Labour has called on the UK government to step up and take a leading role in the international response to coronavirus at a meeting of finance ministers from major powers this weekend, warning: “We can no longer afford to be absent from the world stage.”
Shadow chancellor Anneliese Dodds and shadow foreign secretary Lisa Nandy wrote to their Conservative counterparts urging them to follow the example of Gordon Brown when he led the global response to the financial crisis in 2008.
They warned of the danger of financial contagion from the Covid-19 crisis hitting fragile economies, depriving them of the resources needed to contain coronavirus and increasing the risk of a second wave sweeping around the world.
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And they called on Rishi Sunak and Dominic Raab to use the G20 summit on Saturday to support international efforts to facilitate government debt restructures and allow countries with liquidity pressures to make use of special drawing rights arrangements.
“The UK led the international response to the 2008 financial crisis and acted within days to prevent the global economy spiralling out of control,” said Ms Dodds.
“Our response to the Covid-19 crisis couldn’t be more different. We used to step up to the plate – now we’ve stepped off the stage.
“This weekend the government has a chance to put that right. Ministers must step up and coordinate action to support fragile economies so the whole world can pull together and beat this virus.”
In their letter, the shadow cabinet ministers warned of the “serious threat” that fragile economies which are not given the opportunity to restructure existing debts will be unable to contain the spread of Covid-19.
“Given their links to other emerging economies – and indeed to our own – without concerted global action the impact on our economy and our health may be severe,” they said.
Ms Dodds and Ms Nandy said the G20 needed to take “clear action” to ensure that private creditors cooperate with internationally coordinated debt restructuring by governments, with the UK well-placed to play a crucial role because of the concentration of players in the City of London.
And they said the UK government should coordinate global action to enable fragile economies to make use of Special Drawing Rights issued by the International Monetary Fund to help them deal with liquidity pressures.
Ms Nandy said: “At a moment when the world faces unprecedented economic and political challenges, the government is failing to step up and show the global leadership this crisis demands. This crisis has shown that we are only as strong as the most vulnerable – we can no longer afford to be absent from the world stage.
“The UK is uniquely positioned to bring together democratic countries from across the world to respond to the threats of Covid-19. The government must use those relationships to coordinate with our international partners and help lead the global response.”
The meeting of G20 finance ministers and central bank governors will be hosted virtually by Saudi Arabia on 18 July.
