G8 and G20 Summits

Tony Lloyd Excerpts

Monday 28th June 2010 Commons Chamber

[The Prime Minister]

I know that my hon. Friend is working hard on the middle way option, and that he is going to do further work on it. Of course I shall look carefully at what he produces. I would say to him that the surge in troop numbers has made a difference on the ground. In the parts of Afghanistan where previously it was impossible to step outside a military base, it is now possible to walk around the towns and visit the markets. I went to a training college, the last time I was in Helmand. The previous time, I went to a wheat seed distribution centre. Both times, I was able to have some freedom of movement. So there is some progress, and I think that this is the right strategy. We should use all that we have, this year, to give it every chance of success.

[Tony Lloyd (Manchester Central) (Lab)]

The Prime Minister prayed in aid the International Monetary Fund earlier, but he did not quote the IMF boss, Dominique Strauss-Kahn, who has warned that fiscal retrenchment wrongly done would cost 60 million jobs globally. How many of those 60 million jobs will be lost among the world’s poor, and how many will be lost among the poor of this country?

[The Prime Minister]

I discussed that with the IMF over the weekend. Dominique Strauss-Kahn’s own interventions in the debate at the G20 were very strongly in favour of fiscal consolidation, particularly for the countries—such as Britain—with the largest budget deficits. I looked around that table at the G20. According to the IMF’s figures, our budget deficit, at over 11 per cent., is the biggest. The answer to the question “Do they mean us when they are talking about excessive deficits?” is “Yes, they do.”

The key point made by Dominique Strauss-Kahn and others is that this is a package. If we are to maximise world growth, which will bring more jobs and livelihoods, we need a combination of fiscal consolidation in the countries that require it and measures to deal both with the imbalances in the developing world and with the structural problems in the developed economies such as Germany’s. That is what needs to be done. Dominique Strauss-Kahn is recommending exactly the sort of action that we are taking here in this country.