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World Leaders Summit

My Lords, we on these Benches join in sending condolences to the families of the three people killed in Afghanistan. We all recognise that we are in a severe and serious economic crisis that has its roots in the global economy, starting in the United States and spreading across many other countries. In these circumstances, it behoves us to be hesitant about being over-partisan. I followed the noble Lord, Lord Strathclyde, with puzzlement. He implied that the Conservatives would have been far less committed to free markets and financial capitalism than the Labour Government have been; that they would have wanted to regulate the City more tightly; but that they are resistant to any idea that foreigners should regulate the City more tightly. On the contrary, we on these Benches recognise that, in an international crisis, we need the stronger international co-operation that goes with an open global economy. It has always been a core Liberal principle. We believe in free trade, open markets, and the international institutions and international co-operation that go with them. However, some of us are hesitant about the ambition of our current Prime Minister to undertake, as he said in his Statement, "““the wholesale reform of the international economic architecture built in 1945””." That is a very ambitious and long-term goal. We on these Benches encourage the Government not to raise too high expectations of what is achievable in any group, whether it be eight, 20, 150 or, even worse, 192 or more. How do the British Government see the adjustment to the rise of these new economies? Is the G8 now dead? Do we expect the G8 to continue meeting under the Italian presidency next year, welcoming the ““deeply tanned”” new President of the United States? Or do we expect the G8 now to go into a state of suspension? There is reference to, "““a greater voice and representation for the emerging and developing countries””." The Financial Times today notes that this means that we have to recognise the over-representation of European states. It comments that the United Kingdom could give a lead in suggesting that we reduce the representation of European states. Do the Government have a view on the sort of lead that the United Kingdom might take? I follow the noble Lord, Lord Strathclyde, in asking about the contributions that the rising economies are willing to make. The Saudis appear not to have agreed to contribute to the IMF; nor have the Gulf states with their substantial sovereign wealth funds; nor has China with its massive reserves. It would be more useful if they now recognised that with growing representation come growing responsibilities. There is surprisingly little in the Statement about the contribution that the promotion of global development could make to getting us out of the recession. Kofi Annan had a very good article in the New York Times yesterday on maintaining the commitment to global development. As to immediate measures, we welcome concerted fiscal and monetary measures. It seems to Liberal Democrats correct that Britain should focus on short-term tax cuts and longer term investment in infrastructure. I note with interest that the Conservative Front Bench appears to be against countercyclical fiscal policy—a sort of pre-Keynesian approach to the way in which we should manage things. We note the European framework for better regulation, in which the United Kingdom has led, and for greater transparency, but we are still a little puzzled about how global supervisory colleges of regulators will work. We note with interest stronger measures on tax havens, on which I shall be brief, since I have a Question on this tomorrow. Half of the world’s major offshore financial centres are under UK sovereignty. We are puzzled to know exactly how we will tackle excessive executive compensation schemes, or within what domestic or international framework the Government anticipate that some change in domestic law will be needed. We welcome the Government’s statement on the importance of finishing the Doha round, and we encourage the Government, with their European partners, to push ahead as far as they can on that. Lastly, we welcome that the United Kingdom will be the chair of the G20 next year, and we hope that they will manage to strike the right balance between constructive leadership and an assertion that we were right and that we are leading the world. We need co-operative leadership for the present moment and not a hint of self-righteousness.