In the Interest of Children: How the UK Government Can Fulfil Their Manifesto Promise to “Tackle Unsustainable Debt”

“Tackling unsustainable debt” was rightly included as one of the focus areas for a modernised approach to international development in the 2024 Labour Manifesto. As historic leaders in global governance and development, 2025 represents an opportunity for the UK Government to embrace the innovative, equitable solutions required to deliver on their manifesto pledge. This report presents a policy package with two elements:

1) Make the global debt restructuring system fit for purpose and
2) Prevent liquidity crises and shocks from derailing progress.

Taking this action would signal that the UK continues to be serious about creating a world free from poverty on a liveable planet.

470 million children live in the 40 low- or lower-middle income countries who are either in or at high risk of debt distress. Mounting debt burdens are shrinking fiscal space for many governments, undermining their ability to adequately fund critical public services and make long term investments in the Sustainable Development Goals (SDGs) and climate action. The situation requires urgent action, and the UK has an outsized role to play in reforming the global governance of sovereign debt.