Low and Middle-income Countries: Debt Restructuring

Lord Bruce of Bennachie Excerpts

Tuesday 12th March 2024 Lords Chamber

[Lord Cameron of Chipping Norton (Con)]

I thank the noble Lord for his question. There is an ongoing conversation with the Commonwealth. This is one of the many good advice services that it gives. This year, the year of CHOGM, we are also spending a particular amount of time talking with Commonwealth countries about how they can access finance, not loans in this case but green finance. A lot of finance has been made available, but many of the smaller countries find it hard to access, and we should help with that.

[Lord Bruce of Bennachie (LD)]

My Lords, poorer countries have increasingly become dependent on growing amounts of private finance and, for some of them, time is getting critical. We need to address the issue and announce reform but have emergency considerations for countries that cannot wait until we resolve it. Does the Prime Minister—I mean the Secretary of State—agree that this needs to be done and that we cannot afford to let these countries default or allow the private sector to get away when the taxpayer is taking the risk?

[Lord Cameron of Chipping Norton (Con)]

I agree with the noble Lord that we do not want what we had in the past, which was vulture funds holding out for a better resolution than other holders of debt were getting. If we have new bonds with collective action clauses and new loans with majority voting provisions, that is much less likely to happen. There are also the other innovations that Britain has brought, such as the climate-resilient debt clauses, so that if there is a sudden problem caused by climate change or other shocks, you stop the repayment. I argue that Britain has a long tradition, on a cross-party basis, of helping with debt sustainability and resolution, and we need to keep that record up.