Downing Street Says

Asked if the Prime Minister was trying to reassure people in his speech that he would borrow more than planned, the Prime Minister s Spokesman (PMS) replied that the Prime Minister said that it was the right and responsible thing to do for there to be a temporary increase in borrowing in the face of an economic downturn, but that we would then expect borrowing to fall as a share of national income in the future as the economy started to pick up again.

Asked why the Prime Minister put the key phrase in answer to a question rather than the as part of his speech, the PMS replied that there was no official text of the speech as the Prime Minister was speaking from notes. It was a discursive, interactive event it was what the Prime Minister thought, and he said it.

Asked if the Prime Minister was simply saying that borrowing went up in a recession and that was fine, or was he saying that as an active policy decision by Government we would spend and borrow more than we would in any event have done due to an economic slowdown, the PMS replied that those judgements were judgements for the Chancellor to make in the Pre-Budget Report and the Budget. These judgements could not be looked at in isolation from what was happening as a result of what was happening in the economy. On the point on increased spending, the Prime Minister talked about maintaining spending at this time, and the Chancellor and Chief Secretary had talked about the need to re-profile some spending within the three year totals that we had already set out. For this year in terms of the discretionary action we had taken and its impact on borrowing, by far the biggest action we had taken was on the tax side rather on the spending side with the 120 rebate for basic rate taxpayers.

Put that the Institute of Fiscal Studies had said that public debt would rise to up to 50% of GDP, and asked if we recognised that, the PMS replied that we would set out our forecast in the Pre-Budget Report in the normal way.

Asked when the Pre-Budget Report would be, the PMS replied that we did not have an exact date yet.

Asked about the European Investment Bank event later this week, and was this Britain specific, the PMS replied that the European Investment Bank acted across the whole of the EU. The Prime Minister had been talking for some time about the need for the European Investment Bank to bring forward some of its support, particularly for small and medium sized enterprises, and that would benefit companies in the UK as much as it benefited companies elsewhere in Europe. That was what they would be talking about in more detail on Thursday.

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» Monday, October 27, 2008

Economy

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