Briefing by the Prime Minister’s Spokesman on: meeting with bankers, Cabinet, inflation figures, public sector pay, Jaguar Land Rover, G20, Pakistan and Iraq inquiry
Meeting with Bankers
Asked for a readout from the meeting, the Prime Minister’s Spokesman told the assembled press that the meeting was just breaking up as he was leaving, so there was no readout just yet. As we had been saying, the meeting with bankers was part of the global discussion that the Prime Minister and the Chancellor were having ahead of the London Summit. We had been actively engaging with the financial sector and with business on the G20 agenda.
This morning’s meeting brought together senior international bankers to discuss broadly, the reform of financial regulation and supervision including a discussion on risk management and remuneration, a rejection of financial isolationism and the restoration of lending. This was in line with the speech the Prime Minister gave at the FPA on the 26th January. Asked if the discussion on remuneration included bonuses, the PMS said that he had not had a readout yet, but he would be in a position to do so later. The Prime Minister had set out his views on remuneration including bonuses in the past on numerous occasions, with the emphasis on long-term value rather than short-term risk taking.
Cabinet
Asked for a Cabinet readout, the PMS replied that there was a presentation from the Home Secretary on the updated Contest Strategy, which set out the reasons for the update and the main changes to the strategy paper. There was also a short presentation by the Chancellor on the economy. Asked about what he had said, the PMS said it included the figures that were published this morning on inflation and looked ahead to the presentation that Mervyn King would be giving to the Treasury Select Committee.
Inflation Figures
Asked if there was a sense of relief after the figures had been released and was there any sense that the corner had been turned on inflation, the PMS replied that the Government’s view was that these were difficult times for the UK and the global economy and as the Chancellor had set out in his letter to the Governor of the Bank of England, he welcomed the Monetary Policy Committee’s intention to look through the temporary effects in inflation and to set monetary policy in order to meet the 2% inflation target in the medium term.
Public Sector Pay
Asked if the Prime Minister anticipated any freeze on public sector pay in the next two years, the PMS said that as the Treasury had been making clear, there had been no decisions yet on public sector pay. The Government was considering the recommendations of the pay review bodies and would make an announcement in due course.
Jaguar Land Rover
Put that Tata were asking for £500million worth of loan guarantees for Jaguar Land Rover and were they likely to get them, the PMS said that questions on assistance to car manufacturers were best addressed to the Department for Business, who had been meeting with car manufacturers over the last couple of months, to discuss what assistance the Government could provide.
Asked whether in principle that was a level of assistance the Government would provide, the PMS replied that on detailed questions concerning assistance to individual companies, he advised people to speak to BERR. Asked if it was for Tata to offer those loan guarantees themselves, the PMS said that as we had said in the past, we looked in the first instance to parent companies to support their UK subsidiaries, but he would not speculate on what decisions might be reached on guarantees to individual companies.
G20
Asked why the Prime Minister thought the G20 was relevant to ordinary people in Britain, the PMS replied that the Prime Minister and the Chancellor had both been setting out in recent weeks and months why the G20 agenda was important for the global economy and therefore the UK economy. It was important that G20 countries addressed the issue of financial regulation to enable proper regulation and supervision of global financial flows. As we had seen from events over the last year, the impact of failure in regulation internationally could have profound effects on the UK economy and that had very real effects on UK jobs, UK workers and UK business.
More widely, we were also going to be discussing the coordination of fiscal and monetary responses, which had a very direct impact on the lives of people in Britain. We had taken a number of steps and actions over recent months to deliver real help to British families and businesses, but as the Prime Minister and the Chancellor had made clear, we believed that those actions would be more effective if they were coordinated internationally and that was a message that the Prime Minister reiterated in his conclusions to the European Council press conference on Friday.
It was equally important that the G20 Summit ensured that it put a low-carbon recovery on the agenda and it was very clear that we needed to embed those low-carbon principles in the actions that we took. As people had seen over recent days, with the conclusions of the European Council, we were putting more money into green technology to ensure that that recovery was a low-carbon recovery. These three things were essential to the G20 agenda. They also had a very direct effect on the long-term prosperity of the UK economy.
Asked if the Prime Minister had any concerns that expectations for the G20 had been ramped up too high, the PMS said that our agenda for the G20 Summit tackled the very real challenges that we faced in the global economy.
Asked if the Geithner plan was part of the overall agenda, the PMS said that we welcomed the plan. As the G20 Finance Ministers had set out on the 14th March, they wanted to take whatever action was necessary to restore growth. One of the key priorities for that was to restore lending and one of the necessary steps to achieve that was dealing with impaired assets. The Finance Ministers had set out a framework for G20 countries, which set out the principles that those impaired asset programmes should follow.
Asked how the Prime Minister’s visit to Chile was relevant to the G20, the PMS said that the meeting the Prime Minister was attending would bring together a number of G20 leaders. Argentina, Brazil and Australia would be present and it was an opportunity to discuss the G20 agenda. Asked for more detail on the meeting the Prime Minister was attending, the PMS said that he would not comment on the political aspect of it, but having these leaders in the same place gave them an opportunity to discuss the G20 agenda. In the case of Brazil and Argentina, these were important emerging economies that would play a key role in the success of the G20 process. Asked whether the taxpayer was paying for the Progressive Governance leg of the trip, the PMS said that he would check.
Asked if the Prime Minister would include reviving the Doha agreement on the G20 agenda, the PMS said that the Doha round was critical to the expansion of free trade and that was something the Prime Minister had addressed directly in recent months. The PMS said he would not forecast now what would or would not be in the conclusions to the G20 meeting. The agenda did include the importance of defending against protectionism and maintaining open markets.
Pakistan
Asked if the Prime Minister was happy with the amount of cooperation there was from Pakistan on counter-terrorism, the PMS said that on the specifics of militants operating in Pakistan, he would not comment on speculation on intelligence operations, but as we had remarked before and as the Prime Minister commented when he visited Pakistan in December, we were aware that three quarters of the most serious terrorist plots investigated by the British authorities had links with Pakistan. The training of Britons in Pakistan’s tribal areas was a problem that we were well aware of and had been well documented.
Put that that suggested that the Prime Minister was not happy with the level of cooperation, the PMS replied that that was not what he had said; we had a very broad counter-terrorism relationship with Pakistan and we were scheduled to hold the next round of talks with the joint working group in Pakistan next week.
Iraq Inquiry
Asked repeatedly about the possible timing and nature of an Iraq inquiry, the PMS said that to paraphrase the Prime Minister’s last public comment on this, he had said there would come a time where we would want to look into the circumstances leading up to the war in Iraq in greater detail, but it was not right to open that question whilst we still had troops in Iraq. The PMS added that he would not get into a discussion about how many troops needed to withdraw for that to happen.
Asked if he expected the Government’s position to move forward at all during tomorrow’s debate, the PMS said that he was not anticipating a change to the Government’s position, set out by the Prime Minister.