Downing Street Says

Asked why the Government could help out the banks but could not help out Corus, the Prime Minister s Spokesman (PMS) told the assembled press that he did not accept the premise of the question. The support we were giving was for the real economy; it was to get lending moving for strong businesses and households who wanted to get a mortgage but currently could not get access to one. The reason we were taking action on the banks was precisely so that we could get money into the real economy.

Asked about the car industry meeting and whether there were any specific details, the PMS said that this was the latest in a series of meetings. There was nothing specific that he could say at this point, but as and when BERR were in a position to make any further announcements they would do so.

Put that the Prime Minister had spoken this morning about not retreating into domestic lending in domestic financial markets, when before he had told the banks to pull out of overseas markets and concentrate on domestic lending, the PMS said that the point the Prime Minister was making was a point he had made in an interview ten days ago. What we had seen in the past year or so had been a significant reduction in the amount of cross-border banking activity and that had led to a reduction in lending capacity in all countries.

There were issues for Britain and in order to help address this reduction in lending capacity in Britain, we were taking action in order to get our banks to increase their lending. We also had to work internationally in order to find a global solution to this, since it was a global problem. The Prime Minister was not making comments about any specific institution, but this was clearly a global issue that was affecting all countries, and therefore it was something that needed to be discussed and looked at internationally.

Put that the Prime Minister had spoken about pessimists this morning in relation to the economy, the PMS said that the Prime Minister had been talking about pessimists in the context of those people who would retreat from globalisation. Asked if there was a separate issue that people thought the global economy was irretrievable, the PMS said that the Prime Minister thought that these were challenging times for the economy, but he also thought that that was why it was necessary for Governments to act and cooperate, and through Government action when markets failed we could get through this.

Put that if RBS for instance was lending 80-90% to overseas markets, the Prime Minister wouldn t have a problem with that, the PMS said that the Prime Minister wasn t making a comment about individual banks. He was making a general point about what we were seeing at the moment was financial institutions retreating and retrenching in their home markets. The collective consequence of that was that people were worse off than they would otherwise be.

That was why we couldn t look at this from a national perspective, but a global perspective and we needed to discuss with our international partners, including at the G20, how we managed this process of what the Prime Minister had called de-globalisation.

Put that the Prime Minister would want people to buy British whenever possible, the PMS replied that he thought the question related to a specific campaign, which Lord Mandelson had responded to on behalf of the Government.

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» Monday, January 26, 2009

Economy

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