Transcript of Alistair Darling on the G20 Summit
Saturday 7th November 2009
G20 Summit Q&A – Alistair Darling
Chris Giles, Financial Times: In terms of the framework for strong, sustained and balanced growth you seemed to have made progress on what data that each country needs to give to the G20 and the process. There doesn't seem to be any mention in the communiqué of the common objectives that the G20 have said in Pittsburgh they would set for the whole process nor of the enforcement mechanism should there be a view from the IMF ultimately that the… individual, national policies don't make… don't give the world strong, sustainable and balanced growth. Where is progress on those two specific items?
Alistair Darling, Chancellor of the Exchequer: Well, firstly in relation to the purpose of this – that remains as set out in Pittsburgh. What happened at Pittsburgh was we – countries collectively – agreed on our objectives and then they asked finance ministers to say how would they achieve them. So today it's been very much about how we would do it rather than a new set of objectives so they haven't changed. In relation to what happens if you don't, if you like, I have always been clear we are not talking about a new international system of government. The IMF can't tell countries what to do in relation to do. Of course they've got… they can impose conditions when they are providing assistance and nothing is new there. But in relation to the future, it is up to countries to decide what they do and when they do it. The advantage having the IMF drawing people's attention to things that work in some countries that don't work in others drawing attention to whether or not there is a risk of us not achieving the growth targets we set ourselves is that collectively we can decide what action we take. But just as in the last year, nobody told America, nobody told Germany and no one told us, no one told Japan, no one told China they had to do something. We could see the problem – because we didn't need the IMF to see the problem because it was so blindingly obvious – but we all chose to do it because it was in our sole [sounds like] and self-interest to do it. And this is a classic case where, you know, acting together can actually not contradict your self-interest, we can actually boost your self-interest. So the objectives haven’t changed and I think that the mechanism we have put in place will be effective in drawing countries attention. The fact is what is possible, what they can do if they are prepared to do it. Now I’ll get everybody in but I just go to you next.
David Milligan, Reuters: I would like to ask you a question about the transaction tax and sort of what discussions you had with that with the United States and Japan and what their reaction is, how confident you are and that they all sort of agreed to support something like that when the IMF reports back and what you would say to people who might sort to ask whether this is actually something more focussed on British domestic politics rather than sort of the international environment.
AD: Well, on the latter point, no, I think it is something that affects every country. By their very nature financial institutions are pretty global and many countries are now aware of the potential problem in the future where people can choose to do business, choose to carry out their transactions in different parts of the world with subsequent consequences on countries that presently collect revenues there. The IMF discussed this actually at Pittsburgh and that’s why at the Pittsburgh meeting we asked the IMF to do more work on this which will report to the IMF meetings in April and then it will come back to the leaders meeting at the G20 next summer. And of course we had discussions with the individual countries and, as you may know, it's also been quite a subject or alive [sounds like] debate within the European Union. So it's an issue where there's a lot of interest. It's also an issue where people understand there's a lot of road… a lot of ground to cover because it would only work if it was universal and, as the Prime Minister said, we're absolutely clear we would not do this on our own. There is no way we would do it on our own. This would be only possible if you’ve got international agreement. Lucy.
Lucy Manning, ITV News: Chancellor, I wondered why the British were now talking up this idea of taxing what… the deals that bankers do when the British haven’t been massively keen on it in the past. What’s changed?
AD: In terms of transaction tax? Well, what's changed is, well, the world in changing and what is changing in particular is that I'm very conscious of the fact that multinational companies are becoming much more able to choose where they do business and are pretty mindful of what the tax consequences are. And this is an example, I think, of where we're prepared to think ahead. This is something that is, you know, is not going to happen tomorrow or anything like that. It is something that you need to do the work to see what can be done in the future. So it is an important step and, as I say, we’re not the only country looking at it. And I do think, you know, one of the things that we think to learn of the last year is that... is sometimes it’s not the new ideas that… or the problem, as Keynes once said 'it's escaping from the old ideas' and it does mean that new thinking is sometimes required even if that new thinking takes time to develop, even if that new thinking requires international cooperation. Because, again, the last year has demonstrated it, international cooperation is pretty critical for an awful lot of what we are discussing. That's why we discuss it in the G20. Yes.
Faisal Islam, Channel 4 News: Chancellor, how disappointed were you that some of the emerging economies weren't as keen on discussing climate finance here as you yourself were?
AD: Well, look, there was no lack of enthusiasm in discussing the subject. The subject was discussed at some length but, I mean, you know, let's be blunt about it. We are talking about trying to reach an agreement in Copenhagen in a month time that will have profound consequences – profound consequences for the good if we can get a good political deal for… a deal that is legally binding. But inevitably, in the run-up to Copenhagen, countries will, they negotiate, they will not always show their hand at an early stage. Now actually, in the last 24 hours, some of the issues that have surfaced are ones that we weren’t aware of. The question of governance, you know, who… the question of do we set up a new fund into which countries might put money and if you do – who runs it? Is it the UN, is it the World Bank, is it a new organisation? Now, some very useful exchanges of information took place. And, frankly, there was an opportunity here which is why I put it on the agenda – because it would have been dead easy just to say 'no, we're not going to discuss it because you won’t get a complete agreement.' But I think everyone concerned, no matter where they stand on these arguments, recognised that this was a good discussion to have because these are issues that are not going to go away and in many ways I'd rather they were surfaced here so that we can sort out some of these problems and get a deal at Copenhagen. And as far as Copenhagen is concerned – and make no mistake about it – the price here is absolutely immense. Now, it took a crisis to get us to take action in the G20 to deal with economic downturn. We cannot afford for another crisis to emerge before we take further action on climate change. Now I'm confident that we will make progress at Copenhagen because the spirit is willing right across the world. Of course you've got to get the detail right and, as you would expect, countries including our own, there'll be points of detail that will exercise us. But today was always going to be a step along the way. We've made it clear that we are willing to step up to the plate. We're willing to make a contribution that you'd expect us to do because, you know, for a long time we have taken the lead in relation to climate change – we'll continue to do that and we'll continue to make progress. But this was a very useful occasion to surface some of the things that we need to get sorted out and, as I say, one of the things that the G20 ministers specifically asked is that if we could convene a smaller group of the countries that, you know, have particular problems to see if we can do some heavy lifting before they sit down in Copenhagen in a month time. Yes.
Richard Quest, CNN: It seems – bearing in mind what the Prime Minister said today, what the communiqué said and what you've just said – that the tax, the trading tax…
AD: Transaction tax.
RQ: …yes, transaction tax is… train is leaving the station. If the conditions are met that you specify, are you in favour of such a tax?
AD: Well firstly… I don't… you know, we're not talking about something that has just happened and, you know, somehow, you know, is just being drawn to our attention. This is an issue – like many tax issues – and every year the finance bill, you know, [words unclear] changes the tax system to reflect the fact that conditions change. The point that I am making is that I – like every other finance minister – I'm naturally concerned that the taxpayer gets a fair deal, especially that the taxpayer gets a fair deal from the institutions that certainly in the last year have benefitted massively from support right across the world. And that's why I believe it is right that we should do this work. I think it’s absolutely the right thing to do and, you know, the Prime Minister has set down conditions about the universal nature of it in relation to its comprehensive nature in relation to other measures too – and that's right too – but not to do the work and not to, you know, acknowledge the fact there’s a problem and it's a problem that we need to look at would just seem to me to be wrong. So it is clearly an important thing, piece of work to be done and it's not just this country. I mean we did, you know, this is something we actually asked the IMF to do at Pittsburgh and it was asked, the request was made by the G20 as a whole, not by any one country there. Yes.
Name unknown #1: Chancellor, if I can just take you back to the question briefly of climate finance. The original aim – who am I to tell you – was to achieve a legal treaty in Copenhagen – that was then pretty much watered-down, we've been talking about a binding agreement towards a treaty. But now if we look at the wording here it looks as though we’ve taken a step backwards. I mean, we're talking about 'we discussed a range of options. We commit to take forward further work on climate change finance.' I mean, there is no suggestion here for any kind of agreement or indeed any kind of timescale at all.
AD: No, no. What that refers to is a range of options for financing climate change. It’s not referring to whether or not we should reach an agreement in Copenhagen at all. We were specifically asked, you know, on a very specific matter and that is the climate change financing options – that's what we were specifically asked to look at and that’s what we’re continuing to look at. Now in relation to Copenhagen itself, we haven't got there yet. You know, and, you know, we are quite clear for our part – the UK Government's part – is that we are pressing for an agreement, just as we pressed for a Kyoto agreement. And I say one other thing to you that, a month before the Kyoto agreement, a month before the G20 meeting in London in March, you know, many people have said 'look, you're never going to agree even half of what you eventually turned out you agreed.' It's inevitable when you go to these negotiations that people sometimes hold back, they sometimes don't disclose their whole position until you actually sit down on the day. So I… but I think the overwhelming mood of the meeting we had today was people know the problem, they know the problem won’t go away, they need to sort it out. And they agreed on a lot. Now, there's still work to be done, you know, I did say, you know, over the last few days we will never going to get, you know, everything sorted out this weekend – that simply isn’t possible in, you know, in a day’s meeting – but I think useful progress is being made and I want to build on that because, you know, frankly, I regard the Copenhagen agreement as important as anything else countries are likely to achieve in the next year or so. I'm going to go and have one each. It’s not fair on everybody else. Yes.
Name unknown #1: Chancellor, in relation to the stimulus packages and exit strategies, you said that it was going to maintain support for the recovery until it’s assured [sounds like] and yet Britain is one of the first countries that's going to stop that by raising VAT within a number of weeks. And also you said that you are going to communicate promptly the exit strategies when they do start. How is that going to be manifested in the sense that, you know, it sounds as if the Bank of England or the ECB is going to send out an email 'we're about to raise rates.'
AD: No. Look, firstly, if you look around the world there are many countries that are ending some of their support schemes but they are continuing others. In America, the cash-for-clunker scheme has stopped. It stopped in Germany. You know, there's other measures, too, that… measures taken by the Fed that are either slowing down or may stop. I've always been clear on the VAT reduction…
Paula Middlehurst, presenter: Well, that's the Chancellor, Alistair Darling, addressing a news conference taking questions there from reporters and he's at the G20 summit in Scotland in St Andrews.
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