Downing Street Says

» Tuesday, January 20, 2009

Economy

Asked if the Prime Minister was concerned about how the banking world had reacted to the announcements made yesterday, the PMS said that people had misunderstood the point of yesterday; it was about ensuring that we could get lending flowing into the real economy. We had taken action to strengthen the banks and capitalise them in October. We had taken action on fiscal policy to ensure that the effects of the contraction in lending were mitigated in terms of their impact on households and businesses as much as possible. We had to move to the next stage, which was about removing some of the blockages that existed to increase lending. This was about what we were giving businesses who were unable to get credit, and households who could afford mortgages but couldn t get access to them.

Asked about Lord Myner s comments that the temporary measures announced yesterday regarding the insurance scheme would be in place for no more than 8 or 9 years, the PMS said that he had not seen the full context of Lord Myner s comments but that the measures announced yesterday were temporary and we would do whatever it took to get the British economy through this difficult period. The biggest risk would be if we did nothing and that was why we were taking action similar to the sort of action we saw in the US in order to get credit markets moving again.

Put that the Government now owned a large stake in certain financial institutions, the PMS said the reason we had taken stakes in these institutions was because of the important role they played in the economy and because they were essential in terms of getting bank lending moving so that households and businesses could benefit.

Asked why the Government hadn t taken the decision to fully nationalise the Royal Bank of Scotland, the PMS said that our position on nationalisation had been set out by the Chancellor in the House yesterday and there was nothing to add to that.

Asked if there was a reaction to the fall in inflation, the PMS said that Stephen Timms had given a reaction this morning on behalf of the Government.

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» Tuesday, January 20, 2009

Economy

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