Adrian Hamilton: If only Gordon Brown had taken the job at the IMF

He has set the bar for the G20 so high because he needs to show he is leading
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The Independent Online

As one of the diminishing band of people who believe that Gordon Brown genuinely entered politics to do something about "poverty and unemployment", as he declared in yesterday's Prime Minister's Questions, I find myself both in awe and despair about his approach to the G20 summit in London in a fortnight's time.

That he is sincere about producing an agreement that really makes a difference to the current economic crisis, I am not in doubt. And in many ways the measures that he has introduced here and that he is pushing on others – the recapitalisation of banks, the packages to boost demand and the quantitive easing introduced by the Bank of England (followed yesterday by the Japanese) – are the right kinds of action given a recessionary slide as rapid and as great as this.

We are at a time when the world, and its poor benighted citizens, need a leadership that understands the magnitude of the global slide in recession, that is ready to take action to mitigate its effects and is willing to combine forces to battle the sheer force of deflationary pressures now under way. On all this Gordon Brown is correct. If only it were not so overlain with his own drive for self-justification.

Brown has set the bar for the summit so high for success because he needs to show that he is taking the lead on this issue. He wants a global commitment to reflationary measures because he requires the cover to mask the extent to which Britain has now used up most of the ammunition in its locker and is becoming grossly overextended in the process.

He has become obsessive about the call for global regulators for global finance, and done a back flip on the need for tight regulation and the suppression of tax havens, because he is desperate to keep up a narrative (tenuous at best) that he was always in favour of tougher regulation but couldn't get other countries to support him.

It is the craft of politic, of course, to make the self-interested appear to be for the common good, but in this case Brown is perverting the ends of global action in the G20 to suit his personal means and, in doing so, is raising expectations to a point where the G20's failure to meet them will actually do damage to the consumer confidence that is most in need of revival.

That may be all right for Brown, who can blame the world for failing his vision just as he blames the world for Britain's economic woes now. But it won't help the poor and the unemployed whom he claims as the object of his endeavour.

At this stage everyone is agreed as to the seriousness of the situation. All are in accord that it is a global problem requiring a global response, or at least a general agreement not to make matters worse by rushing to competitive devaluations or trade protection. But there is no consensus on the crucial issue of how far to discard fiscal prudence for reflation or over the extent or means of global regulation. It's too late to talk of a co-ordinated round of new expenditure measures and too early to discuss in any detail the next phase of regulation.

Even over boosting IMF funds for bailouts – the third leg of Brown's G20 stool and the one likely to make the most headway in London – there are disagreements between those who want new funds for a general pot and those (such as China) who prefer to fund bailouts on a case by case basis.

The G20 is not going to fail. It is in no one's interests that it breaks up in disarray. A form of words will be found to keep everyone feeling warm. But to affect the confidence of the markets and consumers – the only thing that really matters at this point – it has to come up with a package of mutually agreed measures that change things on the ground.

It would help enormously, for example, if there were the beginnings of an agreement on currencies. It would steady the markets if Europe could show a determination to ensure that no country reneges on its debts in the region. But in his search for the global stage and a new Anglo-American partnership, Brown keeps sliding away from the specific and regional.

It is the tragedy of a man who could have done so much more. A few years ago the then Chancellor of the Exchequer could have been head of the IMF, or even the World Bank. It was there for his asking. But hunkered down in a debilitating ambition for power in Britain, he declined. If he'd taken it, he would have been a major player on the world scene now, a man who could have made a difference.

As it is he is the embattled head of a country in deep economic trouble, desperately waving the flag of internationalism to disguise the part he has played in its downfall.

a.hamilton@independent.co.uk

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