A COALITION of 20 charities is lobbying the Government to introduce a debt-cancellation scheme for lower-income countries in the Roman Catholic Church’s Jubilee Year.

In a letter published this week, Christian Aid, Debt Justice (formerly Jubilee Debt Campaign), and other charities argue that high debt-servicing costs are preventing global-South governments from investing in “vital public services” such as education and health, and efforts to limit climate change.

The letter reports that 32 African countries spend more on paying external debts than they do on health care. It also reports that debt payments for lower-income countries are at their highest for 30 years. Private lenders such as banks, hedge funds, and oil traders are the largest group of creditors, it says; many are based in the UK, and 90 per cent of their contracts are governed by English law.

“The UK can only lead on international debt if it ensures Western private lenders take part in debt relief,” their letter says. “If effective debt cancellation is not delivered, new multilateral loans will just bail out private lenders, rather than being invested in meeting countries’ needs.

“As in the 1980s and 1990s, countries will remain trapped in debt crisis for decades. When large-scale debt cancellation becomes unavoidable, it will be the public sector which bears the cost, rather than the original lenders.”

While the charities welcome the Government’s prioritisation of “tackling unsustainable debt”, they write that “this will not happen through business as usual but requires a complete change in the UK approach.”

It recommends “a debt cancellation scheme that brings debt payments down to a genuinely sustainable level”, and that the Government “Pass legislation to ensure all private lenders participate in debt cancellation and suspend repayments to private lenders during debt cancellation negotiations.”

To launch the campaign Cancel Debt, Choose Hope, representatives of the charities, including CAFOD, Oxfam, and Save the Children, met outside the Treasury on Monday.