Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Ed Miliband calls for ‘global plan B’ to kick-start economic recovery

Labour leader says November’s scheduled G20 meeting should be brought forward so leaders can agree internationally co-ordinated response to economic slowdown

The Labour leader, Ed Miliband, has said the “world has to come together” to get the economic recovery back on track.

Miliband called for an early G20 summit to develop a “global plan B” to deal with financial crises.

He outlined the case for the international community to speak with “one voice” in an article in the Financial Times, in which he accused the prime minister, David Cameron, of “standing on the sidelines” instead of showing leadership for an internationally co-ordinated response.

Miliband also expressed concern that banking reforms could be delayed following reports of splits within the government and industry-wide lobbying from banks seeking leniency ahead of the 12 September publication of the Independent Commission on Banking report.

The Labour leader said: “What I’m saying in the article today, and I think what most fair-minded people across the country will think, is let’s not have special interest lobbying by the banks to stop happening what needs to happen.

“Now, we’ve got an independent commission which will take a judgment about how we can do this in a way that is good for our economy.”

The Labour leader was speaking during a visit to the Vauxhall Motors car plant in Luton, Bedfordshire, with the shadow chancellor, Ed Balls. The visit came as figures revealed that Britain’s manufacturing shrank at its fastest pace in more than two years as export orders plummeted.

Miliband said the world coming together and speaking with one voice would “reassure the markets” and give them confidence. He warned that the recovery, which appeared to be taking hold a year ago, “has now stalled”.

It was “totally realistic” for world leaders to come together and agree a plan for growth, he added, saying: “This [Vauxhall Motors] is a company that is moving forward and has seen orders going up. But what we also learned today was currently they could expand, they could produce more vans and cars, but they need the orders.

“That is why we are saying … a global plan for growth actually is very important for Luton and very important for this plant. Unless we get these exports up, unless we have other European countries growing, then there aren’t going to be the places to sell to.”

Miliband used his FT article to call on Cameron to press the case for an early meeting of the G20 group of wealthy nations to address the crisis, arguing that the scheduled G20 meeting in France in November was too far away.

He said the summit should set a clear agenda for growth – “a global plan B” instead of the collective austerity approach to put the world’s economy back on track. The summit should tackle the triple challenge of growth, debt and banking stability, he added.

The Labour leader also said the G20 should work to bridge divisions between central banks “which damage public confidence that policymakers have a handle on events”.

He called for a more balanced approach to fiscal policy and warned that deep cuts in state spending risked locking economies into low growth.

“We cannot go on like this,” he wrote. “The international community must start speaking with one voice – and fast.

“When growth is already stagnant across much of the developed world, the idea that all countries should make deep cuts – irrespective of their fiscal position – risks locking into low growth. Collective austerity by our government is too simplistic for the complex challenges the world faces.”

He also challenged the assertion made by the chancellor, George Osborne, that the UK was a “safe haven” for investors, claiming it was “naive” to believe it was immune to the problems.

“Unfortunately, our prime minister and chancellor seem to prefer standing on the sidelines, complacently claiming that we are a ‘safe haven’ even though the British economy has been flatlining since last autumn, well before the turmoil we have seen this summer,” he said.

“The truth is, no country is a safe haven from the problems of the world economy. Political leaders suggesting otherwise are naive, especially when in Britain they are betting the farm on export-led growth.

“Just as with the financial crisis of 2008, we face global economic threats that can only be addressed by global economic leadership. There is no time to lose.”

Miliband was flanked by Balls, who said: “We need our chancellor and prime minister banging the table in America and Europe and saying ‘let’s act to get the economies growing’ so the markets here for these exports are growing, which they are not at the moment.”

He said British businesses “need action now” in order to secure jobs, and called for a “more balanced approach” to deficit reduction, saying the coalition government’s current strategy “doesn’t make sense”. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds