G20 Summit

Peter Tapsell Excerpts

Monday 15th November 2010 Commons Chamber

[The Prime Minister]

Oh dear. First of all, it is lovely to see the right hon. and learned Lady back.

On the Chandlers, I very much agree with what the right hon. and learned Lady said. I spoke to Paul Chandler this morning. It is hard to imagine what that family has been through, and it is great that they are now safely in Kenya and are soon to fly home. I am sure the whole House will want to wish them well.

Let me try to answer all the right hon. and learned Lady’s points. On development, which is something that Britain very much puts on the agenda at such meetings—I spoke up very firmly about the pledges that we had made—she is right in one sense. We talk about global imbalances. There is a huge imbalance between the rich world and the poor world, and if we can get people in the poorest parts of the world to join the world economy, we will all benefit.

On climate change, the key point is we are prepared to sign up to another Kyoto-style period, but we have got to have global agreement where others agree to sign agreements as well. That is the point that we will continue to push. The right hon. and learned Lady raised a point about the introduction of the Basel III accords and how we balance wanting safety in our financial institutions with an increase in bank lending. That is one of the reasons why Basel III is phased in the way it comes in.

The right hon. and learned Lady raised the issue of the deficit and made the usual accusation that, in Britain, we are acting too fast in dealing with it. I just think that Labour is completely wrong about this. The alternative to dealing with the deficit would not be some beautiful period of uninterrupted growth; it would involve putting ourselves in the same category as countries in which interest rates are rising and confidence is falling. That is the alternative, and that is where she and her party would have landed us.

The right hon. and learned Lady said that there were great disagreements over currencies, but if she looks at the language of the communiqué—perhaps next time she will read it before writing her script—she will see a lot of agreement on not having competitive devaluations over imbalances. She is right to say that this issue is not going to be solved overnight; I said that in my statement. We are asking different countries to do different things in order to achieve a maximum global outcome. That is tough and difficult, but there was progress at the summit. I also heard direct from the Chinese about their plans to rebalance their own economies.

The right hon. and learned Lady asked what we had brought to the table. The idea of a pan-African trade deal was not on the G20 agenda; we put it on the G20 agenda. The idea of pushing further ahead on Doha by making the deal bigger was a French, German and British initiative that we did at Doha and that pushed the Americans and others to go further. On the issue of imbalances, the key compromise to get the Americans and the Chinese together was again something that was pushed very much by the Germans and the British.

I think that the right hon. and learned Lady is completely wrong about this. If Labour had been at this G20, it would have been completely isolated over the issue of the deficit. Everyone else in the room was signing a communiqué on how we have to take early action on deficits. That is the consensus, but Labour is completely outside the consensus. One group of people represented at the meeting was the International Monetary Fund, and I suspect that if she had been there, she would have been locked in a room with them.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Did the G20 discuss the situation of the Irish banks which, because of the potential knock-on effects, could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008? If so, what view did the Prime Minister’s colleagues take of Chancellor Merkel’s stated determination not to allow her taxpayers to bail out the gamblers who made great fortunes by taking the risks that have created the present crisis, even if that led to the default of national banks?

[The Prime Minister]

My hon. Friend asks an important question. The issue of Ireland was not specifically discussed at the G20. A statement was issued by a number of European Finance Ministers, including my right hon. Friend the Chancellor of the Exchequer, about the mechanism that will be put in place in the eurozone, because there was a concern that what had been thought about was having a negative impact on Ireland. Obviously, eurozone and European Prime Ministers and Finance Ministers at these gatherings always meet and discuss the health of the European economy and the eurozone. I do not want to speculate about another country’s finances. I recognise that the Irish are taking very difficult action to try to get their own fiscal situation under control. Like the United Kingdom, they obviously have very large banks that have got themselves into difficulty and that have to be managed out of the process. We very much hope that all that will take place.