---

World Leaders Summit

My Lords, these are difficult times in this country, but they are difficult times in the rest of the world. That is absolutely clear from the meeting that took place at the weekend in Washington. Of course, these are most difficult times for those individuals who have lost their jobs. This makes it unbearable for some families, and it makes it very difficult for the economy. That is why we as a government are doing absolutely everything that we possibly can to retain jobs by boosting the economy and to assist those who become unemployed. The noble Lord, Lord Strathclyde, asked about the recession and asked whether I would apologise for the recession. It is clear from what was said at the meeting at the weekend that the world got it wrong and, if the noble Lord reads the communiqué and not just the Statement, he will see that the world has said that the world got it wrong and that we, the world, must do what we can to make things right. The noble Lord asked about the estimate for the forthcoming trade deficit. I do not have figures, but it is clear that the current devaluation of sterling will boost exports and that will eventually be good for business. No, the UK will not accept external regulation that will strangle the City of London because, like the noble Lord, we recognise the importance of this jewel in our crown. In relation to protectionism and the USA, the US Administration were clear at the meeting that they were in constant touch with the transition team of the President-elect. I am hopeful—indeed, I am confident—that President-elect Obama will not resort to protectionism. The noble Lord mentioned the carefully funded proposals of his party. One could interpret that as meaning no new money, at a time when the people of this country, the economy and the businesses of this country need more money so that we can kick-start the economy. Of course, the borrowing that we must do has to be sustainable, which is exactly what my right honourable friend the Chancellor will make clear in his Pre-Budget Report; he will say how he is going to make that borrowing sustainable. I reflect on the point that, at this time, the noble Lord and his party are not looking at finding any new spending, new tax cuts or at pouring money into the economy; whereas the leadership of the world at the G20 agreed that what was wanted now was precisely a fiscal stimulus. The noble Lord, Lord Wallace, briefly mentioned partisanship. I, too, believe that this is no time for partisan politics and I am delighted that there is not a bipartisan approach in the world. As mentioned in the Statement, Governments throughout the world—left, right, north and south—all agree on the way forward. That is important. The noble Lord also asked about the wholesale reform of institutions. The Prime Minister is trying to keep up the pressure so that the necessary reforms take place. Without that impetus, we may not see the necessary reforms. The noble Lord asked whether the G8 is dead. I do not think so, but at the moment we need the G20 more. That is why the meeting took place at the weekend and why there will be another very welcome meeting in April. Will there be a reduction in EU states in the G20? I do not think so; we will have to wait and see. The important thing is to have the right people around the table. The G20 has the right people around the table with five representatives from the Americas and five from the European Union, so it could be said to be balanced. Development issues were covered by the communiqué and all leaders were conscious of the need not to forget such issues at this difficult time. On better regulation, greater transparency and how the colleges will work, we will have to wait to see how they work in practice. As I understand it, for every financial institution a college of regulators will be drawn from all the regulators in the most important economies in which those institutions work to ensure that there is proper regulation. On excessive bonuses, we do not want beggar-my-neighbour remuneration. We want to ensure that it is agreed around the world that excessive bonuses are anathema and that people are paid the proper rate for the job. I am grateful for the comments made by noble Lords.