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The meeting this weekend in New York of the world's 20 largest economies comes as the financial crisis is curdling into something even more serious — a full-blown international recession.
This week has seen dire warnings from the Bank of England over the severity of the downturn. Today the EU said the eurozone is in recession, while it has already been confirmed that the economies of France and Germany are both now contracting. Each day brings news of massive job losses: today, thousands at banking giants RBS and Citigroup, yesterday 10,000 at BT.
Gordon Brown will be in his element in New York, arguing for a new Bretton Woods-style settlement. A multilateral co-ordinated programme of fiscal stimulus will bolster his case for tax cuts in the UK, as well as for counter-cyclical spending.
For despite the bad economic news, the Prime Minister still finds himself ahead of the Conservatives on the economy. Labour lags in the polls but the gap is tightening: the Tories have struggled to keep up in responding to the crisis.
This week not only Labour but the Chinese government announced tax reductions (as has Barack Obama). Such a package now seems almost certain to figure in the pre-Budget report later this month.
Mr Brown has had unhappy experience of fiddling with the tax system in the 10p debacle but this time the pressure is likely to shift to the Conservatives. Still, it is the Government that will feel the main impact of events most keenly: Mr Brown might praise higher borrowing now but voters may be punitive when they realise it means tax rises down the line.
We are only now beginning to see the human cost of the downturn in job losses and home repossessions, a cost whose local effects are laid bare today by our map of the recession in London's boroughs. Tax cuts will put a little money back in voters' pockets; whether they will spend it is far from certain. Likewise, the stimulus delivered by new infrastructure projects is a gamble, and the borrowing involved is an extra burden on the public finances. The steps the Government takes now to restore confidence are also those on which it will ultimately be judged, when the full impact of this crisis is weighed in the balance.
Haringey shame
Will the lessons of the horrific Baby P case be learnt? Children's Secretary Ed Balls has ordered an instant inquiry. But evidence is emerging that despite Lord Laming's review in 2003, following the death in 2000 of Victoria Climbié in the same borough, Haringey's social services have remained resistant to change.
As we report today, ministers were warned six months before the death of Baby P, in August 2007, that social workers in the borough were “out of control”. But they did little about the warnings of whistleblower Nerves Kemal; instead she was suspended and dismissed. The Conservatives have accused ministers of “bureaucratic buck-passing”.
Meanwhile, parents say they were victimised after making complaints against its children's service. Yet incredibly, the service was given a clean bill of health by Ofsted just two months after Baby P's death; its child protection work was singled out for praise. The report, based on paperwork only, was signed off by Juliet Winstanley, a former colleague of Haringey's head of children's services Sharon Shoesmith.
The unavoidable impression is of an institution still behaving arrogantly despite its responsibility for one of the worst ever child welfare scandals in the Climbié case. It is hard to disagree with Lord Laming's verdict earlier this year that he “despaired” over the lack of reform. This time such failure cannot be tolerated.
And celebrating ...
PRINCE CHARLES. The heir to the throne is 60 today. His role is difficult and given the Queen's excellent health, it seems likely to be one he may hold for some time. Yet the Prince has carved out a real niche for himself as the founder of the Prince's Trust and as the spokesman for a number of causes close to his heart. He has our congratulations and best wishes for this landmark birthday.
