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The new transatlantic divide: Jobs

by editor

Lisa Nandy is shadow foreign secretary in the U.K.’s opposition Labour Party.

When the leaders of the world’s largest developed economies meet via video tomorrow, a sharp contrast will be on display.

In the United States, President Joe Biden has vowed to go big on jobs and put economic stimulus at the top of the agenda. The U.K., which is hosting the G7 for the first time since 2013, has not. Prime Minister Boris Johnson may be on the same Zoom call as Biden — but he is on a different wavelength.

Johnson’s extraordinary omission of fiscal stimulus shows how, in just a few months since Biden’s election, the U.K. has begun to drift apart from our allies on both sides of the Atlantic, leaving us increasingly distant from mainstream global politics.

A jobs plan — underpinned by coordinated action across the G7 countries to choose fiscal stimulus over tax rises and spending cuts — should be at the top of tomorrow’s agenda. Unfortunately, it won’t be, at least not when it comes to the U.K.

The U.K. has had the worst economic crisis of any major economy. One million U.K. businesses risk collapsing in the next 3 months. Some 1.7 million people are unemployed, and 5 million more are dependent on a furlough scheme which ends next month.

Globally, the picture is nearly as dire. Developing countries also desperately need global action to shore up their economies, allow them to protect their health systems, distribute coronavirus vaccines and reduce the spread and mutation of the virus. The U.S. is already proposing much greater access to borrowing for those countries to prevent economic contagion spreading across the world.

On health and economic grounds, Biden is right to say coordinated economic action is the priority. By moving quickly, we will get the vaccine to every corner of the globe. By moving together, as the world’s major economies, we will achieve far more, for less, than we could do by acting alone.

Given the scale of the challenge, this year and the next are not the moment to cut spending or raise taxes. The problem is, this is precisely what Britain’s Chancellor Rishi Sunak seems on track to propose in the forthcoming budget in just a few weeks’ time. Even as Biden looks to inject trillions into job creation in the U.S., briefings emerging from the British government suggest tax rises are on the Chancellor’s agenda and No.10 lacks the strength and inclination to resist.

That is why tomorrow Johnson will find himself once again out of step with the direction of travel of our major allies, confronting a reality that bumps up uneasily against his rhetoric. He vowed to lead the global recovery, but given the chance, he has dodged the decisive action necessary to do it.

On so many major questions — from global economic recovery, to the action necessary to deal with China and the role of Western countries in arming Saudi Arabia — Britain finds itself increasingly isolated.

In addition to doing more at home, Johnson should put jobs at the top of the G7 agenda. The leaders meeting tomorrow must move on from the era of global retreat and discredited economics that Johnson represents and support Biden’s focus on delivering substantial fiscal stimulus to the global economy and put forward a jobs plan for when leaders plan to meet in person at a summit in Cornwall in June.

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