The Prime Minister’s Spokesman began by giving a read-out of Cabinet. There was a presentation on the Welfare Reform Bill and the measures included in that. There were also discussions on the economy, specifically the Growth Review, as well as the Middle East and North Africa following the Foreign Secretary’s visit to the region.
Asked if the Government was troubled by the rise in inflation, the PMS said that there had been an exchange of letters. The Bank of England had set out three factors that accounted for the current high level of inflation; the rise in VAT, the fall in Sterling and the recent rise in commodity prices including energy prices. Dealing with inflation and monetary policy were matters for the Monetary Policy Committee.
The PMS added that the Prime Minister had been pointing out that there was some difficult work to do on the economy; we had to rebalance the economy, deal with public debt and a record deficit. The PMS said that we recognised that process would take time.
Downing Street Cat
Put that the PMS had originally said that Downing Street would not be getting a cat and what had changed since then, the PMS replied that there was a group of people within Downing Street that thought getting a cat was a good idea and they had won.
Asked who had chosen the cat, the PMS said that Downing Street staff had chosen him.
Put that bonuses had come down but pay was up and was that what the Government had in mind, the PMS replied that he would not be responding to every set of company results. Barclays pay policy was a matter for them.
Put that there had been months of negotiations between the Government and the banks, including Barclays, the PMS said that the talks had concluded with an agreement with the banks that would see bonuses come down from last year, the amount of tax being raised going up and the amount of lending going up.
Asked about the AV Bill, the PMS said that the Government would be accepting the amendment on the Isle of Wight but resisting the other two.
Put that Liam Fox had been ‘furious’ with the sacking of some staff via email and what was the Prime Minister’s view, the PMS said that the Prime Minister was clear that the way this had been handled was completely unacceptable.
The Prime Minister had been clear that he valued the armed forces contribution extremely highly and this matter should not have been handled in this way.