Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the effectiveness of recent legislative changes at enhancing private sector participation in sovereign debt relief for low-income countries; and whether she plans to introduce further initiatives to help ensure (a) timely and (b) equitable debt restructuring.

The government is not currently pursuing legislative changes to enhance private sector participation in debt restructurings for low-income countries. The UK, alongside the G20 and Paris Club, expects private creditors to participate in debt restructurings on comparable terms and we have seen private creditors’ willingness to engage and provide debt treatments where needed, including for Zambia and Ghana. We work closely with the private sector on several aspects of their participation in debt treatments – including to help ensure timely and comparable treatments – through bilateral meetings, engagement with representative institutions, and the Paris Club’s regular discussions with the private sector.

The government is focused on enhancing a market-based approach to private sector participation – including through working to strengthen the contracts underpinning debt issuance, and to increase transparency. The Chancellor recently announced the launch of the London Coalition on Sustainable Sovereign Debt, which will promote the uptake of UK-led contractual innovations – namely, Climate Resilient Debt Clauses and Majority Voting Provisions – in private lending.