Downing Street Says

The Chancellor also updated Cabinet on his latest thinking relating to compensation for those affected by the removal of the 10p tax band and that would be the subject of his statement to Parliament this afternoon, where he would set out the latest state of thinking in advance of the Treasury Select Committee Inquiry.

As set out in the Chancellor’s letter to the Treasury Select Committee last month, full details of the package should not be expected until the Pre-Budget Report. Put that today’s statement would be an approach towards the subject, the PMS advised people to wait for the statement as he did not want to anticipate it.

Asked whether in terms of compensation, no one would receive anything until after the Pre-Budget Report, the PMS repeated that people should wait for the Chancellor’s statement this afternoon, where he would set out his latest thinking on the matter. The full details would come in the Pre-Budget Report. Put that both the Prime Minister and the Chancellor had said that people would receive compensation more quickly than that, the PMS replied that that was the position set out in the Chancellor’s letter to the Treasury Select Committee of the 23rd April, but he did not want to anticipate further the Chancellor’s statement this afternoon.

Asked whether the Chancellor would be able to assure backbench MP’s on the matter, the PMS reiterated that people should wait for the Chancellor’s statement.

Asked if the timing of the statement was related to the by election at all, the PMS said that the timing of the statement was to enable the Government to set out its thinking in advance of the Treasury Select Committee Inquiry on the issue. Put that Ed Balls had said that it was due to the public’s mood on the issue, the PMS reiterated that there was a Treasury Select Committee Inquiry and the Chancellor would be supplying further information on the Government’s approach in advance of that. Asked if any backbenchers had been briefed on the statement, the PMS said not as far as he was aware.

Asked if there was any discussion in Cabinet about the price of oil or rising food prices, the PMS replied that clearly this was a global phenomenon that was affecting all countries. As the inflation numbers had shown this morning, it was affecting the UK as well as people would expect. We needed to continue to work with our international partners to put pressure on the oil producing countries in particular to see what more they could do to increase the supply of oil to bring the price down.

On food, the Prime Minister initiated an international engagement on the subject in advance of the G8 Summit in July. Asked how much of Cabinet was devoted to the economy and how much time was spent on 10p tax, the PMS said it was a general discussion on the economy that lasted around an hour. 10p was part of that but it wasn’t a discreet part of the discussion.

Asked about inflation and if there would be any further announcements on liquidity, the PMS said that that would be a market-sensitive matter and was for the Bank of England to make a public comment on rather than the Government. On the inflation numbers, the PMS said that we were not normally in the habit of commenting on every specific economic statistic, except that it was clear that what was happening in relation to prices at the moment was that there had been a big increase in global food prices and a big increase in global fuel prices. This was why people were seeing in relation to the inflation figures that the main determinants of the increase were household utility bills, affected by the global oil price.

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» Tuesday, May 13, 2008

Economy

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