How Cameron failed developing countries at the G8

From the beginning, the Prime Minister repeatedly failed to show the leadership on tax avoidance and transparency this summit needed.

The G8 meeting was heralded as a unique opportunity to address some of the structural causes of poverty and hunger. It was a chance to both put our own house in order and focus on making a difference to the lives of those in the developing world. Progress was made towards tackling hunger and malnutrition, with substantive funding commitments made by the UK and EU. We also saw a welcome commitment to supporting the UN’s humanitarian appeal for the horrendous crisis in Syria,  which remains staggeringly underfunded. 

David Cameron rightly made tackling tax avoidance and improving transparency a priority. The flawed system of global taxation has a profound impact on not only our revenues but also on the poor in developing countries. The Africa Progress Panel revealed just this week that African countries lose $50bn a year to illicit tax flows. But despite the Prime Minister’s rhetoric, his efforts fell desperately short in achieving the fundamental changes which are necessary.

It was imperative from the beginning that any G8 agreement should not "lock out" developing countries. However, it is unclear how developing countries will benefit from announcements on sharing tax information and whether they will be involved from the start in the Prime Minister’s new deal. This runs the risk of creating a "two-tier" system which allows advanced economies to benefit from transparency but excludes developing nations.

The Prime Minister also said: "Personally, I want to see the whole world moving towards public registries of beneficial ownership." This would allow all countries to benefit from knowing who owns companies and assets and take a step towards to tackling tax avoidance. It was, then, extremely disappointing and a significant U-turn that the agreements only commit the UK to a private registry of British companies and that no G8 country agreed to create a public register. We need far more than secretive lists in the UK of companies' true owners and vague promises of future action if we are to truly make progress towards ending tax secrecy.

The G8 Communique also includes lots of fine words, particularly on introducing country-by-country reporting for multinational companies and reform to rules which allow companies to shift profits out of developing countries, but no concrete action. Labour has repeatedly called for action on these issues which would enable developing countries to collect the taxes they are due and complement measures to build tax revenue collection capacity in these countries.

The Prime Minister could have used the window of opportunity presented by the G8 summit to deliver real action to tackle tax avoidance, not just for the UK, but for countries around the world.

Instead, from the beginning, he repeatedly failed to show the leadership this summit needed. On putting our own house in order, the government has consistently refused to review UK tax rules relating to controlled foreign companies which the evidence show costs developing countries £4bn a year in lost tax revenue. This is unacceptable.  

He has also been repeatedly criticised, as recently as recently as yesterday by the US, for failing to put in the necessary diplomatic and political work in the weeks and months leading up to the summit to secure meaningful deals on tax transparency. In 2005, the UK used the G8 chairmanship at Gleneagles to achieve the historic promise to increase aid by $50bn by 2010 as well as crucial steps on debt relief and climate change. This shows the magnitude of what can be achieved through ambitious hosting of the G8. But this took significant diplomatic effort and political will.

Sadly, this scale of commitment was largely lacking from the Prime Minister's approach this time around. This G8 could have done for tax and transparency what the 2005 G8 did for aid and debt relief. Instead, away from the hype and spin, when history is written, this summit will be seen as a missed opportunity in the fight against global poverty.

Labour wants to see an end to extreme poverty, a reduction in inequality and an end to aid dependency by 2030. A prerequisite to achieving these objectives will be developing countries having access to fair taxes from their citizens, domestic businesses and multinational companies. David Cameron chose the right priorities for the G8 summit but, as on so many other issues, his fine rhetoric and big promises were not matched by the  conviction or hard work necessary to deliver the radical change that we need. It is to be hoped that the G20 later this year will turn rhetoric and the promise of future action into the commitments we had expected to see. 

Ivan Lewis is the shadow international development secretary

David Cameron speaks during a press conference at the conclusion of the G8 summit in the Lough Erne resort near Enniskillen, Northern Ireland. Photograph: Getty Images.
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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.