Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps her Department is taking to support global debt relief.

The UK Government is committed to policies that tackle unsustainable debt. We progress this work through various multilateral fora, including the G20, the Paris Club and the Global Sovereign Debt Roundtable. Through the G20, we participate collaboratively in the Common Framework, helping to deliver coordinated and sustainable restructurings for low-income countries facing debt vulnerabilities. The UK has fully participated in recent restructurings, working alongside other creditors to restore debt sustainability, and are committed to ensuring that these mechanisms deliver meaningful relief where needed.

The UK also co-chairs the London Coalition on Sustainable Sovereign Debt. The Coalition brings together government and private sector stakeholders to find innovative solutions to more sustainable sovereign debt financing in developing economies. The Coalition has recently published two key documents that support this work:

Firstly, a template Pause Clause developed by the bondholders' working group. This will allow countries hit by major shocks to temporarily defer debt payments in a clear, time-bound way. This sits alongside strong debt transparency so markets can price risk properly, and the group will continue consulting with developing countries to support uptake.

Secondly, an Implementation Guide for Restructuring Private Sector Sovereign Loans provides a practical, voluntary reference on how to organise engagement and streamline discussions. This will help reduce delays and uncertainty in negotiations and limit the economic damage that prolonged debt distress can cause.