I’m delighted to welcome Prime Minister Al-Keib from Libya to Number 10 Downing Street.  I am very proud of the role that Britain played to help secure a successful outcome in Libya and the support we gave through the NATO mission.  I am very much looking forward to hearing about the progress towards full democracy in Libya and your elections that you hope to hold before Ramadan this year.  I am also delighted that we are working so closely together on issues of mutual interest, including having a Metropolitan police team going to Libya to continue the investigation into the murder of WPC Yvonne Fletcher;  I think that is a really positive step forward, and I know it will be welcomed by everyone in Britain.

 There are huge challenges for your country – challenges we want to help you with.  We really believe in the Arab Spring and in what you achieved in Libya.  We will be backing you every step of the way with big challenges, like trying to integrate the revolutionary groups into the police and other armed services.  We stand with you in your battle to deliver the freedom, the democracy and the rights that people in Libya have waited for so long.  And you are very welcome here today, Prime Minister.

ABDURRAHIM AL-KEIB

Thank you very much indeed.  Prime Minister, thank you so very much indeed for welcoming me here in London.  The first time I visited London was 1965, when I was about 15 years old and I am here bringing with me all the sincere appreciations of the Libyan people to the UK people and to you personally. 

 You took a bold decision when it was very difficult for many to even consider supporting the Libyan people and you took that decision that inspired many of us, including many men and women.  So, I would like to express my sincere appreciation and sincere appreciation of the Libyan people for having you as a partner and as a friend, and the UK people as long-time friends and partners as well. 

 The Fletcher case is one case that is close to my heart, personally.  I had friends who were demonstrating that day, next to the embassy.  It is a sad story and it is very unfortunate that it has anything to do with the Libyan people and I am here to tell you that we will work very closely together to resolve anything related to that issue.

Introduction

With permission, Mr Speaker, I would like to make a Statement on the G8 and NATO Summits which I attended in America last weekend.

The common theme across both summits was economic stability and international security.

At the G8 we reached important conclusions on dealing with our debts, growing our economies and dealing with the risks in the Eurozone.

Let me take each in turn.

Fiscal consolidation 

Mr Speaker, deficit reduction and growth are not alternatives.

You need the first to deliver the second.

There was absolutely no debate about this.

It was my view.

It was Chancellor Merkel’s view.

It was President Obama’s view.

And it was President Hollande’s view. Indeed, France will balance its budget at a faster rate than Britain.

In Britain, in two years, we have cut the deficit we inherited from the last government by more than a quarter.

And our approach has been endorsed again by the IMF this week – and by the OECD.

Growing our economies 

At a time of tight budgets, a proper growth plan requires – not just a credible fiscal policy which secures low interest rates but also structural reforms to make our economies more competitive with an active monetary policy and innovative use of our hard won credibility to ensure investment in long term infrastructure.

We are taking all these steps in the UK and promoting them in Europe as well and in every area we need to do more.

Prime Minister Monti and I have gathered 10 other EU leaders to call for the completion of the single market in digital and services.

President Hollande is coming forward with creative proposals such as project bonds.

And, as the House knows, in recent months the ECB has helped supply liquidity to European banks.

I will be pursuing all of these elements at the Informal European Council tonight – and at the formal council in June, after which I will of course be making a statement.

Growing our economies also means doing everything we can to get trade moving.

At the end of the G8 meeting there was a serious and substantive discussion about the potential for an EU-US trade deal.

The EU and US together make up over half of the world’s GDP.

There is a huge amount of work to be done – and a further effort will be made around the G20 next month – but this could have a positive impact on both sides of the Atlantic.

 Risks in the Eurozone

Mr Speaker, the greatest risk facing the Eurozone is the situation in Greece.

The future of Greece is for the Greek people to determine.

It is for them to decide what is best for their country.

But we can’t afford to allow this issue to be endlessly fudged and put off.

The Greek election should in effect be a straightforward choice between staying in the Eurozone – with the responsibilities that entails or taking a different path.

The Eurozone – and Europe as a whole – needs to have contingency plans in place for both eventualities.

This should involve strengthening banks, protecting financial systems and ensuring decisive action by European institutions to prevent contagion.

Mr Speaker, I can tell the House that whatever the outcome, this government will do whatever is necessary to protect this country and secure our economy and financial system.

Other G8 issues
 
Alongside the discussion on the economy, I had two further priorities for this G8 to continue the good work of the G8 on development and to support the Arab Spring and the promotion of democracy and freedom.

Development

On development, the New Alliance for Food Security and Nutrition is an important initiative that aims to help 50 million people lift themselves out of poverty over ten years.
 
For countries to receive help they need to show a real commitment to transparency and good governance.

And in return they get substantial support to generate private sector investment in food production.

This is a great combination of promoting good governance and helping Africa to feed its people.

And I’ll be building on this with a major event on food security during the Olympics.

Encouraging the private sector to create jobs is one of the best routes to sustainable, equitable growth in poorer countries.

But aid still has a vital role to play.

Mr Speaker, for the first time in a decade the amount of aid given by the world’s richest countries to the world’s poorest countries has fallen back.

Promises are being broken.

This is wrong.

Britain continues to honour its commitments. Other nations should do likewise – and in our G8 next year we will once again produce the report which shows who has and who hasn’t.

Freedom

The G8 also reached important conclusions on Libya, Iran and Syria.

Specifically on Syria, there was backing for the Annan Plan – and for further UN measures if Assad doesn’t change course.

And it was significant that the Russians agreed to this.

I raised Burma and the need to support the foundations of a lasting and irreversible transition to democracy.

I’ll be making this a feature of our G8 next year.

And I’m sure the whole House will look forward to welcoming Aung San Suu Kyi when she addresses Parliament next month.

NATO

Mr Speaker, let me turn to the NATO Summit.

Some people write off NATO as a relic of the past.

I believe it is vital to our future security.

The threats NATO countries face largely come from beyond our borders.

Failed states. Terrorism. Nuclear proliferation.

Because of this, it makes sense for NATO to be prepared to link up with partners around the world to act out of area and to spend less on the weapons of past conflicts like battle tanks and more on the technology needed for tomorrow.

All of these things were agreed at the Summit.

That’s not to say NATO shouldn’t take steps to defend Europe and North America.

It should. And we declared that the interim Ballistic Missile Defence capability that will protect Europe is operational.

It was particularly good to have a special session with the partners who work with NATO around the world and in particular the 50 countries who make up the NATO-led alliance in Afghanistan.

Afghanistan

NATO’s military commanders set out the progress in the campaign.

Attacks by insurgents are down.

Transition to Afghan control is on track.

Over the next few weeks, we will reach the point where 75 per cent of the population will be living in areas where Afghan forces are in the lead for security.

The vital next steps are to deliver the final stages of transition continue to build up the Afghan National Security Forces and to ensure they are funded properly.

Britain is pledging £70 million a year.

But it is right that other countries should step up and contribute to the future of Afghanistan, irrespective of the role they have played so far.

This Summit marked a turning point in these contributions – with almost $1 billion being pledged to support the Afghan National Security Forces.

Conclusion

Mr Speaker, Britain has played a leading role in this Alliance for reasons of our own security.

Three years ago some three quarters of the most serious terrorist plots against Britain had links to Afghanistan and Pakistan.

Now I am advised that figure has fallen to about half.

Our aim is an Afghanistan that is able to take care of its own security without the need for foreign troops.

An Afghanistan that can prevent Al Qaeda returning and posing a threat to us and to our allies around the world.

The tremendous hard work of our courageous service men and women is making this possible.

And after ten long years, our service men and women will finally be coming home.

I pay tribute to them.

Their service and sacrifice is beyond measure.

And we remember in particular all those who have given their lives in this vital task to keep our country safe.

And I commend this Statement to the House.

“This summit reached important conclusions on the future of Afghanistan on the timetable for transition, the plan for post-2014 and the future funding of the Afghan National Security Forces.

We also had an important discussion on the future of NATO itself.

Let me say a word about each.

First, on Afghanistan, I have said that British troops will no longer be in a combat role beyond the end of 2014.

That is our deadline. And at this Summit, NATO confirmed it will be the deadline for the International Security Assistance Force (ISAF) mission.

The plan for the transition of full security responsibility from ISAF to Afghan National Security Forces agreed at Lisbon is on track and on target.

President Karzai has announced that the third tranche of provinces will start transition next month. This includes Nahr-e Saraj, the third and the final district of Helmand for which we are responsible.

And by the middle of 2013 Afghan National Security Forces will be in the lead for security across the whole country – and that is crucially more than a year before our troops leave their combat role.

This is a direct result of the tremendous hard work of our courageous service men and women and I want to pay tribute to them again today.

Their service and their sacrifice is beyond measure, and we should remember in particular all those who have given their lives in this vital task which is about stability and security in Afghanistan but it is also about stability, security and freedom from terrorism in our own country and keeping our country safe.

Let me turn to the post-2014 plan.

Work will now begin immediately on the military planning process for the post-ISAF mission, but let me be clear NATO will not establish a new combat mission. Instead we will maintain our commitment to a stable Afghanistan by training, advising and assisting the Afghan National Security Forces post-2014.

We are making a decisive and enduring commitment to the long-term future of Afghanistan. The message to the Afghan people is that we will not desert them.

And the message to the insurgency is equally clear: you cannot win on the battlefield; stop fighting and start talking.

To support the post-2014 operation, we agreed new financial support for the Afghan National Security Forces. Britain is pledging £70 million a year from 2015.

This is in addition to providing 75 per cent of all trainers at the new Afghan National Army Officer Academy which we are leading next year. This was a specific request from President Karzai to the British and I think its something we can make a real and lasting contribution to, the future of military effectiveness of the Afghan parliament.

This is a significant contribution but it is a fraction of the cost of a combat mission. It is very much in our national interest that we continue to play an important role in supporting Afghanistan post-2014. But it is also right that other countries should step up and contribute to the future of Afghanistan, irrespective of the role they have played so far.

Now I believe this Summit marks a turning point in these contributions – with almost a billion dollars being pledged to support the Afghan National Security Forces … [indistinct] including significant new contributions from Australia, Denmark, Germany, Italy, Estonia and the Netherlands to mention just a few. We also looked forward to further announcements of new support for Afghanistan’s economic development at the Tokyo Summit in July.

Finally, we had a discussion at the summit on the future of NATO itself.

With defence budgets in decline some are arguing that NATO needs to retrench, lower its ambitions and look inwards to the core responsibilities of collective defence. But I argued – and this Summit agreed – that NATO should actually do the opposite. We should look outwards, reassert NATO’s relevance and make sure it is ready and capable to tackle the threats that may lie outside its territory, nonetheless are very real threats to us at home.

Only NATO could have taken on the operation in Afghanistan.

Only NATO could have reacted so quickly and effectively in Libya, acting with great precision and incorporating partners like the UAE, Qatar, Morocco and Jordan so effectively into its command and control structure.

To maintain this capability in a tough financial climate, NATO needs a new mindset.

President Obama and I argued that NATO should consider a process not dissimilar to the strategic reviews we have recently carried out in Britain and America – taking a rigorous look at the threats we face today; prioritising for the capabilities we need to meet those threats, not the capabilities we needed for the fights of yesterday; and taking the hard decisions to cut some programmes in order to invest in others.

This approach lies at the heart of the NATO Forces 2020 Defence Package which we agreed at this Summit.

We agreed that NATO needs to modernise and prioritise better to address the new risks from an unstable world of failed states, regional conflicts, global terrorism, nuclear proliferation and cyber attacks.

We agreed NATO needs greater specialisation, so that not every country tries to do everything. For example, the Baltic States are doing a great job on the ground in Afghanistan while others are protecting their airspace and we need more arrangements in future.

And we agreed that NATO needs greater co-operation, with more credible and effective planning with allies and sharing lessons and working together to develop capabilities in the future.

NATO binds the US to Europe not as a security provider but as a security partner.  It is the bedrock of our defence.

It is vital to Britain’s national security, and the decisions we have made today will ensure that it remains the case.”

Q&A

Question:

President Obama’s clearly very vexed this morning by the refusal of Pakistan authorities to allow the ISAF supply checks across the border into Afghanistan. How vexed are you by this and what is being done about it at the moment? Second question if I may – you say the Taliban should stop fighting and start talking- what are you doing to try and get them to the negotiating table?

Prime Minister:

For the first of those-of course it is clearly frustrating. Pakistan is a strong ally and friend of Britain. We have a large trading relationship, we have a big aid relationship. We have tremendous relationships between the Pakistani diaspora in Britain and Pakistan. Obviously we want those lines of control opened again. I believe that they will be. I’m confident that is the case from the discussions I have had. But clearly it’s not going to happen today-we need to carry on with those discussions and make sure it does happen in the future. I’m confident it will. As I said at the NATO dinner last night the Pakistani relationship is vital for NATO, vital for ISAF and vital for Afghanistan. We have to understand the difficult politics and political situation in Pakistan. We have to understand the enormous amount they have lost to terrorism- probably the country that has suffered more than any other. We have to have that real understanding and Britain’s deep relationship with Pakistan I think brings that understanding. In spite of the occasional frustrations we have to stick with that relationship and I believe it will deliver.

On the issue of the Taliban we’ve made a very compelling case, crucially the Afghan government has made a compelling case, which is if you want to give up fighting, accept the basis of the Afghan constitution then as Hamid Karzai has put it there’s a place for everyone in the future of Afghanistan. The Taliban should be in no doubt that they have been defeated every way they’ve appeared on the battlefield. They don’t reconcile, they go on being defeated first by a combination of ISAF and Afghan national forces and then by Afghan forces themselves so there’s no let up in terms of the military pressure of the Taliban. We invariably had a very good report from the military commanders at the NATO ISAF summit today but the choice is theirs – whether they want to reconcile or they want to continue being defeated militarily as I say with the Afghan National Security Forces becoming increasingly capable.

Question:

In recent days you have warned of the make up or potential break up of the Euro. You have said to the Greeks that they have to decide one way or the other if they’re in or out of the Euro on June 17th. You have told other Eurozone leaders to prepare decisive contingency measures. By using that sort of language and by pushing so hard, is there not a danger that far from providing the pace for some sort of settlement of the Eurozone crisis you actually inflamed the crisis and created crisis mentality?

Prime Minister

I don’t believe that’s the case and that is why I have spoken out. I’d make two simple points-the first is this affects us, 40% of Britain’s exports go to Eurozone countries. What happens in the Eurozone matters to the United Kingdom.

And my judgment is that staying silent on the problems would actually be more dangerous than speaking out because we need these issues to be resolved, and I think – while I would commend what has happened in the Eurozone in terms of many of the steps they have taken to make their economies more competitive, to address some of the problems, to try and build a firewall, to go through proper exercises of recapitalising the banks – the truth i  they have still not done enough to decisively resolve the crisis.

And I would argue that the British contribution to this debate has been constructive. We have not just said ‘sort it out’, we have consistently set out the things that we think need to be done, whether that is firewalls, bank recapitalisation, a more active policy on behalf of the European Banking Committee (EBC), looking towards eurobonds for the future. These are important points. So I judge that it would be more dangerous to stay silent and to say there is nothing we can do about this, no contribution we can make, because these issues have to be resolved and in my view the swifter, the more effectively and more comprehensively they can be resolved the faster the Eurozone will be able to return to growth and that will obviously have a positive impact on us.

I would argue in some ways Britain has helped to promote a healthy debate about what needs to be done and that has obviously continued at this NATO summit as well as at the G8.

Question:

Prime Minister, General Allen has said that fighting will continue in Afghanistan right up to the December 2014 deadline and indeed after with Afghan forces. Your own officials are admitting that there will very likely need to be our own counter-terrorism presence there. The job which British troops were sent to Afghanistan for clearly won’t be finished by December 2014 so why are you bringing them home?

Prime Minister:

Ok well I think there are two important points to be made here and this relates very much to what General Allen said at the NATO ISAF meeting this morning. The first is I think one of the points he is rightly making and I made in my intervention as well is that 2013 is something of an inflection because at that stage you’re going to have Afghan forces in the lead right across the country. British troops and ISAF troops will be in this assisting mode but I think it’s very important we don’t mislead people in any way; while we will be in an assisting and helping mode, there will still be occasions when we are in a combat mode before the end of 2014 so I think it’s very important to make that point to people.

The truth is this. The level of attacks and level of insurgency has declined compared with last year. I believe it will go on declining. What is absolutely within our control is the growth of the Afghan National Security Forces, the capability they have. But clearly there will be a better outcome in Afghanistan if that is accompanied by a political development and a political solution as well. That is not fully within our control. But I am confident that our troops can leave with their heads held high having completed the combat task in 2014, because they will be handing over to fully capable Afghan National security forces who will be able to deal with any residual problems and issues in a fully capable way. They will have done a great job and I think people in our armed services now can see what is left in terms of the programme in Afghanistan and what action needs to be done, and crucially, is handing over to fully functional Afghan National Security forces.  

Question:

Did you see the Spanish Prime Minister today and did you talk to him about the security of Spanish banks? And can you assure Santander UK cardholders that their assets, their holdings, will be safe?

Prime Minister:

I’m having a meeting with the Spanish Prime Minister later today, obviously we’ve been discussing the full range of bilateral and European issues including the Eurozone crisis. People should know that British banks are well regulated and well capitalised and in terms of branches of banks in Britain, and all the rest of it, the Financial Services Authority has made the position very very clear.

PRIME MINISTER:

We’re addressing here the two biggest threats to all our economies, and that is, of course, the eurozone crisis, but also the very high oil prices that translate into high prices at the pumps, and we’re making progress on both – particularly on the eurozone.  What is required is a sense of urgency, but then clear actions for strong banks, strong deficit reduction plans, strong governments, and strong contingency plans for whatever might happen.  On all those things, I think, there is a good sense of talks taking place, and a good sense that action needs to follow.

Asked if there was going to be an agreement on doing something?

PM: Well, the G8 can’t instruct the eurozone what to do.  But why meetings like this matter is that eurozone countries can hear from countries outside the eurozone, where… whose economies are affected: obviously Britain, but also America, Japan, Canada.  It’s very important these messages get across, and I would say there is a growing sense of urgency that action needs to be taken, contingency plans need to be put in place.  And the strengthening of banks, governments and firewalls and all of those things need to take place very fast.

Asked how far the German chancellor, Angela Merkel, was the sticking point to any rescue plan for the eurozone?

PM: Well, I think the German chancellor is absolutely right that every country needs to have in place strong plans for dealing with their deficits.  Growth and austerity aren’t alternatives – you need a deficit reduction plan in order to get growth, in order to have the low interest rates that we have in Britain that are vital for the future of our economy.  But clearly, just as Britain benefits from a strong government with a strong deficit reduction plan and strong banks, but also an independent monetary policy giving us low interest rates – helping to push demand in the economy – so the eurozone, I believe, needs that approach as well.

We are living in perilous economic times. Turn on the TV news and you see the return of a crisis that never really went away. Greece on the brink; the survival of the Euro in question. Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course – but the right course. Not to dodge responsibility for dealing with a debt crisis – but to lead our country through this to better times.

My message today is that it can be done. We are well on the way in this journey.

Since we took office two years ago, we have cut the deficit by more than a quarter.
Yesterday, we had encouraging news on unemployment, too.  The number of people in work – up by 100,000 in the last quarter. And the number of new business start-ups last year was one of the highest in our history. So now more than ever this is the time to stand firm.

Let me be clear: we are moving in the right direction – not rushing the task, but judging it carefully. And that is why we must resist dangerous voices calling on us to retreat. Yes, we are doing everything we can to return this country to strong, stable economic growth. But no, we will not do that by returning to the something for nothing economics that got us into this mess.

We cannot blow the budget on more spending and more debt.

It would squander all the progress we’ve made in these last two, tough years. It would mean tough decisions lasting even longer. It would risk our future. It’s not an alternative policy, it’s a cop-out.

The Challenges 

In keeping Britain safe and building the recovery we face three challenges.

First, the struggle to recover from a long and deep recession at home.

Second, the turbulence coming from the Eurozone.

And third, the uncertainty over whether the world is on the right economic path, with debates about trade policy and how to support growth.

We need to find the right answer to all three. And our answers must be rooted in the reality of the global situation. This is not a conventional economic crisis, of the kind Britain has had to deal with in the recent past. This is a debt crisis.

Deficit reduction and growth are not alternatives. Delivering the first is vital in securing the second. If markets don’t believe you are serious about dealing with your debts, your interest rates rocket and your economy shrinks.

Britain can not cut itself off from what happens elsewhere. As our biggest trading partner, the problems in the Eurozone are affecting Britain too. As we prepare for the potential storms we should be both resolute and confident. Resolute because we will do what it takes to shelter the UK from the worst of the storms.

Outside the Euro we do have greater flexibility. We have our own currency and our own central bank with responsibility for monetary and financial stability. We have trade relationships with all parts of the world.

We invest more around the world per capita than America. And last month our trade in goods with countries outside the EU hit a new record at £13 billion. We will make the most of this flexibility to drive the strong deficit reduction programme, and secure the strong banks that will be necessary to keep interest rates low. And we should be confident because of our strengths.

Just today General Motors has given Britain and its workforce a fantastic vote of confidence by backing continued production at Ellesmere Port.  The UK Government gave this its full backing.  The unions supported the necessary changes. The workforce has responded magnificently.  It is a British success story. And General Motors are not alone.

Look across the country, at Honda in Swindon, Jaguar Land Rover in the West Midlands, Toyota in Derby and Nissan in Sunderland. Britain’s car industry is growing.

Indeed, this week our balance of trade in cars turned positive in the first quarter – for the first time since 1976 when Jim Callaghan went to the IMF. And it’s not just our car industry which is strong.  Life sciences, pharmaceuticals, information technology, aerospace, the creative industries, services.  Britain has a stronger base from which to grow. 

We have a global language. A time zone where you can trade with Asia in the morning and America in the afternoon. Some of the best universities in the world. And a government that’s committed to making Britain the best place in the world in which to start a business.

With these strengths I believe we can see Britain through the storm. But to do so we need to act at home, and together with our European and global partners.

Recovery at Home 

First, we must continue to get to grips with the deficit and build recovery at home. Let’s be clear about what we inherited: an economy built on the worst deficit since the Second World War: the most leveraged banks; the most indebted households; one of the biggest housing booms; and unsustainable levels of public spending and immigration.

With a budget deficit of over 11 per cent of GDP, one pound in every four that the last government spent was borrowed.  Britain still spends over £120 million every single day just to pay the interest on our past borrowing – and that amount will continue to increase every day until we start to live within our means as a country.

A central promise of this government – and one of the key tasks that brought the Coalition together – was to deal with this deficit. That is the only path to prosperity.

And that is exactly what we are doing. Despite headwinds from the Eurozone, we are on track.  It is a long-term project. It is painstaking work. But the tough decisions we have taken on deficit reduction really are beginning to yield real results. And there can be no deviation from this.

Those who argue we should spend more want us to borrow more, driving up our deficit and our debt and putting our hard-won credibility and low interest rates at risk.

Higher interest rates would mean higher mortgages, lower employment and even more of the money people work so hard for wasted paying the interest on our national debt.  We must not and will not let this happen.

Getting our debt under control is necessary for growth. But it’s not sufficient. Our responsible fiscal policy is being matched by active monetary policy. That’s the best way to support demand and help rebalance our economy away from debt-fuelled consumption and towards exports and investment. And the independent Bank of England is able to do more to support the economy if necessary or if inflation falls below their target.

Fiscal responsibility and monetary activism is the right macroeconomic mix for our
over-indebted economy. But the additional ingredient that government will deliver and needs to do even more of is a radical programme of microeconomic reform to make our economy more competitive -including competitive tax rates, planning reform and deregulation.

All the key things business has rightly asked for, we are delivering. Some things are absolutely essential in the short term. Companies need to invest more so we are cutting corporation tax to the lowest level in the G7.

Banks need to lend to small and medium sized businesses so we are creating the National Loan Guarantee Scheme that will provide £20bn of cheaper credit for small businesses.

Builders need to build more so we’re scrapping almost 1,000 pages of planning rules.

And those who want a home of their own need the confidence to enter the market  so we’re backing mortgages for people to get new homes, because it’s clear that there’s a massive shortage of housing in a market that’s stalled and we need to get it moving again.

Then there are things that take longer but still make a vital difference.

We need to rebalance our economy so we are supporting the new enterprises that will spread jobs and growth right across the country with 24 enterprise zones and a £2.4 billion Regional Growth Fund that’s securing 328,000 jobs.

We need to get behind the industries of the future so we’re backing the skilled, high-value industries like green technology, aerospace and life sciences in which Britain has a real comparative advantage.

We need to make it easier to take on new workers so we are reforming employment law, including tribunals.

And we need to develop the skills of our workforce which is why we’ve delivered over 450,000 new apprenticeships in the last year alone, a success welcomed today by the Public Accounts Committee.

But we need to do more, embedding high quality vocational education, which is why we are creating University Technical Colleges for 14-19 year olds.

And then there are things for the very long term. But this is a government about the long term, so we’re absolutely focused on delivering them.

We’re investing in infrastructure, building High Speed rail, finding new ways to finance roads and securing the power supplies of tomorrow.

We’re reforming welfare so that it always pays to get a job and we build a culture that that commits everyone to work, not a life on benefits.

And we’re reforming our schools so the next generation have the knowledge and ambitions to match the very best in the world.

This is our plan for growth – short, medium and long term.

But I believe that there is more that we can do. We can use the hard-won credibility of the government’s balance sheet to help the economy grow without adding even further to our debt.

Let me tell you what this means.

In many areas we are already using the credibility we have earned to pass on the benefits of low interest rates to businesses and families. We have the credit easing programme for small businesses we have mortgage help for people who want new homes and then there are the guarantees for new infrastructure projects.

I want us to go further, so I’ve asked the Treasury to examine what more we can do to boost credit for business, housing and infrastructure.

We’ve taken the tough decisions to earn those low interest rates – so let’s make sure we’re putting them to good use. Building recovery is hard work because we are not reinflating the bubble but building a new model of growth. Some people asked why we didn’t have more economy Bills in the Queen’s Speech.  If you could legislate your way to growth, obviously we would. The truth is you can’t.

You need to get in there, pick the problems apart, find the things that hold our economy back and sort them out, step by step, hour by hour.

A government resolutely committed to being on the side of enterprise, entrepreneurs, businesses large and small, wealth creation of all types and descriptions and hardworking people right across the country and that is what I am committed to delivering.

Eurozone

Just as in Britain we need to deal with the deficit and restore competitiveness, so the same is true of Europe.

This is a debt crisis. And the deficits that caused those debts have to be dealt with. But growth in much of the Eurozone has evaporated completely. Indeed without the recent German growth figures, it would be in recession.

I realise that countries inside the Eurozone may not relish advice from countries outside it – especially from countries, such as Britain, with debts and difficulties of their own.

But this affects us too. As the Governor of the Bank of England said yesterday: “the biggest risk to recovery [in the UK] stems from the difficulties facing the Euro area”.

Based on trade flows alone Britain is more than six times as exposed to the Eurozone as the United States – and that’s before you factor in the impact on confidence and our closely connected financial systems.

This Coalition Government was formed in the midst of a debt crisis in the Eurozone. Two years later and little has changed. That’s the backdrop against which we have to work. So it’s only right that we set out our views. We need to be clear about the long-term consequences of any single currency. In Britain, we have had one for centuries. When one part of the country struggles, other parts step forward to help. There is a remorseless logic to it.

A rigid system that locks down each state’s monetary flexibility yet limits fiscal transfers between them can only resolve its internal imbalances through painful and prolonged adjustment.

So in my view, three things need to happen if the single currency is to function properly.

First, the high deficit, low competitiveness countries in the periphery of the Eurozone do need to confront their problems head on. They need to continue taking difficult steps to cut their spending, increase their revenues and undergo structural reform to become competitive. The idea that high deficit countries can borrow and spend their way to recovery is a dangerous delusion.

But it is becoming increasingly clear that they are less likely to be able to sustain that necessary adjustment economically or politically unless the core of the Eurozone, including through the ECB, does more to support demand and share the burden of adjustment.

In Britain we are able to ease that adjustment through loose monetary policy and a flexible exchange rate. And we are supplementing that monetary stimulus with active interventions such as credit easing, mortgage indemnities for first time buyers and guarantees for new infrastructure projects.

So I welcome the opportunity to explore new options for such monetary activism at a European level, for example through President Hollande’s ideas for project bonds. But to rebalance your economy in a currency union at a time of global economic weakness you need more fundamental support.

Germany’s finance minister, Wolfgang Schäuble is right to recognise rising wages in his country can play a part in correcting these imbalances but monetary policy in the Eurozone must also do more.

Second, the Eurozone needs to put in place governance arrangements that create confidence for the future. And as the British Government has been arguing for a year now that means following the logic of monetary union towards solutions that deliver greater forms of collective support and collective responsibility of which Eurobonds are one possible example. Steps such as these are needed to put an end to speculation about the future of the euro.

And third, we all need to address Europe’s overall low productivity and lack of economic dynamism, which remains its Achilles Heel. Most EU member states are becoming less competitive compared to the rest of the world, not more.

The Single Market is incomplete and competition throughout Europe is too constrained. Indeed, Britain has long been arguing for a pro-business, pro-growth agenda in Europe.

That’s why ahead of the last European Council I formed an unprecedented alliance with 11 other EU leaders setting out an action plan for jobs and growth in Europe and pushing for the completion of the Single Market in Services and Digital.

The Eurozone is at a cross-roads. It either has to make-up or it is looking at a potential break-up. Either Europe has a committed, stable, successful Eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the Eurozone.

Or we are in unchartered territory which carries huge risks for everybody. As I have consistently said it is in Britain’s interest for the Eurozone to sort out its problems.

But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system.

Global Economy 

Protecting Britain’s economy is not just about the measures we take at home – or even the steps our neighbours take in Europe.

In a world that is ever more connected and ever more competitive, it is also about the steps we take with our global partners to protect ourselves against global contagion and promote global trade.

So over the coming weeks I’ll be flying to Camp David and to Los Cabos in Mexico to fight for what is right for Britain at the G8 and G20 summits.

That means committing together to make the reforms we need to our economies to get growth in the global economy working again, including involving organisations like the IMF.  It means persisting with reforms to make our banks safe, by implementing high-quality, global financial regulatory standards. It means recognising the risks to the recovery from rising and volatile energy prices and working together to ensure our energy security. And most of all it means getting together to give the world economy the one big stimulus that would really make a difference an expansion of trade freedoms, breaking down the barriers to world trade.

We all know the Doha trade round is going nowhere.  But that doesn’t mean we have to give up on free trade. Far from it.  There is good work from Doha that we can salvage. Like the measures to break down the bureaucracy over getting goods across borders. I want to see a commitment to open markets and to rolling back protectionist measures already in place.

And most importantly, I want us to move forwards with “coalitions of the willing”, so countries who want to, can forge ahead with ambitious deals of their own because we all benefit from the increased trade and investment these deals foster.

For us that means getting EU agreements finalised with India, Canada and Singapore launching negotiations with Japan and, above all, preparing to negotiate with the US – the single biggest bilateral deal that could benefit Britain.

Why is this so important?

Because the opportunities for Britain abroad have never been so big. And we need to work harder than ever before to seize them. Yes, competition for every job and every contract has increased. The last ten years has seen the extraordinary rise of powerful new economies in Latin America and Asia. And the globalisation of supply has meant new competitors making products, and more jobs going abroad. But now these countries aren’t just producers; they are consumers too.

As nations get richer they spend more money on products where Britain excels. On everything from financial services and pharmaceuticals to jet engines, music and computer games.

The globalisation of demand means new countries demanding our products, fuelling new jobs at home. If we make the most of this, there is a huge opportunity to secure a great future for our country. And that is why as we get through crisis, I believe we can look ahead with confidence.

Conclusion

I cannot predict how this crisis will end for others. And I cannot pretend that Britain will be immune from the consequences, either.  But this I can promise: that we know what needs to be done and we are doing it.

Get the deficit under control, get the foundations for recovery in place, defend the long-term interests of our country and hold our course.

As Prime Minister, I will do whatever it takes to keep Britain safe from the storm. 
  

The Prime Minister and Deputy Prime Minister are visiting a business in Essex today to talk about the economy.

The Prime Minister is expected to say:

“Two years ago our two parties came together to form a strong Coalition. We agreed that our number one priority was to keep Britain safe from the financial storm and to rescue our economy.

“That was and remains our guiding task and in these perilous times it’s more important than ever for Britain that we stick to it. I don’t hide from the scale of that challenge – or from the message sent by voters in many places in last week’s elections. I’m listening. I’m leading. I get it.  There are no closed minds, no closed doors in Downing Street.
 
“So here is the unvarnished truth. The damage done by the crisis was greater than anyone thought. The first quarter growth figures have shown a tough task getting even tougher.
 
“Abroad, the Eurozone remains in extreme trouble and is in recession. Oil prices are making life difficult for families around the world. At home, we inherited an economy built on the sands of debt, not on the rock of sustainable investment.
 
“We set out to change that and we are doing so. This means two things.
 
“First, getting our deficit under control. Yes, this means we have had to take tough decisions. The task is long and hard. You can’t borrow your way out of a debt crisis. We can’t burden our children with the costs of paying today’s bills tomorrow.
 
“Britain’s deficit was the biggest of any major economy on the planet and despite two years of firm action, it is still almost as big as a share of GDP as Greece’s.

 

“But we are making progress: under this government the deficit is falling and public sector net borrowing is down. This allowed the Bank of England to keep interest rates at 0.5 per cent. That means real security for people, right now. There can be no going back on our carefully judged strategy for restoring the public finances.
 
“That brings me to the second part of our answer. Our job is to build a recovery on real growth and investment – not debt.
 
“To build a balanced economy, in which all the sectors – business, retail, manufacturing – play a part.
 
“A diversified economy, across all sectors and regions, not one that is overly reliant on financial services and the City of London.
 
“Because our solution is not just about deficit reduction. It’s about getting the banks lending. It’s about creating the most competitive business tax regime in the developed world.
 
“It’s about helping small businesses and freeing them from the mass of unnecessary bureaucracy that too often stifles enterprise and entrepreneurship. It’s about helping people onto the housing ladder, and reforming the planning system to allow for much needed new development.
 
“It’s about supporting business investment, whether through the Regional Growth Fund, the Growing Places Fund, the Enterprise Zones or the world’s first Green Investment Bank. It’s about cutting income tax for hard working, hard pressed families and taking two million low paid workers out of tax altogether.
 
“It’s about reforming and simplifying our benefits system to ensure that work really does pay. It’s about helping people back into the labour market by offering apprenticeships, work experience opportunities and wage subsidies, all part of the Work Programme and the Youth Contract.
 
“It’s about investing in skills, driving up standards in our schools, creating academies, Free Schools and our new University Technical Colleges. It’s about all these things and more.
 
“I know that the task of getting driving our economy forward when faced with the headwinds that are blowing in from the Eurozone is a formidable one.
 
“But the Government is determined to do whatever needs doing to succeed.
 
“We’ve got to sort out our debts…get real growth…and change this country so that once again it rewards people who work hard, want to get on and play by the rules.
 
“And that’s what I am here to do.”

The Deputy Prime Minister is expected to say:

“As the Prime Minister said, the Coalition is now two years old. Recent weeks have seen disappointing news on the economy. Both parties in the Government took a hit in the local elections. And it is only right that we now take stock.

“Our parties came together to rescue, repair and reform our economy. We’ve taken difficult and decisive action to keep the country safe in the immediate future. But we must never lose sight of why we are doing this; what we are trying to achieve; and where we can do more to get it right.
 
“First: we have to remember our economy has undergone a massive trauma, the depth and nature of which we are only beginning to fully grasp.
 
“2008 was like a giant heart attack. The banking sector blew up. The housing bubble burst. People – and government – had astronomical debts they suddenly couldn’t afford. And you cannot recover from that overnight. Our task is nothing short of rebuilding a new economy out of the rubble of the old and that is going to take time.
 
“Second: we don’t just have economic responsibilities here, but a clear moral responsibility too. We have been living under the shadow of debt, against a backdrop of cuts, for two years now. Imagine living like that for years and years with no end in sight. Imagine if, instead of taking the difficult decisions now we left them for our children to take.
 
“Ducking the tough choices would only prolong the pain condemning the next generation to decades of higher interest rates, poorer public services and fewer jobs.
 
“We are taking the tough choices not because we want to, but because we have to – any government would have to do the same.
 
“And when our critics say that we are driven by some sort of ideological obsession with shrinking the state that is plain nonsense.
 
“By the end of this parliament we’ll still be spending over £730 billion . That’s around 42 per cent  of GDP – more than any year between 1995 and the collapse of the banks in 2008.
 
“Finally, third: we must never forget that tackling the deficit is a means to an end and the end we all seek is growth.
 
“Our goal isn’t balancing the books for the sake of it, but doing so to meet our real aim: jobs; businesses investing; entrepreneurs getting off the ground. There isn’t a single button  Government can press to deliver that but I am the first to admit: there’s more we need to do.
 
“And there are two areas I want to single out where you will now see a renewed sense of urgency from Government – a redoubling of our efforts.
 
“One is getting finance flowing to businesses – crucial for growth today.
 
“We’ve already done a significant amount:
 
“Project Merlin: where we secured around £215bn of bank lending for businesses.
 
“Our £20bn national loan guarantee scheme.
 
“Last month I announced a variety of alternative sources of finance so that cash-strapped firms aren’t solely reliant on the big banks.
 
“But the problem is enormous. Too many good British businesses are still telling me they cannot get loans. So I’m determined that we do everything to get the balance right:
 
“Helping the banks recover their strength for the future but not at the cost of lending to good businesses today.
 
“The other area is infrastructure – so roads, rail, broadband, our energy networks. Investments that underpin a stronger economy for the years ahead while creating the jobs that young people need now.
 
“Again, we’ve taken some big steps; prioritising major projects and setting up the world’s first national green investment bank to give you just a few examples.
 
“But this part of our economy was neglected for years and more will need to be done to secure the levels of private investment necessary to get UK infrastructure up to scratch.
 
“So this is where I want Whitehall directing its energies, getting projects delivered as well as scouring every possible source of private funding – leaving no stone unturned. I hope that gives you a sense of our priorities. Think of today as a kind of statement of intent.
 
“Two years in and building the new economy remains the Coalition’s biggest challenge and while the deficit is part of that – it is only a means to an end. This Government is galvanised around growth. We owe it to the next generation to get it right.”

“There are huge challenges facing governments across the world today, and one of the most important of all is how we meet our growing energy demands in a way that protects our planet for our children and grandchildren.

This needs urgent attention and real global leadership.

So I’m delighted that London is hosting this Summit.

And that all of you have been able to join us.

We should be clear that growing demand for energy across the world is a good thing.

It’s a sign of people getting wealthier. It’s the result of millions in China and India owning cars and millions of families in Africa having access to power for the first time.

But with global demand forecast to increase by more than 40 per cent in the next two decades – we urgently need a more diverse, cleaner mix of energy sources that will give us energy security without causing irreparable damage to the planet.

Of course, nuclear energy, cleaner coal, oil and gas including shale gas and carbon capture and storage will all have an important role to play.

But I passionately believe that the rapid growth of renewable energy is also vital to our future. What unites us here today is that we not only share a principled commitment to renewables but that we have also been prepared to make the up-front investments in infrastructure needed to make wind, solar and bio-energy a viable option for the first time.

Whether hydroelectric power in Scandinavia, bio-energy in South America, electric vehicles in North America or onshore wind in China – so much has been achieved and there is so much for us to learn from each other.

As a result, renewables are now the fastest growing energy source on the planet.

And I am proud that Britain has played a leading role at the forefront of this green energy revolution.

When I became Prime Minister, I said that Britain would have the greenest government ever.

And that is exactly what we have.

Today, we are one of the best places for green energy, for green electricity, for green investment and crucially for green jobs anywhere in the world.

We have the world’s first payments to business for generating renewable heat.

The world’s first dedicated green investment bank.

A pioneering Carbon Capture and Storage Programme.

The largest offshore wind market in the world. And in the City of London, the world’s No1 financial centre for low carbon industries.

We are putting energy efficiency where it should be, at the heart of our energy policy – including by introducing our flagship Green Deal programme.

And we are getting to grips with our electricity market, making the long term reforms necessary to attract investment into a balanced portfolio of new nuclear, gas, clean coal and renewable generation.

As a result Britain has gone from virtually no capacity for renewables, to seeing them provide almost 10 per cent of our total electricity needs last year. 

And we’ve added more capacity for renewables in the last two years than at any time in the last decade.

This deliberate investment in renewable energy isn’t just good for our environment.

It’s good for our business too.

In the last year alone we’ve seen announcements of £4.7 billion of investment in UK renewables supporting 15,000 new jobs including plans for several major new factories around our coast to help build the equipment and infrastructure needed for the next generation of offshore wind and marine energy.

And just today six companies are announcing major progress on biomass and wind projects in the UK representing hundreds of millions of pounds of investment, more than a thousand megawatts of new capacity and as many as 800 jobs during the peak of construction in the next few years.

Our commitment and investment in renewable energy has helped to make renewable energy possible.

Now we have a different challenge. We need to make it financially sustainable.

For that to happen, we need to do three things.

First, we need to get costs down.

At a time when higher gas prices are leaving families and businesses struggling with their energy bills and when we are fighting to get to grips with our debts; we don’t just need greener energy – we need cheaper energy too.

Today renewable energy is still relatively expensive.

But government and industry are together proving that we can get costs down quickly.

Already, solar costs have halved in two years. Onshore wind costs are falling too. And we are this week stepping up our efforts with industry to bring down the cost of offshore wind.

As those costs fall so it is right that consumers should pay less in subsidies for new projects.

Let me be absolutely clear.

When we have a made a commitment to a project we will always honour it in full. And we will be every bit as focused on giving companies in the supply chain the clarity and certainty they need to continue to invest with confidence.

But we can get these costs down further.

I really believe that more mature renewable technologies can be among our cheapest energy sources within years, not decades.

That’s good for consumers. Good for our economy and good for our environment.

And our job is to help bring that about.

Second, we need to make renewable energy a viable proposition globally.

That means developing a proper global carbon price so that different energy sources can compete on a level playing field.

And ensuring the EU leads the development of carbon pricing in a way that maintains the competitiveness of industry is a real priority for me.

But it also means developing the framework for international trade in renewables so it becomes a truly global business.

Trade is vital because renewable energy resources are unevenly distributed around the world.

For example, Britain has the biggest generating potential for offshore renewables in Europe.

We need a way of getting this power to where the demand is.

So trading is something Britain is determined to lead.

We are driving a European-wide initiative to link our energy grids.

Just this week we are signing new collaboration agreements with Korea and the US to exchange research and work together on investments.

And we are announcing today a call for evidence on how the UK could increase its trade in renewables.

Third and finally, we each need to focus our investment in renewables in the areas where we are best placed do so.

For Britain, one of the biggest opportunities is in the North Sea.

Since the 1960s, North Sea oil and gas has given Britain – and many of our neighbours – a real competitive advantage.

This came about because of the ingenuity of the private sector together with strong pro-active support from government.

Today, that same partnership between government and business has the potential to make North Sea once again a source of investment and comparative advantage.

This remarkable European energy asset has the potential to lead the world in offshore wind and carbon capture and storage with whole new supply chains to deliver the enormous amounts of capital required.
 
And I am delighted that more than 20 companies are today announcing their commitment to the long term vision of a second renewable energy revolution in the North Sea.

If we can do these three things – get the costs down, make renewable energy a global business and continue to invest up front in the crucial infrastructure needed then we really can secure the future of renewables, alongside other energy sources, as a vital part of our energy supply.

And with it we can help to create jobs, growth and – in the words of the United Nations Secretary General – sustainable energy for all.”

Today, we can see, in your country, that there are changes taking place, reforms taking place, that I know you welcome, and that we welcome. And that is one of the reasons I wanted to come today, because we care about what happens in your country. It is an incredibly beautiful country with extraordinary people. It shouldn’t be as poor as it is. It shouldn’t have suffered under dictatorship for as long as it has, and things don’t have to be that way. And there is the real prospect of change. I’m very much committed to working with you and trying to help make sure that your country makes those changes.

I met with President Thein Sein today. And I think there are prospects for change in Burma, and I think it is right for the rest of the world to respond to those changes. Of course, we must respond with caution, with care. We must always be sceptical and questioning, because we want to know those changes are irreversible. But, as we’ve discussed, I think it is right to suspend the sanctions that there are against Burma – to suspend them, not to lift them, and obviously not to include the arms embargo. Because I do think it’s important to send a signal that we want to help see the changes that can bring the growth of freedom, of human rights and democracy in your country.

Clearly, there are still so many things that need to happen. It is good that some political prisoners have been released, but we want to see more political prisoners released. It is good that you have had the by-elections – and many congratulations on your successful elections – but clearly we all look forward to the general election in 2015. It is good that there has been some progress with the terrible ethnic conflicts that have harmed this country for so many years; but clearly we need to see a real political solution to those conflicts in the months and the years to come.

Let me just end again by saying what an inspiration it is to have followed your struggle, to have watched your incredible courage and the light that you have shone to all those around the world who want to see freedom, democracy and greater human rights. What’s happening here in Burma, I believe, shows that these things can happen, and they can happen in a peaceful way; and that is something we should be hugely encouraged by. Burma not only needs political progress, but it desperately needs economic progress and greater wealth too. It is a tragedy that one in three children in this country is malnourished, and that there is so much poverty. And I’m committed that Britain should do what it can to help not only with political progress, but also development and economic progress too.

But thank you again for giving me such a warm welcome today – it is an honour to stand by your side.

AUNG SAN SUU KYI
Thank you. It’s a great pleasure to have Prime Minister Cameron here at this time, because I think this is the right time – absolutely the right time – for him to come. As you all know, we’ve just had by-elections, and this means a step closer towards democracy. We still have a long way to go, but we believe that we can get there. I believe that President Thein Sein is genuine about democratic reforms, and I’m very happy that Prime Minister Cameron thinks that the suspension of sanctions is the right way to respond to this.

I support the suspension rather than the lifting of sanctions, because this would be an acknowledgment of the rule of the President and other reformers. This suspension would have taken place because of the steps taken by the President and other reformers, and it would also make it quite clear to those who are against reform that, should they try to obstruct the way of the reformers, then sanctions could come back. So this would strengthen the hand of the reformers – not just the suspension, but the fact that there is always a possibility of sanctions coming back again if the reformers are not allowed to proceed smoothly.

We in Burma have always appreciated the help that friends have given us over these last decades, especially Britain and other very close friends. They have always understood our need for democracy, our desire to take our place in the world, and the aspirations of our people. And we have always shared in the belief that what is necessary for Burma is an end to all ethnic conflict; respect for human rights, which would include the release of political prisoners; and the kind of development aid which will help to empower our people and take our country further towards the road to genuine democracy.

I’m very, very happy to be able to welcome all of you – not just the Prime Minister, but all of you who are here today – to Burma, and as this is the time of the water festival, it will give you a good opportunity to wash away all your sins, should you have any – perhaps you don’t have any – and to get yourself nice and pure and happy for the New Year that will be coming on 17th April. That is the first day of the Burmese New Year – 1374. And I very much hope that this is a year which will not only bring happiness to the people of Burma, democracy to our country, but also closer and better friendship between our countries. Thank you.

QUESTION
Even by suspending sanctions, is there not a risk that that removes the pressure on the government to reform? They may simply feel they’ve done enough.

PRIME MINISTER
I don’t believe that’s the case. Clearly we have to be cautious; we have to be careful; we have to be questioning; we want to know that the reform process is irreversible. But I think it’s right, when President Thein Sein has made these steps, it’s right for the world to respond. I think suspension is the right step, rather than lifting sanctions, because it will strengthen, as Daw Aung San Suu Kyi has said, it will strengthen his hand in arguing it’s necessary to keep reforming. All courses of action are full of risk, but I think this is the right step forward for those of us who want to see further progress towards democracy and freedom and rights here in Burma.

And let’s not forget how far things have come. We’re standing in a house where you were, for decades, under house arrest. You’re sitting in a garden where you were barely allowed to walk or to stand.

AUNG SAN SUU KYI
It used to be a jungle anyway, you couldn’t have stood there!

PRIME MINISTER
And only three years ago, you were threatened with prison. So things have come some way; we want them to go much further, but we agree this is the right response today.

QUESTION
We have experienced disappointment before. Why do you both think that this time it is different – that this time, the regime is indeed prepared to give away power?

AUNG SAN SUU KYI
Could I say that what we experienced before was never disappointment but setbacks? We were prepared for all eventualities when we started out on the road to democracy, and we have had setbacks, but I can’t say that we were disappointed. Those were not what we would have wanted, but we were always prepared to keep going forward, and because we were prepared to keep going forward and prepared to take calculated risks, we are where we are now. And in order to proceed further, we must keep on taking calculated risks where necessary, which is why I agree with Prime Minister Cameron that suspension of sanctions is the right thing to do. In any case we are determined to succeed, so please let’s not talk about disappointments.

QUESTION
To Aung San Suu Kyi: the Prime Minister has been talking about Burma as a bright spark, an example, a beacon; do you think he’s right to pile such weight of expectation on yourself and on your country? And Prime Minister, could I just ask you: why do you think that the military is going down this route of reform? You can see economically why they might, but politically they’re just heading towards a wipe-out in 2015.

AUNG SAN SUU KYI
I think the world loves a happy ending, and I don’t at all mind that Prime Minister Cameron would like to see a happy ending to the democracy story in Burma. We will work towards that; we would certainly not like to disappoint our friends.

PRIME MINISTER
I think we should be optimistic, but cautiously and carefully optimistic. I can’t speak for why the regime is acting in the way that it is, but I think it’s clear, when you look at Burma’s neighbours, you can see economies that are growing more quickly. You can see poverty that is being tackled more effectively. You’re seeing in other countries – including those I’ve visited this week – democracy going hand-in-hand with greater economic success and growth. And I just hope that the moves that are being made by this regime – and remember, they have released political prisoners, they have loosened some of the practices on censorship, they are trying to deal with some of the ethnic conflicts. They haven’t done enough – there’s much more that they need to do and we will keep that pressure on. That is why suspending sanctions rather than lifting sanctions is the right answer.

But I think it’s right to take this step. If we really want to see the chance of greater freedom and democracy in Burma, we should respond when they take action and if they keep moving the ship of economic reform forward and the ship of political reform forward then we should be prepared to respond. That is the right thing to do. It may be a bold thing to do but for the sake of a country that has been crying out for freedom after decades of dictatorship and that is crying out for a stronger economy after so much grinding poverty, it must be worth taking that risk and taking that step.

QUESTION
May I ask Aung San Suu Kyi – you said not to talk about disappointment but you also talked about those who would like to stop the move to democracy. What is their strength, do you think? Presumably they are mostly in the military. What is their strength and what do you think would make them change their minds or hold – stay their hands?

AUNG SAN SUU KYI
I don’t know what their strength is but certainly it does not in any way match up with the strength of the people who want democracy. If you were here during the two months before the election, the by-elections, you would have noticed how keen the people of Burma are on taking the fate of the country into their own hands and I don’t think the strength of those who do not want democracy could compare in any way with the strength of the people’s desire for democracy. This is why I’m optimistic but cautiously. I’ve always said I’m a cautious optimist – that’s in my nature – so although we are on one hand cautiously optimistic, on the other hand we are determined to make sure that the will of the people should prevail.

PRIME MINISTER
They were remarkable election results. We were joking earlier that when democracy becomes more embedded you can’t expect to win 45 by-elections in a row – this has not been my experience. But it was a stunning result and shows the strength of feeling there is for democracy and progress in this country.

QUESTION
Daw Aung San Suu Kyi – can I ask you? You’ve written that one of the ways in which your father showed constant courage was that he parlayed with the enemy. Do you believe that you’re parlaying with the enemy? And another thing you’ve written about is how you want to create a revolution of the spirit. Are you embarking on a journey that shows that revolution of the spirit that you wrote about?

AUNG SAN SUU KYI
I believe in progress. My father parlayed with the enemy. I would like to think that I am parlaying with the people who are no longer our enemies and that would be progress. And with regard to the revolution of the spirit, I think I can only repeat again what I just said later that if you had been here just before the elections, you would have seen that there was a revolution of the spirit taking place among the people of Burma. People who had been so cowed just two years ago had decided that they were going to assert themselves and that they were going to be the ones who decided how this nation was going to be run.

PRIME MINISTER
I think  there is one other element of progress that I hope we can move forward on today and that is this: for many years Daw Aung San Suu Kyi was allowed – if she wanted to – to leave this country. You wrote that they would roll out the red carpet all the way to the aeroplane and put you onto it but never let you return. I hope that today – and I have invited Daw Suu today to come to London in June and to come to the United Kingdom in June, to also see your beloved Oxford. And that I think is a sign – if we are able to do this – of huge progress, that you will be able to leave your country to return to your country and to continue your work as a member of parliament.

AUNG SAN SUU KYI
Well yes, two years ago I would have said, ‘Thank you for the invitation but sorry’ but now I am able to say, ‘Well, perhaps’ – and that’s great progress.

QUESTION
I’ve got a question for Daw Aung San Suu Kyi. Can I ask the chances of your attending the parliament?

AUNG SAN SUU KYI
I’m afraid I can’t tell you that yet because we’re working on the technicalities.

QUESTION
What if they refused to change the voting, what would you decide?

AUNG SAN SUU KYI
I don’t think I would like to take such a pessimistic view of the government’s desire for democratic change.

QUESTION
Is there a Plan B?

AUNG SAN SUU KYI
Well I won’t even talk to you about my Plan A let alone my Plan B!

QUESTION
Mr Prime Minister, you mention about suspension of the sanctions except arms embargo. Can you tell us more specifics? What types of sanctions you are thinking especially to be lifted by the European Union? And what are the specific benchmarks or markers that have to be met before sanctions to be ended? Thank you.

PRIME MINISTER
The argument that we will be making with our European Union colleagues is that when the sanctions come up for ending in April that we should instead of lifting them entirely, we should suspend them, so make sure they are still capable of being put back in place, but they should be suspended. And this sanction suspension should cover everything apart from the arms embargo. I think this will give the greatest level of certainty and clarity. It will show to the regime that we respect and welcome the progress that has been made on political prisoners, on political freedom, but it is suspension not lifting and so if this progress is not irreversible then sanctions could be re-imposed.

But this sanction – let me be clear – this covers everything apart from the arms embargo and any other specific measures that Britain itself would have put in place in terms of discouragement. So I think this is a very clear message, but let me be absolutely clear: we know there is still much, much more that needs to be done. As the President himself has acknowledged, there are more changes that need to be made. We are not starry-eyed or credulous about this, we know what a long road needs to be travelled between now and 2015 but the right thing to do for the world is to encourage this change and to believe in the possibility of peaceful progress towards democracy.

QUESTION
Just in terms of time frame, you are thinking around 23rd April?

PRIME MINISTER
This should happen in April if everything goes to plan.

QUESTION
Mr Prime Minister, what are your views on the Chinese influence on the Myanmar and Asia and how important is Myanmar’s position in the Asian geo-politics?

PRIME MINISTER
I think the extraordinary thing about your country is this is, in many ways, the crossroads of Asia. It is a beautiful country, a country endowed with enormous advantages and wealth and resources and it shouldn’t be a country as poor as it is today. And I think there are huge opportunities for cooperation and trade and working with your neighbours and with countries further away like my own. So I am hugely optimistic if we can make these political changes that Burma can have a very bright economic future. There’s no reason why your country shouldn’t be growing and succeeding in the way that other neighbouring countries have done. And as for the relationship with China, that is always going to be a matter for your country and for your politicians, but I think it’s in everyone’s interests that we see a China that is growing and succeeding as part of the world economy. Shall we have one last question?

QUESTION
I have two questions. The first one is for David Cameron. I hear that you are adding to the aid package for helping Myanmar people – yes? Is right?

PRIME MINISTER
Yes, Britain is the largest bi-lateral aid donor to Burma. We’re very proud of that. That money does not go to the government, that is money that goes in humanitarian aid via non-governmental organisations and in other ways to help feed people, to help improve maternal health, to help vaccinate children, to try and make sure that there is a better quality of life and as the… your country develops and as sanctions are suspended there will be further opportunities to make sure our aid is not only helping to save lives as it does today in a country with high childhood mortality but also to make sure it helps enhance the capacity of the country to have [indistinct]… to tackle problems such as corruption and the rule of law and the honest delivery of politics.

So we are committed to Burma. We are a friend of Burma. We want to see your country succeed. We think there is immense potential. We think you have struggled and suffered for too long under dictatorship, that you deserve the dignity, the freedom, the choice, the democracy and that economic progress can bring and we want to be your partners in helping you to achieve that.

AUNG SAN SUU KYI
[Burmese] I think we are going to bring this press conference to an end because all those who have said that they were going to ask questions have already asked their questions so thank you very much.

PRIME MINISTER
Thank you very much, thank you.

Good afternoon, I would very much like to welcome the Prime Minister of the UK, the Right Honourable David Cameron, distinguished guests, ladies and gentlemen. When Prime Minister David Cameron called me a few weeks ago, one of the first things he said to me was, ‘I’d like to share the same platform with you on the Global Movement of the Moderates’. And today he’s keeping his promise, and we’re here today to share the same platform to talk about the Global Movement of the Moderates.

I’m really delighted that Prime Minster David Cameron decided to visit Malaysia and visit the Nottingham Campus. It’s of course my alma mater. I went to Malvern and Nottingham. Prime Minister David Cameron did a lot worse: he went to Eton and Oxford. And today we’re going to talk about the Global Movement of the Moderates, but before we go to the subject of Global Movement of the Moderates, I’d just like to make a remark about how much we have in common within our countries. We drive on the left side – or the wrong side – of the road and we continue to do so.

We have the same legal system; we have the Westminster. We have a parliamentary democracy. It’s actually a Westminster type of democracy. Of course, they have moved on. They’ve decided on a fixed term of tenure of five years. But we’ve still stuck to the old system. So I have the liberty of deciding when the next general election should be, which may or may not work for me or against me – it remains to be seen. But we have so much in common. Of course, football is a great thing in Malaysia and I told David Cameron in the car that the best place in the world to watch English football is right here in Malaysia. People are passionate about football; I’m a passionate supporter of Manchester United. I think I’ve struck the right chord. I wouldn’t embarrass David with the team he supports, Aston Villa, but I think Manchester United will meet Aston Villa again in the next few days, so we will see what happens then.

We have a lot of things here. We understand some of the things like British brands here: Rolls Royce, even Marks & Spencer is here. When I described Marks & Spencer as Marks & Sparks, some Malaysians thought I made a mistake. But actually Marks & Sparks to the Brits is Marks & Sparks, to the Malaysians it’s Marks & Spencer.

British humour is well appreciated here, Prime Minister, if you’d like to know. Personally, one of my favourite programmes is, of course, Yes, Minister and Yes, Prime Minister. Some very quotable quotes. I remember one of the earlier episodes when Minister Hacker came into the office and Bernard said ‘Sir, we’ll take care of your letters’. ‘As in what way?’ ‘Well, we will reply either, ‘we will look into it’ or ‘we will seriously look into it’’. So in a rather baffled manner he quizzed Bernard and said, ‘What’s the difference?’ ‘Well, sir, when we say we will look into your letter it means we have lost your letter. When we say, ‘We will seriously look into it’, it means we are looking for your letter.’ So that has stuck with me in terms of how to deal with bureaucracy.

I’m very fond of this rather wry humour. When a good friend of mine – in my previous life – took me to this wonderful club in London called ‘White’s’, and of course I did ask him whether I would be allowed in the club. We had this wonderful lunch and after lunch we adjourned to this room to have coffee. In this room I saw a few elderly looking gentlemen slumped in their chairs, ostensibly looking and reading newspapers. So I said to my friend, Lord Cranborne, ‘How do you know whether they are still alive?’ And he said, without missing a beat, ‘Very easy, just look at the date of the newspaper’.

So, Prime Minister, you are in good company here. We understand British humour; we understand how the British mind works. I’m delighted that you’re here putting right what has been missing in our bilateral relations, which is a long hiatus. The previous visit by a UK Prime Minister took place almost 19 years ago. So David Cameron has put it right, and from now on we see a strong resurgence in UK British relations. Thank you very much for your presence and support.

Touching on the Global Movement of the Moderates, there is something which is important to us because I made a couple of very, very poignant, very, strong points in my speech in Oxford. I said,‘You know the four young men who came from Yorkshire and decided to bomb the London Underground, they were wrong. They were people who were misconceived in their ideas because they thought they were doing something right for Islam. They were doing a wrong, very sinful deed because Islam is against killing yourself, first of all. That is un-Islamic; it’s totally unacceptable.’ I believe that I am one of the few Muslim leaders who have said it – and put it on record – that Islam is against suicide killing. Secondly, Islam is against killing of the innocent. So bombing civilians is totally unacceptable in Islam; as you know, even in conflict or war, you are not allowed to kill innocent civilians.

]]> http://www.number10.gov.uk/news/transcript-speech-at-the-university-of-nottingham-malaysia/feed/ 0 http://www.number10.gov.uk/news/transcript-business-speech-in-malaysia/ http://www.number10.gov.uk/news/transcript-business-speech-in-malaysia/#comments Thu, 12 Apr 2012 17:00:08 +0000 zingraham http://www.number10.gov.uk/?post_type=news&p=79752 PRIME MINISTER

Thank you very much for that introduction.  Ladies and gentlemen, thank you for such a warm welcome this evening and for laying on this great dinner.

It is great to be amongst so many prominent business leaders.  I am very proud to have brought the strongest business delegation from Britain that has ever visited this region.  I hope that tonight there will be many conversations that lead to many partnerships, many investments, much trade and much business done.

I know an extraordinary amount of effort has gone into preparing for tonight: the logistics, the seating plans, the timetable, the photographs, not to mention of course the extensive arrangements for security.  It has been an eagerly awaited, and much anticipated visit.  I hope that you all feel it has been worth the effort.

It is great to see, not only, so many football premiership supporters here but even some premiership club owners. 

My visit to Malaysia is frankly one of the most important visits I have made since becoming Prime Minister.  Why?  Because Malaysia is a great friend of Britain.  Just like PM Najib, and Dato’ Sri Nazir, over 13,000 Malaysian students now come to study in the UK every year.  Around 40,000 study for UK qualifications.

Over the last decade, dozens of major Malaysian investment projects have created hundreds of new British jobs.  Malaysians today own major British companies – including those football clubs, but also including everything from regulated utilities like Wessex Water, to many other of our key businesses. 

Yet in recent years, Britain has been guilty of what your Prime Minister quite rightly described as an era of benign neglect.  Frankly, I think it is wrong that it has taken almost twenty years for a British prime minister to return to Malaysia, and to speak here tonight.  I was determined to put that right, and I want to say something very simple and very straightforward: the era of benign neglect is over.  Britain is back – back open for business, and open for business with you.

I want to say a word about our common interests on trade and on global security.  First, business: Southeast Asia is the fastest growing region in the world.  Already the ASEAN region has become the equivalent of the eighth largest economy in the world, with a GDP of more than two trillion US dollars.  While Malaysia, one of its most open economies, has growth rates of five per cent a year.  The future is right here in this room, and we can do so much more to make the most of it. 

Today, while we are a big investor into Malaysia, our share of imports is barely more than one per cent.  I am determined to change this.  Since coming into office two years ago, the British Government has been absolutely focused on one thing above all else, and that is reopening Britain for business.  That means dealing with our debts and securing the long-term stability and low interest rates that investors need to have confidence in the strength of the British economy.  It means increasing our competitiveness. 

We are cutting corporation tax to the lowest level in the G7; we are driving down regulation; we have cut the top rate of income tax; and we are also refocusing our energies on strengthening and deepening our trade and investment relationships around the world.  That is why we have such a high powered trade delegation.  That is why we have set up the UK ASEAN Business Council, which is a perfect partner for our hosts this evening, the ASEAN Business Club.  It is why we are hosting a series of global business summits to be held during the Olympics and the Paralympic Games, to showcase the best of what the UK has to offer in our most successful industries: fashion, architecture, technology, aerospace.

I hope that you will all come and visit during the Olympics.   There will be many great events to come and see, but also many investment opportunities.  So I say, come and join them.

I am passionate about what Britain can offer: we have a time zone where you can trade with Asia in the morning and America in the afternoon; we have the English language, the international language of business; the easiest access to the European market; and we have some of the best universities in the world, made all the stronger by the brilliant students from Southeast Asia who come and study at them. 

We have the products and the services that you need.  If you want cars, we have Nissans made in Sunderland, Minis made in Birmingham, Bentleys made in Crewe; all products of the British industry that made 16 of the 24 cars that competed in the Malaysian Grand Prix last month.  If you want modern medicines, we have the world-leading pharmaceutical companies that make them.  If you want a holiday, then why not come to Britain where Malaysians get free visa access.  While you’re at it, you can fly to London on the wings of an airbus plane, where the wings are designed in Bristol, and it is powered by a Rolls Royce engine that is assembled in Derby. 

As a first step, I have been delighted to announce a number of new deals on my visit today: AECOM and Western Williamson providing new rail infrastructure to Malaysia; Lifesaver supplying world-beating water purification technology; and Shell building on its 30-year £1 billion oil recovery projects, with Petronas, with a new £100 million commitment to oil and gas exploration. 

It is not all in one direction.  The Malaysian company Infovalley are investing up to £10 million in the UK on bioinformatics technology.  I hope that this is just the beginning.  We have set a target of doubling our trade by 2016, and I know that with your help we can do it. 

I am not just here out of economic self-interest.  There is something else that is just as important, and that is our shared political agenda.  As Southeast Asia stands up in the world, so it has a growing interest and influence over global issues.  Countries in this region must use their new prosperity to continue to improve the wellbeing of their citizens, but they should also use their growing political clout to be part of the solution to insecurity wherever it emerges and not just as an onlooker.  So, I am here also to work with you as a partner and a major player in international politics, to encourage you to speak out and stand up on the interests that we share. 

The Global Movement of Moderates is an excellent example of one way in which Malaysia is doing just that.  It gives the lie to the idea that Islam and democracy are somehow at odds with each other.  It shows that you can be politically moderate and take a stand against the evils of extremism while being religiously devout, strong-willed and passionate about your faith. 

This is the same vision that is today inspiring brave and courageous people across the Arab world and beyond, to stand up for their rights and their responsibilities as citizens.  It is the same vision that is inspiring young Muslims all across the world to choose democracy as their future.  As I said at the Nottingham University campus today, inspiring young Muslim men and women with a vision of democracy, freedom and economic growth that you have here in Malaysia, that we have next door in Indonesia, is the biggest defeat we can inflict on Al-Qaeda.  It is the thing that they fear the most. 

Yesterday saw the coronation of His Majesty Agong Tuanku Abdul Halim, and we congratulate all Malaysians on this very special occasion.  Like Prime Minister Najib, Tuanku is a graduate of one of Britain’s great universities, and I am delighted that we will now double the number of Chevening scholarships for Malaysian students with the support from BAE Systems. 

We have a great history together.  I am here to make sure we have a great future too.  I hope that as we turn the page from the era of benign neglect, my visit can signal the start of a new relationship between our countries, and more generally between Britain and Southeast Asia.  Let us take our inspiration from the great Malaysian proverb, forgive me in advance for my pronunciation, ‘Bagaikan aur dengan tebing’ – ‘Like the bamboo and the riverbank, inseparable’. 

Let us please raise our glasses to the Agong, to the Prime Minister, to the people of Malaysia and to a new era of relations between Southeast Asia and Great Britain.  To a new era of relations, to your good health, thank you.