Downing Street Says

Asked if the subject of the European Commission forecast came up at Cabinet this morning during the economy discussion, the PMS said that the European Commission forecast was mentioned at Cabinet and the Chancellor made the point that the European Commission forecast showed that they were expecting the UK to perform better this year and next year than the Euro area as a whole.

Asked what the upshot of the economy discussion was, the PMS said that the upshot of the discussion was that we faced challenges at the moment and that there were a number of sectors that were facing difficulties. It was the Government s view that we were taking the right decisions and that the action we had taken on banks, tax and other help we had provided was enabling Britain to get through this better than otherwise would have been the case. We were determined not to repeat the mistakes of the past when short term increases in unemployment became permanent and hundreds of thousands of businesses went to the wall unnecessarily. We had to keep our focus on the future challenges of the economy and our country, which was why an issue like education, which the Prime Minister was talking about today, was so important.

Asked about Liam Byrne s contribution to the discussion on the economy, the PMS said that Liam Byrne was the Cabinet Office Minister responsible for coordinating Government policy, so he was talking about how we were coordinating action across the Government on the economy and wider issues.

Asked about what Lord Mandelson said at Cabinet, the PMS said that Lord Mandelson gave an update on the perspective from the business sector, including the car industry, on the economy. There were a number of schemes to help the car industry and a number or issues that the car industry faced. Lord Mandelson updated the Cabinet on where we were with the scrappage scheme and other issues.

Asked if there had been a discussion about Fiat and Vauxhall at Cabinet and what interest the Government had in these companies, the PMS said that there was a general discussion about the current state of the car industry. The Government was working closely with the company on a range of issues and was in close contact with the US and our European counterparts. In terms of specifics it was best to speak to the Department for Business.

Asked if the Government would stick to the proposals already outlined for the Royal Mail, the PMS said that Pat McFadden had been out this morning talking about this; we had set forward our proposals, those proposals were currently going through the House of Lords and were expected in the Commons later in the summer.

Asked if the Prime Minister was happy with the way Nick Brown was handling this issue, the PMS said that the Prime Minister was fully confident in the way the Chief Whip handled all issues.

Put that it was too late in the proceedings for the Government to find an alternative, the PMS said that the key issue was how we addressed the underlying financial problems that the Royal Mail faced; they had a 5.8 billion pension deficit and there was falling demand for their services due to the increase in other forms of communication. We were determined to save the Royal Mail and protect the universal service obligation of the Royal Mail. That was why we had put forward our proposal and, as Pat McFadden had been saying, if there were alternative proposals that secured the financial position of the Royal Mail then we should hear them, but we hadn t seen them so far.

Asked if the Government was sympathetic to the idea of shared ownership in the Royal Mail by their staff, the PMS said that we had put forward our proposals and we thought that they addressed the issue of the pension deficit and the fall in demand for postal services. Those were the fundamental issues and that was what we had to keep the focus on. As we had been saying, if there were alternative proposals that secured those objectives then we would want to see them, but they had to be credible, properly thought through and they would have to address the fundamental issues. It was not clear if alternative proposals did that.

Asked if the Government was prepared to push through their proposals on the Royal Mail on the back of Conservative votes, the PMS said that the Government was prepared to take action in order to secure the future of the Royal Mail. The PMS also said that he would not be drawn into a discussion about what the exact voting arrangements would be for a vote that was still some way down the line.

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» Tuesday, May 5, 2009

Cabinet

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