Keir Starmer will have been glad his fortnight bookended by appearances at COP30 and the G20 was out the way before returning home to shore up – he hopes – his leadership with the budget. When it comes to positioning the UK's global leadership, he may at least have succeeded in distancing himself from Trump just enough to preserve relations with global South leaders.
That wasn’t hard; turning up to both summits was a start. With Starmer declaring in Belem that the ‘consensus is gone’ on climate change, the UK’s net zero commitments and its support for a roadmap beyond fossil fuels was enough to secure media headlines that put the UK on the right side of that divide.
Come the G20, Starmer signalled his commitment to global cooperation, not least by announcing the UK as G20 host in 2027. Scratch beneath the surface, however, and it seems a long way from Labour’s manifesto pledge to “rebuild Britain’s reputation on international development” through genuine partnerships with the global South.
Read Christian Aid and Debt Justice’s report on how the climate and debt crises are colliding to trap millions in the global South in to poverty and what the UK can do about it.
Christian Aid and our partners were at both summits, as part of a broad coalitions pressing for deals that that offer hope for the world’s lowest income, indebted, and most climate vulnerable communities. Our partners working in countries facing these crises know more than anyone that speeches and pledges matter less than the action to achieve them - the most important measure of which comes down to one word: finance.
Here, the UK's climate leadership looks less convincing. Just 10 months ago, the Prime Minister slashed the aid budget; source of the UK’s international climate finance. Despite COP29 setting a new climate finance goal last year, the UK has declined to say at COP30 how it will contribute, with no mention of this need in the recent budget.
With a hollowed-out aid budget, the government is increasingly pinning its hopes on private finance. But this is misplaced: private finance for adaptation accounts for less than 0.5% of global climate finance. Rather than pursuing the chimera of a major increase in private finance for adaptation in poor, climate vulnerable countries, the government would better focus on mobilising funds by raising tax on fossil fuel producers.
The principle that the polluter pays is well established in other areas of environmental liability, but leaders of wealthy nations are yet to recognise its potential to fund climate action. In this budget, the government has resisted the pressure from the oil and gas giants to end the current windfall tax, which is something. But it needs to go much further to raise revenue from polluters and draw on part of this money for climate finance.
The challenge of climate finance is two-pronged. Not only are wealthy countries, which have contributed most to the climate crisis, failing to deliver adequate finance to enable lower-income countries to adapt to its effects. Piecemeal and insufficient climate finance, much of it provided as loans, has also contributed to the worst global public debt crisis in a generation, which is trapping millions of people in Africa in poverty and hitting healthcare and education.
To offer genuine partnership to the global South, the UK Government must demonstrate a bold vision on the twin challenges of climate and debt. It was no wonder then that G20 hosts South Africa ensured that debt sustainability was high on the agenda in Johannesburg. Christian Aid, as part of a growing global movement, has long called on wealthy governments to tackle both the symptoms and underlying causes of the debt crisis, including changing the way global debt is governed, to shift power to lower income countries.
At Johannesburg, Starmer told his fellow leaders that we need to make debt restructuring under the Common Framework for Debt Treatments “better, faster and easier". Yet he failed to mention that the UK has a unique responsibility in helping to do just that. Despite G20 leaders reaffirming their commitment to support low and middle-income countries in addressing debt burdens, they keep failing to introduce new measures to bring that about.
The UK could break the logjam in the Common Framework, as most debt contracts between low-income countries and private creditors are governed under English law. Private creditors hold the largest share of debt owed by many governments and charge the highest rates of interest – double that of Chinese lenders – and it is the private creditors that are holding back progress.
The UK’s official position is that they are working with private lenders to encourage responsible lending, but voluntary initiatives have delivered negligible outcomes. Meanwhile, private lenders have strung out debt restructuring negotiations to hold out for higher payments, while dangling the threat of suing governments in UK courts.
Earlier this year, South Sudan, one of the world’s poorest and most climate vulnerable countries, was sued by a private creditor at the UK’s High Court for a sum equivalent to almost half its government revenue and has had further cases filed against it since. Many of the poorest countries are caught in a debt trap, in which public finances are drained by private creditors, at real cost to lives and livelihoods, while the costs of the climate crisis rise.
According to our new report with Debt Justice, based on current payments Nigeria will pay private creditors $13bn in debt servicing between 2025 and 2030: a sum that by 2030 could fund installation of solar power for 5 million homes and 200,000 small businesses, convert 30 million homes to clean cooking and eliminate gas flaring.
The UK can catalyse an end to this twin crisis of unsustainable debt, and under-funded climate action.
Campaigners, economists, and a growing number of heavily indebted countries are calling on the government to introduce new legislation that would compel private creditors to negotiate fair debt deals, thereby potentially unlocking billions for countries facing the brunt of climate breakdown and a broken financial system.
When the Prime Minister came into office, he pledged to reset the UK’s standing on the world stage.
As the climate and debt crises collide, it's time to deliver on that promise.
