The UK has consistently demonstrated its dedication to promoting responsible international lending and borrowing practices, as well as supporting debt relief initiatives and fostering trade with developing countries. The UK's post-Brexit independent trade policy emphasises trade over aid, fostering economic growth, job creation, and poverty reduction

The UK plays a leading role in international efforts to promote responsible lending and borrowing practices. It supports the IMF-World Bank Debt Sustainability Framework and OECD lending principles, ensuring that official export credits adhere to responsible lending guidelines. Furthermore, the UK contributes to the African Legal Support Facility, which offers legal advice to countries facing litigation, and the World Bank's Debt Reduction Facility (DRF), which helps low-income countries eliminate commercial external debt.

International Debt Relief

The International Development Committee (IDC) has recently released a report examining the UK's initiatives in offering debt relief to low-income countries. In response to this report, the Government has addressed its findings, including the suggestion to consider legislation that would encourage private creditors to participate in the Common Framework. It is worth noting that multilateral international finance institutions continue to be the primary external source of financial support for low-income countries. As a member of the World Bank Group, the International Monetary Fund (IMF), and six regional development banks, the UK actively participates in lending to developing nations.

The IMF and the World Bank developed schemes to help low-income countries with unsustainable levels of debt restructure or eliminate debts, including the Heavily Indebted Poor Countries (HIPC) initiative, which the UK has been a key supporter. Launched in 1996, this program aimed to strengthen the link between debt relief, poverty reduction, and social policies. I am encouraged that the UK has provided debt relief worth £650 million through this scheme.

The UK exercised its influence at key international meetings to advance the HIPC, such as the UK's presidencies of the G8 and the European Union in 2005. Furthermore, by promoting the 100 per cent of eligible debt relief by multilateral institutions, the UK led international efforts in the HIPC and the subsequent Multilateral Debt Relief Initiative (MIDR) which led to the combined cancellation of approximately US$130 billion in debt for 26 countries between 1998 and 2010. The UK alone provided debt relief worth £1.4 billion under the MIDR.

The Covid-19 pandemic and Russia's unlawful invasion of Ukraine have undoubtedly worsened the global debt crisis. In light of these challenges, the UK has played an active role in the Debt Service Suspension Initiative (DSSI). Building upon the DSSI, the G20 and Paris Club have supported the Common Framework, which aims to facilitate coordinated debt relief measures for eligible nations. As a result, governments worldwide have temporarily halted debt repayments for 73 low- and lower middle-income countries, allowing them to access around $12.9 billion in fiscal space.

Responsible Trade

I share the stance of recognising the power of trade in driving economic growth, increasing incomes, and eradicating poverty. Trade has become undoubtedly a priority over aid. Following its exit from the EU, the UK has committed to using its independent trade policy to enhance opportunities for enterprise and trade with developing countries. The Developing Countries Trading Scheme (DCTS) is a significant initiative, replacing the Generalised Scheme of Preferences, which covers over 65 countries across Africa, Asia, Oceania, and the Americas.

Under the DCTS, qualifying countries benefit from simplified rules of origin requirements when exporting to the UK. This leads to lower import costs, amounting to over £750 million per year, which British businesses can leverage. The scheme also ensures that a wide range of products, including clothing, shoes, and unique food items, enjoy lower or zero tariffs. For example, 99 percent of goods imported from Africa will enter the UK duty-free, fostering trade diversity and economic growth.

This work is part of a wider commitment to trade in order to drive prosperity and help eradicate poverty. This extends beyond the DCTS, even before its launch, the UK had invested £49 billion in Africa, surpassing the investments of any other nation. This investment reflects the UK's determination to use trade as a catalyst for prosperity and poverty reduction, providing long-term benefits to both the UK and its trading partners.

The UK's unwavering commitment to responsible lending, debt relief, and trade underlines the dedication to global prosperity. By actively participating in international initiatives, supporting debt relief programs, and implementing favourable trade policies, the UK empowers low-income countries to alleviate their debt burdens, stimulate economic growth, and enhance the well-being of their citizens. Through responsible lending practices, debt relief efforts, and trade partnerships, the UK reaffirms its role as a compassionate and professional global leader in driving positive change.