Briefing from the Prime Minister’s spokesman on: Savings/Public Investment, Israel/Gaza, economy/recession and misc
Savings/Public Investment
Asked about taxation of savings, the Prime Minister’s Spokesman (PMS) said that savers benefited from the low inflation environment we were seeing at the moment, including the price of many goods coming down, which protected the real value of savings. Since 1997 we had introduced significant support to help savers with the introduction of Individual Savings Accounts (ISAs), which 18 million now benefited from.
Asked what the Government’s plan for savers was and when it would come into effect, the PMS said that we would normally announce our plans on economic policy at the time of the Budget.
Asked about the £10 billion increase in public investment, the PMS said that the £10 billion increase in public investment was the figure set out in the Pre-Budget Report (PBR), which showed that public sector net investment rose from approximately £30 billion in 2007/08 to £40 billion in 2009/10.
Israel/Gaza
Asked if the Prime Minister believed that the continued action was proportionate and justified, the PMS said that, as the Prime Minister said yesterday to Andrew Marr, the key focus was on what we could do in order to help the situation in Gaza rather than getting into a blame game. The Prime Minister was focusing on 3-fold practical measures that could help; firstly, we needed an immediate ceasefire and that included the stopping of rockets into Israel. Secondly, we needed a resolution over the problem of arms trafficking into Gaza, and particularly the situation regarding tunnels. Thirdly, we needed the borders open, which required some form of international cooperation and international solution.
Asked if a ceasefire was imminent, the PMS said that it was something we continued to press for. The Prime Minister spoke to Prime Minster Olmert over the weekend and we stayed in close touch with our key allies in Europe, America and the region.
Asked if the Prime Minister had any plans to talk to Prime Minister Olmert or President Abbas today, the PMS said that the Prime Minister was in regular contact with both Prime Minister Olmert and President Abbas.
Asked if the Prime Minister felt frustrated that Israel was ignoring international calls for a ceasefire, the PMS said that the Prime Minister was no going to get into a situation where he commented on those sorts of questions. The Prime Minister’s focus was on what we could do to make a difference, and as well as the immediate ceasefire and stoppage of rockets into Israel, we needed to work with our international partners in the region and elsewhere to deal with the other issues such as arms trafficking into Gaza and the issue of maintaining the borders into Gaza.
Asked if the Prime Minister had spoken to Tony Blair over the last few days, the PMS said that the Prime Minister had said during his Andrew Marr interview yesterday that he had spoken to Tony Blair yesterday morning.
Economy/Recession
Asked to explain the Prime Minister’s comments to Andrew Marr yesterday that only £1 billion of the Government’s £18 billion package had been spent, the PMS said that the VAT cost of £12.5 billion for 13 months, which was around £1 billion a month, had already come into effect in December. The other elements of the PBR package had not yet come into effect; that included the £145 for basic rate taxpayers, which would come into effect in April. There was also £3 billion of capital spending which was being brought forward into the 2009/10 financial year, which had not yet come into effect. As of the end of December, the only measure that had come into effect was the VAT cut. On 1 January this year we also brought forward the increase in child benefit and the special payment for pensioners. We still had significant measures to come into effect, including the bringing forward of capital spending and the extra help for basic rate taxpayers.
Put that the Prime Minister had given the impression that he did not know when the recession would end but that the Treasury had said it would end in the middle of next year, the PMS said that there was no inconsistency between the two; the Treasury had to make forecasts and publish those forecasts by law twice a year, therefore the Treasury had to take a specific view. However, as the Treasury and everyone else would acknowledge, these were very uncertain times and, as the Prime Minister said yesterday, a lot depended on international action.
Misc
Asked if there was Ministerial backing for a third runway at Heathrow, the PMS said that there were a number of proposals relating both to the future of Heathrow and more generally to transport infrastructure. This was something that the Department for Transport was considering and as and when we were in a position to make any firm announcements on this we would do so.
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