Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of debt servicing on the ability of low-income countries to fund public services and climate adaptation; and what steps she is taking to support international debt cancellation initiatives.

The UK government is focused on delivering an international financial system that better finances development needs, reduces debt vulnerabilities, and supports relevant countries to be more resilient to shocks, including those caused by climate change and nature loss.

We are working with all our partners to tackle unsustainable debt and ensure all countries can invest and grow. I am co-chairing the 'London Coalition on Sustainable Sovereign Debt', launched in June to work with private creditors on sovereign debt issues, and at the UN Fourth Conference on Financing for Development, the UK co-led the launch of the Debt Pause Clause Alliance. We continue to drive progress in the G20 on strengthening and accelerating debt restructurings via the G20 Common Framework.

The UK government is committed to playing our part alongside other developed countries and providers to deliver our international climate finance commitments, including through our shareholdings at the Multilateral Development Banks (MDBs), the largest providers of public climate finance. We are also pushing for new sources of funding such as agreement on the International Maritime Organisation's Net Zero Framework alongside efforts to mobilise more private capital.

In line with the UK's commitment to the OECD's sustainable lending practices, the UK government considers debt sustainability when providing financing, particularly in cases of lending to countries deemed at high risk of debt distress. In such cases, the UK only supports projects in line with limits set by the IMF and World Bank. We also follow best practice under the G20 Official Guidelines on Sustainable Finance, including strong commitments to debt transparency, and recently published our own self-assessment against these guidelines.