Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with UK-based private lenders on debt cancellation for lower-income countries.

Supporting developing countries to tackle unsustainable debt is a key development priority of this government.

The UK government is working closely with borrowers, official and private creditors, and the IMF and World Bank, to strengthen the wider debt architecture and provide timely and coordinated restructurings for countries where needed, to support holistic debt sustainability for low-income countries.

The Paris Club, and now the G20 as part of its commitment to coordinate on debt treatments under the Common Framework, are clear on our collective expectation that private creditors must participate in restructurings on terms at least as favourable as those provided by sovereign creditors.

In working with the private sector, the government has focussed on enhancing a market-based approach. This includes working with private sector creditors to strengthen contracts underpinning debt issuance to ensure private sector participation in debt restructuring, building on IMF evidence that suggests this approach is working well.

Recognising the importance of the private sector in debt discussions and drawing on the expertise of the City of London, we have set up the London Coalition on Sustainable Sovereign Debt, which I will co-chair and which will consider non-bonded debt issues among others. The Coalition will leverage London’s role as a financial services hub by bringing together government and private sector stakeholders to drive solutions for more sustainable sovereign debt financing in developing economies.