The Prime Minister’s Spokesman (PMS) said that there were a number of updates at Cabinet this morning; the Energy Secretary gave an update on the issue of offshore drilling and the plans to look at whether we needed to strengthen the current regime; and the Foreign Secretary gave an update on Gaza, and on his ongoing European tour.
Cabinet also discussed the announcement on spending today and the spending review process. The Treasury would be releasing a document this afternoon explaining the process of the spending review and how it would work. The Chancellor reiterated the fact that this was a big challenge for this Government and reminded Cabinet that the Institute for Fiscal Studies (IFS) had made calculations about the previous Government’s plans, which suggested cuts over a four-year period of 15-20% in some departments. Given the scale of the challenge, it was important to go about this spending review differently to make sure it was genuinely collaborative and that we drew on expertise across the public sector and the private sector. The Government obviously had not chosen to be in a position where it had to deal with a deficit of 11%, but we would use the spending review to have a fundamental rethink about the way Government did things.
Asked about the announcement the Department for Energy and Climate Change (DECC) had made today, the PMS said that DECC had been looking at the regulatory regime for offshore drilling in this country, in light of what had happened in the Gulf of Mexico. The conditions here were obviously different to those in the Gulf, as the drilling there was much deeper. DECC was comfortable that the regime we had in place was sound, but wanted to make sure it was as robust as it needed to be for the future.
Asked if there had been any mention of the Falklands at Cabinet in regards to offshore drilling, the PMS said no.
Asked if there was a discussion at Cabinet on securing energy supplies, the PMS said no; it had been a brief oral update on the DECC announcement today.
Asked if there had been any contact between Ministers and BP, the PMS said that the last Ministerial meeting took place between the Energy Minister and BP last week.
Asked when the increased inspections would begin and how much it would cost, the PMS said that people should talk to DECC for details.
Asked if the plan was to strengthen the checks on offshore drilling, the PMS said that there was a regulatory regime in place for drilling in the North Sea and a number of inspections that took place on rigs to ensure that the industry was compliant with the regime. The intention was to increase the number of those checks.
Asked why we had to change the regime if it was already robust, the PMS said that in the light of what had happened recently, Ministers at DECC wanted to reassure themselves that our regime was the right one.
Asked if there had been any talks between DECC and industry about this change, the PMS said that there had been discussions between the department and the industry in the last few weeks.
Asked about the Prime Minister’s meeting with Lady Thatcher this afternoon, the PMS said that it was a private meeting and if we had anymore to tell anyone we would do so this afternoon.
Asked how the Government would be able to reassure people that their views would be taken into account, the PMS said that the Government’s approach was to be open and consultative about this; there was recognition around the Cabinet table that this was a significant challenge and it was important to take the country with us. Today we were setting out the process that would take place on the spending review, so we could start the consultative process as soon as possible.
Asked if any figures were being announced today, the PMS said that there weren’t any figures being published today. Today’s announcement was about the process we would go through for the spending review. There would be a Budget in a couple of weeks time, which would set the overall amount of spending that would take place, consistent with our fiscal objectives. The spending review itself would be the process by which we made choices as to where and how we would spend money, and where we would stop spending money. Today’s announcement related to how we went about that process.
Put that the Treasury under the last Government did not accept the IFS interpretation of its spending objections, the PMS said that this morning the Chancellor had simply been setting out what the IFS calculation was.
Asked what the Prime Minister thought about Fitch’s comments regarding the Government needing to take fiscal consolidation, the PMS said that what Fitch had been saying about fiscal consolidation was in line with what the Government had been saying. We were very clear that we would do what we needed to do to tackle the deficit.
Put that Fitch had questioned the idea of loading the bulk of tightening on spending, the PMS said that he had not seen the full report from Fitch, but the Prime Minister had been clear that the bulk of the consolidation should come on the spending side. There was considerable international evidence that successful consolidations were based around spending restraint. In terms of growth it was important that we got a sustained private sector recovery, and dealing with the deficit would allow interest rates to remain lower for longer.
Put that this Government said that it had left a golden economic legacy to the previous Government after a fiscal consolidation of 50-50 and that they were now talking about 80-20, the PMS that the Government had talked about the bulk coming from spending consolidation. International evidence showed that successful consolidations tended to be those where the bulk of the consolidation came on the spending side.
Ex Mps’ Pay
Put that there was a report out today suggesting that ex-MPs were paid £10.4 million in resettlement payouts and asked if the Prime Minister thought that was an excessive amount, the PMS said that he understood these were contractual entitlements and that the Independent Parliamentary Standards Authority would look at the regime and make recommendations on the regime for the future.
Asked if the Prime Minister had taken his children to school this morning, the PMS said that he would not get into the habit of commenting on school runs and if or when they took place.
Asked why the Prime Minister was chairing the Joint Ministerial Committee meeting, the PMS said that the Prime Minister felt the committee was very important and as people would recall, his first visits as Prime Minister were to the devolved administrations. He was keen to stress the Government’s cooperative approach and respect agenda, which was why he wanted to chair the meeting.