Press briefing from the Prime Minister’s Official Spokesman on: Pensions and Iran
Pensions
Put that Adair Turner, former Director-General of the CBI, had told the BBC that it was completely untrue to suggest that publicly or privately, he was responsible for any lobbying that took place in 1997, yet Ed Balls said the opposite on Saturday and the CBI had lobbied the Government, the Prime Minister’s Official Spokesman (PMOS) said that what was more important was to focus on the actual substance of this issue. This was a decision about getting the balance right between incentivising investment versus paying out dividends. It was a tough decision, but the Prime Minister fully backed the Chancellor’s decision at the time, and he still did because it believed that it was in the long-term health of the economy, as it was for long term interest of the economy, including pension funds, to increase investment. As the Treasury had pointed out, this decision was part of an overall package, which included cuts in corporation tax, which had 50% increase in investment over the last ten years. Corporation tax had been cut from 33% to 31%, the small business rate from 23% to 21%. Temporary capital allowances for SMEs had been doubled. The reduction of corporation tax had benefitted 450,000 companies. Therefore, there was an overall package within which this was one part.
Put that if those arguments were so strong, why didn’t Ed Balls repeat them, the PMOS replied that the broader argument had to be about whether it was right to continue with a system which distorted the investment market. The Chancellor took a tough decision at the time that that was correct. The Prime Minister fully backed him on that.
Put that the CBI clearly believed that they had been misrepresented, and were we going to apologise to them, the PMOS said that in terms of the CBI, it was better that the Treasury dealt with that side of things. With regards to the substance of the argument, which is where we should be, there had been a 50% increase in investment over the last 10 years. We believed that this decision had been right, because it had played a part in that increase in investment. That increase in investment did feed into pension funds. We recognised that because of the other world-wide problems there had been with pension funds, the market value overall of occupational pension schemes fell between 1999 and 2002 by £250 billion, but that was mainly due to the fall in the stock market. We had to take account of that, because this was a world-wide phenomenon, not just a UK one.
Put that the CBI was taking issue over this because of the way their views were being misrepresented, the PMOS said that in terms of the overall argument, which was what the public were interested in, it was much more important to understand the reasons for the decision, and why the Prime Minister believed the decision was right at the time.
Put that Derek Scott had revealed that the Chancellor in 1997 wanted to cut £8 billion a year, not £5 billion from pension funds, and that there was a row about it all, and the Chancellor had backed down, and did we recognise any of that account, the PMOS said that not giving a running commentary was retrospective, as well as current, and it was not right to give a retrospective running commentary.
Iran
Asked what actions the Government was going to take this week on the Iran hostages, the PMOS replied that the Iranians knew our position. They knew that stage-managed TV appearances were not going to affect that position. They knew that we had strong international support, and we had responded to the Iranians initial letter, and we were now waiting for their response. There was a lot going on behind the scenes, but as people knew, it was better not to discuss this in any way. We remained very clear in our position and what our objective was, and we would judge our response day to day accordingly. At this stage, it was better that we waited to see what the Iranian response was.
Put that there was a holiday in Iran, and what would the next stages be, and what were we looking for now from the rest of the world, the PMOS said that there was a holiday in Iran, and it did impact a bit on the situation. At this stage, it was better to wait and see what the Iranian response was, and that meant that there was not much the PMOS could tell people that was new.
Asked if the UK Government had made a specific proposal for resolving the issue in the letter, the PMOS said that it was not useful for him to get into any details. It was better that people knew clearly where our position was, and whatever was shown on television screens coming out of Iran was not going to affect that position. What matters was how the Iranians responded next.
Asked for further information on Des Browne’s direct negotiations, the PMOS said that not only would he not use the word “negotiations”, but also, in terms of discussions behind the scenes, it was better that he did not get into details.
Put that the PMOS did not contradict a journalist for using the word “hostages”, and did we now regard the captured sailors as hostages, the PMOS said that again, what we did not want to get into was discussing particular words. What was important was that we achieved the objective, which was to get the 15 people back, and that we did that by increasing the international awareness and pressure on Iran to do the right thing. We had seen that pressure coming from the EU very strongly, as well as the UN, and now the US. Iran knew where we stood; we now needed to know where Iran stood.
Asked if there were any plans to go back to the UN or the EU, the PMOS said that what happened next depended on the Iranian response, and we would decide the next step then.
Asked if we were optimistic that the matter would be solved this week, the PMOS replied that we had to see what the Iranian response was.
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