With permission, Mr Speaker, I would like to make a statement on last week’s G20 Summit.
Mr Speaker, there were three key aspects to this summit.
First, agreement on an Action Plan for growth and jobs with specific countries agreeing to do specific things in order to maximise overall growth in the world economy.
Second, the G20 continued with its work to identify and remove some of the key obstacles to growth: imbalances between surplus and deficit countries; stopping the slide to protectionism; improving global governance; and protecting the world’s poorest from the current economic problems.
Third, there was, of course, the main issue of instability in the Eurozone.
Let me take each in turn.
Action Plan for growth and jobs
First, the Action Plan for growth and jobs.
This includes many of the things Britain is already doing, from fiscal consolidation and monetary activism to removing the barriers in the way of business and job creation.
The G20 recognised yet again the importance of implementing - and I quote - ‘clear, credible and specific measures to achieve fiscal consolidation.’
It also clearly identified a group of countries who have the space to borrow for additional discretionary measures.
And I have to tell any Members of the House who would like to see the UK borrow more, no one was proposing that the UK should be in this group of countries.
We are determined to deal with our debts - not to leave them to our children and grandchildren.
And the need to press on with our plan for fiscal consolidation has now been recognised by the G20, as well as the IMF and the OECD.
Second, obstacles to growth.
The imbalances which did so much damage in the run-up to 2008 are growing again.
This matters because if we are to maximise global growth, and avoid some of the speculative bubbles of the past…
…countries with a trade surplus need to increase domestic demand and ensure they keep markets open…
…while those with a trade deficit have to undertake structural reforms to restore competitiveness.
There was some real progress.
For instance, Russia is making changes to its foreign exchange regime.
And China agreed to increase its exchange rate flexibility.
Both of these are reflected in the communique.
But more needs to be done.
Slide to protectionism
The greatest mistake the global economy could make is a slide towards protectionism.
The WTO report sets out all the protectionist measures that have been taken in G20 countries over the last year.
And these are a cause for concern.
The G20 reaffirmed its pledge not to take protectionist actions…
…committed again to roll back any new protectionist measures that may have arisen…
…and reaffirmed its determination to refrain from competitive devaluation of currencies.
We also welcomed the fact that Russia, the last G20 country outside the World Trade Organisation, is now set to become a member of the WTO by the end of the year.
On Doha, I have said it is time to look at working with groups of countries in so called ‘coalitions of the willing’.
Together with 5 other G20 leaders, I wrote to President Sarkozy ahead of the Summit to call for new and innovative approaches to trade liberalisation.
This conclusion is clearly echoed in the communique.
On improving global governance, I presented a report which I am placing in the library of the House today.
And I am pleased to say we secured agreement for our key proposals.
First, that the G20 should continue as an informal, flexible gathering, rather than attempting a complete reordering of the system of global governance. What is needed is not new institutions but political will.
Second, that we should make the now established Financial Stability Board a separate legal body to give it the authority and the capability that it needs go continue its excellent work on financial regulation.
And third, that we should strengthen the WTO’s role as the guardian of the world trade system, fighting against protectionism, settling trade disputes and helping us to find innovative approaches to trade liberalisation.
Further progress was also made on cracking down on tax havens, tax evasion and a proper regulatory system for banks to make up for the woeful system that has existed in so many countries - including ours - over the last decade.
On development, Bill Gates gave a presentation suggesting ways of mobilising resources to help the poorest.
This included helping some developing countries help themselves through proper systems for collecting taxes and transparent revenues for natural resources.
At the same time he gave strong support to the UK’s own record on the development agenda.
On the Financial Transactions Tax
I’ve been clear all along that we are not opposed in principle to such a tax if one could be agreed on a global level.
But we will not unilaterally introduce a new Financial Transactions Tax in the UK…
…and neither will we support its introduction in the European Union unless it is part of a global move.
Britain has introduced a bank levy and we are meeting our global agreements on overseas aid.
If other countries want introduce new financial taxes at home, including to raise revenue for development, that is for them to decide.
But what they should not do is try to hide behind proposals for an EU tax as an excuse for political inaction on meeting targets for spending on development or indeed climate change.
And Mr Speaker, let me make this point.
The current proposals for a Financial Transactions Tax in Europe are so deeply confused that different European countries - and institutions - have talked about spending the revenues of such a tax in 5 different ways…
…on development, on climate change, on social policy, on resolving the banking crisis, and, most recently, to supplement the EU budget.
Mr Speaker, let me turn to the problems in the Eurozone.
It is clearly in our national interest for the Eurozone to sort out its problems.
As the Chancellor has said, the single biggest boost to the British economy this autumn would be a lasting resolution to the Eurozone crisis.
That is why Britain has been pressing the Eurozone to act - not just at the G20 - but for many months.
The deal in Brussels 10 days ago was welcome progress…
…and it reflected the three essential elements that Britain has been calling for.
First, reinforcement of the bailout fund by Eurozone countries to create a proper firewall against contagion.
Second, recapitalisation of weak European banks.
And third, a decisive resolution to the unsustainable position of Greece’s debts.
The Euro area countries now need to do everything possible to implement their agreement urgently.
Of course, the rest of the world can play a supporting role, but in the end, this work has to be done by the Eurozone countries themselves.
No one else can do it for them.
As I have said before, Britain will not contribute to the Eurozone bailout fund; whether that’s the EFSF or a special purpose vehicle.
And while the IMF may administer a fund, it can not and will not contribute to it.
The IMF does, however, have a vital role to play in supporting countries right across the world that are in serious economic distress.
There are 53 countries currently being supported by the IMF, of which only three - Greece, Ireland and Portugal - are in the Eurozone.
It is essential for confidence and economic stability that the IMF has the resources it needs.
So at the G20, Britain, the US, China and all the other countries round the table, made clear that we are willing in principle to see an increase in IMF resources to boost to global confidence.
There was no agreement about the timing, the extent or the exact method through which this could be done.
However, Britain stands ready to contribute within limits agreed by this House.
Those who propose we walk away from the IMF…
…or who even opposed the increase in IMF resources agreed by the last government…
…are not acting responsibly or in the best interests of Britain.
It is in our national interest that countries across the world that are in distress are supported in their efforts to recover.
The collapse of our trading partners - whether in the Eurozone or not - would have a serious impact on our economy.
Businesses would not invest.
British jobs would be lost.
Families across Britain would be poorer.
Through the IMF we can help other countries in a way that doesn’t affect our own public finances.
But let me be clear.
It is for the Eurozone and the ECB to support the Euro.
And global action cannot be a substitute for concrete action by the Eurozone.
The G20 withheld specific IMF commitments at this stage precisely because we wanted to see more concrete action from Eurozone countries to make their firewall credible and to stand behind their currency.
In short, the world sent a clear message to the Eurozone at this summit:
Sort yourselves out and then we will help. Not the other way round.
Mr Speaker, these are very difficult times for the global economy.
This government is completely focused on one objective: to help Britain weather the storm and safeguard our economy.
Because of the tough decisions this government has already taken to get to grips with our deficits…
…Britain has avoided the worst of this stage of the global debt crisis.
In 2008, under the last government, UK bond yields were about the same as Greece.
Today, although we have the second highest deficit in the EU, behind only Ireland…
…our bond yields are almost the same as Germany and around the lowest they have been since World War II.
This is because we have a credible plan to deal with our debts and the resolve to see it through.
The situation in Italy further emphasises the importance of a credible plan to deal with debts and ensure confidence in the markets more generally.
Mr Speaker, at this summit, the G20 has made further progress in helping to stabilise the global economy and tackle the obstacles to growth.
The Eurozone must now do what is necessary and see through the agreement it reached in Brussels 10 days ago.
Britain - and all our G20 partners - will continue to press for this to happen.
And I commend this statement to the House.