My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Chancellor of the Exchequer on the G20 meeting held on 2 April. The Statement is as follows:

“Today, leaders and Finance Ministers from countries all over the world have come together in an unprecedented show of unity to take action on the greatest economic crisis of modern times. That crisis has deepened since the last G20 summit and it is now affecting the lives of people in every country. Today, we have agreed to do whatever is necessary to restore confidence and growth in our economies, to repair the financial system, to restore lending, to strengthen regulation and supervision, to rebuild trust in the financial system, to fund and reform the international financial institutions to overcome this crisis and prevent further ones, to promote international trade and reject protectionism, and, crucially, to build an inclusive, green and sustainable recovery.

There are no quick fixes, but, because of the progress that we have made today, by agreeing to work together we can help to restore confidence, save jobs and bring the world economy out of recession.

First, we agreed to deliver the scale of sustained fiscal effort necessary to restore growth. That does not mean that all countries will act in exactly the same way or at exactly the same time, but it does mean that an agreement has been made to take whatever action is necessary to restore growth. We are confident that the action agreed today will accelerate a return to trade growth.

Since the summit in Washington in the autumn, G20 countries have announced and are now implementing the greatest macroeconomic boost the world has ever seen. The combined fiscal expansion across the G20 will put an additional $5 trillion into the world economy by the end of next year. That will save or create millions of jobs across the world this year alone.

Central banks across the G20 countries are also taking exceptional action, cutting interest rates aggressively in most countries and using all levers available to put money into their economies to support growth. We have already made available significant support for individual banking systems through liquidity, recapitalisation and dealing with problem assets in line with our agreed framework for restoring lending. In all the actions to support the economy, there is a determination to ensure long-term sustainability and price stability, as well as exit strategies for Governments’ involvement in the banking sector.

The immediate cause of this crisis is a failure in the global financial sector and in global financial regulation. It is imperative that we rebuild trust and clean up the global banking system. As part of that, we must build stronger regulatory systems that support growth and serve the needs of people and business. Domestic financial regulation must be reformed to promote integrity, guard against all types of risk, discourage excessive risk-taking, dampen rather than amplify the effect of financial shocks and protect consumers as well as investors.

We also want a more globally consistent regulatory system. To that end, we agreed today to establish a new Financial Stability Board, with wider groups of developed and emerging countries as members, which will work together with the International Monetary Fund to spot risks and provide early warning. We also agreed to endorse and implement new tough principles on pay and compensation and to expand regulatory oversight to all systemically important financial institutions, including hedge funds.

We will also take action to protect the world’s financial system—and therefore our public finances—by cracking down on tax havens, and we note that the OECD has today published a list of countries assessed by the global forum against the international standard for the exchange of tax information.

We must give international financial institutions, such as the IMF and the World Bank, the legitimacy and the power to provide surveillance and support. It is crucial that emerging and developing economies can continue to receive the flows of capital on which they depend. Over the past few years, some 70 per cent of world economic growth has come from those economies, and we must not let them down now.

We have agreed a trebling in the resources available to the IMF, from $250 billion to $750 billion. We also support a substantial increase in lending of at least $100 billion by the multilateral development banks, including to low-income countries.

We have also agreed to support an injection of a further $250 billion into the world economy, increasing global liquidity through a greater allocation of IMF special drawing rights. These steps will provide an additional $850 billion of financing to support growth in developing and emerging countries, which will be able to continue trading with us and other G20 economies, in turn supporting global growth and employment.

Hand in hand with more resources will come reform of the IMF and the World Bank. Emerging and developing countries need to be represented too, so we agreed that the next review of IMF representation should be concluded by January 2011, while World Bank reforms must be completed by next spring.

World trade has underpinned rising prosperity for half a century, but today it is falling for the first time in 25 years, so we have agreed to support international trade as a crucial driver of growth in countries everywhere. International trade is currently being undermined by a shortfall in trade finance, on which 90 per cent of all world trade depends, so we have agreed today to make available over the next two years not $100 billion but $250 billion through G20 export credit and investment agencies. So in total, we have agreed over $1 trillion of additional support for the world economy, and this will support trade, growth and jobs.

We remain committed to reaching an ambitious and balanced conclusion of the Doha development round, as we believe that this could boost the global economy by a further $150 billion a year.

The fifth element of the agreement today is a commitment to help the world’s developing and emerging countries. We reaffirmed our historic agreement to meet the millennium development goals and to achieve our respective pledges on aid, debt relief and development.

This action, and the decisions that we have taken today, will increase the resources available to low-income countries by $50 billion, for social protection and long-term food security, for example. We will act and do everything possible to build a fair and sustainable recovery.

We agreed also to make sure that when we support our economies, we do so in a way that also protects the environment. We will support investment in clean, innovative and resource-efficient low-carbon technologies.

We will also support those affected by the crisis by creating job opportunities and through income support measures. We will support employment by stimulating growth and investing in education, and through active labour market policies that focus on the most vulnerable.

This is a global crisis, and today there has been a global response. We will play our full part, and I commend this Statement to the House”.

That concludes my right honourable friend’s Statement.

My Lords, I thank the Minister for repeating the Statement made in another place immediately prior to the Recess. It is, of course, unusual for Statements to be repeated after the lapse of so much time, but this Statement was due to be made after this House had risen for the Recess, and we therefore agreed that the House would be better served by taking the Statement today.

The G20 leaders are now long departed, having duly praised themselves at the concluding press conferences, and we have had the intervening two and a half weeks to reflect on what the G20 meeting achieved. The G20 has barely left the headlines in the media in the past couple of weeks, but for all the wrong reasons. The behaviour of the police, at the G20 demonstrations and subsequently, has raised serious questions about the acts of individual police officers and the strategy for dealing with demonstrations.

The Minister did not repeat what the Chancellor actually said in the other place. The Minister omitted an expression of the Government’s thanks to the police for their effectiveness and professionalism. For the most part that was justified praise, but we cannot airbrush the problems away. I hope that the Minister will agree with me that it is vital that the Independent Police Complaints Commission conducts its inquiry into the death of Mr Tomlinson and into the other complaints as rapidly as possible.

The Prime Minister puffed the G20 meeting in advance as creating “a new world order” and “a new Bretton Woods”. Of course, it did nothing of the kind, and the Chancellor’s Statement had the good sense not to claim that. Nor was it an abject failure. It avoided disagreement, although this was achieved by avoiding contentious issues such as the impact of China’s trade surpluses and currency policy, and by appeasing our quarrelsome European neighbours. It did achieve agreement to some important things, such as reform of the World Bank and the IMF, at least in terms of direction if not yet in terms of tangible outcome. It did not seem to agree to some things which are manifestly wrong or harmful. For example, despite all the Prime Minister’s efforts to the contrary, the G20 did not advocate a further fiscal stimulus.

We are thankful that the communiqué referred specifically to the need to preserve long-term fiscal sustainability and to credible exit strategies from the measures already taken. We hope that the Chancellor has taken this to heart. The Budget later this week must not be an exercise in avoiding the truth about the country’s financiers and must recognise, as the G20 did, the need for fiscal sustainability.

One area where the G20 was disappointing was on world trade, where there was talk of remaining committed to reaching a conclusion to the Doha round but no associated actions. Can the Minister explain what this commitment means in practice? What precisely is going to happen to the Doha round and when?

More generally on trade, the communiqué reaffirms the Washington commitment to refraining from raising new trade barriers without even acknowledging that 17 of the G20 have, since last November’s meeting, raised barriers or tariffs. This commitment has been extended only to the end of 2010, which sounds like a free-for-all waiting in the wings. Can the Minister explain what the Washington commitment now amounts to?

Lastly on trade, the communiqué refers to at least $250 billion of trade finance over two years. Can the Minister say what this means in monetary terms in each of 2009 and 2010? By how much do UK exporters benefit, and is this new money or is it a reannouncement of existing commitments? The back-up documents show only $3 billion to $4 billion going into an IFC liquidity pool but what about the rest of the $250 billion? Which countries is that coming from and where will it go? How much will the UK provide?

The Statement referred to more than $1 trillion of additional support for the world economy, which was a fine headline-grabbing amount of money. Apart from trade finance, to which I have just referred, the IMF will get $500 billion in increased resources and $250 billion of special drawing rights. Was all the $500 billion new money agreed at the G20 or did it, as the Prime Minister has appeared to suggest, include $200 billion of money already pledged by Japan and the EU? How much is the UK contributing and when? Will it show up in this week’s Budget Statement? Can the Minister say how much of the $500 billion is being paid to the IMF in hard cash, and when will the IMF receive it?

Turning to the $250 billion of special drawing rights, can the Minister confirm that this is the IMF’s form of printing money? The small print says that there will be a general allocation of SDRs and that $100 billion will go to emerging markets in developing countries. Where is the rest of the $250 billion going? Can the Minister explain where the liquidity for the SDRs will come from and what controls the IMF will exercise over their use?

The Government have been talking up taking the stigma out of applying to the IMF. We have no wish to stigmatise those countries which, through no fault of their own, have seen their economies hit by the collapse in global trade. However, we have a problem if the Government are rolling the pitch for an application by the UK. If we have to go down the 1976 route again, the Government will most certainly deserve blame. Will the Minister today rule out the Government applying to the IMF for funds?

Lastly, the Statement talked about saving or creating millions of jobs across the world in this year alone. Do the Government not realise that statements such as that demonstrate more than anything else that G20 meetings and the like have no resonance for the people in this country? Unemployment in this country is now over 2 million, rising at the fastest rate since records began and likely to hit a peak of over 3 million. How many jobs are being saved here? People will not be fooled by headlines created by a passing caravan of world leaders. At the end of the day, fine words and smiles from world leaders have no meaning if jobs are still being lost and houses are being repossessed. The task of fixing the UK's economy remains a massive one and that is the task by which the Government will be judged.

My Lords, we are grateful to the Minister for repeating the Statement, albeit after such a long interval. For those noble Lords who are not avid readers of every last bit of your Lordships’ Hansard, I can say that the Minister, the noble Baroness and I spent the afternoon of Thursday 2 April, when we might have been taking this Statement, happily engaged in Committee on the Saving Gateway Accounts Bill, to which we return tomorrow. That is presumably why we did not take the Statement then.

Two and a half weeks later, the Statement already reads like an historical document, but we should accept as a starting point that the summit, by the standards of these events, was quite a success. That was for two reasons. First, arguably for the first time ever, the key developing economies participated on an equal basis with everybody else. The benefit of operating through the G20 rather than the G8 on major international economic issues was amply demonstrated in this summit. The second reason why the summit was a success was that it reached agreement on a raft of issues, which, if implemented, could have a substantial impact on the global economy. Obviously, as the noble Baroness said, it does not solve every last issue facing global leaders in economic management, but it dealt with a substantial number of the most urgent of them.

However, I am aware, and I am reminded of it by the noble Baroness’s response today, that there is a considerable degree of cynicism about such summits, not because of what they agree at the time but because of the extent to which agreements reached at the time are then carried out when the leaders go home. I have a question for the Minister on the process that now follows the summit. I gather that there is to be another, follow-on summit in September or some time in the autumn. In the mean time, has the noble Lord, Lord Malloch-Brown, been condemned to act as a perpetual Sherpa shuttling around trying to ensure that there is an adequate report on progress between the summits and a sensible agenda for the next summit? I rather hope that he might do that, because he is probably very good at it, but will the Minister say something about the process and how we can ensure that these events, which have a big part to play in driving forward co-ordinated action at a global level, are properly supported rather than requiring huge efforts by the host leader, which might or might not happen depending on domestic circumstances? Such summits also require a tremendous amount of back-up work across a whole raft of issues. What action will the UK take to ensure that we play our part in that and that the process itself is robust?

On the specific issues that arose, the Statement talks about exit strategies, as the noble Baroness mentioned, including involvement in the banking sector. I will say something about the banking sector in a minute, but in the mean time I would welcome a commitment from the Government that, until we have an exit strategy—we certainly do not at the moment—for those banks that are now in the public sector, they will be treated as if they were in the public sector with government direction rather than as if they were in the private sector and therefore incapable of being so directed.

Secondly, there was a welcome reference to cracking down on tax havens, which is an issue that we debated recently in your Lordships’ House. The question is, again, whether the momentum will be maintained. In the UK, on Wednesday, we have the publication of the Foot report on tax havens in those territories for which we have some responsibility. I rather regret that the report is being published on Budget Day, when it will get the least possible coverage. I would welcome an assurance that that does not mean that the Government will let up on their new-found desire to be tough on tax havens.

The summit agreed to $1 trillion of additional support for the world economy. In its minor way, that is a great achievement for the Prime Minister, because he said that he wanted the summit to agree to a boost to the global economy of at least $1 trillion. He did not mean this kind of $1 trillion; he meant a fiscal stimulus. However, he has managed to cobble together $1 trillion of worthwhile support by the IMF. Like the noble Baroness, we hope that that $1 trillion will be put to use rather than sit on the books of the IMF. I share her concern that there was but a passing reference to Doha at a time when we need far more impetus on it.

The summit discussed briefly the need to do everything possible to build a fair and sustainable recovery in a way that protects the environment. There has been quite a lot of criticism that the summit did not do more in that respect, but I was cheered by statements over the weekend by the Chinese suggesting that they may set energy efficiency targets and CO₂ targets way beyond anything that they have done before. I wonder whether the Minister could say anything further about that. If the Chinese come on board in that way, for the first time it will be possible to have a global settlement on CO₂ targets.

However, the Government need to look to their laurels in respect of the environmental agenda. In particular, their foot-dragging on carbon capture and storage over the past two or three years has been absolutely pathetic. Can the Minister tell us anything today about when serious decisions will be taken to get pilots on carbon capture and storage moving ahead? There is no reason to delay.

Finally on the specifics, the Statement talked about tough new principles on pay and compensation. When the Statement was read in another place, my colleague Mr Cable asked the Chancellor what that meant for British banks, particularly the nationalised banks, in respect of pay. He pointed out that the Royal Bank of Scotland was proposing to double the pay of its senior management from an average of £150,000 to £300,000 to compensate for the loss of bonuses. He asked whether that was true and, if so, whether the Government would stop it. The Chancellor did not begin to give an answer and I wonder whether the Minister may do so today.

Generally, does the Minister accept that, across the broad swathe of issues covered by the summit and the communiqué that he read out today, the best way in which Britain can exercise its influence on a global stage is by taking the action that the summit requires of everybody, so setting a lead that others may follow?

My Lords, I start by responding to the final comments of the noble Lord, Lord Newby. I believe that the G20 made major progress in establishing a basis for restoring confidence and growth in the world’s economies and repairing the financial system and, in so doing, restoring the availability of credit, which is so important to economic activity—but restoring a growth of credit in an environment of strength, regulation and supervision, which will address the core causes of much of the serious problem that the global economy currently faces. If we do that successfully, we will rebuild trust in our financial system and in our financial institutions. To do this, we also need to fund and reform the international financial institutions: the IMF and the World Bank in particular. That was an important area of shared agreement in the G20 announcement. We will also work hard with other member countries of the G20 to promote international trade and to reject protectionism.

I welcome the strong endorsements by the noble Lord, Lord Newby, for the G20. For far too long, these international fora have been dominated by the old world order built around dominant countries from the developed world. We have now brought into this forum a much broader membership, which is absolutely critical. The next stage is to ensure that the importance of the world’s developing economies is reflected in the governance of the IMF and the World Bank.

The noble Baroness, Lady Noakes, quite correctly pointed out that I did not include the words that my right honourable friend the Chancellor used in advance of reading his Statement to the other place, which included a reference to the policing of that day—an issue that was also picked up by Mr George Osborne. I share her concern that, if there were any policing failures, they must be appropriately investigated and followed up. I am not going to prejudge this matter; it is being appropriately handled. I warmly support and endorse the right to demonstrate—the right to join others to express views. Indeed, I have participated in demonstrations in my own past. I have always done so lawfully, but that requirement to be lawful applies to all involved in the demonstration, including those who are charged with policing and managing it.

The noble Baroness referred to a number of achievements, particularly the strengthening of resource for the IMF and the World Bank, and I am grateful to her for those comments. There are, of course, no quick fixes; this is a global problem of truly enormous scale and is quite unparalleled in modern times. However, we saw in the G20 a commitment to sustained fiscal effort across G20 countries. There was a commitment on the part of all countries to recognise that no one country can lead us out of global recession through its own fiscal policies and that there is a need for each country to determine, as part of a global commitment, a series of domestic programmes appropriate to its own particular circumstances.

I share the noble Baroness’s concern about Doha. I know that many in this House, and certainly in government, wish to see real progress on Doha. There have been a number of changes in international leadership and in the heads of Governments of major economies in recent months, and we are hopeful that those changes may presage a change of attitude to bring Doha to a conclusion. It is simply unacceptable for Doha to continue to lie in the “work pending” basket rather than being put into the “work completed” basket.

The noble Baroness asked about trade barriers. There is an incipient tendency towards protectionism under the guise of patriotism. The G20 was clearly alert to this and charged the WTO specifically with drawing to the attention of G20 leaders and monitoring any steps that they regard as protectionist.

The noble Baroness asked a number of questions about IMF resources, in particular whether they represented a printing of money. The SDR issuance is not simply an increase in the global money supply; it is closer to global liquidity insurance programmes. A substantial SDR allocation will increase EME access to liquidity and will therefore provide an important source of credit and liquidity to keep the global economy operating in an efficient manner.

The noble Baroness also asked about the $250 billion of additional short-term trade financing, which will be made available over the next two years. Of that sum, approximately $50 billion will come from public/private sector commitments via a new IFS facility. Nearly $200 billion of world trade support will come from G20 members bilaterally, predominantly via their export or investment agencies. Whether the UK will benefit from this, or the extent to which the UK will benefit, will depend on how well we compete in international markets for the provision of products and services. I am confident that our outstanding skills in manufacturing and export services mean that we will get our full share of the benefit of the increased demand that will arise as a consequence of this new facility.

In her closing remarks, the noble Baroness referred to a passing caravan of world leaders having little impact on people’s lives. I believe that that is to understate the consequence of the G20. The G20 brought together the world’s major leaders in a quite unparalleled commitment to address a global shortfall in demand and to be frank about the causes of that shortfall; to bring forward specific programmes to address deficiencies in the governance, leadership and regulation of financial institutions; to broaden the span of institutions to be brought under regulatory control; to address tax avoidance through tax havens; and to ensure that in doing this we remained alert to the needs of those who were not represented at the G20, including those in the poorest countries of the world.

I am pleased that the noble Baroness referred to concerns about people in this country, including those who have lost their jobs or have had houses repossessed. It is pleasing to hear the Conservative Party finally acknowledge that these are real issues, even though it does not seem to have policies that will do anything to ameliorate the concerns of those who are most exposed at the moment. The Government, through their international and domestic policies, are clearly driving an agenda to address the source of the problems, which are essentially global.

I share the admiration of the noble Lord, Lord Newby, for the work of my noble friend Lord Malloch-Brown. I do not think that we could possibly have a better Sherpa, but the noble Lord raises some interesting questions about whether the G20 may need or would benefit from some form of permanent establishment or facility to support its work. In the mean time, we should not lose sight of the fact that, in taking forward the work of the G20 ahead of the next meeting later this year, the IMF, the World Bank, the new Financial Stability Board and the World Trade Organisation have all been given specific mandates and responsibilities for aspects of the G20 communiqué.

The noble Lord, Lord Newby, raised questions about UK banks. The UK banks in which the public, through the Government and UKFI, have significant shareholdings remain in the private sector. They will continue to be managed in a way that is appropriate to all their shareholders, rather than denying the rights of the other shareholders by using them as a tool of public policy. I assure the noble Lord that there is no question of a doubling of salaries at the Royal Bank of Scotland in order to compensate for the loss of bonuses. I can also assure the Liberal Benches that, contrary to a quotation in the papers last week from the noble Lord, Lord Oakeshott, there is no suggestion that the making of loans to employees of RBS and Lloyds Bank is a way of providing covert bonuses.

The noble Lord, Lord Newby, makes an important point about tax havens. I can assure him that the Government are as committed as the Government of any country in the G20 to addressing the issue of jurisdictions that provide protection for tax evasion. He hopes that the interim report from Mr Michael Foot will not be lost in the noise of Budget Day. It is a valid point and the Government will ensure that that does not happen.

Finally, I am sure that I am going to be tempted to speculate on the content of the Budget announcement this coming Wednesday afternoon. I will say nothing more about it other than to address the comments made by the noble Lord, Lord Newby, about environmental taxes and carbon capture and to note that this will be the first Budget in the world to set a carbon target enforceable under law. Otherwise, we will await the Statement of my right honourable friend the Chancellor on Wednesday.

My Lords, I welcome the Statement that the Minister has repeated, in particular the increase in resources for the IMF and the World Bank, which is extremely important for emerging markets with their own banking crises. Did the Minister notice the statement by Dominic Strauss-Kahn, the managing director of the IMF, on the eve of the G20 summit in which he said that the lesson of 122 banking crises which the IMF had overseen was that until the banks were cleaned up, there could be no—repeat, no—recovery. By “cleaned up”, he did not mean future regulation: he meant the removal of toxic and impaired assets from the banks. Since the Minister is deeply involved in this, can he give the House an update on the position of the Government’s asset insurance scheme? I know that this is a complex problem, but there is an impression that it is overly complicated, is taking too long, and is not as definitive as the scheme put forward by the Irish Government where every bad asset is being put in one bad bank. Can he assure us by setting out what are the next stages in the insurance scheme and how it is working?

My Lords, I was aware of the statement made by M. Dominic Strauss-Kahn immediately before the G20 summit. “Cleaning up the banks” is a term that can mean many things to many people, but I agree with the noble Lord that it is about addressing the issue of bad assets, and I do not think that one should limit them to the term “toxic assets” either. There are issues around assets that are impaired in terms of credit and which may or may not improve with time, and there are issues where the core problem is one of liquidity. Various jurisdictions have adopted different approaches. The American approach, led by Mr Timothy Geithner, is focused on using the limited resources available to the American Government to leverage them up in order to buy bad assets off banks through hedge funds and private equity. That was announced three or four weeks ago, but to date there has been no further progress. There are also doubts about how the scheme will operate in practice, whether it is structurally at risk of being gamed by participants, and whether there are inherent risks around agreeing the valuation of the assets that will go into the scheme.

Elsewhere, other methods have been adopted. In Switzerland, loans have been taken off the balance sheet of UBS, while in Ireland the Government have announced an intention to do something similar, although again—addressing the core of the noble Lord’s question, which is what progress are we making and how is this going to work in practice—the Irish scheme also raises a number of questions. In particular, the Irish Government have talked about making a levy on the banks to eventually recover the costs but have not been specific about how that levy will operate.

Our own asset protection scheme is now closed in accordance with the timetable we set at the end of March and we have agreed conditional access for the Royal Bank of Scotland and Lloyds Banking Group. This has been hugely welcomed by markets. The share prices of those institutions have risen, the claw-back share price for Lloyds Banking Group being now well below the current share price, and the availability of credit to those institutions and the cost of credit has fallen. So we have already achieved a positive step forward in confidence. We said that it would take three to four months to complete documentation because these are enormously complex programmes. I previously said to the House that in each case we would be talking about several billion data points for each of the banks. But we remain on timetable to complete documentation and I am encouraged by the fact that the banks, their customers and the markets are taking considerable comfort from the robustness of the model that we have introduced and will be completing, as I said, before the summer.

My Lords, one of the things to which everyone at the G20 agreed was the need for more integrity and fairness, not only in banking but in business generally, in trade and in company and individual taxation. Does the Minister agree that this is one thing on which everyone was agreed? If so, how is it going to be achieved?

My Lords, I thank my noble friend for that question. We have witnessed a profound collapse in standards of integrity and purpose on the part of a small number of people at the top of a small number of important international banks. This is the consequence of the adoption of a new model of banking in which banks no longer regarded themselves as having a long-term relationship with their clients but instead preferred to originate and follow a composed portfolio and distribute model which meant that their loans were passed on to other people. With the benefit of hindsight, this weakened the sense of ownership and commitment and the fundamental understanding of a shared interest which had previously typified the relationship between a bank and its customers. That is now being reversed as a consequence of the very expensive lessons that have been learnt, but it will require more engagement on governance, supervision and regulation.

I, for one, strongly endorse the broad issue of the importance of high ethical standards and integrity in all aspects of commercial and government life. We need to return to better standards of conduct and a broader sense of responsibility than has characterised an era of greed which has brought so many fine banking names to a point of acute weakness.

My Lords, in view of the fact that even the Financial Times stated during the G20 conference that the Prime Minister had a reputation for,

“numerical inflation … and double counting”,

why on earth does the Minister expect us to believe the figures he gave today— repeated from his right honourable friend’s Statement in the House of Commons earlier—and that the resources to be given to the IMF are extra, new resources when he must have known that this was not the case? This is another confirmation of numerical inflation. Does he share the view expressed by the former senior economist at the IMF, Professor Subramanian, that these figures were wrong? Does he also share the professor’s view that the statements connected with the figures for the IMF were all spin and lacked substance?

My Lords, the figures that I gave to the House were drawn from the G20 statement, endorsed and supported by all G20 leaders, and were not a statement from the UK Government alone.

My Lords, in intervening in this debate I should probably declare an interest as I am going to mention the Bretton Woods institutions: I spent 30 years at the World Bank and am in receipt of a pension from it.

I am looking for some reassurance from the Minister—I apologise if this is a rather esoteric point—about the real purpose of the new Financial Stability Board and how its mandate will be strengthened in contrast to the Financial Stability Forum, of which it is the successor. I was never totally convinced of the Financial Stability Forum in the first place; that body seemed to be largely second-guessing what the outcomes might be.

It is said that,

“the FSB should collaborate with the IMF to provide early warning of macroeconomic and financial risks and the actions needed to address them”,

but the IMF and the World Bank together are extremely well placed to fulfil that function, as the noble Lord, Lord Ryder, has mentioned with regard to the former chief IMF economist. They are a powerhouse of research information and good ideas about where the global economy is going.

Since the Financial Stability Board does not even represent all the countries of the world, I wonder what the added value is of having a board of this kind. The fact that it is asking for an increase in the powers of the FSB compared with the Financial Stability Forum suggests that the forum itself was not working very well. Will the Minister reassure me that this body really is necessary, that it is not just second-guessing what the IMF and other institutions can tell us about what needs to be done to improve our understanding of macroeconomic and financial risks, and that it is not simply a cosmetic institution-building exercise?

My Lords, I thank my noble friend Lord Grenfell for his question and for his declaration of interest about his pension. I am wrestling with myself over whether I should ask more questions about it, but on this occasion I will probably be excused by the House if I do not.

It is the very success of the Financial Stability Forum that has led the G20 countries to believe that it can play an even more important role in the future if given more resources and broader membership. I discussed this with the chairman of the FSB, Mario Draghi, at the recent ECOFIN meeting in Prague, and he certainly relishes the opportunity for the FSB to be given an even more important role as a result of having a broader membership reflecting that of the G20, rather than its previous membership, which more loosely paralleled that of the G7 and the G8.

The FSB will consist in future of a chairman, a steering committee and a plenary group comprising all national members. The steering committee will remain smaller and therefore able to continue to operate as effectively as the FSF has in the past, but it will have a slightly changed membership. The FSB will also have a full-time secretary-general and a much enlarged secretariat, because the work of the FSF to date has been achieved on what can—by international banking organisation standards, at least—be described as a shoestring.

I believe that the FSB in particular will provide a powerful role in addressing such matters as the co-ordination of international accounting standards; the extension of regulation into areas which are not currently as well regulated as perhaps they should be, such as the derivatives market; and the challenges of institutions which are not presently closely regulated but are nevertheless of systemic importance, such as the largest macro hedge funds. The FSB will also have a very important role to play in addressing the challenge of macro-prudential supervision, the term now used to address the fact that we might have been rather better, globally, at regulating individual institutions than has been the case in the past. However, that was seriously undermined by the fact that no agencies were addressing with sufficient force systemic and generic problems affecting multiple institutions.

My Lords, the Minister referred to policing in the context of the G20. He even suggested that there is evidence that, whereas the mass of police officers acted very properly and lawfully, there were exceptions on the part of a very small minority. Does he agree that there seems to be a great deal of eyewitness evidence, supported and corroborated by photographic evidence, that a small number—a significant number—of police officers removed or hid their badges of rank and registration numbers? If that was so—and it does appear to be the case—does he not agree that such action would be utterly reprehensible on the part of a police officer? Does he agree that in light of the fact that there is bound to be a fuelling of the debate about the relationship between the police and the public, one should accept the definition given by the late Lord Callaghan of Cardiff—a very great Home Secretary, whom I had the honour to serve under as a Minister 40 years ago—when he described the police as citizens in uniform, no more and no less?

My Lords, I am sure that the noble Lord, Lord Elystan-Morgan, would not expect me to go beyond saying that I think that questions have been asked which need to be appropriately investigated. Those include whether, as some have suggested, members of the police force concealed the numbers that they should be wearing, although I understand that that requirement is limited to certain ranks. We need a forensic investigation to establish whether those who may not apparently have been showing their numbers were actually required to do so. There is a need for a proper investigation, which I fully support.

My Lords, the noble Lord had a great many interesting things to say about the board, and he described its very extensive functions. To whom will the board be responsible and what powers will it have to exercise its authority as far as individual countries are concerned?

My Lords, the new Financial Stability Board, under its continuing chairman, Mario Draghi, who is the head of the central Bank of Italy, will be accountable to the IMF and the World Bank and, through that accountability, to the G20. More announcements will be made in due course about the membership of the FSB and how it intends to conduct its work. It would not be appropriate for me to anticipate those announcements.

My Lords, could the Minister answer the specific questions asked by the noble Baroness, Lady Noakes, about the scale of the UK’s contributions to the increases in the funds agreed by the G20?

My Lords, I apologise to the noble Lord, Lord Broers, for not answering that question. The noble Baroness always asks many questions and I always appear to fail to answer them all, for which I apologise. I diligently go through Hansard to identify those that I have failed to answer and write to the noble Baroness and others. The UK’s contribution to the IMF will be in accordance with the existing formula. Importantly, the IMF is also talking about broadening its governance and membership and the allocation of funding responsibilities. We stand four-square behind the IMF in ensuring that it has the necessary funds and resources to play its critical role at this very difficult time.

My Lords, would the Minister accept that there is a great gap between the public’s understanding of the G20 bulletin and their understanding of the effect on themselves? Is it the Government’s intention to try to close that gap by making clear how what was said at the end of the meeting goes beyond the very welcome fact that the 20 met? I entirely agree with the noble Lord, Lord Newby: it is very good that the meeting was held, but there is a gap in the minds of the public. How do the Government intend to close it?

My Lords, the noble Viscount, Lord Eccles, issues a challenge that I will be most surprised if the Chancellor does not respond to in his Budget speech on Wednesday afternoon in the other place—to take from the global to the national to the specific, and to show how such issues as IMF special drawing rights and world trade agreements translate into matters that are comprehensible in terms of people’s security of employment, confidence in the future and capacity to honour their financial obligations. That will be one of the things that my right honourable friend the Chancellor of the Exchequer will ensure is appropriately reflected in the text of his Budget speech.