From the Prime Minister's spokesperson on: Defence Review, Comprehensive Spending Review and Banking Code of Conduct.
Asked for some broad themes the Prime Minister would touch on in his statement tomorrow, the Prime Minister’s Spokesman (PMS) told the assembled press that we had published a National Security Strategy (NSS) today and the Strategic Defence and Security Review (SDSR) would be published tomorrow.
Asked why the Prime Minister was giving the statement and not the Defence Secretary, the PMS said that this had been conducted through the National Security Council (NSC) which the Prime Minister chaired and also because it was a Security review as well as a Defence review.
Comprehensive Spending Review (CSR)
When asked if the CSR was complete, including the Welfare changes, the PMS replied that as the Chancellor had said yesterday, it was complete.
Asked what ‘complete’ meant, the PMS said that it meant that we had made the decisions required to set out budgets for all Government departments. Through that process and the discussions between the Treasury and individual departments, they would have been looking at individual programmes.
Put that there were still negotiations ongoing about individual programmes, the PMS replied that the CSR set out spending limits for four years. The PMS said that departments would manage themselves within those budgets over those four years.
Asked whether the programmes that were going to be announced on Wednesday had been fully decided, the PMS said that people would have to wait and see what detail was given on Wednesday; there would be a top level budget for each department and people could expect some detail on how departments intended to manage programmes within those budgets.
Asked if there was any flexibility in the spending totals, the PMS replied that expenditure limits were set for the next four years. As was normal procedure, there was a reserve and if departments encountered unforeseen events they needed to deal with, they could be dealt with by the Reserve in the usual way.
Asked if extra tax receipts went into the Reserve, the PMS said that they would go into the Consolidated Fund where all tax receipts went.
Asked if the Government would stick to the level of spending being set in the CSR even if tax receipts increased for instance, the PMS replied that the Government was setting out its plans for the next four years. The PMS said that people should not see this as different to the usual process for public expenditure; we were setting out departmental limits for the next four years and departments were expected to live within those limits.
Put that if there were extra revenues from tax receipts, they would be used to pay down the deficit, the PMS said that he was not making a statement on fiscal policy.
Put that Chris Huhne was wrong to suggest that spending plans could change according to how the economy performed, the PMS said that both the Prime Minister and the Chancellor had dealt with this question. The Prime Minister had said at his press conference last week that we would be setting out the plan for the next four years. The job of fiscal policy was to ensure that we had sound public finances and monetary policy was there to manage demand in the economy.
Banking Code of Conduct
Asked whether the Government was disappointed that Lloyds was not signed up to the Banking Code of Conduct given that it was partly Government owned, the PMS said that he had not seen any statements from banks setting out their intentions. The PMS said he understood that there was some time before this would be finalised, but the Treasury might be able to give people an update.