed to that important discussion, so I thank him for securing it.

As has been mentioned, Britain is a nation that has always been known for its Christian compassion. At the same time, we have always advocated the principle of helping others to help themselves as the best pathway to providing long-term sustainability, particularly for developing nations, many of which have been mentioned in the debate.

So many contributions have been very powerful, particularly that of the hon. Member for Loughborough (Dr Sandher), who spoke about Somaliland. I met representatives from Somaliland recently. It is so important that we use our knowledge and expertise to help developing countries to develop the type of economy that will generate wealth and prosperity. Having such debts around their necks will not help them to get out of their problems and become prosperous in the future. The hon. Gentleman drew on his expertise, and I commend him for it.

Others have spoken about issues such as colonialism. To be frank, I am not convinced that the hon. Member for Clapham and Brixton Hill (Bell Ribeiro-Addy) should focus on colonialism. There are other, more unifying things that we should talk about. Britain can lead the way in this if we get things right, but talking about Britain’s past wrongs—they are subjective, and there are a lot of good things that Britain has done—and tying everything to colonialism is a divisive route to go down. Let us look at solutions and advocate ideas that offer a way forward, rather than creating political division.

[Bell Ribeiro-Addy]

This is not necessarily a divisive issue. When we ask those who are suffering the most from these matters, we find that they believe that it is difficult to move forward because of some of the wrongs that have been done to them in the past. It is simply about recognition and looking at ways to tackle this issue, and at how we can deliver recompense for the wrong that we have done. It is not about being divisive; it is just about accepting what went wrong and understanding that we have a duty to make it right.

[Esther McVey (in the Chair)]

Order. I remind hon. Members that this debate is about debt cancellation for low-income countries.

[Andrew Rosindell]

I respect the hon. Member’s point, but she did say that we should pay what we owe. All kinds of arguments can be put forward about what we owe, but it is a matter of opinion. Today we should bring unity and look for solutions, rather than making this a political issue. We can achieve more for developing countries if we work together, rather than looking at where things have gone wrong or right in history and at who may owe what, depending on what is going on in the world today. I do not think that will get us very far, so we should move on from that and focus on how we restructure the repayment of debt, and how we can develop a better system globally to deal with this issue, rather than looking too far back into history.

It has been clear to me, right from when I stood for Parliament for the first time, that this issue needs to be addressed. That has been confirmed by the passion that hon. Members have shown in today’s debate. Debt relief deserves serious consideration, and the Opposition recognise that. Unsustainable debt burdens can be huge and significant impediments to economic development and growth, trapping nations in a cycle of poverty. However, I believe that we must approach this matter in a responsible way, with both caution and pragmatism.

If pursued, debt relief must be conditional and tied to a strong policy of fiscal responsibility measures, so I hope the Minister will provide assurances that any recipient countries would be expected to implement sound economic policies, tackle corruption and take steps to prevent future over-borrowing. I do not think the Minister can disagree that without those safeguards, we risk creating a system in which there is financial mismanagement in perpetuity. We should focus on rewarding the expense of responsible governance. Making the hard-pressed British taxpayer foot the bill is not acceptable to most of our constituents, and we need solutions. We need to solve these problems and not see this as a one-way street.

If the United Kingdom taxpayer’s money is involved, I want the Government to tell us how they will ensure that such relief also serves the interests of the British people. During these difficult economic times, we must justify every single penny spent by the Government and always be mindful that it is our constituents’ money, not the Government’s. Debt relief must become not an open-ended commitment, but a strategic tool that strengthens bilateral ties and ensures geopolitical stability.

I hope the Minister can tell us how the Government intend to prioritise sustainable development, and what mechanisms are in place to monitor that. I also hope she will agree that the focus should be not on perpetual aid or blanket debt forgiveness, but on fostering economic self-sufficiency. That is the only sustainable way forward. We must also consider how the United Kingdom can play a meaningful part in helping low-income countries to develop their domestic industries, improve resource management and reduce their reliance on foreign debt. Without those structural changes, would debt relief simply serve as a temporary fix, or would she prefer to have a system that offers a sustainable solution? That is what the Opposition want.

[Jim Shannon]

I would never wish to be anything other than supportive of what the hon. Gentleman says, but everyone who has spoken so far has mentioned the charities and groups that contribute and sometimes fill the gap. May I ask, respectfully, if some recognition could be given to those groups?

[Andrew Rosindell]

The hon. Member touched on this in his speech earlier, as did the hon. Member for Melksham and Devizes. That is another new constituency name, and I think it includes Chippenham. Is that part of the hon. Gentleman’s constituency?

[Brian Mathew]

No, but it is in Wiltshire.

[Andrew Rosindell]

It is in Wiltshire, so it is in that part of the world—a great part of the world.

Many churches and faith organisations, not just Christian, do a huge amount in all our constituencies to help raise funds to alleviate poverty. In my constituency, churches and the Christian organisations take the lead in this, and it is a wonderful thing. If we are to alleviate world poverty and deal with the restructuring of international debt, it has to be a collective thing. It is not just about Governments; other sectors must be involved in these discussions. We must all give credit to the charities, church organisations, faith groups and other parts of the voluntary sector that raise money week in, week out, to help to alleviate poverty and for disaster relief in different parts of the world. As Members of Parliament, we all know that from our constituencies. I commend the hon. Member for Strangford (Jim Shannon) and all Members for the charities, churches and organisations in their constituencies that do that incredible work.

We simply cannot ignore the geopolitical dimension. The belt and road initiative from the People’s Republic of China has created debt dependency, threatening many sovereign nations around the world. Will the Minister tell the House how the Government intend to counterbalance Beijing’s influence and provide a credible alternative to Chinese financing, which is of great concern? Will debt relief and the belt and road initiative feature in the Government’s China audit? Can she also confirm that any UK-backed debt restructuring would promote transparency, fair economic partnerships and long-term stability?

Beyond individual cases, will the Government tell us how they plan to advocate for more responsible lending and borrowing practices that ensure that relief leads to lasting improvements rather than repeated crisis? Does the Minister also accept that we should be looking beyond debt cancellation and focusing on investment incentives, infrastructure partnerships and trade agreements that enable these countries to generate revenue and pay their debts? How will the Government ensure that their approach fosters economic growth rather than continued reliance on external assistance?

It is crucial that any policy pursued by His Majesty’s Government is effective and responsible. Debt relief can be a force for good when structured correctly, but it must be part of a broader strategy that promotes economic resilience, accountability and sustainable development. The Government must navigate these challenges while always ensuring that British interests remain protected.

15:59

[The Economic Secretary to the Treasury (Emma Reynolds)]

Thank you for calling me, Ms McVey. It is a pleasure to serve under your chairmanship for the first time, and I am sure not the last.

I thank the hon. Member for Southgate and Wood Green (Bambos Charalambous) for drawing attention to these issues and for bringing this debate on debt cancellation to Westminster Hall today. I also thank the other Members, whose speeches have made for a rich discussion on this issue. I will mention them briefly and then hope to come to everyone’s questions, should time allow. I thank the hon. Member for Strangford (Jim Shannon) for his kind words about my appointment—I am still early in my time in this role. I also thank him for underlining the importance of the role of charities in the development work that they do in low-income and vulnerable countries.

My hon. Friend the Member for Loughborough (Dr Sandher) spoke with great passion about his experience working in Somaliland. He brings great insights to the House after working in that capacity previously. I thank the hon. Members for Melksham and Devizes (Brian Mathew) and for Esher and Walton (Monica Harding) for stressing that the UK needs to restore our leadership on international development. I will come to some of their questions later in my contribution.

I also want to thank my hon. Friend the Member for Clapham and Brixton Hill (Bell Ribeiro-Addy) for raising crucial points about the situation that many low-income countries vulnerable to the impacts of climate change find themselves in. I will say a little more about that, too.

The Government are highly concerned by the debt challenges faced by many low and middle-income countries, with 3.3 billion people living in countries that spend more on servicing their debt than on health or education—a point made by many hon. Members. Among low-income countries, 10 are currently in debt distress and 25 are at high risk, and there is an urgent need to address the vulnerabilities. As a Government, we are fully committed to tackling unsustainable debt burdens in a way that supports development needs and helps countries address those vulnerabilities.

We are acting in three key ways. I will attempt to answer questions, particularly from my hon. Friend the Member for Southgate and Wood Green who secured the debate, when discussing the three key ways. The first is on addressing liquidity challenges; the second is on ensuring effective debt restructurings; and the third is on promoting debt resilience.

First, on addressing liquidity challenges, we are working with international partners to address immediate liquidity pressures facing many countries, which are crowding out vital spending on climate, health and education. We support the IMF and World Bank’s three-pillar approach, which is designed to support countries with high debt repayments. The first pillar is focused on action from vulnerable countries to improve revenue mobilisation and implement sound economic policies. The second focuses on ensuring that countries receive new flows of finance at concessional rates from international financial institutions and other development partners. The final pillar looks at providing case-by-case action to reduce the cost of existing debt burdens where needed.

Secondly, we are working to address debt vulnerabilities through improving the effectiveness of debt restructurings for countries in debt distress. The G20 common framework remains the best mechanism for co-ordinating debt restructurings to address unsustainable debt burdens, but further progress is needed.

The UK is working closely with the G20 and other international partners to ensure the framework delivers more timely, orderly and predictable debt restructurings. I know that is high on the priority list of the South African G20 presidency this year. The UK will be pressing for rapid implementation of the lessons learned from the common framework, which were agreed under the Brazilian presidency of the G20 last year.

The private sector, which has been mentioned by many hon. Members, must also play its part in debt restructuring efforts. We are actively engaging with private sector partners—for example, through the global sovereign debt roundtable—to ensure continued private sector support for addressing the debt challenges faced by countries, leveraging the City of London’s leading role in sovereign debt markets.

Several Members, including my hon. Friend the Member for Southgate and Wood Green, mentioned the issue of private creditors and whether we needed legislation to force them to participate. The Government are not currently seeing evidence that private creditors are refusing to participate in debt restructurings. Recently, private bondholders have agreed to debt treatments for common framework countries, including Zambia and Ghana. We are working closely with the private sector through bilateral meetings, engagement with representative institutions and Paris club discussions.

Hon. Members also raised the issue of comparable treatment by private creditors. I reiterate that both Zambia and Ghana have reached agreements on debt restructurings with their private bondholders. Official creditors have deemed these comparable with their own restructurings.

My hon. Friend the Member for Southgate and Wood Green raised the need for UK leadership on debt relief, and we heard that from others, too. I highlight that the UK has a strong track record of pushing for effective and holistic solutions to debt challenges, including supporting the IMF’s three-pillar approach for countries facing liquidity challenges and pushing for more effective co-operation and co-ordination under the G20’s common framework. The UK also co-ordinates debt treatment through our membership of the Paris club and our commitments to the G20 common framework in partnership with other creditors.

This is a key point: unilaterally writing off debt owed to the UK would not be in the interests of the UK taxpayer—the shadow Minister, the hon. Member for Romford (Andrew Rosindell), mentioned the UK taxpayer, of course—which would be subsidising ongoing payments to other creditors if done unilaterally. The Government are therefore working closely with borrowers, official and private creditors, and the IMF and World Bank to strengthen the wider debt architecture and provide timely and co-ordinated restructurings for countries, where needed to support holistic debt sustainability for low-income countries.

The third way that the Government are pursuing this issue is through tackling unsustainable debt by promoting greater resilience in debt markets. In response to the shadow Minister, I mention that the UK is committed to provide sovereign financing on sustainable terms and to act in an open and transparent manner to support global debt sustainability.

We are playing a leadership role internationally in several key ways. The hon. Members for Melksham and Devizes and for Esher and Walton asked what the UK was doing to provide leadership.

[Jim Shannon]

My contribution, not that it was better than anybody else’s, put forward the idea that the countries we are helping with debt might be able to supply us with some goods as a way of paying us back, rather than making a financial repayment. Is that something that the Minister and the Government would look at?

[Emma Reynolds]

I am not sure that is something we are actively considering, but I will check and write to the hon. Gentleman.

In December 2024, we were the first country to publish our self-assessment against the G20’s operational guidelines for sustainable financing. In line with those guidelines, we publish annual reports on the total stock of debt owed to the UK, including reports on our new sovereign lending transactions.

Finally, we are committed to provide sovereign financing on sustainable terms, adhering to the OECD’s sustainable lending principles. My hon. Friend the Member for Southgate and Wood Green also suggested creating a private sector transparency register. The UK supports all initiatives to improve debt transparency and is open to considering proposals for such a register. We also acknowledge the ongoing work by Georgetown University in this area.

The UK has led the way in promoting debt resilience through the introduction of contractual innovations, an approach that the IMF has found to be working well. Under our G7 presidency in 2021, the UK developed two contractual innovations together with private sector stakeholders. The first relates to external shocks, which my hon. Friend the Member for Southgate and Wood Green mentioned in his speech. Climate resilient debt clauses help to strengthen the resilience of vulnerable countries by suspending debt repayments in the wake of external shocks, which frees up fiscal space for the country. The UK has led the way by including CRDCs in our own lending and calling for all lenders to adopt CRDCs by the end of this year.

Second, the UK helped to develop majority voting provisions, which are for use by the private sector specifically for syndicated lending. MVPs allow a majority of creditors to bind the minority to the terms of a restructuring and thereby mitigate the risk of a minority of creditors holding out in a restructuring scenario, which hon. Members mentioned in their contributions, and enable more efficient debt restructuring processes.

On Monday, at her speech at the London Stock Exchange, the Minister for Development, my right hon. Friend the Member for Oxford East (Anneliese Dodds), announced that the FCDO will provide technical assistance for borrower countries that intend to include majority voting provisions in their contractual agreements with private sector lenders.

I will now turn to a couple of questions that were asked during the debate. I apologise if I do not get to answer all the questions in the time available; I promise to write to hon. Members if I do not get to all of them. My hon. Friend the Member for Southgate and Wood Green asked about reforming the governance of international organisations. We agree that more needs to be done. First, we must change the international financial system in order to deliver a fairer deal for developing countries, including by using our board seats at the IMF and the World Bank, for a bolder approach on unsustainable debt. Secondly, we need to ensure that our system is more representative of those most in need, so we will make the case for not only fairer outcomes, but fairer representation in how we represent them.

The Liberal Democrat spokesperson, the hon. Member for Esher and Walton, asked whether the Government would return to spending 0.7% of GDP on development, which the last Labour Government were very proud to commit to and reach. This Government remain committed to restoring ODA spending to 0.7% as soon as fiscal circumstances allow. Although the Office for Budget Responsibility forecasts show that the tests have not yet been met, we continue to monitor these forecasts closely and remain one of the top ODA providers in the G7.

There were a number of questions about climate, including from my hon. Friend the Member for Clapham and Brixton Hill, and I want to make a few comments about that. To strengthen the resilience of vulnerable countries and free up fiscal space when responding to shocks caused by climate change, the UK has led the way in encouraging the broader adoption of climate resilient debt clauses, which suspend debt repayments, on a cost-neutral basis, in the wake of exogenous shocks. We welcome creditors who have committed to providing CRDCs, and encourage others to follow suit.

My hon. Friend also said that the common framework should be expanded to middle-income countries and offer an automatic suspension for countries that apply for restructuring. The UK is fully committed to making the common framework a success. We support expansion of the framework to middle-income countries and providing automatic debt standstills for countries that apply for restructuring under the framework. We continue to push for those reforms in the G20. I hope that answers her question on that point.

I thank the shadow Minister, the hon. Member for Romford, for his contribution—I think this is the first time that we have debated this way. He asked about reassurance on sound economic policy and preventing corruption. We agree that any lending and policy must be agreed on a sustainable basis. First, the scale of debt treatments is set under the IMF’s debt sustainability analysis. Secondly, the UK is committed to acting in an open and transparent way, as we have shown by publishing our own self-assessment against G20 guidelines. The hon. Gentleman asked a number of other questions. He was talking about open-ended commitments and sustainability. I think we all agree we want to reduce the reliance of low-income countries on foreign debt. That is what this debate is about, and we want a sustainable solution. He asked about the role of China specifically. I am happy to write to him, in a follow-up to his questions, on that. All I will say now is that it is really important that we work with all international partners on this issue, because only by working multilaterally will we have success in the sense of providing sustainable solutions. We do not think we can act alone.

I thank all hon. Members for their thoughtful contributions during today’s important debate. Together with the international community, we must work actively and urgently in order to address the significant debt challenges faced by vulnerable countries, and the Government are committed to doing just that.

16:14

[Bambos Charalambous]

I will be brief. I very much welcome the Minister’s responses, certainly in relation to financial institutions and reforming the IMF, representation, how we look at debt, and transparency. In relation to external shocks, I think we should look at automatic cancellation of debt when a country is facing a climate event, for example. I very much hope that that can be looked into, long term.

On comparable treatment, I know that the Minister has taken that on board and will be looking into it further. I disagree with her on legislation in relation to private creditors. Private creditors have not shown themselves to be responsible in this matter. I have given examples of private creditors who have not engaged in the G20 framework in the way they were expected to. I hope that, if the Minister does have regular meetings with them, she is able to convey this message to them. Until we see changes, I certainly will be pursuing legislation through my private Member’s Bill, the Debt Relief (Developing Countries) Bill.

We have had a good discussion today, and I thank all Members for contributing as they have, to show the unanimity on what we would like to see done. I think we all support debt cancellation and would like to see more done to help low-income countries—the most vulnerable ones—to get back on a level footing so that they can develop their economies as we would like to see them develop.

Question put and agreed to.

Resolved,

That this House has considered debt cancellation for low-income countries.

16:15

Sitting adjourned.