G20

Edward Miliband Excerpts

Monday 7th November 2011 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement, but I have to say to him—what a complacent statement from an out-of-touch Prime Minister! Anyone listening to him would think that the G20 summit had been a great success, but it was not.

Let me ask the Prime Minister about the three areas in which the summit should have made progress: the eurozone, reform of our banking system, and economic growth. On the eurozone, the Chancellor said in mid-September:

“'The eurozone has six weeks to resolve this political crisis.”

The six weeks are up, but there is no clear solution on financing. How much, from whom, and in what circumstances? None of those questions are being answered. Now we see the crisis in Greece spreading to Italy, and no plans for jobs and growth—just more austerity.

Can the Prime Minister tell us why European and G20 leaders failed to find a solution to the problems of the eurozone? Given that the Chancellor told us from Cannes that he and the Prime Minister were

“right at the heart of the discussions here”,

people will be struck by the Prime Minister’s tone today. Progress that was made at the summit was, of course, down to him—and, as always with this Prime Minister, failure is nothing to do with him.

Does the Prime Minister not now regret that he did not try harder and earlier to engage in the discussions and push for an agreement, rather than standing aside and claiming that Britain was a “safe haven”? If we were indeed at the heart of the discussion, can the Prime Minister say what responsibility he takes for the failure of the eurozone? Given the importance that all this has for Britain, can he tell us specifically what he plans to do in the coming days to secure an agreement?

Let me turn to the funding for the IMF. The Prime Minister said in his press conference on Friday, and again today,

“you can’t ask the IMF or other countries to substitute for the action that needs to be taken within the eurozone itself.”

We agree with that position. The sensible step of increasing resources for the IMF should not be taken to make up for inadequate eurozone action.

The Prime Minister has said that he would not support the direct use of IMF resources to top up the European financial stability facility, but can he also categorically rule out the use of IMF resources indirectly, in parallel, to make up for insufficient funding from the EFSF or the European Central Bank? Can he also square his position that his commitment is within agreed resources with the comment of the managing director of the IMF that there is “no cap…no ceiling” on IMF resources?

Let me turn to the issue of banking reform, and specifically the global financial transactions tax, which we support and believe should be implemented if we can reach agreement in all the major financial centres. It was on the agenda in Cannes, although no real progress was made. I have to say I could not tell from his statement whether the Prime Minister really supports it; after all, “not opposed in principle” is hardly a ringing endorsement. I do not think we should be surprised, because the week before the summit negotiations had even started, the Chancellor was writing to business leaders casting doubt on whether any such mechanism offers an efficient way to raise revenue. So can the Prime Minister tell us whether he actually argued for a global financial transactions tax at the summit, and can he tell us what steps he will be taking in the weeks and months ahead to advance its cause?

Turning to growth, the first substantive paragraph of the communiqué states:

“Since our last meeting, global recovery has weakened, particularly in advanced countries, leaving unemployment at unacceptable levels.”

That is certainly true in this country, where growth has flatlined and unemployment is at a 17-year high. So does the Prime Minister understand why people are so disappointed by the failure of the summit?

The Prime Minister talks about the words in the communiqué about trade and imbalances, but action on trade and imbalances will take years to implement. He also mentions undertakings by various countries who have scope to take action, but it is a very important point in the communiqué that they will be implemented only if

“global economic conditions materially worsen.”

People around the country will be wondering: how much worse do they need to get for action to be taken? He says, by the way, that nobody is arguing for Britain to change course, but the IMF said only last month that if the British economy continues to undershoot, the Chancellor should do just that. How much longer does the country have to wait for him to change course?

After the April 2009 G20 summit the Prime Minister said:

“The glitz and glamour of this week must seem very remote to the small businessman who still can’t secure the credit to stay afloat—or the mother worrying if she’ll be able to keep a roof over her children’s heads.”

The 2009 G20 summit succeeded, and this one failed. For the young person who is unemployed, for the business that has seen demand for its goods disappear, and for the shops that have seen people leaving the high street, this summit achieved precisely nothing. That is why the Prime Minister looks so out of touch when he claims that the summit has made a difference on growth. But is not the real problem this: the Prime Minister does not really believe that we need a global plan for growth? He thinks the answer for the world is collective austerity, just as he used to claim that the answer is austerity at home.

People wanted action from this summit, and they did not get it. Those struggling to find work, seeing their living standards squeezed, asking why the economy is not working for them, deserve better. Is not the truth that this is a do-nothing summit from a deeply complacent Prime Minister, out of touch with the real needs of our economy?

[The Prime Minister]

Honestly, I do not know who writes this rubbish! I liked the bit when the right hon. Gentleman quoted my response to the 2009 summit: I have to say that if the 2009 summit was such a success, why did the Labour party vote in the House of Commons against one of its key conclusions—the idea of increasing IMF resources? He talks about regulating banks, with no recognition of the failed regulatory system that he oversaw for a decade. He talks about the eurozone, with no recognition of the fact that Labour had a “national changeover plan” to get the whole of Britain to adopt the euro. Above all, let us be clear: if we had listened to his advice, we would not have been in Cannes discussing a Greek bail-out; we would have been at the IMF discussing a British bail-out.

Let me remind the right hon. Gentleman of the figures. In 2008 Greek and British bond yields were both 4.5%. Since then, in the UK that rate has halved, whereas in Greece it is up by six times. That is because they did not have a credible policy for deficit reduction, and we do.

Let me come back to the issue of the IMF, because what we are seeing from the Labour party is breathtakingly irresponsible. Let us be clear about its position on the IMF, and let us remember that that is an organisation founded by Britain, in which we are a leading shareholder, and also an organisation that rescued us from Labour in the 1970s. Labour’s position is, first, to vote against the increase in resources agreed by the G20 under their own Government. They called it a “triumph” at the time, yet Labour Members trooped through the Lobby in a complete display of opportunism. But it gets worse, because now they are saying that they do not want IMF resources for any eurozone country. Are they saying that they want to take the money from Ireland and Portugal? They would have turned up at the summit, where every country was talking about increasing IMF resources, and said that on no account would Britain support that. How ridiculous. They are saying to eurozone countries, which also contribute to the IMF, “You’re never, ever allowed to seek its assistance.” If they meant that, I would take it seriously—but this is all about politics: they are putting the politics ahead of the economics. We know that that is the case with the shadow Chancellor: he only ever thinks about the politics. The question for the leader of the Labour party today is: are you a bigger politician than that? I am afraid that the answer is no.