UK charities urge government to tackle climate breakdown and debt crises

The Blue Marble - Photo taken during Apollo 17 Lunar Mission 1972

Source: Christian Aid

CAFOD, Christian Aid, Oxfam, Debt Justice, Greenpeace, Amnesty International UK and others are urging the new government to increase funding to tackle the climate crisis and introduce legislation to facilitate debt relief for lower income countries in crisis.

Labour MP Sarah Champion, the Chair of the International Development Committee, has backed their appeal and urged Ministers to demonstrate "global leadership". Former aid worker and Liberal Democrat MP, Brian Mathew, is backing the appeal too.

The coalition of charities has joined forces to warn the new Labour government that urgent action is needed to address the climate crisis and growing inequalities that together are trapping hundreds of millions of people in poverty.

The intervention comes ahead of the World Bank and IMF Annual meetings this month and COP29 in November, both among the new Labour government's early forays on the international scene. The Labour Party pledged a "new approach based on genuine respect and partnership with the global South" in its election manifesto.

The charities are urging the new government to deliver an ambitious target for increasing and mobilising public finance to help the lowest income countries tackle the climate crisis, devise a package of taxes on extreme wealth and polluters to help pay for the UK's contribution, and introduce legislation to facilitate debt relief for lower income countries in crisis.

Sarah Champion MP, Chair of the International Development Committee, has backed their appeal. The Labour MP said: "National debt isn't an abstract number that's detached from day-to-day life. It incurs a huge human cost. Every dollar that a low-income country spends on servicing unsustainable debt is money taken away from healthcare, education and tackling climate change.

"The Labour government has a unique opportunity to improve the lives of hundreds of millions of people without any extra public spending, just by changing the laws that govern debt. I urge the UK Government to unclog the international gears of debt relief by demonstrating global leadership and adopting an interventionist, legislative approach to compel creditors to participate in debt relief."

A recent report by Christian Aid that found that 34 African countries spend more on debt repayments every year than they do on health and/or education. In total African governments spent 50 times more on external debt payments than the entire UK aid budget to the continent last year.

In a letter to the Foreign Secretary, the Energy Secretary, and the Development Minister, the groups said: "As you step out onto the global stage, yawning inequalities and climate change are trapping hundreds of millions of people in poverty. Women and girls and those experiencing intersecting forms of discrimination bear the brunt.

"There is an urgent need to dramatically increase and mobilise public finance for the lowest income countries to accelerate progress towards the Sustainable Development Goals and to deal with the climate emergency. The UK has a moral obligation to the world's most marginalised people to act."

Patrick Watt, the Chief Executive of Christian Aid, said: "Almost twenty-five years ago, a Labour government in its first term led a global effort to cancel hundreds of millions of pounds of debt of global south countries. It made a huge difference to people in poverty, and boosted the UK's moral standing.

"Fast forward to today, and with much of the debt owed to wealthy private creditors governed by English law, this new Labour government has a unique opportunity to break the debt relief logjam by one stroke of the legislative pen."

Maja Darlington, climate campaigner at Greenpeace UK, added: "Many developing countries are caught between a debt crisis and worsening climate disasters they did not cause. Meanwhile, fossil fuel companies continue to dig up more planet-wrecking oil and gas, ravage communities with environmental destruction, and rake in enormous profits. It's time these polluters were properly held to account.

"Here in the UK, the cradle of the industrial revolution and the home of oil majors, our responsibility is clear. Rather than making ordinary households pay more, Ministers should increase taxes on this polluting industry and push hard for other countries to do the same, so that climate-impacted communities at home and abroad get the financial support they deserve. From a new oil and gas extraction levy, to cancelling production subsidies, and taxes on trading and dividends, the options to make polluters pay their fair share are extensive. The government should use the upcoming international summits to make that case on the world stage."

Liberal Democrat MP Brian Mathew, who previously worked for WaterAid and other agencies in Tanzania, agrees. He said: "The UK needs to pass legislation urgently to incentivise private creditors to take part in debt relief and to shame them if they do not. The 2010 Debt Relief (Developing Countries) Act needs to be replicated so that no private sector creditor can hold out for more than government creditors will receive through common framework debt restructuring. And for a debt payment standstill once a country applies for debt relief, so long as it is negotiating in good faith. In doing so debtor countries need to be given greater confidence that applying for debt relief is legitimate, and to protect them from being sued during the negotiation process. Such protection is standard practice for corporate debt protection restructurings and this protection should be provided urgently to developing countries in the same way too."

Labour MP Abtisam Mohamed, a former human rights and immigration lawyer, added: "Low-income countries need long-term economic stability and an international approach towards development that is based on respect and a genuine partnership to eliminate poverty, tackle climate change and reach the global goals. Facilitating debt relief for lower income countries in crisis is not merely an economic issue; it is a humanitarian challenge of global justice that demands our immediate response."

The full text of the letter follows:

As you once again step out onto the global stage, yawning inequalities and climate change are trapping hundreds of millions of people in poverty. Women and girls and those experiencing intersecting forms of discrimination bear the brunt. There is an urgent need to dramatically increase and mobilise public finance for the lowest income countries to accelerate progress towards the Sustainable Development Goals and to deal with the climate emergency. The UK has a moral obligation to the world's most marginalised people to act.

We welcome the new Government's commitment to be a respectful partner to the Global South, to tackle unsustainable debt and to unlock climate finance; and we are fast approaching a series of crucial opportunities for you to demonstrate what these commitments look like. The World Bank and IMF Annual meetings this month and COP29 in November each demand urgent action on finance, to arrest the global crises of poverty and climate breakdown. Many now look to the UK for what we will deliver.

As a leading historical polluter, the UK must act to support lower income countries facing the worst impacts of climate change, which they have done little to cause. Yet, climate finance is falling woefully short: finance is often provided as loans which drive up debt and fail the most marginalised communities, and insufficient investment in adaptation is increasing the severity of loss and damage. While we welcome the establishment of the new Fund for responding to Loss and Damage, the UK must use its influence to ensure it delivers for communities on the frontlines of the climate emergency whose lives are being routinely upended - whether by crop failures, destroyed homes and schools, or loss of loved ones.

Compounding all this, many lower income countries are in a debt crisis that prevent governments from addressing the needs of their people or responding to the climate emergency with their own resources. 34 African countries spend more on debt repayments every year than they do on health and/or education. Lower income countries spend five times more on debt than on climate action. Widespread debt cancellation is needed but private creditors are delaying and weakening global debt relief initiatives.

At the World Bank/IMF Annual Meetings and COP29, our country must bring to the table a credible offer that drives global ambition. We call on you to:

- lead efforts at COP29 to deliver an ambitious post-2025 new collective quantified goal, with clear sub-goals for mitigation, adaptation and loss and damage, and show how the UK will deliver its fair share of public, grants-based finance. This is vital to rebuild waning trust in negotiations and ensure the costs of climate change are no longer borne by those least responsible for the emissions causing it.

- champion the role that tax justice must play in climate and development. To urgently deliver our fair share of finance to communities in the Global South, this must include devising a package of taxes on extremely wealthy people and corporations in the UK, particularly those most responsible for pollution such as fossil fuel companies. It must also include supporting an ambitious UN Tax Convention at UNGA and beyond, as a vital step toward tackling tax avoidance, raising necessary public finance and reducing inequality.

- as an immediate step, introduce legislation to facilitate debt relief for lower income countries in debt crisis. As the majority of debt owed by lower income countries to private creditors is governed by English or New York law, the UK government has unique powers to unlock multilateral cooperation on debt relief, freeing up resources for lower-income countries to invest in tackling the climate crisis and fulfilling the SDGs. This measure would come with no cost to the UK government or the taxpayer and can deliver real world change, while sending a powerful signal on the world stage.

Climate breakdown and debt crises are devastating the lives of millions. Now is the time for bold action.

Yours sincerely

Patrick Watt, CEO, Christian Aid
Dr Halima Begum, Chief Executive, Oxfam GB
Christine Allen, Director, CAFOD
Areeba Hamid, co-Executive Director, Greenpeace UK
Heidi Chow, Executive Director, Debt Justice
Robert Palmer, Executive Director, Tax Justice UK
Dr Mary-Ann Stephenson, Director, UK Women's Budget Group
David Hillman, Director, Stamp Out Poverty
Priya Sahni-Nicholas and Jo Wittams, Co-executive Directors, The Equality Trust
Ruth London, Director, Fuel Poverty Action
Kate Metcalfe, Co-Director, Women's Environmental Network
Sarah Edwards, Executive Director, Just Money Movement