Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to require private creditors to cancel debt owed by developing countries during the covid-19 pandemic.

The UK recognises the debt burden faced by developing countries during the Covid-19 pandemic. Support for developing countries is a key priority for the UK’s G7 presidency this year, and this includes delivering effective debt treatments that free up fiscal space to respond to the pandemic.

We regularly work with our international partners in the G7, G20 and Paris Club on debt issues, including private sector participation in debt restructurings. As such, we are supportive of the full and swift implementation of the Common Framework. The Common Framework is a G20 agreement that brings together, for the first time, G20 creditors to participate in coordinated debt restructurings.

Under the Common Framework, private sector creditors will be required to implement debt restructurings on at least as favourable terms as official creditors. This agreement should pave the way for more efficient, equitable, and effective case-by-case debt restructurings, which will allow low income countries to benefit from a more transparent and responsive approach to seeking debt treatment.