As a rule of thumb, it is wise to ignore anything said at any summit beginning with the letter G. When Harold Wilson went to the G6 summit in 1975 there was a point: there had just been an oil crisis so Britain, France, West Germany, Italy, Japan and the United States got together to discuss it. The meetings continued without an agenda. The admission of Russia, with its appalling record on civil economic liberty, turned the G8 summits into a biannual joke. So when the G20 meets in Pittsburgh next week, the world knows precisely what to expect.
The last summit, in London, ended with Gordon Brown triumphantly claiming to have brokered a $1 trillion deal to kick-start the world economy. The figure was entirely concocted by the Prime Minister, without so much as a penny of new money. But nothing substantial, of course, can ever emerge from any such summit. The G20 leaders, with a few dictatorial exceptions, do not have the authority to agree to anything without the agreement of their legislatures. All they are capable of is producing deliberately woolly communiqués.
Yet the summit, with its comic photocalls and its behind-the-scenes power-broking, does serve as a useful guide to how geopolitical power is shifting. China, for example, is now treated as the most honoured guest, seeing as it has the money which chronically indebted countries like Britain and America are dependent on. The South Koreans, too, are slowly being regarded as paymasters rather than guests. As the extraordinary recovery in Asian markets demonstrates, their clout is only likely to increase.
Australia and Canada are also standing strikingly tall. Neither country is nursing a budget crisis, with the kind of eye-popping deficits suffered here. Neither have had to stump up a cent of taxpayer’s money to support a failed bank. Both seem almost suspiciously immune to what is supposed to be a global crisis. Their taxpayers have been protected by something sorely lacking in Britain and the United States: competent government which saved money in the boom and properly regulated the banks. Even the Italians managed to put money aside during the boom.
The French have their own fairly simple agenda: to destroy the City of London. When Gordon Brown was still functioning as a politician, he was aware of this threat and fended off European Union directives aimed at destroying our competitive advantage. No such resistance is being offered now. It has fallen to Boris Johnson, the Mayor of London, to denounce the proposed hedge-fund regulation as a ‘blatant attack’ on what remains of our financial sector.
Of all the G20 nations, it is hard to think of any country whose reputation in the world has fallen more during the credit crunch than Britain. And this is why Mr Brown will struggle to use the shindig in Pittsburgh to project himself as some kind of global economic guru. There is perhaps no one in Britain who carries more blame for the crisis than the Prime Minister. It was his inept regulation which allowed the banks to take such catastrophic risks, his decision to run wild deficits in the boom years that left Britain so unprepared for recession.
If there is to be a serious status report next week, Britain should admit that our banking system has not been fixed, which is why mortgage rates are so much higher than Bank of England base rates, penalising millions of homeowners. Mr Brown will fly to Pittsburgh as a man whose much-vaunted fiscal rules ended in complete failure. He has given the other G20 nations a spectacular lesson in how not to run an economy. And it is a lesson they are unlikely to forget.