Downing Street Says » Finance Package

Asked if the Prime Minister was less than satisfied with the coverage he got this morning, the PMS said no; the Prime Minister felt that the Government had taken a very significant decision yesterday and it was only right that that should be properly explained to as many people in the country as possible, and that was why he was in the West Midlands today and in the South West tomorrow. The Prime Minister would continue to make his case and explain the action that was taken in the coming days and weeks. As we had been saying this morning, we were also talking intensely with our international partners on how we could strengthen international cooperation.

Asked how the Prime Minister felt yesterday s announcement had gone down throughout the country, the PMS said that it was not really for the Prime Minister to pass judgement on media coverage. In terms of most of the informed commentary that we had seen, it appeared to be broadly positive.

Asked about how the announcement had been perceived by people, the PMS said that, like any significant announcement, it was important that it was explained to people. This was an issue about complex financial matters and it needed to be explained in language that people understood and it needed to be explained over a period of time.

Put that the Prime Minister was doing podcasts and travelling the country because he had seen the backlash in America following the Paulson announcement, the PMS said that the Prime Minister would acknowledge that the decision taken yesterday was a very big one and therefore there was a lot at stake, which meant it was important that the public properly understood the decisions that the Government had taken on their behalf.

Put that it had been reported that the Prime Minister had met with pensioners, young people and businessmen and women and asked where/when these events had taken place, the PMS said that the Prime Minister met lots of different members of the public all the time.

Asked what the Prime Minister had meant when he said that people would be punished for behaving irresponsibly, the PMS said that he had nothing to add to the lengthy exchanges on the subject at this morning s lobby.

Asked about the different tone the Prime Minister had taken during his exchange with David Cameron in the House of Commons yesterday, the PMS said that he did not think that the Prime Minister had taken a different tone at all; the Prime Minister had consistently said in recent days and weeks that he thought one of the principles that should guide reform of the financial system was rewarding responsible risk taking.

Put that the Prime Minister presumably didn t want banks to go back to what the Chancellor described as unwise lending , the PMS said that the Prime Minister thought that banks should act in a responsible way; the best exposition of the Prime Minister s position was the speech he gave to the UN General Assembly about 10 days ago. The Prime Minister had talked about the principles that should underline reform in the financial system.

The Treasury had made very clear yesterday in their statements that they would need to be satisfied on the overall approach that the banks were taking in relation to lending to small businesses and to mortgage holders. The PMS added that the reason that families, households and small businesses were finding it difficult to access finance at the moment was the inter-bank lending market had been working much less effectively than it should do or had done in the past. The whole point of our reform package yesterday was to get inter-bank lending moving again which should enable money to flow through the system much more regularly.

Put that Nick Clegg had written to the Prime Minister this afternoon urging for the removal of senior banking executives responsible for the crisis, the PMS replied that Alastair Darling made the situation clear yesterday; we were not seeking to control or run banks, we were taking stakes in them, in exchange for a return.

Asked where that left punishing senior bankers, the PMS said what the Prime Minister was referring to was to ensure that in the future, it was responsible risk-taking, entrepreneurship and hard work that would be rewarded.

Asked about a letter sent to other EU leaders and whether it was in the public domain, the PMS said there was no such letter in the public domain, at least not as put out by us. We had been making clear, that we would be talking to our European and other international colleagues to discuss how best we can strengthen international coordination around some of the principles that we set out yesterday.

Asked whether the finance package would affect spending on public services, the PMS said that the Chancellor had made clear yesterday that we would finance the taking of stakes in the banks through extra borrowing.

Asked whether the Prime Minister agreed with Tony McNulty who said that the current downturn could well turn into a recession, the PMS said that the Prime Minister agreed with himself when he said yesterday that the Treasury would update its forecasts in the PBR.

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» Thursday, October 9, 2008

Finance Package

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