G7 summits nowadays are mostly fields of the cloth of gold. They are about showing off, with Boris Johnson in full Henry VIII rig. He staged beach parties, hired cruise ships, dug up trees, summoned royals and organised worship of David Attenborough. The planet was saved, the world cleansed and the poor vaccinated. Johnson got through £70m in policing for a three-day event.
Most important, the G7 hates any row that spoils the show. Johnson succeeded in neutering the US president, Joe Biden, on the Northern Ireland protocol, deftly deploying tea with the Queen. He failed on the same subject with France’s Emmanuel Macron. With his signature banality, he equated the vexed protocol with Macron barring a Toulouse sausage from reaching Paris.
When Macron pointed out that France was one country, Johnson exploded that the UK, too, was one country, and fell right into the trap. He had just spent the past year of lockdown boasting how well he got on with the other “three nations” of the UK, one of them overseas. Meanwhile he is wrestling to keep Scotland aboard, and signed the protocol keeping Northern Ireland in the EU single market. Johnson had always been adamant that Brexit meant leaving it. It was game, set and match to Macron.
Most extraordinary is Johnson’s failure to boast what should be the major achievement of this year’s G7. It came via the preliminary finance ministers’ meeting on 5 June. These meetings were the G7’s true origin in the 1970s, before the gathering was hijacked by egotistical prime ministers and presidents. The agreement was to seek a basic 15% global tax on “stateless” multinational corporations, notably those of global big tech. The British chancellor, Rishi Sunak, rightly called the deal “seismic”.
These corporations are estimated to have parked offshore profits of some $6tn (£4.25tn). Possibly as much as $240bn (£170bn) a year in unpaid taxes sloshes about the money markets, in addition to billions owned by rich individuals. The agreement has nothing to do with fiscal sovereignty. It would be a voluntary agreement to treat wealth equitably. Some 40% of such tax revenue might go to less well-off countries.
There is massive work still to be done, identifying loopholes and securing local agreements. But the Economist magazine predicts the start of a process that could eventually render Caribbean and other tax havens obsolete, and not before time. It is also a step down the road to regulating digital corporations, now bigger, more intrusive, more powerful and thus more dangerous than any in history.
A time of global disruption is when nations tend to be open to collaboration. The aftermath of the second world war saw the creation of the IMF, the Marshall Plan and the United Nations. The 2008 financial crash led to a surge in credit cooperation. Just now, a revivified Washington is ready for reform. A process begun at the 2021 G7 is in train, one that could be a huge step forward for global equity. Funny that no one mentioned it. No pictures of Johnson perhaps. Or was it because his potential rival Sunak called it seismic?