G20 Summit

Lord O'Neill of Gatley Excerpts

Monday 8th July 2019 Lords Chamber

[Lord O'Neill of Gatley (CB)]

My Lords, it is a pleasure as well as an honour briefly to speak in this debate. I congratulate the noble Lord, Lord Howell, on securing it and join others in commending the tremendous work that he has conducted in his committee. I can only hope that his example is taken up in the commitment of others and that, in the spirit of some comments already made and a couple that I shall now reflect on, it pushes our country on to be more thoughtful and bold on the global stage.

I want to make six brief points. First, the G20 meeting in Osaka took place against a background of many high-frequency indicators suggesting an ongoing slowdown in the world economy. Four out of five indicators that have a particularly good cyclical track record are all softening: Germany’s Ifo leading indicator, as it is known; the US ISM survey of manufacturing; the sub-components of that same index for new orders and inventories; and Korean exports—South Korea is the first country to report its export data every month and does so on the first day of the month referring to the month before. The data for June, published a week ago, show a sharp weakening in exports—a bellwether of what is going on in world trade. The fifth, US weekly jobless claims, is the only indicator that continues to be strong, but if the others carry on in the same way, that will soon no longer be the case.

Secondly, fortunately the G20 statement did acknowledge downside risks to the world economy, which was a relief, not least given that that was its original expertise. Of course, as we have heard, the Trump announcement of a truce—for now—in the trade war with China was also a relief. However, as others have commented, it is not clear that there was anything at the G20 meeting, with the possible exception of increased expectations, yet again, of policy burdens falling on major central banks to do more to help economic growth. That in itself, in my opinion, is a growing concern, as it is now becoming almost an addiction.

Thirdly, as said quite correctly by others, the G20 itself is the most representative body to deal with the many complex social challenges of the world, as well as the macroeconomic ones we have heard some reference to. Indeed, I applauded its emergence way back in 2008, seven years after I first wrote about the so-called BRIC concept, in an article that actually tried to show that we needed a much better form of global economic governance, even if it would be more complicated. With the G20, in principle, we have it. It is much more sensible, as I believe others have mentioned, than the very outdated G7, but it needs to start doing something.

Fourthly, as we see in many of the paragraphs in the leaders’ statement, it is not clear that the G20 is doing anything any longer beyond publishing statements of recognition and showing awareness of what much of the world is talking about. Beyond accounting for itself more regularly, perhaps a separate problem is its sheer size. A couple of noble Lords commented on the exclusion of certain obvious countries, but another part of the problem, which the noble Lord, Lord Grocott, talked amusingly about, may be that there are too many. I have long believed that within the current G20 perhaps we need, separately, a new G7, which would, in my opinion, definitely include China, probably India, and perhaps Brazil and Russia, and then, of course, the US and Japan and, instead of many individual European countries, the EU.

Fifthly, noble Lords will notice that I did not mention the UK. The UK would understandably want to be part of such a narrow group, if such circumstances ever came around. Given our history and what we have still in principle in terms of values, we could be an eighth; but we need to demonstrate that we have something powerful that would help the world move forward and become a better place. That in itself partly relies on the Government having a clear and powerful vision for post-Brexit Britain and the world.

Sixthly and lastly, I want to end specifically on the topic of antimicrobial resistance, or AMR, which luckily no one else has yet mentioned. I was relieved that paragraph 33 referred to this huge challenge and I remain proud that the review I chaired under David Cameron played its part in getting the topic on the agenda in 2015, with increased focus in 2016. I take this opportunity to pay tribute to the dedication of a number of civil servants who I know worked tirelessly to ensure that this statement appeared. I am irritated, and to some extent alarmed, by what I have picked up about the attempts by some G20 countries to downplay the focus on this issue, including some that claim to share the UK’s championing of this issue in recent years. This in itself highlights, as could many other examples, the weakness of the current G20 operational style: G20 leaders need to urgently change this game-playing approach. In this instance, the so-called market failure in the market for antibiotics is getting dramatically worse. The solutions my review highlighted have been broadly supported by many of those few who analyse these things, but as of yet, we just have words: no incentives or moneys are coming from the G20 or the pharma industry. As we showed getting on for three years ago, if we do not address this, along with the other challenges that need to be met, we will have 10 million people a year dying by 2050. The G20 needs action and not just pleasant words.

It is also important that our next Prime Minister, whoever it is, the Chancellor, Foreign Secretary and the rest of the Cabinet get back to start talking about these things powerfully and regularly, as they have done in the past—not least, as one of the many symbols they could give of what global Britain actually is.

I will finish, and I apologise for going over by 30 seconds—

[Baroness Stedman-Scott (Con)]

Perhaps the noble Lord could bring his remarks to a conclusion.

[Lord O'Neill of Gatley]

To echo the words and spirit of the noble Lords, Lord Howell and Lord Grocott, it is exceptionally important that the UK be on the front foot at the G20, with thought and serious attention. As a final thought in the spirit of the interesting comments of the noble Lord, Lord Hannay, perhaps the UK can itself outline ways in which the G20 can start monitoring and measuring what it says at meetings.