Briefing by the Prime Minister’s spokesman on: floods, letter to NATO Secretary General, bank loans and bank charges
Floods
The Prime Minister’s Spokesman (PMS) said that the Prime Minister continued to be updated on the situation regarding flooding in Cumbria. The key factor was that overnight rain did not seem to have affected the flood levels so far. Transport Minister Sadiq Khan would be touring the affected areas today to see the impacts of the floods and the superb work being done by the community and emergency services.
Letter to Nato Secretary General
The PMS said that the Prime Minister had written today to NATO Secretary General Rasmussen, following their meeting in London earlier this month. At that meeting both the Prime Minister and Rasmussen undertook to work on NATO allies to secure an increase in non US/UK troop numbers, as part of the international response to the McChrystal review.
The UK had been taking this forward - as we said, the Prime Minister asked the Defence Secretary and his Foreign Policy Advisor to lobby around 10 countries with the aim of securing 5,000 extra troops.
The Prime Minister was now optimistic that this effort was yielding real progress, and that a majority of the countries we had been lobbying would increase their troop numbers, as well as announce additional police trainers or civilian staff. So he had written to Secretary-General Rasmussen to update him on the UK’s efforts, telling him that he believed we had made good progress. These extra troops would help strengthen the process of Afghanisation and the training up of the Afghan security forces.
We would continue to work with the coalition on this, but the Prime Minister felt it important to update Rasmussen at this point, whose leadership he greatly respected.
This also showed how we were working hard to meet the three conditions the Prime Minister set for deployment of our extra 500 troops, one of which was fair burden sharing.
Asked if the letter gave a breakdown of numbers, the PMS said that the letter did not go into numbers or the names of countries; the purpose of the letter was for the Prime Minister to update Mr Rasmussen on the situation and to indicate where we were following visits made by his advisers.
Asked if the Prime Minister was optimistic that the extra 5,000 troops would be secured, the PMS said that the Prime Minister was optimistic; we had already seen a doubling of troop numbers from Slovakia (from 250 to 500).
Asked if the 5,000 extra troops included UK and US numbers, the PMS said no, the 5,000 did not include troops from the UK or US.
Asked when the Prime Minister would send the 500 extra British troops, the PMS said that the extra British troops would be sent when our three criteria had been met. Conditions included, where we had got to with the Afghan Government, post-election; the guarantee that troops would be fully equipped and decisions from our allies regarding troop numbers. Once we knew President Obama’s decision on troop numbers and how many extra troop numbers there would be from the ten other countries (mentioned in the Prime Minister’s letter), then we would be ready to make a decision about when to send our extra troops. Two of these conditions had effectively been met and we hoped the third condition would be met once we knew the US numbers, however, we would not give a specific date.
Put that that suggested that the final condition could be met next week, the PMS said that he would not be pinned down on whether or not it would be next week, but we were moving in the right direction.
Asked how quickly troops would be able to go into Afghanistan once we knew the decision on US troop numbers, the PMS said that it would be for military advisers to talk to the Prime Minister about. We had the 500 extra troops ready to go in principal and we would want to move in consultation with the military advisers and chiefs.
Asked if the letter was a rebuke to NATO for not doing enough, the PMS said no; the letter was an update on encouraging news, in principle, from recent discussions.
Asked what reason the Prime Minister had for being optimistic about troop numbers from other NATO countries, the PMS said that the Prime Minister had had positive feedback from his advisers.
Asked if the Prime Minister had been seeing counterparts at summits who had been giving him positive feedback, the PMS said he had not said that; the Prime Minister had asked the Secretary of State for Defence and his Foreign Policy Adviser to spend time talking to the countries concerned. As he said in the letter, ‘following these meetings and contacts [he was] now optimistic that a majority of these countries [would] indeed make available increased numbers of troops, and more police trainers and civilian support’.
Put that it sounded like the Prime Minister had sent the Secretary of State for Defence out and about in NATO countries to talk to people, the PMS said that he would not characterise it like that; this was about making sure we had the people closest to the issue out there talking on the Prime Minister’s behalf.
Asked if these discussions had been on a Ministerial or official level, the PMS said that the person principally involved was the Prime Minister’s Foreign Policy Adviser, who was closely involved in Afghanistan.
Asked why we weren’t naming the ten NATO countries mentioned in the letter, the PMS said that we did not think it was appropriate at this stage to mention the ten as discussions had to take place in private.
Asked if the Prime Minister had spoken to Angela Merkel about Germany’s troop numbers, the PMS said that the Prime Minister had spoken to the Chancellor and other leaders about this and many other issues over the last few weeks.
Asked how the British Government had convinced others to send more troops out to Afghanistan, the PMS said that we had set out what the UK and allied strategy was for Afghanistan. There was agreement that real progress needed to be made on Afghanisation.
Asked if the 5,000 would be made up of troops only, the PMS said that most of those 5,000 would be troops, but we were very keen that people made more police trainers available. When the Prime Minister made the original request it had been for troop numbers.
Asked if the NATO Secretary General had specifically asked for the Prime Minister’s help on this, the PMS said no. The Prime Minister felt it was very important for him to take a leadership role in this area.
Bank Loans
Asked how people could be sure that other loans wouldn’t emerge like those revealed yesterday from the Bank of England to RBS and HBOS, the PMS said that it was not for us to make any comment on whether or not there were any other loans of this type; this was a Bank of England decision and questions should be put to them. However, it was important to put things in context; one of the key functions of the Bank of England was to be the lender of last resort, which was what had happened in this case. The two banks in question were in the midst of a very serious global financial crisis at the time and the decision the Bank of England made was thoroughly thought through. Mervyn King had announced this yesterday, as it was the first opportunity he had had to brief the Treasury Select Committee on it. The money had been paid back in full and the banks and the banking system were now in a much better position. The Government’s involvement at the time had been to underwrite the loan.
Asked why Mervyn King had told people yesterday, the PMS said that was a question for the Bank of England.
Asked if it had been appropriate for the Prime Minister to publicly encourage a merger between HBOS and Lloyds at a time when Lloyds shareholders had no idea about the loan from the Bank of England, the PMS said that it was not fair to characterise it as the Government encouraging the merger; the decision to merge had been taken by the boards of the two banks concerned. There was an issue around competition and the Government had been involved in that aspect.
Put that the Prime Minister had encouraged the two banks to merge, the PMS said that the Prime Minister did not promote the merger of the two banks; the merger between two public companies was something that had to be agreed by the boards of those two companies in principle and the shareholders. The decision was made to waive the competition laws and allow the merger to go ahead once both boards and both sets of shareholders had separately voted in favour of it.
Put that Lloyds shareholders had not been aware of the state supported guarantee at HBOS, the PMS said that he would not characterise it as state support; it was a loan that was leveraged off the Bank of England balance sheet and the Bank of England asked the Government to underwrite it. This was very different from state aid. It was important to remember that the loans were paid back and that the banks were now in much better shape than they were at that time.
Put that if someone had read the Bank of England annual report with a keen eye then they would have spotted that something like this was going on, the PMS said that he did not know the detail of what appeared in the Bank of England’s annual report.
Bank Changes
Asked if the Government was disappointed about the Supreme Court’s judgement on bank charges, the PMS said it was for the Office of Fair Trading to consider the next steps. The Government had a package of measures that had been put in place and would be implemented through the Financial Services Bill, which would enable consumers in the future to take the type of class action that we had seen today and ensure the safety of customer deposits. Through the legislation that would be put in place we wanted to ensure a better deal for customers.
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