6 December 2006
Iraq, Iran, the Middle East and pensions dominated the agenda at the PM’s monthly press conference.
Other topics included child support, welfare and the European Union.
Parts of this transcript may have been edited
Opening statement
Prime Minister:
Good Morning everyone. I would like to say a few words at the outset about welfare reform, particularly in the light of the pensions proposals going through parliament at the moment and further announcements today, and then obviously I will take a full range of Questions.
It is worth just recapping what has been achieved in respect of welfare reform over the past few years. Britain has now got the highest employment rate of any G8 country, we have more than 2 million people in work, we have got the lowest unemployment rate for several decades, and we have also lifted three-quarters of a million children out of relative poverty and 2 million pensioners out of acute hardship. For the first time through tax credits and the minimum wage, additional child benefit, there is real hope and help for families on lower incomes, and meanwhile the living standards of the entire country have risen significantly.
Over the past year however John Hutton, who is the Secretary of State for the Department of Work and Pensions, has resolved some of the most intractable problems facing the country in welfare. In January we published the Welfare Reform Green Paper which is now going through parliament, and that is the reform related to incapacity benefit and essentially taking away some of the perverse incentives for people to go on incapacity benefit and stay on incapacity benefit and trying to make sure that we pay out to those people who are severely sick and disabled, but we encourage people who can return to work to do so.
In February we asked David Henshaw to redesign the system for collecting maintenance from absent parents, and as you know we are now committed to abolishing the Child Support Agency, and I will come back to that in just a moment. But in May we announced our intention to implement the Turner Commission’s recommendations on pensions. Now this was a report that we had commissioned where Adair Turner and his colleagues went into the pension system in very great detail, and essentially the Pensions Bill going through parliament embodies these reforms, it re-establishes the earnings link and by 2050 the state pension could be worth twice as much as if it had been linked to prices, it makes state pensions fairer for women and carers. There are around 30% of women will receive a full basic state pension now and that will rise to three-quarters of women by 2010, so that is a big change, but also the pensions proposals increase the state pension age in line with longevity to 68 as the pensionable age by 2050.
Now all of these measures would have frankly been inconceivable only a couple of years ago, and today just a year on from the publication of the Turner Report we are implementing the final part of the package. We are going to set up new low cost systems of personal accounts which is going to extend the benefits of low cost saving to those without access to good occupational pensions. For the first time savers will receive then a matching employer contribution, they will put in 4%, they can opt out, but if they don’t opt out they will put in 4%, the employer will put in a matching contribution of 3% and there is tax relief for another 1%. Employees, as I say, will be automatically enrolled in their occupational pension for personal accounts and the purpose of that very simply is to make sure that as far as possible we are encouraging people to save.
Now these reforms are challenging and difficult. This is setting out a reform process literally for the next half century, but it is very, very clear, if we want to be able to afford decent state pensions in the future, and we want to ensure that people in increasing numbers aren’t pushed on to means tested benefit, then we simply have to make long term reforms for the future. Now we tried to do this on an evidence-based report that Lord Turner presented to us and although it is challenging for employees, for employers, for government, for everybody, nonetheless it offers the best and most secure way of providing a long term pensions framework for the future.
Tomorrow we are also publishing the White Paper on the replacement of the Child Support Agency and the idea here is to create not just the new organisation to deliver child support, but basically support parents who want to make their own arrangements by removing the requirement that those on benefit use the Child Support Agency. Essentially 70% of those people are forced to use the Agency, they aren’t often keen on doing so and so you end up in a situation where the agency is trying to get payments off fathers who don’t want to pay, using mothers who don’t want to cooperate, and the result of that has been all the difficulties over the past few years. And the truth of the matter is, whatever reforms we have put into the Child Support Agency, they have not worked because essentially it is extremely difficult when the Agency is being asked to chase relatively small sums of money from people who don’t want to pay, in circumstances where the mother often doesn’t want that arrangement to happen either. The result is very large sums of money are spent to little purpose.
So this is a change in that system which will allow the system to operate in a far more simple more effective way, but also say to parents if they have their own arrangements then that is fair enough. But what is important is that in circumstances where the mother then approaches the Child Support Agency and actually wants to have the father pursued for benefit then the Agency is able to do so.
So these are major reforms to our welfare system and they are reforms that will change the nature of welfare in the years to come. In addition to that there are proposals that are being worked on now as to how we get more people off benefit and into work. We have done very well in terms of reducing the overall levels of unemployment, but there are still significant numbers of people on benefit for large periods of time who could work. The incapacity benefit reforms will help, but we need to go further and these proposals are being worked on now, they are the subject of a review and we will report back in a few months time. But essentially what is happening over the past year is that in respect of pensions, child support and welfare, there are major areas of reform that we are taking forward that will make the country stronger for the future. In the end there is no alternative, if we are to fund our welfare state properly, that we increase significantly the proportion of people at work. We already have made a lot of progress in this area but we need to make much more, we reckon probably 80% should be at work in the years to come if we are to be able to afford the welfare provision that people quite rightly and understandably want to see.
Question and answer session:
Question:
Prime Minister, since this is the last of these events this year, could I ask you what personally …
Prime Minister:
You’re after festive greetings, are you?
Question:
No, what personally you think you have achieved as Prime Minister and [party political content]
Prime Minister:
[party political content]
I think the most important thing about the last year has been the pushing ahead on a whole series of areas of fundamental importance for the long term future of the country: increasing specialist schools, trust schools, city academies; making sure that a very difficult set of changes in the Health Service yield better patient care, better value for money in the long term; ensuring that we put in place proper pensions and welfare provision that guarantee people’s security for the decades to come; energy policy where for example we took difficult decisions that I think have been ducked for a long time, particularly on nuclear power. So I like to think that in domestic terms, and of course you have all the changes that we are proposing now in the Home Office, in domestic terms I think this is a government with a strong forward reform agenda. And if I look back over the last year, despite all the issues to do with me and my departure and so on, I think the interesting thing is that across the board, whether it is pensions, energy, health, education, law and order, the government is pushing forward with plenty of energy and determination.
[party political content]
I don’t know whether that is more or less what you wanted.
Question:
Inaudible.
Prime Minister:
I don’t know, that is for you guys to give. I am sure you will be very generous.
Question:
Prime Minister you mentioned tough decisions, one of the big discussions that is going on in politics at the moment is about how to restore trust in politics, particularly in the wake of the cash for honours inquiry. There are two policies doing the rounds, one is to limit the amount any one individual or organisation can give to a political party, the second option doing the rounds is that Prime Ministers and party leaders should no longer have the right to nominate people to the House of Lords, and yet you on these policy decisions are resolutely opposed to them. Can you explain why you oppose these two changes?
Prime Minister:
Well actually I am really just waiting for the Hayden Phillips report and I think we should wait for the report. And forgive me for not, actually if you want to ask a Question on something else.
Question:
Inaudible.
Prime Minister:
Well I have asked him to report and I would prefer, I assure you I will make copious comments on it when he reports, but not before.
Question:
Inaudible.
Prime Minister:
I am not sure, you can find that out from him, but you won’t have to wait too long. Do you want to ask me something else?
Question:
Well let me ask another Question, you might not like this. Have you been Questioned by the police in the cash for honours inquiry.
Prime Minister:
Oh not that one.
Question:
Have you had any contact between yourself and your office over that?
Prime Minister:
I think, as I said to you before, I have got absolutely nothing to add to what Tom Kelly, as I understand it, says daily on my behalf. Would you like another go because I feel this is really bad, we should go through, how about …
Question:
There is something possibly that you might be able to discuss. We know that you are travelling to the Middle East at some stage soon and yet there is huge division within the Palestinians at the moment. One side at least seems prepared to kill their opponents’ children because they are so concerned about it. What possible hope do you have for any kind of progress in this kind of context?
Prime Minister:
Well it is precisely because of the desperate situation that I think it is important we make every effort to break the deadlock, and I obviously discussed this at length with President Bush and there were other discussions with the administration over the weekend. But we have also been in constant dialogue with other countries in the region and I want to see if it is possible to get round the deadlock that is there at the moment because we can’t get a Palestinian government that the international community can deal with properly. And if we could get such a government then we could release funds to it, we could help the desperate situation that the Palestinians are in, and we could also then unlock the process of negotiation towards a lasting peace. So there is no more important time frankly for the Middle East at the moment. And I think the other thing is you only need to see what is happening in Iran over the past couple of days to realise how important it is that all people of moderation in the Middle East come together and try to sort out the problems that there are there. And there literally could be nothing more important on the international agenda at the moment than that.
Yes, Andy.
Question:
Sorry Andy.
Prime Minister:
It was my fault because I pointed at Andy and then I looked at you.
Question:
A quick Question on pensions.
Question:
I don’t know what we should draw from that.
Question:
Moving swiftly on on to pensions, or back on to pensions, two quick points. There is a great danger isn’t there with this pensions policy that people will feel very resentful that they are being forced to pay more, and as a result of that feeling they will simply opt out and turn their back on their own pensions? And secondly, you yourself will be drawing your pension very shortly, it is £96,000 a year, how are you feeling about that?
Prime Minister:
I don’t think we will go into the second point of that. Your first point however is a very good point. Look this is the problem that we have as a country making policy in this area. If we don’t encourage people to save we will face a situation where we cannot sustain the cost with an ageing population of large numbers of people on state benefit in their old age. And it is not fair between the generations to end up in a situation where you have to raise taxes massively, as you will have to do in the years to come, to pay for state benefits for an ageing population that has not saved when they were at work. And what we have tried to do is to create a situation in which by introducing a simple and clear method of saving, with matching contributions from employers, that people then can make provision for their own retirement that tops up the basic state pension.
Now there is no easy solution to this problem and we commissioned an independent report precisely because we knew that. But I can tell you every country round the world is struggling with the same problem, certainly developed countries, because people are living longer, there is a situation where in the next few years I can tell you that for the first time in the country’s history the numbers of people over the age of 65 will be greater than the numbers of people under the age of 16. That is the first time in this country’s history. So we have no option but to make changes if we are going to have a decent state pension in the future and we are not going to have large numbers of people on benefit. So people can opt out, we are not forcing them to, and some people wanted us to force them to, but if we don’t have a simple way for people on middle incomes to save then we will end up in a situation where a generation to come will simply say we are not paying this bill, we can’t pay it. And I don’t think it is responsible of us to let that situation pass. And I hope we will get a broad consensus on these proposals because difficult though they are, I can’t see the alternative.
Question:
Prime Minister you are off to the Middle East soon, can you point to anything in that region that is not worse than it was three years ago?
Prime Minister:
Well of course there are things that are real hope for progress. You know interestingly the last time I was in Kuwait, you speak to them there about the massive investment they can now get in their country because they have not got Saddam Hussein next door; if you look at the modernisation that is going on across the Gulf region; if you look at the moves towards greater democracy in the Middle East there is significant cause for optimism there. But I totally agree, in the Lebanon, in Iraq, in Palestine there are major major problems and all of this is now overshadowed by the issue of Iran. And I think there is a very clear sense in the region now that Iran poses a significant strategic threat and how we deal with that is a major challenge. But I think one of the things that will be interesting I hope on the visit is that there is another side to what is happening in the Middle East, for very obvious reasons it doesn’t get the same publicity, but that is countries in the Arab and Muslim world showing how it is possible to be modern, to have thriving economies and to make significant economic, social and political progress. But as you rightly imply, that is not the case everywhere.
Question:
Prime Minister you said at the end of last week that you would consider the comments made by the former Chief of the Defence Staff, Sir Mike Jackson. You have had time to do that now. What is your message this Christmas to the men and women of Britain’s armed forces around the world who very often feel that they are being let down in terms of the wrong pay and conditions, perhaps not enough equipment, at a time when there is enough money to go round and they feel that they are being asked to put their lives on the line without being catered for properly by the British government?
Prime Minister:
Well first of all my message to our forces is one of gratitude for the courage and professionalism and commitment that they show. It is interesting when I was in America again, the regard in which the British forces are held is enormous. And in relation to this, we try to listen carefully to the points that are made. On equipment for example, some of these stories when you actually go into them turn out not to be as they are reported. And the other thing is that in a case for example like Afghanistan, when people actually go in and start engaging with the enemy on the ground, there then are a whole series of things that they then learn as a result of that engagement and then they come back and say well actually we need more helicopters, or it could be different types of vehicle and so on.
We try to do our best to meet those requirements and we have introduced certain changes, not least the additional allowance tax-free that is going to be given to those forces who are engaged and that will result in a significant additional sum of money to them. And obviously I took very seriously the reports recently about for example accommodation, but when we looked into it there is a particular issue with a certain part of the armed forces’ accommodation which we are working on, we are spending literally hundreds of millions of pounds on it. But you know these things will arise from time to time and I can assure you we take our duty to our armed forces very, very seriously indeed.
Over the past few years there have been increases, real terms increases in defence spending. But for all the issues, and there always will be, no-one should ever forget that British armed forces are not merely amongst the very best in the world, but also amongst the very best trained, equipped and supplied. Now in any war fighting situation there will be gaps, we have to fill them, and we know that, but no-one has a greater respect for the work they do than myself.
Question:
Following the Iraq Study Group, one of the confusions seems to be whether we would always act in tandem with the United States. It is not entirely clear yet how the United States is going to act, but if they were say to hold their forces at 120,000 or something like that in Iraq and we were to draw ours down in 2007 to 3, is that a scenario you would be willing to engage with, is it a scenario you are willing to follow where our troop numbers rapidly decline in the coming year, two years, and theirs stay the same, will we always act in tandem or might we act differently?
Prime Minister:
Well we are acting in tandem because we are both in the same situation of saying that as the Iraqi capability increases so we draw down. And you measure that area by area. And part of the confusion here arises in that the situation in Basra is not the same as in Baghdad. Now the Americans face a far tougher situation up in Baghdad. We face a very tough situation in Basra but the components of the problem there are different. There is less sectarian aggression and fighting down in Basra. So we apply the same test, but the test may operate, because the situation is different in different parts of the country, in a different way. So when and if we complete the operation in Basra at the moment successfully, where we have done roughly I think more than half the city now, putting Iraqi forces in control, having our forces then in support rather than actually out there doing the visible policing and so on, you know if we complete that successfully then the need for us to be in that role, we will still need a support role, will obviously diminish.
Likewise with the Americans, you know if and when they are able to change the situation in Baghdad then they too will be in a different set of circumstances. But the pace at which both of those things happen may be different, it may be different down in Basra than it is in Baghdad. So all the way through I think what is important, and I read the Iraq Study Group very carefully indeed and I certainly do not take the Study Group as saying that we should just get out come what may. They are not saying that at all, what they are saying is that we have to increase our driving up of the capability of the Iraqi forces because it is obviously better that the Iraqis themselves take responsibility, and indeed the Iraqi government is increasingly saying it wants to take responsibility. Then the coalition forces will still be in a support role but it won’t be the same as the role that we have at the moment. Now how fast we can do that depends on the situation in different parts of the country.
Question:
… President Bush, do you get the impression that he is willing to contemplate a faster withdrawal, the drawing down of troops and fairly rapidly over a couple of years?
Prime Minister:
Well you see I think that if you look at what General Casey has said, and this is where I think that a lot of confusion arises because if people actually read what General Casey said, General Casey some months ago was talking about draw down of troops in the next 12 - 18 months provided that, and it is conditions based, the Iraqi capability comes up to the mark. Now that is obviously the issue at the moment, but all of this is conditions based, and in fact I wasn’t taking the Baker-Hamilton report as saying anything other than that. So of course it is our strategy to draw down our forces as swiftly as possible, but that strategy can only be adhered to if the conditions allow us to do that.
Question:
Geoff Hoon at the weekend said that when he was Defence Secretary both he and yourself pressed very strongly for the Americans not to go ahead with the debaathification of Iraq and not to disband their forces so quickly, and he says that now it was a mistake for the Americans to have done that. The Americans overruled you. What does that say about the special relationship?
Prime Minister:
Well first of all I have talked about this myself before on many occasions I think I did at one of the press conferences with President Bush. And you could argue about the debaathification process and whether it went on too fast, although I would just tell you at the time, I remember very well, that the pressure particularly from Iraqis who had suffered under the Baath party was for debaathification to happen at an even faster rate. So you know we can I think now get this somewhat out of the context at the time. But the other point I would make is this, and it is incredibly important that we understand this, otherwise our strategy for dealing with the enemy we face on the ground will go wrong. The principal reason we have a problem in Iraq is because people are deliberately giving us a problem. There is sometimes a sense in which if only we had sort of had a different post-conflict strategy somehow we could have avoided this problem. This problem hasn’t originated naturally, it has originated as a result of the deliberate outside interference linking up with internal extremism to thwart the will of the majority who wanted a non-sectarian government directly elected. And we will only defeat these people when we show the same determination as they show in trying to defeat us, and that is why in the end you know whether you debaathified or you didn’t, I think today that is not the Question, the Question is how do you defeat the Al Qaeda people linking up with Sunni extremists, and the Iranian-backed elements of the local militia, and both are trying by acts of terrorism to derail the democratic process. And you know the trouble with terrorism, particularly when you are using suicide bombers, is that you can cause havoc and chaos very easily and tremendous fear of course.
Question:
What does that say about drawing Iran into the talks which the Iraq Study Group suggested? It is impossible, isn’t it?
Prime Minister:
Well again, it is obviously a complicated situation and sometimes a sort of headline ends up distorting the reality. There are two quite separate things here. One is involving Iran and Syria in any local regional grouping of countries and they obviously are neighbouring countries. Now the fact is there is little point in them being part of such a grouping unless they are prepared to be constructive, but we have involved them in such talks before. That is one issue. The other issue is how do you deal with Iran and Syria separately in terms of the whole of the region and I think the two of those countries are different.
But in respect of Iran the problem is very simple, Iran is deliberately at the present time causing maximum problems for moderate governments and for ourselves in the region, in Palestine, in Lebanon and in Iraq. And I found that this conference they had Questioning the Holocaust shocking beyond belief. To go and invite the former head of the Ku Klux Clan to a conference in Tehran which disputes that millions of people died in the Holocaust, I mean what further evidence do you need to have that this regime is extreme? I don’t believe incidentally it is supported by the majority of the Iranian people but it is a deeply extreme regime that is hostile to our interest. So you have a regional grouping to talk about Iraq, obviously everybody who is prepared to be constructive is invited, but I don’t think there is any point in us hiding from the fact, and incidentally I am sure James Baker is of the same view, that Iran at the moment poses a major strategic threat to the cohesion of the entire region.
Question:
Nevertheless Prime Minister Baker does advocate direct talks with Iran and there are people that can be engaged with there. Is there, one, any prospect of your talking to anyone in Iran personally before you leave office; two, when you go to the Middle East will you talk to Hamas? Now presumably your answer will be no because they don’t recognise Israel, and yet when it came to the negotiations which brought peace between Egypt and Israel, and between Jordan and Israel, recognition was actually one of the last things to fall into place, and surely that is what you have learnt from your negotiations in Northern Ireland, that in the end the most difficult Questions are the last Questions, yet with Hamas you make them the first Questions and you say as a result of it I, Tony Blair, will not speak with Hamas. Or are you going to surprise us?
Prime Minister:
Well I always like to surprise you Jon. But I think that Hamas and Iran are rather different in this regard. It is true we are not in discussion or negotiation with Hamas. On the other hand there are plenty of people in the region who are talking to Hamas and making it quite clear what the circumstances are that would allow us to move forward. And actually I think you would find that people are prepared to be quite reasonable about this. These Quartet principles that are laid down by the United Nations, never mind Europe, America and Russia, there is a certain amount of flexibility in them, but it is very difficult to see how you can negotiate with Hamas in circumstances where they are saying emphatically, right, we deny the right of Israel to exist. You know when we were having discussions with the Irish Republicans, it is true it took a certain amount of time before we could get into the right area, but I don’t think they ever disputed that the only basis for an agreement was a commitment to exclusively peaceful and democratic means.
Question:
… said never, never, never, and yet you are now working on the basis that he very well may.
Prime Minister:
Yes, and that is a tremendous step forward, but it was only on the basis of agreed principles. Ian Paisley, and with some justification, would still be saying never, never, never if the IRA was saying well actually we don’t recognise the right of Unionists to exist or make their case. And therefore, look, the point that I am making to you about Hamas is this: it is not as if no-one in the region is having any contact with them or that they are sitting there wondering what do they really want. It is not that type of situation. And there has to be a genuine willingness on their part, or at least on part of elements of Hamas, to engage in a meaningful way with Israel, and I don’t notice that at the moment.
Question:
… never spoken to them.
Prime Minister:
Yes but you know whether someone like me speaks to them or not, it is not that they don’t know what it is that we require from them, and all I am saying to you is I think in respect of Hamas I think you would find that there have been numerous people that have made contact with them, numerous people. And so I think the issue is slightly different. But you know one of the reasons frankly for going and my speaking to President Abbas is to find out what prospects there are for a National Unity Government and if there was any prospect of being able to get such a good government we would welcome it. And if it is in line with, and as I say there is a certain amount of flexibility, but if it is in line with the Quartet principles and laid down by the UN then I have already said we will deal with that government then and we can release money to it. We can improve the conditions on the Palestinian side and I am sure I speak on behalf of my European colleagues at least when I say we are desperate to play a part in helping the Palestinians.
And in respect of Iran, I don’t think I have really got anything to add to what I said earlier, but the real problem with Iran is, and I sent Nigel Sheinwald as you know to Syria and we put the strategic choice to Syria that it faces, and so it is not that I am against the concept of reaching out to people, the trouble is I look round the region at the moment and everything that Iran is doing is negative. And then they hold this conference yesterday which, you know maybe I feel too strongly about these things, but I think it is such a symbol of sectarianism and hatred towards people of another religion, I find it just unbelievable really.
Question:
On the point you were discussing with Jon about Hamas, Mahmoud Abbas is due to make a speech on Saturday setting out what he regards as the way forward and his spokespeople have said in effect that he believes the negotiations about a national unity government have broken down and the main card on the table now is early elections both for his post and for the Legislature. Do you regard that as the way forward now, do you support him in his interpretation of the next steps in Palestine because you did refer to the two options in your discussions with the President in the past week?
Prime Minister:
Well I think what he is underlining is the fact that it is very hard to see how you make progress if Hamas won’t have any sort of give at all. And I think actually in answer in a sense also to what Jon was saying, you know Mahmoud Abbas is in constant contact with Hamas, it is not as if there isn’t somebody who isn’t directly negotiating with them and negotiating with them precisely with the desire of bringing them into the government and in a sense legitimising their role in the whole process. But the problem is it is very difficult to do it if at the very time that you are trying to do this Hamas are making life even more difficult. And the other thing I would say is that if you look at the comments that some of the Hamas spokesmen have been making over the past few days, it is one thing to have a position about Israel, kind of it is your formal position but you don’t push it, but if you look at what they have been saying in the past few days it almost sounds to me I am afraid deliberately unhelpful.
Question:
… going back to pre-1967 borders, which is at least a negotiating point.
Prime Minister:
Yes, I understand that, but I think if you add up what has been said over the last few days about Israel, and not always in answer to a Question either, then it is quite difficult to see what the way forward is with them. And of course as I say President Abbas is in a sense in a better position to judge whether it is possible to make an agreement with them or not than anyone. But I will obviously discuss with him when I see him and our basic position remains to support him and to support all the Palestinians who want to see a lasting and durable peace.
Question:
… if he supports early elections you will support that?
Prime Minister:
Well I don’t think I will speculate on that until he makes his speech if you don’t mind.
Question:
Prime Minister you have been a strong supporter of Turkey’s hopes of entry into the European Union, are you really willing to go to Brussels this week and sign off on the idea that negotiations should be suspended in 8 key areas? Aren’t you aware that that is being greeted by many who don’t want to see Turkey enter the EU as the beginning of the end as far as those hopes are concerned?
Prime Minister:
Well it is most emphatically not, as I think was made very clear at the General Affairs Council yesterday. And I support Turkish accession to the European Union, we have been working very hard with the Turkish government to achieve this. There is an issue as you know to do with the Ankara Protocol and so on, but I emphasise to you that even on the basis of the General Affairs Council decision, 27 of the chapters will be taken forward. And some of those that wanted to see a halt to this process have not been successful in doing that.
Now I hope that we can make progress on the various issues to do with the Ankara agreement and so on in the time to come, but I think that it would be, as I said when I was, which was the summit, was it Lahti that I said it at, but I think I said in the last few weeks that in my view it would be a very big long term strategic mistake for Europe to turn its back on Turkey and I understand all the short term political difficulties in European countries, and in any event Turkish accession is not about to happen. But I hope that we can get through Friday’s Council now satisfactorily and then regain the momentum, and that is what we will be working for.
Question:
I understand why you don’t want to comment on party funding as regards the Hayden Phillips proposals, but could you confirm Prime Minister the Labour Party’s position as leader of the Labour Party that you are still firmly opposed to a cap on donations of around £50,000 which Jack Straw has previously said would basically open the door to cutting the links with the unions. Is that firmly still your position or are you open to negotiation on that point, because some Labour MPs are under the impression that you may want to give way on that?
Prime Minister:
I don’t think it really is helpful to speculate on this at the moment, I am sorry about that and I know lots of people are speculating but I would prefer to wait and see what Haydon Phillips comes up with.
Question:
Do you have any concerns at all about the American Nasdaq taking over the Stock Exchange? There have been some doubts expressed by Ken Livingstone and others that this is basically a strategic interest which should not go abroad, or do you believe that basically the free market in the City, as elsewhere, should be allowed to rule?
Prime Minister:
If I was doing Prime Minister’s Questions I would be searching through my folder for the brief on it. I don’t think I am going to get into that one either at the moment. I can give you a line on it later if you like, but I know it is quite a sensitive issue so perhaps it may be better if I don’t blunder into it.
Question:
Prime Minister, on the point about Hamas recognising Israel, many in the region would ask what price Israel would give the Palestinians. There was a PLO and Palestinian Authority who already have recognised Israel but they have not achieved anything, so what price, what the Palestinians need is a credible world leader giving some award that Israel will do one, two, three and the price for it is recognising Israel. Would you be able to get that, have during the conversation with the American President you know get to that stage?
And on the other hand you know you are giving Siniora’s government full support, its elected government and you are standing by it on the situation it is facing, on the other hand the Palestinians are saying that this Hamas government is also very credible because they have been elected. So you have two different approaches for the same region. And on the issue of Syria you have sent your special advisor there, so in terms of the situation in Lebanon how far do you expect to go with Syria on this front, especially when you talked about the importance of seeing Syria or Iran playing a constructive role on the regional level?
Prime Minister:
Well it is very important that everybody, including Syria, supports the democratically elected government in Lebanon, there shouldn’t be any doubt about that at all and I think Prime Minister Siniora has become Prime Minister by a proper democratic process and he should be given our full support, and I do give him our full support. In relation to Hamas and what could the Palestinians expect if they were to make the change that you are suggesting, I think that is a very good Question and I hope that I can answer that in the course of the visit that I make, because I agree I think it is important for us to say very clearly this is what we will do if you are prepared to accept that any negotiation on two states must be on the basis of mutual respect and mutual recognition.
Now I think it is going to be possible, and it is one of the things that I want to do in the course of the visit, is to spell out exactly what we would do in those circumstances for the Palestinians, including and in respect of Hamas. Because I have never disputed Hamas’s legitimacy or its mandate, that is not the issue, the issue is how do we make progress in circumstances where elements of Hamas at least are deliberately trying to frustrate that progress. But if they or if elements of Hamas were to join in with this process then I think it is absolutely right to spell out precisely what they would get in return for that and I think we will be able to do, that is one of the things I want to do in the course of this visit.
Question:
Remaining on Syria and Lebanon if I may Prime Minister, what is your comment on the political impasse Lebanon is facing at the moment, and could you give us an update on the contact you made with the Syrian leadership?
Prime Minister:
Well the only thing I can say to you about our contacts with Syria is that we have said very clearly that it is important they play a constructive role in the region, that means in respect of Palestine where I think the release of Corporal Shalit would make a huge difference in being able then to release Palestinian prisoners and have the whole of that process move forward, in respect of Iraq where it is important they support the government, and to be fair they did then go and support the Iraqi government, but also in respect of Lebanon because there can’t be any way any responsible member of the international community engages in trying to undermine a democratically elected government. So we will continue to engage but it must be on the basis that everybody understands there is a strategic choice, do you support the international community in the region or not, and if people make the wrong choice then there is then a strategic decision for us and countries like us as to how we react to that.
Question:
And with regard to the Lebanon?
Prime Minister:
Well with regard to Lebanon I reiterate my complete support for Prime Minister Siniora’s government and the future of Lebanon should be decided by the people at the ballot box, and they elected the government and the government should be allowed to govern.
Question:
You said again before that the principal problem in Iraq is extremists attacking democracy. There are many people who think as big a problem, or an even bigger problem, are the militia groups who are sometimes part of the government and in some ways connected intimately to the people who are in government. I wonder if you think the militias are as much a part of the problem, if you think the government in Iraq is because of that the problem or the solution? And if I can ask a follow-up, if there is just any comment you might have on the new leader of the Labour Party in Australia who is doing very well in the polls, as the opposition leader is here?
Prime Minister:
Well first of all if you would just allow me actually to say a word about the outgoing Labour leader. Kim Beasley as you know is a good friend of mine and I feel very sorry for Kim at this time, particularly after the very sad death of his brother, and he is I know a real Australian patriot and someone who has given immense service to Australia and I am sure people recognise that, whether they agree with him or disagree with him on his political views. And if you will forgive me I don’t think I should comment on the new situation there, but I did want to say that about Kim.
Secondly, in respect of the militia, well you are absolutely right, the militia are a significant problem. Some of those are backed by, particularly down in the south, Iranian elements, there is no doubt about that, some of them are a response to the attacks that are coming on the Shia population from extremists on the other side. What is important, as you rightly imply, is that whatever the situation we support the government in building capability of a non-sectarian type. Now there are real concerns, as you know, about aspects of the police, I think there is less concern about the army. For example down in the south in Basra the Tenth Division of the army is holding up well and doing well, but we have to make sure, and this was one of the points out of the Baker-Hamilton report that we are supporting non-sectarian institutions of government. But you know the purpose of the terrorism, of course this is what terrorism does, the whole purpose of it, you know we saw this in Northern Ireland 30 - 40 years ago in obviously a wholly different set of circumstances, but the purpose of the terrorism is to create such hatred and division between people that then the terrorists get their echo on the other side. And what we have got to do is try and build the capability of the Iraqi government that is established on a non-sectarian basis in order to defeat that.
Question:
… leaders in the Iraqi government, some people would argue even the Prime Minister, you have got to cut your link from the militias, that is part of the problem, or do you say well look the Shia militias, that is in response to Sunni attacks, we are going to kind of tolerate you having your militias there but …
Prime Minister:
No, there is no doubt about our position at all, our position is to say that there should only be one institution that is capable of law enforcement and that is the proper institution of the state, and those aren’t local militia, those are properly constituted army and police services. Now as I say there has been, and is, grave concern about aspects of the Iraqi police, less so about the Iraqi army because the Iraqi army has actually in many circumstances performed extremely well. But no there is no Question of us giving any permission for militias at all, we are opposed to anything other than the properly constituted army and police in Iraq as the sole instruments of law enforcement.
Question:
Given the protests last night outside the house of a paedophile, what is your latest position on Sarah’s law? And the other Question, I want to get your opinion on a big democratic vote that is happening this weekend, who are you backing in the X-Factor?
Prime Minister:
I am afraid I don’t really have any comments to make on either of those two things. One because in respect of the second I am wholly unqualified. But in respect of the first, I mean I think the Home Office has indicated the moves we are making, because what we are trying to do here is to balance the public’s concern and the public’s desire, in some cases right, to know about a particular problem in their neighbourhood without provoking a situation in which you get some mob rule. So this is a very very difficult set of circumstances to balance and we are not the only country again that faces this type of problem. Now the Home Office have recently announced moves towards a greater awareness, but we will make a full report on this sometime in the early New Year where we hope we can sort out these issues to do with Megan’s law in a satisfactory way.
Question:
In Prime Minister’s Questions a couple of weeks ago you talking about Gordon Brown having a lot of attributes to making the next Prime Minister, I wonder if you could say exactly what you think they are. And could you explain exactly what you meant when you talked about a big clunking fist?
Prime Minister:
No I couldn’t really. I think it is pretty self-explanatory to be absolutely honest. But anyway there you go, sorry about that, that is the most you will get.
Question:
I want to ask you when are you going on your trip to the Middle East and if you are going to talk to the leaders about an international peace conference, as the Baker-Hamilton people were suggesting, or whether you think that I felt that you believed in the Baker-Hamilton suggestions last week, but then after some changes happened in the last few days the policy is changing now. We are not talking any more about international conferences. So my Question to you, you know I listened recently to a certain gentleman called Henry Siegman who is very knowledgeable about Middle Eastern affairs and he said the only way we can solve the Middle Eastern problems are if European governments support initiatives like the Baker-Hamilton in strength and don’t allow anybody to torpedo these suggestions. And I feel now in the last few days they are being torpedoed because the President of Iraq, Talabani you know starts saying he is against it, Rumsfeld makes a visit, … goes to Washington, things happen and automatically you know the Baker-Hamilton is no longer credible. But I know that you personally, you supported Colin Powell and you supported Baker-Hamilton, are you going to go to the Middle East supporting Baker-Hamilton or going with a not clear policy about the Middle East peace conference?
Prime Minister:
I should say that my view of it hasn’t changed since I last spoke in public, which I think was last Thursday and that was my view then and remains my view now. And the essential elements of it, look exactly how you get international support working in the right way is an open Question, but there is no doubt that you need the international community to come behind the stabilisation of Iraq, both in terms of the region and in terms of the wider community. And I think the elements that are there in Baker-Hamilton are the elements that any plan for Iraq has to encompass and those are essentially the three points that I made, it has got to encompass the building of the capability of the Iraqi government in terms of security, in terms of economy, in terms of governance; it has secondly to mobilise the region in support of that democratically elected government; and thirdly it has got to have a broader Middle East perspective to it so that you have a policy for outside as well as inside Iraq. Because my view is, albeit not obviously directly but indirectly the stronger we have a coherent policy for the whole of the Middle East the more likely it is that we can mobilise support for the proper government in Iraq. So my view of Baker-Hamilton hasn’t changed since I spoke last week.
Question:
… Europeans as well, and for the Middle East as well you need an international conference.
Prime Minister:
I have just said that.
Question:
When are you going by the way?
Prime Minister:
I don’t think we answer those Questions but soon I think is the fairly obvious answer.
Question:
Prime Minister, Gordon Brown and John Reid made it very clear last week that they are sick and tired of political correctness, they were particularly talking about Christmas. What is your message on that?
Prime Minister:
Well I am always amazed when I hear these stories about people saying that someone has gone and banned Christmas. I read something today in preparing for this that some vicar doesn’t want to support Christmas or something. Look you never know whether these stories are true or not to be honest, because every time you look at them it turns out to be slightly less than it appears. But all I know is that as far as I understand it, people in Britain are very happy to support Christmas, that people of other faiths don’t in the least mind that Christians support Christmas and regard Christmas as a very important part of our year, and I think that if there are misguided people out there who think there is something wrong with celebrating Christmas, certainly if you are of the Christian faith, then I don’t think they should be taken as indicative of some great movement towards political correctness. I just think the whole thing is daft. And I tell you, if you look round this building I don’t think I have ever seen so many Christmas trees as I have in this building, which is very good incidentally, he says quickly.
[party political content]
Question:
Alistair Darling said recently the Post Office network is not sustainable at its current size, it is just making too many losses. We are expecting him to announce 1,000 closures later this week. I just wondered, do you accept the government has any part of the blame for the Post Office’s plight because of the way it is no longer requiring benefits to be paid through Post Offices and the changes there, or do you think this is entirely a factor of market forces?
Prime Minister:
Well I think it is a consequence of change. We have put in since 1999 £2 billion worth of taxpayers’ money into supporting the Post Offices, but there is a simple fact that you can’t get round that 4 million fewer people are using the Post Office to transact their business than a few years ago. And Post Offices I think last year were losing overall some £2 million a week and I think now it is £4 million - I will check those exact figures for you. But the point is that as a result of people transacting their business through bank accounts and online, and remember as this next generation of pensioners comes through, you know the next generation of pensioners were part of the, or some part of the ’60s generation. You know it is a very different situation that you are dealing with and I think that particularly rural Post Offices have a real part to play in local communities, but you know we have got to be honest with people about this, you cannot carry on putting a massive amount of public subsidy into this.
Now we will look for ways that we hopefully can stabilise the situation and give the majority of Post Offices a way forward for the future, but you know the reason why under the previous government and under this government Post Offices have continued to close is not because it has been government policy to close them, it has been because people have made an individual choice to transact their business differently. Now as I say I met the delegation from the Sub-Postmasters just a short time ago, and incidentally they are excellent people and do a fantastic job in local communities, but you know you have got to decide at some point what is the viable future for it, otherwise you just carry on paying really large, I mean £2 billion is not nothing, it is a lot of money. And the Question is can you carry on making a subsidy as large as that in circumstances where it is not obvious it is actually doing any good. And I can’t remember again what the exact figures are, but I think I am right in saying there were several hundred Post Offices in which they would get 16 customers a week. Now again I will check that for you but it is very difficult to know what you are supposed to do in those circumstances because otherwise you literally are paying out money in circumstances where you have then got to ask the Question well is that the right use of taxpayers’ money.
Question:
Prime Minister on climate change, what do you think of David Miliband’s idea of personal carbon allowances that was mooted in the Guardian yesterday? And on Sir Nicholas Stern’s report he talked about a need to do something within the next ten years and perhaps to move an agreement forward on the next round of emissions cuts closer to now than 2008. I wonder if you feel there is sufficient urgency in the debate on climate change at the moment to get the proper outcome.
Prime Minister:
Well I think what David is talking about, I mean he will make some announcements on that a bit later, but I think he has provided a great deal of drive and commitment to dealing with the issue of climate change and I think he is absolutely right in saying we have got to mobilise individuals to be part of this. And the meeting I had with business leaders yesterday was really very welcome indeed, I mean to have broadcasters, big business companies round the table all saying, retailers, that they were going to make a major effort in showing how their customers could be part of the solution to this I think was very very exciting indeed. And the reason why everybody is getting increasingly agitated and urgent about this issue is that the issue is becoming increasingly urgent. I don’t think there can be any sensible serious person who disputes now that we have a major long term threat to the stability of the environment and therefore the future of the planet.
And interestingly enough when I was in the United States last week, although this didn’t really for obvious reasons get any publicity, a lot of the meetings I had were on climate change, and I found a very broad degree of consensus amongst many Republican and Democrat Senators, Congressmen and women that this was an issue that had to be faced and tackled. And I think the first six months of next year will be very important in the German Presidency of the G8 and we have a real opportunity to move this forward, and I also talked about it at length with President Bush. So I think this is an issue where the sense of urgency is in many ways being driven by genuine public concern, the solutions are there and we have got to try and create the conditions in which we can agree a substantial and proper framework for the future.
Question:
Prime Minister may I also ask you two Questions, first in regard of Russia. Are you worried about the recent development in Russia, and I am not only referring to the Litvinenko murder and the whole case of speculation that is going on there, but also that Shell apparently were forced to reduce its stake in the Sakhalin II project in favour of the state Gazprom company. So are you worried or concerned about this development and what does it mean for British energy security? And the second Question in regard to what the Conservative Party said yesterday, Ian Duncan Smith was backed by David Cameron, do you share the analysis that marriage is actually at the heart of the problem about antisocial behaviour and yob culture?
Prime Minister:
On the first point, when we the European Union met the Russian President in Finland we made it very clear what our concerns and worries were, and obviously as you say there have been other issues that have happened since then. I think in respect of Shell I don’t really want to comment on that because I haven’t studied the detail of the contract and I don’t know what the reaction of Shell itself is to that. But we have made it very clear in the UK that we see our future energy policy as diversity of supply, so of course there may be Russian gas that is supplied to the UK, but we have also secured a deal for 30% of our future gas needs from Norway, and one of the reasons why nuclear power is back on the agenda here and why I believe we will have a new generation of nuclear power stations is again to make sure that we have that diversity of supply.
On your second point, you see I entirely agree that marriage is an important institution, that supporting the family is intelligent policy for any government because if children are brought up in a secure home where their parents are in a committed relationship then this is important for children, I think that is a matter of common sense. And in that sense in terms of the analysis of the report, I think the analysis is one that most people would share, certainly I would share the analysis. The real issue, and I have looked at this policy very closely over the last decade, is then what, I mean then what in terms of policy? And the problem that you run into here is that if you try to use the tax system through the old system of transferable tax allowances, the reason why that system, and it wasn’t my government that started this, changed the system was because of the problems in getting the support to children and the difficulty is you can’t have a situation where, even though of course we support marriage, we support the family as an institution, but if you have children that are not living in that situation but need help, then you can’t penalise the children because of something that has happened or not happened in respect of their parents. So that is the problem, but you know it is a perfectly sensible debate to have and it is important. I have constantly said this myself that the family circumstances in which children are brought up obviously makes a difference to how they live in later times.
Question:
Prime Minister what would you say to the perplexed Israeli who wants peace, has seen chaos and carnage in Gaza, has seen the Hezbollah try to bring down the Lebanese government and is now very concerned? They were willing, or the majority of them were willing to hand over the West Bank, or parts of it, they can’t see any future at the moment, they get more and more worried by the activities of their neighbours and the unsteady hand of Iran? And second, do you have any proposals to counteract the very damaging process going on in Iran over the last two days with their conference, is there anything that Britain can do to resurrect the name of the Holocaust so it is made clear it was one of the worst tragedies in the history of mankind? And can I wish you a Happy New Year, Merry Christmas, seasonal greetings, whatever you wish to have.
Prime Minister:
Thank you Jerry, thank you for that. I am sure you speak for everyone.
I think what the events in Iran will do is provide a very specific context for when we come to Holocaust Memorial. And as I said earlier, I find it just quite shocking that a country, a government of a country should organise such a conference which is a really quite disgusting thing to do in terms of the people and the families of the people who died, millions of them, in the Holocaust. And I think it is just very sad and I also find it, I had to get someone to go and check twice that they actually invited this person who was the former head of the Ku Klux Clan there, I mean it is unbelievable. So I think that is the case.
And what I would say to any Israeli who is in Israel looking around the neighbourhood of Israel and wondering how on earth there is ever going to be peace is that we have no option but to seek it, because the alternative is what we have and the alternative is unacceptable. It is unacceptable to Israel, it is unacceptable to the people in the neighbouring countries. But the strategic opportunity I think is this, that I believe the majority of Palestinians, the majority of people in Lebanon and the majority of people in the region want to see the two state solution. Now at the moment it looks a long way distant, but we have not got to give up trying to develop proper partners for peace, and then of course it is for Israel to play its part in making sure that if we have a proper partner on the Palestinian side willing to take this process forward that Israel plays its full part. But there isn’t an alternative I am afraid, the alternative is to work at this until the dynamics of the situation are changed in a more positive way. And I have said before, and I say it again, there is nothing more important both in itself and in terms of its symbolic importance to the rest of the world.
OK? And Happy Christmas to everyone here. Thank you.
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