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G20 Summit

Volume 757: debated on Monday 17 November 2014


My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows.

“I am sure the whole House will join me in utterly condemning the sickening murder of American aid worker Peter Kassig. Our thoughts are with his family and his friends at this time. We will not be cowed by these sick terrorists. They will be defeated and they must face the justice that they deserve. This threat is faced by countries right across the world. We must face it together. It featured strongly in the discussions I had with Prime Minister Tony Abbott in my bilateral visit to Australia.

I took the opportunity of setting out further detail on some of the steps we will take as part of the counterterrorism Bill here in the United Kingdom. As the House knows, these include new powers for police at ports to seize passports, to stop suspects from travelling and to stop British nationals returning to the UK unless they do so on our terms. It also includes new rules to prevent airlines that do not comply with our no-fly lists, or our security screening measures, from landing in the UK. Every country across the world is examining what powers are necessary to keep their people safe, and I am determined that we will do that right here. We will make a full announcement about the counterterrorism Bill soon.

Let me turn to the G20 summit in Brisbane this weekend. Australian Prime Minister Tony Abbott set a clear agenda for the world economy and we gave it our strong backing. The Brisbane Action Plan includes a commitment on dealing with our debts and an infrastructure hub that will see British companies as part of a global pipeline for the biggest projects on the planet. But above all it is a plan for growth and jobs, with every country pledging actions that will boost global growth and therefore help create jobs. The aim is an additional $2 trillion to be added to the global economy.

When it comes to growth last year, this year and the forecast for next year, as the head of the IMF said in Brisbane, it is Britain and America that are leading the pack. However, it is also clear that growth is stalling in the eurozone, that world trade is not developing as fast as it should and that previously fast-growing economies are slowing down. Only today Japan entered recession. These warning signs in the global economy show that it is more important than ever that we stick to our long-term economic plan. That is the only way we can secure a better future for our country.

There were also important discussions on climate change, where China and America took important steps forward at the APEC summit in terms of moving towards a deal in Paris next year. Britain will continue to play a key role, including by using our already earmarked resources for the UN Green Climate Fund.

In terms of the global negotiations, the EU has taken the lead with significant planned cuts in carbon emissions. I made clear the importance of every country—Australia included—making a contribution to securing a deal next year.

My focus at this summit was on helping to deliver our long-term economic plan by addressing some of the big global challenges that could potentially threaten our recovery at home. There was important progress on fighting protectionism, on dealing with the damaging effects of global tax avoidance and corruption, and on confronting the instability caused by conflict and disease. I want to take each briefly in turn.

On fighting protectionism and promoting free trade, we welcomed the breakthrough on the Bali trade facilitation agreement, which had been stuck for so long. After an agreement between America and India, it will now go ahead. There was also an important meeting between the countries of the European Union and the United States to agree that an EU-US trade deal must be done next year. This could add £10 billion to the UK economy alone. These trade deals can mean jobs and growth for Britain, so I challenged European leaders to think ambitiously about other deals that could be done, including with our hosts, Australia, and with emerging markets such as India and China.

We pressed for reform of the World Trade Organization so that poverty-busting trade deals can be put together, agreed and implemented more quickly. Britain, Germany and the US, among others, all agreed that the way this organisation works needs to change in the future.

Secondly, there was progress on ensuring that big companies pay the taxes they owe. This is not just a technical issue; it is a moral one. Ensuring the correct taxes are paid is vital in sustaining low taxes and enabling hardworking families and small businesses to keep more of the money they earn. That is why Britain first put this on the international agenda at the G8 in Northern Ireland last year. This issue has now been firmly hard-wired into the G20 agenda. This summit agreed a G20-wide action plan to ensure there is nowhere for large companies to hide to avoid paying the taxes that are due. There are now 93 different countries and tax authorities signed up automatically to sharing tax information. Before the G8 in Northern Ireland last year it was just 29. As the OECD set out in Brisbane, the action we have taken so far in its view has already meant $37 billion of extra tax being paid by big corporations.

The Lough Erne summit also made important commitments at G8 level to stop the true owners of companies hiding behind a veil of secrecy. This is vital in tackling the cancer of corruption that does so much to destroy countries and increase the risks to our security. In Brisbane we agreed to extend this work on beneficial ownership to cover the whole G20—China included.

Thirdly, Britain continued to play a leading role in dealing with the threat of conflict and disease which is vital not only in keeping our own people safe but in ensuring our long-term prosperity. On the conflict in Ukraine, we called on Russia to respect the Minsk agreements and made it clear that if it does not we remain ready to intensify sanctions. Of course, there is an economic cost to us from sanctions. But the cost of allowing such a fundamental breach of our rules-based system to go unchecked would be infinitely greater in terms of cost in the long run. I met President Putin and once again made it clear that continued destabilisation of Ukraine can mean only more sanctions and more pressure. He has said that he does not want a frozen conflict and, as he put it to me, sees Ukraine as a single political space but he must be judged by his deeds not his words.

On Ebola, I wrote to Australian Prime Minister Abbott ahead of the summit to secure a specific G20 leaders’ statement, with a clear plan for dealing with this disease and for improving our readiness to respond to such epidemics in future. Other countries including South Korea, Japan and Australia are now doing more to help with more money, trained medical staff and equipment, while the IMF agreed to double its current programmes in Sierra Leone, Liberia and Guinea and to provide additional debt relief.

The UK will continue to lead the way on the development of a vaccine, with the Wellcome Trust establishing a joint research fund of more than £1 million. We also welcomed the support of the English and Scottish Football Associations which will be raising money at their friendly international tomorrow night. The UK Government will match-fund any public donations up to £5 million.

I also pushed the G20 to consider additional measures that could improve the ability of the global community to respond to a similar outbreak of disease in the future. This could include the possibility of a standing pool of global medical experts who can be deployed quickly during the early stages of a potential epidemic, strengthening in-country surveillance and health infrastructure, asking the IMF and World Bank to explore new mechanisms for ensuring the world is better prepared to deal with such pandemics in future and doing more to fight bacteria resistant to present-day antibiotics. The World Health Organization itself also requires reform.

This was a good G20 for Britain. We delivered progress on the key global economic challenges that will help to protect us from a global economic downturn. In doing so we supported our long-term economic plan to repair the broken economy that we inherited and to deliver jobs and growth in every part of our country. I commend this Statement to the House”.

My Lords, that concludes the Statement.

My Lords, I thank the Leader of the House for repeating the Prime Minister’s Statement in the other place. I join her in expressing horror and revulsion at the barbaric murder of US aid worker Peter Kassig. Once again, this is a demonstration of ISIL’s evil ideology against innocent people. Our thoughts go out to his family at this terrible time. It reinforces our determination to defeat ISIL.

I will turn to the situation in Ukraine. The ceasefire agreed in September is extremely fragile and there are recent reports, confirmed by the OSCE, of further Russian military vehicles crossing the border. The noble Baroness reported on the Prime Minister’s meeting with Mr Putin. Does she think enough is being done to send a clear message to Russia about its aggression and to support President Poroshenko’s Government? Under what circumstances will the UK be pushing for further sanctions against President Putin and Russia? We are all aware of the way in which a conflict such as the one in Ukraine can generate headlines for a few weeks then be forgotten. This must not become a forgotten conflict.

I turn to the issues raised on the formal G20 agenda. As with any summit, the task is to turn good intentions into concrete measures. Tax avoidance is a problem which affects rich and poor countries alike. In June 2013, at the G8 summit, the Prime Minister promised that all UK Crown dependencies and overseas territories would produce registers on the real owners of shell companies. We are 17 months on from that summit: will the Leader of the House give an update on progress? This weekend, the G20 repeated the G8’s commitment that developing countries would have a place at the negotiating table, as part of the process to reform global tax rules. Can the noble Baroness say what progress has been made 18 months after the G8?

On climate change, I agree with her on the welcome steps on carbon emissions made by President Obama and the Chinese President last week. I also welcome the agreement to support the climate fund designed to help with the effects of climate change. When will the UK be announcing our contribution? Can the noble Baroness explain the delay in doing so? What is she doing to bring more sceptical countries with us for an ambitious agreement in Paris next year, not to mention the more sceptical noble Lords who sit behind her?

On the Ebola crisis, I welcome the UK’s role as the second-largest donor in helping tackle this potential threat to people, not just in west Africa but across the world. The G20 conclusions were short on specific commitments from other countries. What does the noble Baroness think we can do further to encourage other countries, including those in the EU, to ensure we tackle the crisis with aid, equipment and—especially—health workers?

Finally, I turn to the G20 conclusions on global growth. Today, the Prime Minister told us that there are red lights flashing in the global economy. This is what is known as getting your excuses in early. The Prime Minister used to tell us that the problems in the British economy were all to do with the British Government and nothing to do with international factors. Now he wants to tell us that, on his watch, they are all to do with international factors and nothing to do with the British Government.

Is it not true that, even before the Prime Minister went to Brisbane, we already knew his export target was off track and that the trade deficit is the highest it has been for 25 years? Before he went to Brisbane, he knew that Britain’s productivity had stagnated on his watch and that average families are £1,600 per annum worse off. The Prime Minister has gone from saying that everything is fixed thanks to him to saying everything is not fixed but it is nothing to do with him. He should have been listening all along to the British people, who see deep problems in an economy that is not working for them. Is it not time that the Prime Minister stopped blaming everybody else for an economy that is great for a few people at the top but is not delivering for most working people?

I thank the noble Lord for his remarks about Peter Kassig. I join him in sending condolences to his friends and family. Across this House, and the country as a whole, there is unity in our views on the terrible atrocities that have happened and in the support we send out to the victims.

I turn to the noble Lord’s comments about the Prime Minister’s Statement and the events at the G20 summit. The Prime Minister’s Statement shows that the UK is setting the agenda at global summits and leading the way when it comes to action. The noble Lord asked specific questions about tax and tax avoidance. My right honourable friend the Prime Minister made this a high priority at the G8 summit last year. Because of doing so, we now see some real progress in this area. Every one of the Crown dependencies and British Overseas Territories has signed up to an action plan on beneficial ownership, so that is clearly progress. Some of them have registers and some are considering making them public, but crucially, every single one of them has agreed to automatic exchange of tax information. That is a real breakthrough because it means that all these tax authorities are exchanging that information and companies cannot hide where they are making their money. As I said when I repeated the Prime Minister’s Statement, when they pay their fair share in tax it means that there is less burden on everyone else.

The noble Lord asked about Ukraine and whether the message to Russia was clear enough. One interesting thing at the G20 summit was that all the foreign leaders present were clear and united in their message to President Putin. There can be no mistake about their views on the need to withdraw from Ukraine. Clearly, if there is more destabilisation in Ukraine, that would trigger greater sanctions. Similarly, if there were a taking down of destabilisation, that would lead to removal of sanctions. But I agree with the noble Lord that what is really important is that this conflict is not forgotten and does not become a so-called frozen conflict in Europe in the way that the world moved on after the destabilisation of Georgia.

Again, we were very much in the lead in ensuring that climate change was part of the agenda for debate and discussion at the G20 summit. There is pressure on all countries to bring forward their plans for the meeting in Paris next year. We have set money aside ready to make our contribution to the climate fund, and will do so in the way to which we have been committed. We are proud to be in the lead on that.

The noble Lord asked about specific pledges made on Ebola. At the G20, Korea and Japan made specific pledges and of course Australia backed up its plan to provide 100 beds in Sierra Leone. As the House will recall from the Statement that I repeated after the recent European Council summit, the Prime Minister was successful in ensuring that the combined contribution from European countries to Ebola has increased to €1 billion. We should not forget that on Ebola it is not just about financial support. There are very many other ways in which countries are lending their support, which is an important aspect of our efforts in the fight against that dreadful disease.

As far as what the noble Lord said about the economy and the Prime Minister’s remarks this morning, let us be absolutely clear: the UK is leading the world, along with America, in terms of growth. That was recognised at the G20 by the head of the IMF. It is only now that we are seeing the problems that other countries face that we can see just how well this country is performing because of the measures that we implemented, and the plans that we have for the future are essential to that continuing. The private sector has created 2 million more new jobs in the past four years and 400,000 new businesses have got off the ground. We are leading the way. We must, however, be very conscious that there are serious threats from elsewhere, but there is no question that we are not on the right course economically.

My Lords, may I just remind noble Lords that there are 20 minutes for questions? As a matter of courtesy, it would be much appreciated if noble Lords could keep their interventions brief.

My Lords, through my noble friend, the Prime Minister should be congratulated on the agreement on beneficial ownership transparency. She knows, however, that the World Bank believes that the United States and the United Kingdom are the two jurisdictions where most companies that hold proceeds of corruption incorporate. It is a little disappointing to see in the communiqué that, while countries are required to submit action plans, there is no time target for how long the approximately 90 of them that have signed up will take in terms of sharing information and achieving the action plans. Can my noble friend tell the House if there is any discussion about that?

On transparency overall we have made a huge breakthrough over the past few years, but my noble friend is right to express some frustration on beneficial ownership transparency. It is an area in which we would like to see greater progress. We have taken concrete action and are establishing this public central registry for company beneficial ownership information. We are working hard to ensure that others follow our lead, but I do not have any further details to offer at this time.

My Lords, we all condemn acts of terrorism. However, does the Leader of the House think that it is productive to use words such as “mindless” or “sick” in describing such acts? That kind of rhetoric should perhaps be removed. As for the long term, it will be better ideas and better practice that defeat the jihadis. The Statement refers to what happens when British nationals return to this country. Can she throw more light on the meaning of,

“unless they do so on our terms”?

Will there be some kind of probation? Surely the long-term objective should be to rehabilitate and reintegrate such people.

I have huge respect for the noble Lord, but I disagree with his comments about the language that the Prime Minister has used to describe the terrible beheadings that have taken place, and the actions against innocent people who have gone to these countries with the sole purpose of helping those in such desperate need.

On the matter of the counterterrorism measures referred to by my right honourable friend the Prime Minister when he was in Australia, more detail will come shortly. We expect the new legislation to be introduced in the Commons later this month. I do not know when it will arrive in this House. When it is introduced, clearly there will be an opportunity for proper scrutiny of it in the normal way.

The Statement refers to the Prime Minister’s concern about a number of instability factors, with reduced growth in the global economy. I understand that. But I am troubled that one of the factors over which he has control is the instability caused by Britain’s threat to withdraw from the European Union. This not only reduces investment in the European Union and here, but also increases the instability. Why does he not say very clearly that under his watch Britain will not withdraw from the EU?

My right honourable friend the Prime Minister has been clear that reform of the European Union is needed. He has great support for this in the European Union. Reform of it would be in the interest of the British people and that is totally consistent with his plans for ongoing growth in this country.

My Lords, does the Minister recognise that what was decided on trade—in particular, the agreement that the Transatlantic Trade and Investment Partnership would be concluded next year—was very welcome? Can she say whether President Obama gave any indication of whether he was now likely to get fast-track authority to conduct that negotiation? What are the Government doing to deal with the broadly spread misconceptions, in this country as well as elsewhere in the European Union, about the risks of such an agreement, particularly stories that this would lead to the undermining of the National Health Service, for which there is no foundation whatever? These misconceptions need countering. Are the Government doing something about that?

On the World Health Organization, it is right, as the Statement says, that it needs some reform. Above all, it needs some resources. There is strong evidence that an absence of resources was part of the reason why it was rather slow off the mark when the Ebola outbreak began.

On the question of the transatlantic trade talks, or TTIP, the Prime Minister was very much in the lead in ensuring that there was an opportunity for those discussions to take place outside the main G20 summit. He is reported as saying that, in the course of those discussions, rocket boosters were put under the need for agreement on this trade deal. It is so essential to our economy and the European economy more broadly. That is an additional point that I would like to make to the noble Lord, Lord Soley, in response to his comments on Europe. This is a trade deal between Europe and the United States, and the Prime Minister is in the lead in ensuring that this is agreed.

I cannot vouch for what President Obama said during the discussions, but it is noted that the change after the recent mid-term elections and the Republicans securing control of Congress make a deal on TTIP that much more likely. This is clearly a good thing. The noble Lord is right to highlight the misconceptions of the risks in TTIP. There has been some worrying scaremongering about this being a threat to the National Health Service or food standards. That is completely wrong, in each case. The European Union Development Commissioner has made it clear that the public sector is excluded from TTIP. But the noble Lord is right: we must continue to make these things quite clear.

As far as his remarks about the World Health Organization are concerned, I do not know whether things got as far as talking about funding. In looking at its reform, how to make it more effective is key.

My Lords, I seem to agree with my noble friend that if anything the words used to describe the Islamic caliphate were not strong enough. Its habits are to decapitate its prisoners, murder aid workers, violate women and produce the kind of medieval butchery that we thought had been expunged from the planet. The rhetoric aside, can she say whether at the G20 there was any readiness to recognise that more than speeches are needed, that action from all the partners in the G20 throughout the world is needed, and that to try to contain the caliphate and its murderous habits is not just a western task? It is a task for all civilised nations, whether we are talking about China, Australia, the United States or even Russia, whose values are equally threatened. Can she say whether something more definite was put forward in those terms at the G20?

I am grateful to my noble friend for his endorsement of what I said about rhetoric. I agree with him: there are no words strong enough to describe what has happened at the hands of these people in Syria and Iraq. As to his question about action from all the G20 partners, certainly the Prime Minister urged all the G20 partners to demonstrate their support for the Iraqi Government and the international efforts to counter ISIL, as well as the need to work against Assad and condemn his regime, which has allowed terrorism to flourish. As my noble friend said, we must all recognise—which I think is now starting to happen—that there are threats from ISIL to all parts of the world and it is not just a threat that we face in the West.

My Lords, in the tax and transparency portion of the Statement, there is a reference to the OECD saying that $37 billion of extra tax is being paid by big companies. Can my noble friend give us any information as to how much of that extra tax is being paid to G20 countries and how much is being paid to the rest of the world?

I am afraid that I do not have the level of detail to answer my noble friend so I will provide further information in writing, if I may.

My Lords, will the noble Baroness say a little bit more about the alleged Russian intrusion into eastern Ukraine? We have heard a lot about this. President Putin says that there is no Russian infiltration into eastern Ukraine; the Canadian Prime Minister says that he is lying. We have seen one or two clips on YouTube or iPhones of the alleged military intervention. There are, after all, satellites in the area. Not a mouse can move without a satellite taking a picture of it. May we have some indication of when NATO or Her Majesty’s Government will publish proper evidence of what the situation in Ukraine is?

There is a united view that Russia is threatening and destabilising Ukraine and that its actions are having that impact. As I said in response to the noble Lord, Lord Hunt, there was unanimity among the leaders at the G20 in their steps to seek to apply pressure on President Putin to disengage, and there is absolute commitment to ensuring that stability is returned to Ukraine as soon as possible.

My Lords, in her reply to the noble Lord, Lord Hannay, the noble Baroness was not able to answer his question about the TTIP arrangements. If President Obama agrees that the plan is to get agreement on that next year, it will not happen unless the Americans get the fast-track arrangement from Congress. As Congress is now Republican-dominated, did the President give an undertaking at the meeting that he had got agreement from both Houses of Congress for the fast-track procedure?

As my noble friend knows, sadly I was not at the G20 summit or privy to those discussions. What I know from the briefing that I have received is that there is agreement between the European leaders who were at the G20 and President Obama that this deal is incredibly important and they want to see it reached by the end of next year. If I can offer any more information to my noble friend after the Statement, I will certainly do so, but I can absolutely assure him that there is no unwillingness on behalf of the President to get this deal sorted.

My Lords, at Brisbane the issue of falling wages and job insecurity was discussed by a delegation of trade unions, including the general secretary of the TUC, Frances O’Grady, which met the German Chancellor Angela Merkel and President Obama. It is reported that the Prime Minister did not have time to meet them. Will the Leader of the House take a message back that this is a very important subject for ordinary working people in the country and that it would help both sides if the Prime Minister met Ms O’Grady and others to discuss the issue?

It is quite clear that jobs are at the absolute top of the Prime Minister’s agenda, and ensuring that the economy is on a sure footing and that more jobs can be created, as indeed they already have been. I have no doubt whatever that he continues to be absolutely committed to that.

In response to the remarks of the noble Lord, Lord Hunt, will my noble friend confirm that the coalition Government have in fact shown great and practical compassion to some of the most vulnerable people in the country, by raising the basic tax level; by providing free school meals for the youngest children and help with childcare; by increasing the state pension for the elderly people; and by providing a real means to tackle failing schools and the lack of any hope for so many young people? Will my noble friend confirm that these measures, among many others, are evidence of the coalition Government’s real compassion?

I absolutely agree with my noble friend. She is right to outline a whole range of measures through which this Government have ensured that the success of this country is felt by everyone. That is what we are trying to do. By putting the economy at the top of our agenda, we are ensuring that there is security and stability for everybody, and if we have a sound economy we can ensure that the reforms we have introduced, whether in education or welfare or the way that we are ensuring the future of the NHS, mean that everyone in this country benefits from the future success of this country.

My Lords, I want to return to one of the more compelling points made by the noble Lord, Lord Hunt—I thought some of his remarks later on were getting a little desperate; one might almost think we had an election in the offing—when he mentioned Ukraine. There can be no doubt that the Kremlin has acted irresponsibly, impetuously and almost certainly illegally, but much the same would have been said about the Kremlin during the whole of the Cold War and yet during that time we always kept the channels of negotiation open. There are reports in America that the Russians may wish to withdraw from nuclear safety discussions, which would be entirely short-sighted. Will she take that message back and ensure that the channels of communication are always kept open, no matter how desperate the situation gets? After all, that helped bring the world back from the precipice in the Cold War. We should regard what is going on now not as a fight to the end but, I hope, a battle for what might be a new beginning.

My noble friend is right to emphasise the importance of retaining communication at all times. Indeed, that is certainly what we in the UK are doing. My right honourable friend the Prime Minister had a bilateral with President Putin at the G20. Others did as well. There is certainly no question of us seeking to close down those channels of communication and we would urge all other nations to keep those channels open.