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Campaign and petition email responses | Will you help stop cowboy lenders?

Campaign and petition email responses

Will you help stop cowboy lenders?

Thank you very much for getting in touch with me on such a serious international issue.

As you rightly say, the House of Commons' International Development Select Committee (IDC) recently published a report entitled "Debt relief in low-income countries."

The recommendations of this report include:

  • Calling on the UK Government to adopt "an interventionist, legislative approach to incentivise and/or compel all creditors, including the private sector, to participate in debt relief";
  • Encouraging the UK Government to "support continued emergency debt service suspension for countries that have applied for the Common Framework" (a new debt relief initiative);
  • Insisting that the UK Government "exercise its influence at the IMF to establish a clear definition of unsustainable debt to inform potential applicant countries on the likelihood of meeting the eligibility criteria for the Common Framework";
  • And that the "UK Government must acknowledge the critical interplay between debt and development by including its strategy for debt relief in (a) the next iteration of its International Development Strategy and (b) the updated Integrated Review."

As you rightly say, these recommendations pertain directly to vulture funds (private hedge or equity funds that invest in debt which is seemingly likely to default), as well as 'cowboy lenders' (which can include banks).

According to Debt Justice, "90% of the lending for the poorest countries is enforced through UK courts." Whilst not all of this funding will be coercive or exploitative, this does not excuse the UK Government's inaction on safeguarding countries in debt crisis. The UK's political and legal systems have a unique opportunity (and moral obligation) to ensure that vulture funds and 'cowboy lenders' cannot exploit the world's most debt-insecure populations for their own profit.

The SNP fully support calls for the UK Government to introduce legislation to curb the influence of vulture funds and 'cowboy lenders' that exploit countries unable to pay their debt. In fact, in December 2022, the Minister for Development indicated that he is in favour of such legislation whilst giving evidence to the IDC. Myself and fellow SNP MPs in Westminster will continue to push the Minister (as well as his Government colleagues) to introduce such legislation to the House as a matter of urgency.

On the wider issue of debt cancellation policy, the SNP have been one of the most vocal and progressive parties within Westminster. My SNP colleague and Member of the IDC, Chris Law MP, has been a particular champion of debt cancellation for the poorest and most debt-insecure countries around the world.

The SNP have long supported the cancellation of poor or struggling countries’ debt, thus empowering them to better alleviate poverty and channel the money they do have into improving infrastructure.

The SNP also agree that, as an Executive Board member of the IMF, the UK is in a prime position to raise this sensible and just proposition in the international monetary field.

In short, please rest assured that the SNP are supportive of your campaign, and will use all opportunities to press the Minister for International Development to take bold and progressive steps in debt relief policy.

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@StewartMcDonald on Twitter