From the TUC

Spin at the Summit

28 Jun 2010, by in International, Public services, Society & Welfare, Working Life

According to the Prime Minister, the G20 Summit of world leaders backed the UK’s Budget as ‘tough but fair’. How does this claim stack up?

The Summit’s Declaration had something for everyone, especially on the question of whether or not it is too early to start cutting deficits. The key passage in the analysis of where things stand reads as follows:

“While growth is returning, the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt. Strengthening the recovery is key. To sustain recovery, we need to follow through on delivering existing stimulus plans, while working to create the conditions for robust private demand. At the same time, recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, properly phased and growth-friendly plans to deliver fiscal sustainability, differentiated for and tailored to national circumstances. Those countries with serious fiscal challenges need to accelerate the pace of consolidation.”

It is the same thing when it comes to the prescriptions section, where each recommendation pointing in one direction is immediately followed by one pointing the opposite way:

“Following through on fiscal stimulus and communicating “growth friendly” fiscal consolidation plans in advanced countries that will be implemented going forward. Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges of aging populations, and avoid leaving future generations with a legacy of deficits and debt. The path of adjustment must be carefully calibrated to sustain the recovery in private demand. There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth.”

President Obama could quote the warning about everyone cutting deficits at the same time and the Prime Minister could quote the reference to “sound fiscal finances”. We have seen that Mr Cameron thinks the Summit backed him; Mr Obama believes that:

“At Toronto, the G-20 leaders agreed that their highest priority is to safeguard and strengthen the recovery and to lay the foundation for strong, sustainable and balanced growth.  They agreed to carry through with their existing plans to support recovery, and that the fiscal consolidation necessary to restore sustainable public finances over time needs to be calibrated to protect the recovery and tailored to national circumstances.”

Everyone was so eager to avoid defeat on this issue (and, to a lesser extent, finance reform) that a goalless draw was inevitable. Much less attention was paid to what was said about social protection. As a result, the Summit actually said something that meant something. The Summit agreed on “strengthening social safety nets” – a commitment that necessitated welcoming the recommendations on social protection from the G20 [originally given as an ILO meeting, corrected 28 June, 15.10] meeting of Employment and Labour Ministers in April. These recommendations include:

  • “We recommend that, where needed, social protection systems and active labor market policies be strengthened because significant numbers of people, including the most disadvantaged, will remain unemployed even after recovery takes hold and others will need help to adjust to structural changes in our economies.
  • “We recommend that all countries establish adequate social protection systems so that households have sufficient security to take advantage of economic opportunities.
  • “We recommend renewed attention to labor market policies and institutions to improve the quality of jobs and respect for fundamental rights at work.  We stress the importance of social dialogue.”

The Budget did not ‘strengthen the social safety net’ and the chances of the most disadvantaged households being able to ‘take advantage of economic opportunities’ are worse now than they were a week ago. Will the Coalition’s policies ‘improve the quality of jobs’ or do anything for social dialogue? The question answer itself.

The G20 Summit only backed the Prime Minister to the extent that it backed every leader who was there, whatever their policies. But it did set a fairness challenge the government will find it hard to meet.

3 Responses to Spin at the Summit

  1. Tweets that mention Spin at the Summit | ToUChstone blog: A public policy blog from the TUC —
    Jun 28th 2010, 2:37 pm

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  2. Canadian G20 gives talking shops a bad name | ToUChstone blog: A public policy blog from the TUC
    Jun 28th 2010, 10:58 pm

    […] my colleague Richard Exell remarks, virtually every world leader left able to claim victory, because the declaration demands fiscal […]

  3. captaingrumpy
    Jun 29th 2010, 12:12 am

    Nearly every world leader is a freebie welfare junkie. They are mostly from the left that believes people have a right to gov money. If the welfare bill was checked and cuts to people like unmarried mothers was made to make it a hard life then more would not go that way. I know a lot of people on welfare and in MOST cases they have a better lifestyle than those that work. This stinks. For too long we have let lazy people live like those that will get off their butt and get a job or two or three.
    If welfare was cut then the world would not have jobs that are not filled.