Low and Middle-income Countries: Debt Restructuring

Debate between Lord Bruce of Bennachie and Lord Cameron of Chipping Norton

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.

UN Sustainable Development Goals

Debate between Lord Bruce of Bennachie and Lord Cameron of Chipping Norton

Tuesday 16th January 2024 Lords Chamber

[Lord Cameron of Chipping Norton (Con)]

I respect the noble Lord and what he says. We have been leaders on this through the Paris Club and other mechanisms; in many cases it has been the right thing to do to write down a country’s debt. With respect to climate change, these climate resilient debt clauses can make a great difference in helping these countries. Fundamentally, if we want to achieve the SDGs, we need to motivate global finance, and one of the ways that we can do that is through the multilateral development banks because if they expand their balance sheets there is probably an extra £400 billion that they can invest to help these countries with their growth.

[Lord Bruce of Bennachie (LD)]

My Lords, the Foreign Secretary has said he thinks that the merger of DfID and the Foreign Office, and the cuts in aid, were justified; that was not what he said at the time. How much does he regret that his successors have trashed his proud legacy and, more to the point, how assured can he be that the funding for Africa, which is still being cut even if an increase has been promised, will not be diverted to the Home Office, as has happened in the last two years?

[Lord Cameron of Chipping Norton (Con)]

That is not exactly what I said. I am very proud that we reached 0.7%. I had some disagreements with this Government before I joined but politics is a team enterprise; when you decide to join a Government, you accept Cabinet collective responsibility and you accept you are going to work with that team and the policies they have. I am proud that, with 0.5% and a growing economy, we are seeing more money going to overseas development. Now that the refugee crisis is abating—I mentioned Africa—we will see, in our budgets, an increase from £600 million to over £1.2 billion, and we are committed, when the fiscal rules allow, to get back to the 0.7% that we historically achieved.