G8 Summit

Lord Triesman Excerpts

Thursday 13th June 2013 Lords Chamber

[Lord Triesman]

My Lords, I join everyone in thanking the noble Lord, Lord Trimble, for initiating this debate and for his very powerful introduction. On behalf of these Benches I thank the right reverend Prelate the Bishop of Bath and Wells for his very considerable contributions while a Member of this House. We wish him well.

It is always sensible for a Government hosting a G8 to set out its priorities and achieve focus. The work leading up to a G8 summit needs focus, and the sequence of conferences feeding into the summit are a critical part of achieving a coherent outcome. As the noble Lord, Lord Brooke said, the Prime Minister trailed his programme in detail, especially, I though, at Davos. He has planned the whole process for a long time. It will be a key moment to judge his effectiveness, because in this case I am convinced that he will be judged by real outcomes.

Recent G8 summits have been choreographed as relaxed fireside chats among the leaders of the world, or at least among those who purport to be its leaders. Of course, these are the optics of such a meeting, but the tests are always of the substance. What should we look for in the final communiqué? What will success look like? The first objective is to create a major boost to growth through trade, which I think is a point also made by the noble Baroness, Lady Jenkin. From 2008, following the sharpest decline in world trade since the great depression, the people of this country, as elsewhere, have been looking for a credible plan for growth. They will look to the G8 in its general review of whether that is possible.

In my view, the reality is that the Government are desperate for some good news from the G8. The United Kingdom has flat-lined. It looks much more like the long period of stagnation which the Japanese economy experienced than an economy on the move. David Cameron will want the G8 to point in a direction that he appears to be unable to achieve with his own Chancellor. So trade improvement is mission critical to this summit.

The combined IMF report and the latest Institute for Fiscal Studies report showed that the next two general elections will be played out to the accompaniment of the harsh tunes of austerity. There is no optimism here about debt reduction or other missed targets: they are all going to be missed. The limited data that the noble Lord, Lord Trimble, mentioned on inventory growth has to be placed in context, as I am sure he would do himself. It is about stocks rather than about finished manufacture and growth. The IFS states:

“We should expect not just 2015 but also 2020 to be an austerity election. Spending reductions are set to be a long-term feature of the UK's public finances, rather than a short and sharp experience”.

What on the horizon could lift that gloom? The best bets are on the potential free trade agreements between the EU and G8 partners. The EU/United States negotiations are due to start; if successful, the Government believe that this might add £100 billion to the EU GDP and more than £80 billion to the United States GDP—all stimulating world trade. If all the free trade agreements succeed, the boost to the world economy could be—these are big figures, I know—more than £1,000 billion. Noble Lords will have anticipated the point that I want to make. These are EU negotiations; what an extraordinary moment for the Government to embark on what may be a populist and gadarine policy that could sever the United Kingdom from the EU. That is now a palpable risk. No wonder that some eminent Conservatives look with dismay at the Eurosceptic brigade among them. What a time for those who want to liberalise and reform the global economy, as we do, to pander to the protectionism and nationalism of some of our vocal xenophobes.

I make one further point on the trade priority. Some fireside corner of this G8 must assess the consequences of the collapsed Doha round. The G8 continues to take far greater value from trade out of Africa than we put in. That point was made by a number of noble Lords. The mispricing and underpricing of African commodities is a motor for African poverty, disease and conflict. The inflated prices that the advanced world extracts for sophisticated, not always useful products; our unwillingness to transfer knowledge and capacity; and the willingness of some people to renege on the G8 promises at Gleneagles are all millstones on Africa. My noble friend Lord McConnell was right to remind us of the significance of what was said at Gleneagles, and the noble Earl, Lord Listowel, reminded us of the 0.7% as well, which is very important. There was progress at the hunger summit of 8 June, but if we fail Africa by not recognising its interests in world trade, that would be at best myopic and at worst a betrayal.

Tax evasion and avoidance is, rightly, the second major priority. While the warm-up discussions have revealed some big differences of opinion about where tax liabilities are generated and tax can be collected, these are key issues, and I applaud the Prime Minister’s intent on this. Whether individuals or Google-style companies are involved in evasion or avoidance, these matters need to be addressed. The noble Lord, Lord Trimble, was right to remind of us of the nine multi-nationals in such a position. That is not a critique of fair tax planning, but it is a call for opposition to what may be the Canadian and Russian objections that could scupper the process.

David Cameron should come back to Parliament to report that he has secured five practical steps. First, we need a clear reform of country-by-country reporting where multinationals publish all the key information required to assess their tax liability—revenues, profits and taxes in each country in which they operate. Secondly, disclosure of tax avoidance schemes and systems should be extended to all global transactions. Thirdly, we should seek greater transparency in tax havens, disclosing information on who is hidden behind front companies and trusts. The G8 should launch a convention on tax transparency. Canada is not entitled to block such arrangements. Fourthly, the G8 global assessment of the impact of controlled foreign company rules with attention to developing countries would be helpful. I note that the Government are reluctant to get into this area but it is a global package that would strengthen their own G8 priority. Fifthly, we should seek reform of the corporate tax system to prevent profit shifting and the use of opaque havens. The current system lags far behind global economic developments and the wiles of specialists. I heard what the noble Lord, Lord Howell, said about the perhaps unconquerable barrier of complexity. Tax cannot be put into the “too difficult” box, although I thought what the noble Lord said was intriguing and I intend to read and study it with great care.

Will the Minister respond positively to those five suggestions, designed to bolster the G8 priorities of the Government? The points made about the impacts on transparency are also a priority. We support the focus on land and extractive transparency, and progress would unquestionably be a blow to corruption. I join in commending the African Union’s land policy initiative and commend Kofi Annan’s reports on the imbalances of trade which are impacting on Africa. I am tempted to recommend an initiative on transparency and anti-corruption in international football, but I might be straying a touch too far today.

In general, this is the right time to push for anti-corruption agendas. Many will advise the Prime Minister not to push too hard in case some of those to whom he speaks recoil. Russia’s interests in Cyprus have been mentioned by the noble Lord, Lord Trimble; the noble Baroness, Lady Falkner, has mentioned some of these matters and a quite remarkable set of statistics from Delaware. A commitment to transparent public registries would transform matters. It would never be easy again for international criminals to work the way that they do and have the freedom that they have had. We should not settle for a lesser or cosmetic solution. I hope that the Minister will assure the House that the Prime Minister will put on all appropriate pressure, including on the United Kingdom’s overseas territories.

I started by commending focus and I finish with a word of caution about too narrow an agenda. The G8 provides opportunities to share thinking and it would be a waste if environmental degradation, nuclear proliferation and the death spiral of Syria—as the right reverend Prelate the Bishop of Bath and Wells just reminded us—were not covered properly. The G8 needs to prepare for the tough issues. On all these priorities my greatest anxiety and, in my view, the gravest test for the Prime Minister, lies in split-personality thinking in the United Kingdom Government.

We say that we want co-operation on fundamental propositions from nations with whom we appear to want no real or deep relationship. We tell them that they are consistently wrong about a wide spectrum of things. We raise three melodramatic cheers for every veto we exercise, whether it is a real one or just theatrical. We do not seem to understand that partners become less inclined to work with us each time that we do that. We need to consider that if we want partners, let us behave like partners. This will be the test of the contention of the noble Lord, Lord Brooke, about whether the Prime Minister has put a foot wrong. The dance is not yet over. I wish the Government well and I put these matters in plain terms precisely because I wish them well. There is nowhere better than Northern Ireland to face and resolve the toughest issues.