Fifty UK parliamentarians – including international development secretaries Andrew Mitchell and Justine Greening – wrote to Philip Hammond suggesting the UK should take a lead in increasing the transparency of loans to governments.
For a loan to government to be enforceable it must be publicly disclosed on the register, the letter sent on Wednesday said.
This comes after the Jubilee Debt Campaign charity released figures, in April, showing developing countries’ foreign debt payments had soared by 85% between 2010 and 2018.
“Transparency is a vital step in the good governance of resources. It allows parliaments, media and civil society to hold governments to account on how loans are spend.”
Lenders will also have more certainty on the basis upon which they are lending, it added.
“It should give borrowers lower interest rates because lenders can be more confident about the size of risk they are taking on,” the letter also said.
The letter asked for Hammond to push for “all relevant jurisdictions” at this year’s G20, to be held in Japan between 8 and 9 June.
“Given the City of London’s role as a major global financial centre”, the MPs wrote, it is “of urgent importance that the UK government take a lead on this agenda”.
The letter concludes by echoing support for Hammond’s statement in December last year that he “reject[s] the idea that laxer regulation makes a jurisdiction more attractive”, expressing hope that he will make the UK a “world leader in improving the transparency of loans to governments”.
Currently 48% of international loans to governments are owed under English law, with the other 52% owed under New York law, according to the IMF.
Director of Jubilee Debt Campaign Sarah-Jayne Clifton said: “In the main cases of secret loans to impoverished countries, such as Mozambique and Republic of Congo, the loans were given under UK law by UK-based or listed companies.
“While increased international attention on lending transparency is welcome, so far the G20 governments have done little in concrete terms to get more public disclosure of loans.”
Prominent Labour MP Dame Margaret Hodge has also signed the letter, alongside former Labour international development secretary Hilary Benn.
