Campaigners welcome Gordon Brown's 'bold move' on debt

Debt campaigners have welcomed the Chancellor's announcement that Britain will unilaterally cancel its share of the debt service paid to the World Bank (and other development banks) by the world's poorest countries. "The debt crisis isn't over, but the UK has taken a bold step towards ending it.

This announcement is a vindication of the concerted hard work of debt activists, who have been campaigning over the last six months for the government to take unilateral action to break the log-jam on debt. Its now time for the rest of the G7 to put their hands in their pockets too," said Henry Northover, CAFOD Debt Analyst.

Campaigners from Action Aid, CAFOD, Oxfam, Tearfund and the Jubilee Debt Campaign are now looking to the rest of the G7 to follow suit and mirror Gordon Brown's announcement. The IMF and World Bank meetings take place later this week and offer a real opportunity for progress. The campaigners are also pushing for Brown to do all he can to ensure IMF gold stocks are revalued, a move that would raise around $32bn, and then use this to cancel IMF debt. Campaigners will also be looking for confirmation that the money for debt cancellation will be in addition to the recently announced increased aid budget.

"This is an audacious move by Gordon Brown. He has thrown down the gauntlet to the rest of the world to follow suit. If they do, today could herald the end of the debt crisis as we know it and dozens of poor countries will be offered a fresh start. If the Chancellor can go to the IMF later this week, get others to back his move and agree a deal to revalue IMF gold, this debt double whammy will change the lives of millions," said Ashok Sinha, co-ordinator of the Jubilee Debt Campaign.

Gordon Brown's announcement builds on US proposals to cancel 100% of the debts owed by the HIPC countries to the World Bank and IMF using existing aid resources. Although, under the US proposal poor countries would not receive any additional money. 2005 is a crucial year for the UK to lead the world in combating global poverty. Campaigners are hoping for further moves this week to demonstrate how the Government intends to tackle the issues of debt, trade and aid to ensure that the opportunities of next year are seized.