Is G20 make or break for Brown?

It is perhaps appropriate that the G20 meeting is taking place in London's Docklands.

This is an area which rose, phoenix-like, from the ashes of past economic shocks but which needed state intervention, and sizeable public spending on infrastructure, before it took off.

But the parallels don't stop there.

The prime minister's long-standing reputation for economic competence has also taken a battering as the world shifted around him.

So he is hoping that it too can rise again as a result of state spending - rescuing the economy, and Labour's political prospects, simultaneously.

But while he had hoped to bask in the warm glow of international approval at the G20 for his "fiscal stimulus" - his plans to spend his way out of the recession - he may instead get his fingers burnt.

Although many other countries are pumping money into their economies, their rhetoric does not always mirror the prime minister's, or indeed that of the US president with whom Gordon Brown is keen to appear close.


G20 LONDON SUMMIT
World leaders will meet this week in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

Q&A: G20 Summit
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Many EU leaders - and in particular Germany's right-of-centre chancellor, Angela Merkel - are warning about the risk of building up debt.

Part of Labour's political strategy was to use this week to highlight David Cameron's isolation but the Conservative leader will pounce on any difference of emphasis among G20 governments to suggest that the world is not all that keen on being saved by Mr Brown.

So it is perhaps not surprising that government ministers are now engaged in an exercise of expectation management.

There is less talk than before of a global "new deal" being hammered out.

Reduced expectations

Instead, the Chancellor Alastair Darling is saying there is little point in being "overly optimistic" about what can be achieved.

The G20 summit, he believes, "is important, but it is not the end of the process".

But even if the G20 turns out to be a diplomatic and economic success - for example, there are hopes in government that there will be agreement on tackling tax havens; on instituting better international regulation of the banks and on increasing resources for the International Monetary Fund to help poorer nations - there may not be much of a political premium for the prime minister.

The agenda of the G20 may seem remote from people who - to use the government's own phrase - need "real help now".

The benefits of any agreement at the G20 on a new global financial order might not become apparent until after the next election.

So this week's international meeting should be seen as something of a companion piece to a decidedly national event.

In three weeks' time - much later than is usual in the fiscal cycle - the government will unveil the Budget.

Downing Street insiders are already telling anyone who will listen that there will be substantial help for the least well-off.

That is partly to draw dividing lines with the Conservatives, who are persisting with plans to raise the inheritance tax threshold, and partly in the belief that those lower down the income scale will spend rather than save any extra cash, thus boosting the economy.

But the Conservatives will focus on rising debt levels and even more gloomy forecasts for economic growth - so the Budget will not necessarily boost Gordon Brown's political prospects even if it does boost some people's incomes.

Panic button

With Labour trailing the Conservatives consistently in the polls, some see the G20 as the last thrown of the dice for the prime minister.

The international financier George Soros has said the event is "make or break" for the world economy.

But it will not be make or break for Gordon Brown.

A more likely date to circle in the diary is the day after the European elections in June.

By then, voters will have benefited from any Budget munificence, and might also be in a position to see if the world is shunning or supporting Britain's economic strategy.

If they remain unimpressed as they go to the ballot box, then that is when Labour MPs might be tempted to hit the panic button.