Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with (a) his international counterparts, (b) global financial institutions and (c) private creditors on developing a debt relief plan for low-income countries.

The UK is strongly supportive of work to safeguard debt transparency and sustainability in low-income countries. In April 2020 the G20 and Paris Club of official creditors announced a historic joint Debt Service Suspension Initiative (DSSI) for low income countries. The DSSI has supported 43 countries which have requested suspensions by freeing up $5 billion in fiscal space to fund their COVID-19 responses. Given the depth of liquidity needs in these countries, the UK supports an extension of the DSSI into 2021.

Given the significant pre-existing debt vulnerabilities in many low income countries, in some cases further debt relief will be required after the DSSI. This should be on a case-by-case basis in the context of an IMF programme to ensure it is tailored to need, with equitable burden sharing among all official and private creditors.

Last week the Chancellor met with his G7 counterparts to discuss the possibility of both an extension of the DSSI and a future Common Framework for debt relief between the G20 and Paris Club. A joint statement detailing this discussion is available on the US Treasury website. Discussions in the G20 are ongoing, and there is regular engagement with the International Monetary Fund, World Bank Group, and other Multilateral Development Banks. The Paris Club is coordinating closely with the Institute of International Finance, as the primary membership group for private creditors to low income sovereigns