G20 back UK cuts, claims Chancellor
Published 27/06/2010 | 19:02
The communique agreed by leaders of the world's major economies at the G20 summit in Toronto will amount to an endorsement of the Government's decision to rein in state spending, Chancellor George Osborne has said.
Expectations were high ahead of the summit that the gathering would witness a clash between European states, which are pursuing tough fiscal consolidation programmes to reduce debt, and US President Barack Obama, who has warned that making cuts too fast risks pushing the world into a fresh recession.
But Mr Osborne said that his austerity Budget was given a warm welcome by leaders and finance ministers from the other G20 states, who accepted that different policies will be appropriate for different countries.
All were agreed to work together to deliver sustainable economic growth, he said.
It is understood that at Saturday night's working dinner for G20 leaders, Mr Obama singled out last week's UK Budget as an example of the kind of necessary courageous action needed to restore health to the world economy.
Speaking to the BBC ahead of the publication of the communique, Mr Osborne said: "I think the British budget has been noticed here in the G20 and has been appreciated. I think the communique will explicitly recognise that countries with serious fiscal challenges need to accelerate the pace of dealing with them, and of course that is exactly what the Budget did."
Mr Osborne said that discussions in Toronto had shown that the G20, which brings together the major G8 powers - the US, UK, France, Germany, Italy, Canada, Japan and Russia - with emerging economic giants like China, India and Brazil, was united in its desire to work together to restore growth following the economic crisis of the past three years.
"I think there is a recognition that everyone in the G20 and everyone round the world wants to see sustainable economic growth," said the Chancellor.
"But for European countries with high budget deficits - especially for the UK with the highest budget deficit in the G20 - we have got to make our contribution to that sustainable growth by showing the world that we can live within our means.
"The Budget that I produced last week set out a credible plan to do that and show that, yes, we will get on top of our debts and do it in a way that promotes growth and is growth-friendly and injects confidence into the British economy. I think that has been appreciated here at this summit."