EXCLUSIVE: Campaigners aghast as Labour suggests u-turn on pandemic debt relief

Starmer's spokesman said it was not Labour policy to back debt cancellation for developing countries to tackle the pandemic.

UPDATE 28th Jan: Labour has now released a statement confirming the party remains committed to debt relief for developing countries. The comment appears to have been made in error.

Keir Starmer’s spokesman has rejected calls to cancel the debt of developing countries to help them tackle the pandemic.

Asked by Left Foot Forward whether Labour would back the idea, he told journalists on Wednesday: “That’s not a policy of the Labour party…That’s not our policy”.

The call was made by the Commons’ International Development Committee this week, and was backed by the Lib Dems.

On Tuesday, Liberal Democrat Spokesperson for Foreign Affairs Layla Moran said: “Developing nations are facing a deadly combination of crises caused by the coronavirus pandemic – between increasing food insecurity, stretched medical supplies, disrupted education and more. Cancelling developing countries’ debt would provide much needed relief during this unprecedented time.”

The statement from Starmer’s spokesman appears to contradict Labour policy from last April. Labour’s Preet Gill then called for the government to push for “the cancellation of debt repayments for low-income countries” – allowing them to prioritise investment in their health systems during the Covid-19 crisis, as reported by LabourList.

Activists have responded to the apparent reversal online. “Debt cancellation for developing countries was a really good policy from the last Labour govt that we should be proud of. This is very disappointing,” one member said.

Responding, Nick Dearden, director of Global Justice Now, said: “I’m not sure why Labour are equivocal on this point – it’s a very clear issue of justice and equality. Not only should Labour be loudly calling for debt cancellation for poorer countries, as the Lib Dems have done, they should be calling for a major change in the global debt system to prevent us getting into this situation again. New Labour put debt cancellation at the heart of their international policy in the late 1990s. It’s incredible that Keir Starmer doesn’t feel able to so the same.”

He added: “There have been calls from really establishment figures, including even the heads of the World Bank and IMF, for real debt cancellation for developing countries. Without it, countries in the global South will continue to be imprisoned in what is effectively a debtor’s prison, forced to repay rich governments, banks and investment funds rather than spending money protecting their people’s lives and livelihoods.”

Asad Rehman, Executive Director, War on Want, described the comments as ‘hugely disappointing’: “The UK is in a unique position when it comes to ending the Global South debt, as over 90% of bonds owed by sub-Saharan African governments are owed under UK law.” he said.

“The right thing to do – when some of the poorest countries are spending more on debt than on protecting their citizens – is cancel a substantial amount of neo-colonial, unjust debt, and use UK influence to bring private creditors including UK banks to the table with African governments to discuss vital debt cancellation,” Asad Rehman added.

Jennifer Larbie, Christian Aid’s UK Advocacy and Policy Lead told LFF: “Some of the poorest countries in the world are facing the twin crises of climate change and Covid-19.  They are already struggling to support their people through these and yet on top that they have to manage their crippling debt repayments to rich nations. 

“As a group of MPs have stressed this week debt cancellation would give these countries breathing room to try and tackle their many challenges – some of these challenges, such as climate impacts, are due to the activities of rich countries like the UK. With the UK hosting the G7 this year we have an crucial opportunity to bring about this fiscal emancipation and help some of the poorest people in their hour of greatest need.”

LFF has contacted both Starmer’s team and Preet Kaur Gill to see if the comment was made in error – or whether this is a u-turn from the party.

Josiah Mortimer is co-editor of Left Foot Forward.

As you’re here, we have something to ask you. What we do here to deliver real news is more important than ever. But there’s a problem: we need readers like you to chip in to help us survive. We deliver progressive, independent media, that challenges the right’s hateful rhetoric. Together we can find the stories that get lost.

We’re not bankrolled by billionaire donors, but rely on readers chipping in whatever they can afford to protect our independence. What we do isn’t free, and we run on a shoestring. Can you help by chipping in as little as £1 a week to help us survive? Whatever you can donate, we’re so grateful - and we will ensure your money goes as far as possible to deliver hard-hitting news.

Comments are closed.