Press release

Number 10 Press Briefing - Downing Street 09 February Afternoon

The Typhoon bid and bankers' bonuses were among topics discussed at the Dowing Street press briefing.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Bankers’ bonuses

Asked whether the Prime Minister (PM) had a message for the Chief Executive of Barclays ahead of his impending bonus announcement, the Prime Minister’s Spokesperson (PMS) said he did not, Barclays’ bonuses were a matter for Barclays.

Put that last week the Government had said both public and private boards should show restraint and responsibility, the PMS said the Government had published proposals on reforming corporate governance which would see a greater role for shareholders in setting remuneration policy but it was not be for him to comment on the pay deals of individuals in private sector companies.

Asked if this represented a change in tone following the Chancellor’s speech on the issue the other week, the PMS said it did not. He added that the Government’s policy was clearly set out in proposals published by the Department for Business, Innovation and Skills.

Asked if the overall bonus pot for Barclays should come down, the PMS said this was an issue for the company and its shareholders.

Asked about a meeting between Business Secretary and the Chief Executive of Barclays a few weeks ago in which the Business Secretary reportedly made clear that he believed that implicit state backing of the private sector meant that it should show some restraint in awarding bonuses, the PMS said he was not aware of this meeting and the individual should speak to the Business Department directly. He added that the Government was tackling the issue of implicit guarantees through sector wide reforms recommended by the Independent Commission on Banking.  

Asked if the PMS was withdrawing his earlier comment that all companies should show restraint over bonuses, the PMS replied that he was not, but that this was an issue for Barclays and not for Government. He added that the Government was responsible for making sure the overall framework was the right one and it wanted to see a greater role for shareholders and to ensure more bonuses were made in shares rather than cash. He further added that he understood why individuals would ask him questions about publicly, or part publicly owned companies such as RBS and Royal Mail, as there was significant public shareholder interest, but Barclays was a private company.

Questioned whether Barclays would be in its current situation if the public purse had not injected money into the financial sector, the PMS said there was clearly an issue about implicit guarantees for banks. This had been considered in detail by the Banking Commission and Government was taking forward the proposals. 
Asked if it would be wise for Barclays to show restraint in the interim period as proposals were being implemented, the PMS said he had said all he could say on the matter.

Questioned whether there was a direct taxpayer interest in the situation after the Bank of England had injected £200bn of liquidity into the economy to shore up the financial sector, the PMS said it was true that the Bank of England and other central banks around the world had provided liquidity to the financial system and that had ensured the continual supply of credit to the economy. He added that the Monetary Policy Committee had set out its reasons for further quantitative easing. They saw a risk of inflation falling below the two per cent target in the medium term.

Asked whether there was any truth in the concern raised in the House of Commons about PM and Chancellor’s involvement in the BIS Select Committee’s decision to attack the Business Department’s decision to appoint Professor Les Ebdon as Chairman of OFFA, the PMS said his understanding was that the Select Committee had had a hearing, put questions to Professor Ebdon and come to a conclusion which was advisory. He added that select committees make their own pronouncements on issues. 

Pressed further if there had been any involvement from the PM in this decision, the PMS explained that legislation set out that this was a decision for the Business Secretary.
Asked when the appointment was expected to be confirmed, the PMS said the Department was considering the views of the Select Committee.

Pension Reform

Asked how serious the PM was when he linked the idea of automatically adjusting the pension age in line with changing life expectancy, the PMS said the purpose of the visit (to the Northern Futures Forum) was to discuss with likeminded countries some of the issues impacting us all and one of those issues was how Government’s responded to an ageing population. He added that the UK had already begun the process of reforming pensions and this question of a more automatic mechanism for future increases in life expectancy was referenced in the Green Paper.

Lord Ashcroft

Asked if the PM had seen the recent documentary on Lord Ashcroft, the PMS said the PM had been at European Council at the time.

Asked if Lord Ashcroft remained a Government advisor, the PMS said he was a member of the House of Lords and that individuals would have to check with the Ministry of Defense on work specifically related to them.

India/Typhoon bid

Asked if the PM had plans to call the Indian Government with reference to the Eurofighter deal, the PMS said he was not aware of any plans.

Asked why the PM was not using his personal capital on the issue, the PMS said the Government was looking to see what more it could do and it would not be helpful to provide a running commentary on the situation.

Asked if the Government thought there was a realistic possibility of winning the contract, the PMS reiterated that the Government was doing all it could to reverse this decision.

Published 9 February 2012