Home > Essays > All

Sunday 27 May 2012

The G20 summit is lousy value for money. Cancel it

18 March 2009

/article_images/articledir_6905/3452981/1_listing.jpg

Ross Clark looks ahead to Gordon Brown’s summit at which he will try to revive his own political fortunes, found a new global economic order and stage a Bretton Woods for our times. No chance: the whole thing is an expensive sham

What, by the way, happened to the banking regulatory system which G20 members promised to set up in the communiqué issued at the end of the last emergency summit, in Washington in November? Listed among the ‘immediate actions’ to be undertaken by 31 March 2009 was a promise to set up ‘supervisory colleges’ to monitor the activities of international financial institutions. Banks, according to the communiqué, were supposed to ‘meet regularly with their supervisory college for comprehensive discussions of the firm’s activities and assessment of the risks it faces’. Admittedly there is still a week left but has anyone yet spotted the bosses of Lloyds and RBS trouping off to a meeting with their ‘supervisory college’? I did contact the Treasury press office to ask what progress had been made on this issue, but at the time of going to press I had received no answer.

Since the G20 doesn’t have a hope of getting through its ambitious agenda in a day, might it drop an item or two? There is one thing begging to be left off until another time, yet for some reason I have a suspicion it is the item about which Gordon Brown cares most. It is the subject of tax havens. Brown — and this is one subject on which he does find common ground with Angela Merkel — wants to close them down. He wants their banks to be forced to reveal information on their depositors. Fair enough, where the aim is to trace criminal activity. But why try to stitch up the rules at what is supposed to be a crisis meeting for the global economy and to which the tax haven nations have not even been invited? There are no prizes for guessing why: Brown knows full well that the dire state of the public finances will require taxes to be raised sharply after the election — way beyond the new 45 per cent upper rate of income tax which has already been announced — and that it will create a flight of wealthy citizens to tax havens.

That is the essence of G20. It is about big countries using their might to exclude small, inconvenient ones from international business. Forget the talk of free trade: after building up huge deficits to bail out their economies, the last thing big countries will want is competition from small nations with low tax rates. We’ve had G7, G8 and now G20. Next time how about a G193 — the number of independent nations recognised by the United Nations? If we are going to create a new global economic order, the Cayman Islands has every right to a say.

Or, on reflection, wouldn’t it be better just to cancel the whole thing?

Previous page 1 | 2 | 3 | 4 | 5

More articles from: Ross Clark | this section

Print this article | Email to a friend | Permalink | Comments (18)

Post this entry to: del.icio.us | Digg | Newsvine | NowPublic | Reddit

Post comment

Martin Cox

March 19th, 2009 8:40am Report this comment

What is the 'pearl'? It does not appear in my draft.

Kalyan

March 19th, 2009 9:01am Report this comment

Absolutely brilliant.

richardj

March 19th, 2009 9:13am Report this comment

Sole purpose - to get Brown on camera with elected prime ministers and heads of state. Very New Labour!

Augustus

March 19th, 2009 6:18pm Report this comment

The conclusion to all this must be that we should have no illusions. Not about Brown or Darling, or the IMF, or the FSA or anyone else. Financial institutions will continue to innovate and financial regulators will continue to be one step behind. When people warn of impending problems during the next boom, politicians should listen and regulators should act. But will they?

john problem

March 20th, 2009 8:25am Report this comment

Instead of agreeing he has saved the world and should be awarded the Economist of the Decade medal, the Euros will be scoffing and wining at our expense and laughing up their tailored sleeves. At least they will then know who their host is. On French and German TV there are a number of features on the G20 meeting 'in London' but never a mention of Gordon Brown. But it will be fun for all of us to see Barack and Sarko chatting away happily and Gordon trying to charm a blank-faced Angela. We must take our pleasures where we can. Meanwhile, outside on the street, Joe Public will be struggling on....

Johnathan Pearce

March 20th, 2009 11:01am Report this comment

Superb article. The final flourish about the outrageous demonisation of tax havens was particularly good.

Brian Phillips

March 20th, 2009 12:50pm Report this comment

Excel is in the former Royal Docks, not the Isle of Dogs. I hope the rest of your research is more reliable.

ChristopherM

March 20th, 2009 3:44pm Report this comment

As Martin Cox says, can we have the article edited to include the missing "pearl" from clause 4 of the finance f***wits beanfeast?

David Short

March 20th, 2009 9:23pm Report this comment

What elegant, patrician headlines the Spectator now comes up with...

Observer 99

March 21st, 2009 12:03am Report this comment

An interesting piece ruined by the following:

"We all know the real reason why 22 world leaders — the presence of Spain and the Netherlands has spoiled the name somewhat"

I thought English people stopped thinking like this in about 1900. If the fact that today Britain is a bankrupt international joke doesn't stop this smug air of groundless superiority, I don't suppose anything will. To progress, the Brits MUST understand they are a weak, poor nation with a smaller navy than Turkey, a third world debt level, lower GDP than India, and no natural resources. No progress can be made as long as the Brits think they are naturally superior to all other nations.

Zorro

March 21st, 2009 5:22am Report this comment

Oh the irony of the preening backstabbers! It is a shame that these potentially democratic and enlightened processes, branded with images of global integration, get hijacked as another morally self-righteous smokescreen for selfinterest. Australia is doing the same currently. Forcing consumers to pay high prices in industries with inflated wages and executive salaries. Speaking of removing barriers as trade and labour walls go up behind them. I feel for the rice and beans-bound poor who suffer as a consequence.

David Bouvier

March 21st, 2009 12:20pm Report this comment

Observer99 you chippy nutter - the point is that there are 22 coming to the G20 - so the "G20" name has been spoiled. I think you are the only person on the planet who thought it was a claim that Spain and the Netherlands have less claim than others to world leadership. Took me long enough to work out what you were on about. Projecting your own bile I think.

Dimitrios

March 21st, 2009 1:27pm Report this comment

We should remind him it is too late. We do not want a British Europe but a European U.K. to paraphrase his predecessor's saying Margaret Thatcher. When the mind of man flourishing it is occupied by the science, when it starts flexing it turns to philosophy and when sunsets it resorts to politics. The third case applies to him.

Alide Kohlhaas

March 21st, 2009 5:34pm Report this comment

Sorry to have to point out that Brown was not the first head of state to meet Pres. Obama. The president spent seven hours in Ottawa before PM Brown came to Washington. He spent far more time with PM Harper than he did with Brown. As for the banking system, if every country were to institute the checks and counterchecks that are imbedded in the Canadian banking system, the world would not be in such a mess now.

Wilfred

March 21st, 2009 7:28pm Report this comment

By the end of this increasingly ridiculous article, Ross Clark was actually trying to enlist the reader's sympathy for tax havens: "That is the essence of G20. It is about big countries using their might to exclude small, inconvenient ones from international business." Oooh, so sorry for the plight of the Caymans. What the f***? In this crisis, Clark is worried about the tax evaders?