Asked if the Prime Minister had had any conversations with President Obama, Chancellor Merkel or President Sarkozy in the last 72 hours and if not what was he doing to address the crisis, the PMS said there had been lots of conversations with these leaders in recent weeks. He said the Prime Minister was focussed on protecting the UK economy from the global economic storm, and that by taking the action we had taken and by having a credible plan for dealing with the deficit we had ensured that the UK had been seen as a safe haven by the markets. Asked if the Prime Minister shared President Obama’s concern about the Eurozone, the PMS said that was exactly what the Prime Minister had been saying the previous day and at previous meetings. Asked if there was anything further the UK could do, the PMS said we had been encouraging a resolution to the crisis by talking to our European counterparts and others around the world. The PMS said we had been arguing at the G20 for an IMF that was properly resourced to act as a global backstop, but some actions were for eurozone countries.
Asked if the Prime Minister was concerned that a small number of European countries seemed to be making all the decisions, the PMS said that people would expect eurozone leaders like President Sarkozy and Chancellor Merkel to be at the heart of these discussions.
Asked further questions about UK involvement in Eurozone discussions, the PMS said there would be a discussion on economic governance in the European Union at the next European Council. The PMS said President Van Rompuy has been asked to report on options to the European Council and the UK would be fully engaged in discussions ahead of that meeting. The PMS said that the UK had been making the point that any changes to governance needed to take account of the needs of all 27 members of the European Union.
Asked if the Prime Minister was pleased that our bond yields were low, the PMS said that yields reflected a view in markets that the UK was a safe haven, but that it also reflected the continued uncertainty in other markets. The PMS said that we knew that problems in the eurozone would create problems for us here, so we were not complacent and we were doing everything we could to ensure there is a resolution to the crisis.
50p tax rate
Asked if the Prime Mister agreed that one way to stimulate growth would be to abolish the 50p tax rate, the PMS said our priority was to protect the UK economy from the global economic storm. He referred to the Chancellor’s comments in the Budget that the 50p tax rate should be a temporary measure, but he did not think that it would be the right time to remove it when we were asking others in society on much lower incomes to make sacrifices. The PMS said the Chancellor had asked the Treasury to look at how much revenue the 50p tax rate generated.
Asked if the Prime Minister was concerned about fuel prices, the PMS said the Prime Minister recognised that the cost of petrol was a concern for many families that rely on their car, which is why we removed the fuel duty escalator in the Budget and cut fuel duty, and as a result petrol was 6p per litre lower than it would otherwise be.
Asked if Sir Gus O’Donnell had received and would act on a letter from Simon Danczuk MP asking him to investigate claims Home office special advisors briefed against the former head of the UK Border Agency Brodie Clark, the PMS said he understood that Sir Gus O’Donnell had not yet received a letter.
Asked if the PM was considering a UK referendum on Scottish independence, the PMS said a referendum was something the Scottish Government wanted, and the next step was for them to set out their plans.