Downing Street Says

Asked if Mervyn King met with the Prime Minister this morning, and if they discussed interest rates, the Prime Minister s Spokesman (PMS) replied that obviously interest rates were a matter for the Bank of England and something he would not be commenting on. The Governor of the Bank of England was in the building this morning, but he was meeting the Chancellor not the Prime Minister.

Asked to clarify that since the independence of the Bank of England, interest rate changes only happened once a month, the PMS replied that interest rate decisions were operational matters for the Bank of England.

Asked what was discussed when the Governor, Chancellor, and the Prime Minister met on Tuesday morning, the PMS replied that it was a private meeting and he was not going to discuss the specifics, but clearly they would have discussed all the relevant issues relating to the financial markets and the economy.

Asked if the strong commitment to preserve Scottish jobs and a Scottish headquarters was a result of pressure from the Government, the PMS replied that this was absolutely not the case, this was a commercial decision taken by Lloyds.

Asked when the Prime Minister met Sir Victor Blank on Monday evening, was that the first time that he learnt of this, the PMS replied that he was not going to get into the specifics of exactly what the nature of the discussions were. But the Government, the Treasury, and No10 had been informed that discussions had been taking place for several days.

Asked if the issue of Scottish jobs was raised at an early stage by the Chancellor, the PMS replied that the Prime Minister did not lobby on issues of jobs relating to any part of the United Kingdom, these were decisions taken by Lloyds which was a commercial organisation.

Asked to clarify for how many days we had known about discussions, the PMS replied that he did not want to get into specifics of what happened when, but clearly the relevant individuals in the Bank of England, the FSA, and people who dealt with these matters in No10 were obviously kept informed of this matter.

Asked if Jeremy Heywood was one of those individuals, the PMS replied that he was not going to get into named individuals within Downing Street.

Asked what message the Prime Minister had for workers in Edinburgh given that tens of thousands of people could lose their jobs, the PMS replied that these were clearly very difficult times in the global economy, and in global financial markets. This was affecting all financial sectors, and given the importance of the financial sector to the UK as a whole, obviously we could not be insulated from what was happening. But people had to consider what the alternative would have been, as the Chancellor said this morning. As a result of this proposed merger, which the Government welcomed, this should lead to a stronger financial sector in the UK than would otherwise have been the case.

Asked that when the PM said on Tuesday that neither the UK or any part of the UK could be insulated from this, did he have this in mind, the PMS replied that the Prime Minister used that particular form of words as he was in Northern Ireland.

Asked if the Prime Minister thought that speculators had a hand in the fall in HBOS s share price, the PMS replied that as the Chancellor said this morning, if there were any issues relating to market abuse then that was clearly something for the FSA to look at.

Asked if the Prime Minister had an opinion on short selling, the PMS replied that he had nothing really to add to the Chancellor s words this morning, if there were any examples of market abuse, then clearly that was something that the FSA would need to look at.

Asked if this was suggesting that short selling was market abuse, the PMS replied that he was saying that if anybody had behaved in a way that was illegal then clearly that was something that the FSA would need to look at.

Put that short selling was legal, the PMS replied that he was the wrong person to ask questions to about exactly how short selling operated. Clearly if there was any example of market abuse that was inconsistent with the current legal and regulatory framework, then this was something that the FSA would want to take very seriously.

Asked if the rules should be changed to make things that are currently legal, illegal, the PMS replied that again the Chancellor said this morning that if the FSA were to bring forward any proposals on that this would be something that he would consider.

Asked that given the current waiver of the usual competition considerations in this case, would the same apply if for example RBS was taken over by another bank, then PMS replied that he was not going to get into hypotheticals about individual institutions. Clearly there were exceptional circumstances in this case, which was why the Secretary of State for Business and Enterprise made the statement he did.

Asked if the Citigroup drinks on Monday was a long planned engagement, the PMS replied that it had been in the diary for a while.

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» Thursday, September 18, 2008

Economy

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