What is really at stake at the G20

13 April 2012

AS WORLD leaders arrive in London for the G20 summit on Thursday, British officials have been damping down expectations for a grand agreement. Nevertheless, much still rides on the outcome. If there is a deal requiring tax havens to share information on criminal tax evasion, that would be an achievement. But if the agreement is to impress the public, the Prime Minister will also need to show he is prepared to get tough on those, including his own City Minister Lord Myners, who quite legally use offshore territories to keep down their tax bills.

There will certainly be no consensus on renewed large-scale fiscal stimulus. As Angela Merkel, the German Chancellor, said: "I will not let anyone tell me I must spend more money." Other countries will take a similar view of incurring more debt, seen as the Anglo-American way of beating recession.

Gordon Brown should concentrate on other elements of his agenda. Besides tax havens, these include better regulation of financial institutions along the lines suggested by Lord Turner for British banks, and decisive action against protectionism. Indeed, the greatest good that would come from the summit would be a commitment to conclude the Doha trade round as quickly as possible, which would benefit poorer economies as well as those represented at the summit. The least the participants must do is promise to keep tariffs at no more than their present levels. Giving the IMF greater clout and greater funds to help struggling economies is another priority, though countries are readier to support the IMF in theory than contribute substantially to its funding, Japan being an honourable exception. However, in return for greater influence within the IMF, India and China may be willing to bolster the institution. Given the possibility of debt defaults in Eastern Europe as well as Latin America, this matters.

The Prime Minister has spent months raising the stakes. His ambitions for global consensus may not be realised. But the summit could, at least, be a chance for world leaders to articulate some important principles which need reinforcing now more than ever.

Stop the perks

THE PRIME Minister has intervened more decisively than expected in the growing row over how much MPs are paid, following news of their above-inflation pay rise and increased London Supplementary Allowance. Sir Christopher Kelly, who as chairman of the Committee on Standards in Public Life is leading an inquiry into MPs' expenses, had not been due to report until after the next election. However, in a recognition that the affair is now damaging ministers, following the revelations about the Home Secretary's second-home claims, Mr Brown has asked Sir Christopher for a report "as soon as practical".

So he should. This is supposed to be a Parliament, not a lifestyle support system. Inflated and implausible claims, in particular for second homes, have done great damage to public trust in politics. The Prime Minister is therefore right to call for the abolition of second-home allowances for outer London MPs. The claims made by Leyton and Wanstead's Harry Cohen or Harrow's Tony McNulty for a second residence infuriate all those constituents who commute the same distance without special perks. Of course MPs must be paid adequately, or few people will want the job. But Mr Brown must show the way to a more transparent system that commands public acceptance. Otherwise he will get the blame for dithering over a matter which, in a recession, will loom large in electors' minds.

Life force

AT THE age of 86, Lucian Freud has a new muse, Perienne Christian, 25, and is painting as energetically as ever. His place as this country's greatest living artist is not in doubt. But it is inspiring to see that at an age when most of us have retired, for Freud, the creative drive is as vigorous as it was in his youth.

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