No. 10 Afternoon Press Briefing From 17 Mar 2008
Briefing from the British Prime Minister's Spokesman on: The Dalai Lama, Economy, Peter Mandelson, Deficits and Misc.
Afternoon press briefing from 17 March 2008
The Dalai Lama
Asked whether the Prime Minister would be meeting the Dalai Lama, the Prime Minister's Spokesman (PMS) told the assembled press that he did not have anything to add to what he had said this morning. It was still quite early in terms of the exact arrangements for the Dalai Lama's visit and no decision had yet been taken.
Put that when former Prime Minister's had met the Dalai Lama in the past it was as a spiritual leader and not the leader of a nation, the PMS replied that the Dalai Lama was an important spiritual leader and Government representatives had met him in the past.
Put that the Bank of England had just spent £5billion to support the liquidity of financial institutions, the PMS said that he did not think that they had spent £5billion. They had injected that amount into the money markets; clearly it was a loan and it was secured, so they could reasonably think that they would get their money back.
As the Prime Minister had said in his statement, in line with other central banks, the Bank of England had taken this action today. We would not be commenting on the specific action itself, but as the Prime Minister had also said, we would continue to do whatever was necessary in order to maintain stability in the economy.
Asked if people should be troubled that the markets had continued to tumble, the PMS said that he would not comment on day-by-day market movements and neither would people expect him to. As the Prime Minister had been saying in his statement, we would continue to take whatever action was necessary to maintain economic stability and that our economy was resilient and the fundamentals of the economy remained strong.
Asked whether the Prime Minister had had a conversation with President Bush about the current economic situation, the PMS replied that we were in close contact with the US Government and other major economies, as people would expect. Asked if the Prime Minister had spoken to Mervyn King today, the PMS said that he wouldn't normally be expected to get into the Prime Minister's specific conversations with named individuals, but there had been close cooperation between the Treasury, the Bank of England and the Financial Services Authority.
Asked about the Chancellor's letter, the PMS said that it was his understanding that the Treasury would be making the text of the letter available this afternoon. Essentially, what the letter did was to set out the discussions that had been taking place at a European level, most recently at the European Council. We also had detailed discussions when the leaders of the four G7 European countries plus the European Commission met in January and outlined some of the steps going forward.
Asked whether people could expect decisions on these matters, as people seemed to have been talking about things for a long time, the PMS advised people to speak to the Treasury. A lot of the issues were detailed and very technical. It was being taken forward in the G7 as well as the Financial Stability Forum and by financial regulators as well. It was quite a broad range of measures being talked about and each specific proposal was taken forward on its own specific timetable.
Asked whether the Prime Minister and Mr Mandelson had had any discussions while the Prime Minister was in Brussels, the PMS replied that they did not have an opportunity to meet. They had a long and constructive meeting in Brussels just a couple of weeks ago and they talked regularly. Asked whether it was normal for the Prime Minister to visit a European Summit without speaking to the European Commissioner, the PMS explained that the meeting had been with Heads of Government. Individual Commissioners were not always necessarily in the room or even at the meeting. It depended entirely on what was on the agenda and what was being discussed.
Put that the Prime Minister had not confirmed whether he would welcome Mr Mandelson to stay on for a second term, the PMS said that we had gone round that course several times last week. The Prime Minister had spoken on the subject and he had nothing further to add.
Put that the Prime Minister had said that the American deficit would be higher than the British deficit because we had taken the right action to deal with global economic turbulence and did the Prime Minister think that deficits were a good thing as it kept economies inflated, the PMS replied that we had fiscal rules that were defined over the economic cycle, so of course it was right that the deficit should go up at a time when the economy was slowing. This was built into the system and was meant to happen and that was one of the reasons why we had been able to maintain positive economic growth over the last decade.
Put that the Prime Minister could potentially increase deficits to maintain economic stability, the PMS said that we had announced in the Budget an increased deficit. This was because the automatic stabilisers were working as they were supposed to work. In other words, when you experience an economic slowdown, it was entirely natural that there should be an increase in the deficit.
That was why our fiscal rules were designed specifically over an economic cycle in order to enable that to happen. Asked if that would enable the UK to go beyond the deficits the Government had announced in the Budget, the PMS said that as and when there was a time to update, we would update them.
Asked whether the Prime Minister felt any need to revise the forecast offered by the Chancellor a couple of days ago, the PMS said that we should never be complacent; we always had to be vigilant to the risks. As part of the process by which the Treasury conducted these forecasts, they were based on deliberately cautious assumptions. The forecast used for the public finances was a quarter of a percent lower than the central forecast for economic growth.
Put that Ed Balls had announced that 46 people working in schools at the moment had been found out to be sex offenders and what was the Prime Minister's view on the matter, the PMS said that the Prime Minister's view was that it was a matter for the relevant department who were dealing with it.