Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the impact of increasing levels of sovereign debt repayments on extreme poverty in developing countries.

The UK recognises the significant debt vulnerabilities faced by many low-income countries and that high debt service levels may impact efforts to invest in measures to tackle poverty.

That is why, in May 2020, the UK, together with the G20 and the Paris Club, agreed to the Debt Service Suspension Initiative (DSSI). This aimed to provide eligible countries with additional fiscal space to respond to the Covid-19 pandemic, freeing up resources to fund social, health and economic measures. Preliminary estimates suggest the DSSI has suspended over $12.9 billion in debt service repayments.

The DSSI was a short-term tool to address immediate financing needs. To deliver a longer-term, more sustainable approach to dealing with debt vulnerabilities the UK, along with the G20, also agreed a new Common Framework for Debt Treatments beyond the DSSI. This was designed to provide more efficient, equitable and effective debt treatments that are better able to set countries on a more fiscally sustainable path, freeing up resources to spend on reaching development goals.

The UK is fully committed to implementing the Common Framework in coordination with our international partners.