19 December 2007
Transcript of the Pirme Minister’s December press conference from inside Downing Street. Mr Brown was joined by the Chancellor of the Exchequer to answer questions from journalists.
Parts of this transcript may have been edited
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Prime Minister:
Good morning. Thank you very much for joining us for this, the last press conference of the year.
In the last few days I have been talking about the global financial turbulence with Chancellor Merkel, President Sarkozy, the President of the European Commission, and I will talk later today to President Bush. This morning I met the Chancellor who is with me today, the Governor of the Bank of England and the Chairman of the Financial Services Authority. I wanted to hear from them at first hand the measures being taken to ensure stability and continued growth in the British economy in the face of the financial turbulence. I heard from the Governor and the Chairman of the Financial Services Authority that inflation in Britain has been brought down and remains low, demonstrating that the fundamentals of the British economy are and remain sound.
After the wave of recent oil prices, inflation is over 4% in the United States and over 3% in Europe, but Britain’s most recent inflation figures of yesterday showed inflation at 2.1%, very close to target and a sign that the action that we have taken this year on public sector pay in particular has brought inflation down, so with lower inflation today than in most other countries with the exception of Japan, and indeed faster growth and rising employment, we stand able to weather the global financial storms and to respond where necessary, as the Bank of England has already done, with a cut in interest rates.
This global financial turbulence led last week to the co-ordinated international action by central banks to improve liquidity in the financial system, the international authorities will continue to work together and I have invited Chancellor Merkel and President Sarkozy to London to follow up our joint proposals for greater financial stability in the global system. At all times we will take the tough long term decisions to ensure in testing times the stability of the economy and by taking the tough decisions on inflation, something governments failed to do in the past, we will steer a course of stability. That is an essential foundation for meeting the long term challenges of equipping our country for the future. So in welcoming you to the last press conference of the year and in inviting the Chancellor to say a few words, I want to repeat that this year has been about rigorously addressing, one by one, the long term challenges that this country faces: in education, in health, in housing, in climate change and in foreign policy, in Iraq and Afghanistan in particular, and we will not shirk from continuing to take the long-term decisions that enable Britain to have a better future.
Chancellor:
Gordon, this morning I met with the Governor of the Bank of England and the Chairman of the Financial Services Authority, one of our regular tripartite meetings, to examine recent events and to consider the next steps to support global financial stability. We very much welcomed the action taken yesterday by international central banks including the Bank of England to increase liquidity in the financial system and for the last few weeks I have been in constant touch with my counterparts in the other G7 countries. Yesterday I spoke to Hank Paulson. Later today I am due to speak to Christine Lagarde in France and Peer Steinbruck in Germany. The current turbulence is something that all countries face across the world and addressing it demands co-operation between us all as we saw with the central banks’ announcement last week.
Here in Britain we have taken action to ensure that inflation has remained within one percentage point of our two percent target. Brent Crude prices have hit nominal highs in both dollar and sterling terms. Commodity prices too have been rising fast and against this our policy has been to bring inflation down to give us the flexibility we need to respond to these global events. Overall inflation is now 2.1%, down from its peak in March and the September and October wage inflation has come down to 3 ½%. And the public sector of course has made its contribution to ensuring that pay settlements are consistent with the government’s target and they have averaged 1.9% this year, the lowest level awards for over 10 years. I know that can be difficult, and no-one would have wished to have done more than us to give the police and other vital public services their full pay rises, but to have their pay rises wiped out by rising inflation and rising interest rates would be completely counter-productive.
So, despite the international slow-down, the British economy has been growing well in 2007 with low inflation and rising employment. Indeed this year, Britain will be the fastest growing G7 economy and this month’s figures show that we have record high employment at 29.3 million, the lowest level of unemployment since 1975. And with head counts in the civil service falling, this employment growth is coming predominantly from the private sector.
Now following our meeting this morning the government’s priority in the coming weeks is to continue to take whatever action is necessary to bear down on inflation and to maintain economic stability particularly in these present times of financial uncertainty. Yesterday as part of the co-ordinated international action, the Bank of England made available additional liquidity. Together we have taken action to protect depositors in Northern Rock of giving that company the space necessary to consider its strategic options. I have said before it would be wrong to dismiss any option without proper consideration and I continue to believe that it is right to use the time that we now have to explore the best outcome for the company and the public interest.
As I said to the Treasury Select Committee in October, next month I will publish our proposals for a new regime for banks that get into difficulties. We need a system that can respond to difficulties in the future and deal with problems that arise quickly and we need to make sure the Bank, the Treasury and the FSA can be more responsive and clarify the responsibilities for all three. And more generally, with the Bank of England, we will take whatever decisions are necessary to keep inflation low and to maintain that. We will deal with these challenges because we have a fundamentally strong economy and despite uncertainties in the financial markets, the world economy remains strong. Today’s business investment figures show new levels of profitability in the non-financial sector and investment intentions remain robust. And here with low inflation, low interest rates, the lowest unemployment for 30 years and a strong economy, we have the strength to deal with the challenges we face. Thank you.
Prime Minister:
Thank you very much.
Question:
Why was it that Britain was the only country following the sub-prime crisis that suffered a run on a bank, and do you feel that there is a need to change the way the tripartite system works in this country and that therefore things could and should have been done differently back in 1997 when you gave the Bank of England a modicum of independence?
Prime Minister:
I don’t accept, and I will ask Alistair to come in on this as well, I don’t accept that Britain is the only country other than the United States to be affected. All over Europe there have been issues arising in each of the financial systems because of the fall-out from what has happened in the United States of America and financial institutions all round the world are reporting write-offs or reporting new valuations of their assets and that is primarily what has caused the problems that we are seeing in Britain as are being seen in other countries. I think as far as Britain is concerned, the issue has always been given that Northern Rock had a fundamentally unsound business plan, preventing that spreading over into other institutions and while the problems of Northern Rock were identified in the summer, I think it is true to say that as things stand we have prevented the spreading over of the problems of Northern Rock to other institutions in the way that some people predicted and therefore that is a sign of the financial system and the system itself, the tripartite system, working well.
Now of course there are reforms that we are discussing, and Alistair will say something in a minute about them, but I think since 1997 what is remarkable about the British economy is that we have been tested by the Asian problems, we have been tested by a Russian crisis, we have been tested by an American recession, we have been tested at all times by the trebling and in some cases the quadrupling of oil prices affecting our economy but at each time, as we will with this global financial turbulence, having put in the right framework, and of course it needs amending from time to time, but it is fundamentally the right framework and remains the right framework. We continue to have stability in our economy. And one of the real tests of this is when we had to get inflation down to give us the flexibility to respond, we have managed to do so in a way of course that figures look better than America and better than Europe and that is a sign of an economy that is fundamentally sound.
Chancellor:
As Gordon said there are financial institutions all over the world that have been experiencing difficulties because of the current uncertainty, and it is important to remember in relation to Northern Rock what its basic problem was. At the beginning of this year it underwent a rapid expansion of its business that was totally dependent on it being able to raise billions of pounds from the money markets every day, every week. And of course in the summer that became rapidly more difficult and then impossible for it. And the problem that Northern Rock had, unlike most other financial institutions, is that there was no plan B and if you ask what could be done better, as the FSA has already acknowledged one of the things they need to look at is the liquidity position of institutions and in particular in Northern Rock somebody should have said earlier this year, what happens if you can’t get this money on the money market, what is your fall-back position, have you got reinsurance as other institutions have. Northern Rock got into difficulties, we were absolutely right to intervene to provide lender of last resort facilities because there was a systemic risk to the banking system and we would have been quite rightly criticised if we had not taken that action, and indeed it was widely welcomed at that time by many people who today are trying to run away from the support they expressed at that time. We will see this through. As I said before, there are discussions taking place and we want to explore every possible action to ensure that the situation can be improved for Northern Rock and therefore for the system as a whole.
Gordon was referring to reforms. Firstly we will build on the reforms that we made 10 years ago. The model of the single supervisor - the Financial Services Authority - is one that countries all over the world are seeking to follow. I don’t think anyone wants to go back to the old system where we had 7 or 8 different regulators or the multiplicity of regulators you have in America for example. The Bank of England has two responsibilities: monetary policy but also that of financial stability, but I will be announcing some wide-ranging reforms in January to the House of Commons which I believe will improve the position especially improve the position in relation to banks that might get into difficulty as the Governor was discussing in the Select Committee yesterday.
Question:
You kindly found some money from the taxpayer to give us all a mince pie this morning, so in the spirit of Christmas …
Prime Minister:
It was from me personally actually Nick. It is even greater generosity!
Question:
Is it declarable? Let’s not go there. As people prepare for the most expensive time of the year - Christmas - what is your message to them about how tight economically it is going to be for families up and down Britain? And you talked about being tested by tough economic times. Isn’t the brutal truth that the Brown-Blair partnership was tested and most people think succeeded, but the Brown-Darling partnership many think was tested and failed at the first hurdle, a run on a bank?
Prime Minister:
I think you will find over the next few months that the British people see that the measures we have taken this year to protect the stability of the economy are measures that are working. And I understand when people see financial turbulence right across the world, when they see some of the biggest institutions in the world having to report either losses or write-downs or revaluation of their assets that they worry about what the future holds and that is why it is important to get back to the fundamentals. What the British people need to know is that there is not going to be a repeat of the events of stop-go and boom and bust that we had in the past. Therefore what they need to know is that we are going to have low inflation and continue to have low inflation that will keep interest rates down and what we need to know therefore is that interest rates have been able to come down because inflation is low and we will not return to the situation of 10-15% interest rates that we saw in the early 1990s and I believe that the measures we have taken this year, including unpopular measures on public sector pay, have been necessary to ensure the low inflation and the stability of the economy that we have and I think over the next few months as people see that we have maintained growth, employment of course is at the highest ever that this country has seen, our economy is growing faster than any other country in the major G7 countries, people will see that all the measures that will protect their standards of living for the future, particularly home-owners, are being taken.
And you ask about the partnership and what we are doing. Harold Macmillan once said that it was events that determined how people saw you. I actually think he wasn’t quite right. I think it is how you respond to events and when people see that you have seen a problem that has arisen, some of these problems you don’t have control over but you have got to deal with them, it is how you deal with them and then show that you are not diverted from the long-term challenges of building a stronger economy, 3 million new homes, the Climate Change Bill, education from 3 to 18 which is the new policy of the government, rebuilding and renewing parts of the Health Service like GP access and of course cleaner hospitals and making people feel that the Health Service will give them a personal service in future, now these are all the measures that we started this year, big long-term changes facing the country, and I believe that people will see the results, so let us not lose sight of the long-term challenges in the face sometimes of turbulent issues that arise.
Question:
It is about how you respond to events, but it is also about how you respond to warnings. The Governor of the Bank of England seems to be saying that you were warned of the possibility of a run and you ignored those warnings. Could you tell us a bit more about your meeting with him this morning, the mood and the tone of the meeting. He does not seem to have full confidence in you. Do you still have full confidence in him?
Prime Minister:
I think if you look at what the Governor said yesterday and it is certainly very much in line with what the Governor said to the Chancellor and me this morning, that the Governor and I and the Chancellor are completely at one in both the way we deal with these events and analyse what has happened. We were dealing with a bank, Northern Rock, that had an unsound business plan. The challenge was to prevent that spreading across to the rest of the financial system. Everybody knows that we are dealing with the problems of Northern Rock at the moment and of course we are vigilant about the future. But I think we have taken the action that is necessary and I saw the Governor yesterday and heard what he said and he supported all the action that has been taken. Now the test at the end of the day is whether we can withstand the global financial storms and I believe that the actions of the Bank of England through the Governor and the Chancellor are taking, these are the right actions to withstand the global financial storm.
Question:
But what about the accusation that you were warned of the possibility of a run on a bank?
Chancellor:
But this is not true, and if you heard Mervyn King yesterday giving his evidence, he refuted that suggestion. The position is as I described a few moments ago and on many previous occasions, Northern Rock got into difficulties for the reasons that I described. It was necessary to provide lender of last resort facilities, so we did that. I then subsequently made it clear that the government would guarantee deposits because that was the right thing to do, but we were faced with really unprecedented pressures in recent years where you have a problem that starts in the American sub-prime market, it spreads to the United States, then right across the world within a few weeks. Now we are dealing with that and I have said, and as Gordon has said, all of us were absolutely clear that when Northern Rock got into the difficulties it had, we had to intervene to provide support because there was a threat to the stability of the financial system. So we took that action and we will see it through because that is entirely the right thing to do and that is something that the Governor agrees with, the Chairman of the FSA agrees with, I agree with. It was the right thing to do and I think if you look at the evidence that Mervyn King gave the Select Committee, that is exactly what he said yesterday.
Question:
Prime Minister can you guarantee that the taxpayers will get back all the money, plus interest, that they have lent to Northern Rock?
Prime Minister:
What I can guarantee is that the loans that we have made available, the liquidity we have made available to Northern Rock is backed by the assets of Northern Rock. And what I can also say is that we are doing everything in our power to help Northern Rock find the right buyer for the future. Now at the moment, as you know, there are two financial firms have expressed interest in Northern Rock and that is a process that is working its way through the system. But as the Chancellor said, we do not rule out any options for the future.
Question:
[INAUDIBLE]
Chancellor:
I have been asked about this on many occasions. I set out the principles that would govern our approach on 19 November and one of them is that the Bank of England needs to get the money back that it lent. And as I said before too the money that is lent is secured against Northern Rock’s assets, its mortgage book, and ironically, despite the fact that this is a bank that got into difficulties because it couldn’t get day to day money it has actually got a good mortgage book and it had good assets and these assets have been secured by the Bank of England against its lending. So that position is there and I have made it very clear that one of our priorities, as and when we get to a solution, is that we want to ensure that we get the money back that was lent by the Bank of England.
Question:
Prime Minister can you clear up whether or not Mervyn King will be given a second term as the Governor of the Bank? And also to both of you, are either of you taking holidays this Christmas period whilst this economic crisis seems to be threatening the country?
Prime Minister:
The process of appointment for the Governor is the usual process and an announcement will be made in due course. You wouldn’t expect it to be announced at a press conference just before Christmas, it will be done in the normal way. As far as Christmas goes, yes I am taking a holiday and we will be taking holidays and suspect the Chancellor will be able to take a holiday as well.
Chancellor:
Though I have discovered since becoming Chancellor there doesn’t appear to be anything called a day off.
Question:
What do you think of Charles Clarke’s comments in the Guardian today to the effect that Labour MPs were appalled by your comment about British jobs for British workers, and also he is astonished that senior MPs have shown huge loyalty to you when you show great disloyalty to Tony Blair.
Prime Minister:
I think Charles Clarke has got a very important role to play in the future but I think you are distorting the comments that he made. First of all Charles Clarke is said to have said something about bringing in senioir Ministers, and of course Alistair Darling is with me today, David Miliband was with me when I did my press conference in Europe last Friday, at an earlier press conference I had Hilary Benn. And all the discussions we have in the Cabinet revolve around the important long term challenges we face. And just as I worked with Tony Blair, I work with all my colleagues in the Cabinet. As far as British jobs for British workers is concerned, it is right that people who are inactive and on the unemployment register are brought back into work in Britain for the jobs that are available, and I make no apology for saying that we will sign partnership agreements with companies in Britain to get people off the unemployment register and get them into work. And the contrast would be 3 million British workers unemployed, as we saw under the Conservatives. What I want to do is see British workers getting the jobs that are available and that is why we have the training and other measures that are necessary to do so.
Question:
Are you prepared to hand power of appointment to the Lords to an independent commission?
Prime Minister:
The appointments commission proposal is one that has been put forward by David Steele in his Bill, it is now put forward in the committee report that we have seen. I have already said, if I can just put this on record, that I don’t think the Prime Minister should have the final say over these matters. I think if appointments are being made to the Lords, of course all parties will make their recommendations, but I think it is right that two tests be applied, not just one test, the first test is of course probity and that test ought to be met in all circumstances, and the second test is what is the public interest concerned here. And of course there may be candidates that are very good but the public interest may suggest that other candidates should be chosen. So I have already said that this is a matter where the final decision would be made by an appointments commission but it should be made on two criteria, both probity and the public interest, and I hope that will go some way to answering the questions that have been raised in recent years which I believe with all-party support we should be in a position to answer at some stage.
Question:
Everyone talks about the credit crunch and indeed the regulatory structures, but I am wondering what you think of the actual individuals who got us into this mess, the wide boys in the hedge funds, many of whom have creamed money out of them before they go bust? Many ordinary punters reckon there is a quite a degree of criminality out there which hasn’t had the strong arm of the law visited. What do you actually think of the individuals both in the United States and here who got us into this mess?
Prime Minister:
I think you are being quite picturesque about some of the things that have happened. I mean not all the problems that have arisen arose from hedge funds, in fact very few of them have arisen from hedge funds.
Question:
… bad debts for example …
Prime Minister:
I doubt if you could sustain your argument about criminality either. What has actually happened in the world economy is this. There was an under pricing of risk, so institutions were lending and perhaps were under pricing the risks that were being taken in certain markets. That has led to a number of problems that have had to be dealt with. But for the British economy the key question is this: are we in a position to withstand this global financial turbulence? Have we got the fundamentals right and are we building on solid enough foundations so that if problems arise, like they are arising here, we can deal with them? And the fact of the matter is with inflation just about 2%, with a structure that has worked for the last ten years - Bank of England independence - and with a determination on the part of all members of the tripartite committee to work together to solve these problems, we are in a good position to withstand what are global financial storms. And I think that is the big question that people are asking about the British economy and that is the question that I think is answered by the evidence that we put before you today.
Question:
Thank you for the mincemeat pie but I already knew you were generous because you have a Celtic heart.
Prime Minister:
Ah, thank you very much. The Christmas spirit is extending from the journalists to the politicians. Thank you very much.
Question:
You see having both my grandparents Scots and with a Mexican connection as well …
Prime Minister:
People will think I invited you here …
Question:
You did actually invite me here.
Prime Minister:
Can I say come again! But maybe I should ask for a question.
Question:
Well I was going to say that I know that of course you don’t suffer fools gladly and you can take a lot of flack because of this sturdiness, but my question for both Prime Minister and Chancellor is that in this year in which the best news seems to be that you have the most respected and beloved and Thank God sturdy Queen and Her Majesty, which are the good news at the end of 2007, beginning of 2008, for both please.
Prime Minister:
Well I want to thank The Queen for everything that she does for the country. I was in Uganda with her at the Commonwealth Conference and I think the way she brought the Commonwealth together and the respect that she enjoys in every continent as a result of that is something that I think the whole country is very proud of. And I believe the celebration this year of her wedding anniversary with the Duke of Edinburgh was something that the whole country shared in.
Question:
Prime Minister you end the year trailing badly in the opinion polls, a lot of your MPs are very demoralised. What is your New Year message to them? Is it don’t panic or the Churchillian blood, sweat and tears next year?
Prime Minister:
To never lose sight of the big issues and the big challenges that we are meeting. This is the year in which we have made the big decisions. We are committing ourselves to building 3 million homes to deal with the problems of affordable housing; we are reforming the planning, transport and infrastructure system such as the announcement about Crossrail; we have got the first Bill in the world that legally binds governments to cutting carbon emissions; we are pushing up the education leaving age to the age of 18; we are doubling investment in science; we have put Iraq and Afghanistan in a far better position by the announcements we made in the last few weeks. And never lose sight, even faced with turbulent issues that can hit you day to day of the big challenges that we face. And interestingly enough on all these big challenges where we are trying to equip the country to meet all the difficulties that all industrial nations face in the future, we have no support from either of the opposition parties in facing up to these big challenges. And I think the country will see very clearly next year who is actually addressing the big challenges, building on the stability we have achieved, making Britain best equipped for the future and I think that means prosperity for family life in the future.
Question:
Prime Minister earlier this month when Vince Cable suggested temporarily nationalising Northern Rock you said he was better at jokes than economics. What has changed? Have you got the joke? And why are you guys not specifically ruling that out?
Prime Minister:
To be clear, I said in answer to Vincent Cable we were looking at all options, and continue to look at all options, and that is what the Chancellor has been looking at.
Chancellor:
We have always made it clear that all options are on the table. But Vince Cable too believes that the best long term solution for Northern Rock is a private sector purchaser. Now I repeat that all options remain on the table but at the moment our objective is to give the bank the breathing space that it needs so that it can reach a resolution to its current problems. That is the right thing to do for Northern Rock, it is the right thing to do for the wider financial stability.
Question:
Prime Minister this week Sir David Varney issued his report which recommended that corporation tax in Northern Ireland should not be reduced. Many on the island of Ireland have said that he didn’t actually look at the evidence which shows that competitiveness can be increased by a reduction in corporation tax. They have also suggested that he is too close to the Treasury so that the second report that you have also commissioned should be carried out by somebody else. How do you reply to that and what specific measures do you think can be put in place if you are not going to reduce corporation tax in Northern Ireland to enable Northern Ireland to compete more effectively with the economy of the south?
Prime Minister:
I talked to David Varney only a few days ago and invited him to do the second review. And I believe that the first review in which he was involved commanded a great deal of respect from people whom he consulted. And I think contrary to what you say, the consultations were wide and various, but of course there are big issues about both legality and the advisability of the reforms that some people were proposing. Now as far as Northern Ireland is concerned, I have said to people in Northern Ireland that I want them to get all the advantages that are available in other parts of the island, in the Republic in particular, and we will do that by providing a better service for businesses as they look to invest in Northern Ireland, we will provide help with research and development, we will provide training grants so that there are incentives for people to train people as they come to invest in Northern Ireland, we are running an investment conference in America with the administration to support new investment in Northern Ireland and the signs are that people want to come and invest in Northern Ireland. There is also however an issue in Northern Ireland, its public sector is 70% of the economy. In the southern part of Ireland it is 30%. And I believe that David Varney can help the administration do what it wants to do to look at new opportunities for private investment in the north. So I don’t agree with you. I think David Varney’s second report will be an important addition to the work that is done in increasing investment and jobs and prosperity in what is growing investment already in Northern Ireland.
Question:
Prime Minister we all understand that you were under maximum political pressure to withdraw British troops from Basra as soon as there was a reasonable excuse for doing so, but how does somebody with your moral compass feel about the morality of the situation? The Police Chief in Basra now says that unfortunately the British didn’t understand the nature of Iraqi society recruiting policemen from the political parties whose loyalty is to party or militia. We hear horrific stories of women being beheaded by religious extremists. Haven’t you just handed over Basra to the militia and to the religious extremists?
Prime Minister:
I don’t accept that. First of all we are still in Basra, we are in Basra airport. We have 4,500 troops in Basra and we are supporting what this a growing Iraqi security and policing force. And I think you failed to mention that there are now 30,000 police and armed forces representing the Iraqi government and the Iraqi administration keeping law and order in the area. We always said that our objective was to move from combat to overwatch and that means that we have got a reintervention capability, it means that we will supply the lines and it means also that we will train the Iraqi forces, and that is what we are doing at the moment. But since a few months ago there has been a 90% fall in the violence against British troops, there is more emphasis now being placed by the Iraqi people on economic and social development, there has been less violence, not more violence, as you suggest. And when we moved out of Basra Palace a few months ago there was a reduction in violence, not an increase in violence. So I do not accept the picture that you are presenting. Of course nothing is perfect in a situation where you have militias, nothing is perfect in a situation where you are training people for the first time to be police as well as to be armed forces, but the reduction in violence over the last few months has been an important element in allowing us to move to a decision that if I may say so we took later than we planned to move to overwatch in the Basra area. This is a decision supported by the American administration, by General Petraeus himself, by the Iraqi government and by our commanders on the ground and it is a decision that allows I think the economic and social development that is necessary in the Basra province so that people feel they have a stake in their future. In other words I disagree fundamentally with the picture that you present.
Question:
In your answer to Nick Robinson you seem to be telling ordinary families to do nothing to protect themselves from the economic crisis ahead and just not to worry. Wouldn’t it be more sensible, if you have got a mortgage and credit cards, to start spending a little less and saving a little more?
Prime Minister:
Well I have always said, and Alistair may wish to repeat this as well, that the decisions about borrowing and lending are decisions that people have got to make in the light of the knowledge about what is happening to both their own personal circumstances and the economy. What I was drawing attention to was in every other global downturn that we have faced as a country before the mid-1990s, whenever we wanted to reduce interest rates so that we could deal with the problem, inflation has almost invariably been far too high and made it impossible for the monetary authorities to react. So in the early 1990s inflation had gone up to 10%, and so interest rates had to go up rather than come down when were trying to deal with a problem that arose in the economy. In the ’80s and ’70s exactly the same thing happened. On this occasion, facing a problem, we have been able to see interest rates coming down because we have already taken the action to deal with inflation. And I don’t want to go back on it, but the public sector pay decisions we made at the beginning of the year, they were not popular and we have already seen the reactions. And I too would like to pay the police more for our police officers, but these were important decisions in making it clear that we were going to take inflation seriously, get inflation down, get it down to target and enable us, as we have been able to do over the last few weeks, to reduce interest rates. So decisions about borrowing are decisions for individuals. The important thing I think is that people should know that we will continue to take the tough long term decisions, and it will not be easy in certain circumstances, to make sure that the stability we have seen in the economy over the last ten years, even in some of the most difficult global financial turbulence, that stability can be maintained.
Chancellor:
On borrowing and lending, people have to be sensible. Banks have to ask themselves whether or not the individual can repay any loan, and individuals have to ask themselves whether they can afford it. The difficulties arise, it was the point that Jon Snow was alluding to, if you look at what happened in the American subprime market, what happened there is that financial institutions lent to people who could just about get by when interest rates were 1%, but of course when they went up to 5% there was no way they could meet the repayments and that is the root cause of the current difficulties. But the central point, and as Gordon has made and I have made on many occasions this morning, is that unlike past occasions our economy is very strong. Now we have both referred to the fact that inflation is low and the Bank’s Monetary Policy Committee’s report, which is published this morning, makes it clear that unlike in the past it does have room to take further action if that is necessary. But the other thing, another big difference between the present situation and the past is that we have a record number of people in work. As I said, unemployment is the lowest it has been for over 30 years. So our economy is fundamentally strong and it is because of all the decisions that Gordon took over the last ten years that the British economy is in a completely different position to that which it was in in decades past because we took the difficult decisions, we have been able to deal with problems in the past, whether it was the Asian crisis, the US stock market problems in the earlier part of this decade, we have been able to deal with that because we have a fundamentally strong economy which will enable us to deal with these problems as well as the other actions we have been taking as well.
Question:
For the sake of clarity, why are you hesitating over the reappointment of the Governor of the Bank of England? The markets think you are going to boot Mervyn King out in the New Year. Are you?
Prime Minister:
We are not hesitating, we do everything in the normal way. I think when Eddie George was reappointed he was reappointed in the February of the year. We do it in a normal process and we will make the announcement in due course.
Chancellor:
I said last October we would deal with the reappointment next year when it became due and that remains the position.
Question:
When and how are you going to get people to trust your Government again because after the events of recent weeks, like data loss and donations, people simply don’t. And do you have any personal New Year resolutions as well?
Prime Minister:
I think the first thing we have got to do is deal with problems as they arise. I said that it is not events that I think are what causes problems to Governments, it is if they don’t deal with the problem when it arises and then show that that problem has been dealt with properly. Now we had a political funding issue, we are making proposals for change. I dealt immediately with that. We had a data loss issue which happened in a child benefit office in the north east of the country. Whenever we found out about it we took the action that was necessary, both with the police and in tightening up procedures. And when Gus O’Donnell, the Cabinet Secretary, asked all departments to look at everything that had happened over the past few months, we reported what had happened and then said here are the measures that we are going to take to deal with it, including spot checks where the information officers in an individual department will not have the power to say don’t come in, a spot check that the Information Commissioner can organise to make sure that the procedures are being followed. So whenever there is a problem the test is have you dealt with that problem and are you able then not to be diverted from the other long term challenges that you are facing. And that is what we are trying to do.
Question:
Inaudible.
Prime Minister:
I think people know that when a problem arises we will deal with it, and we will deal with it even if that means taking very difficult decisions, and whether it is on political funding or whether it is on data, when there is a problem we will not hide it from the public, we will deal with it and then we will show people that we are not going to be diverted from meeting what I think, and this is where my New Year’s resolution I think is important - focus on the long term challenges, focus on what matters to the people of this country. Many of the things that have been written about in the last few weeks will be forgotten quickly, many of the things that are important to the people of this country - affordable housing for your listeners, we are behind in building the homes that are necessary for the future. I have made that a priority. We are going to have equal terms, we are going to have a push on building homes. And equally on the Health Service and on education I have made it my priority to concentrate on what matters most for people - access to GPs, clean hospitals, being treated as a person and not as a number; and on education giving people new chances to get apprenticeships, go to college and university. Now these are the issues that we will concentrate on, building on the stability that we are determined to maintain in the economy.
Question:
Prime Minister you will be visiting China soon I understand. Do you have any idea how you can convince the Chinese leadership in joining the developed countries in finding a target in emissions. And while you are in Asia will you be visiting Japan? If not, is it because of the weak leadership or is it because Japan will be chair of the G8 next year?
Prime Minister:
I will be visiting Japan over the course of next year because as you rightly say they are President of the G8. And I think the Chancellor will be visiting Japan in February. I will be visiting China and India because I want to talk to these very important countries, not just about the global economy but about the very issue you have raised - climate change. And I believe there was an historic breakthrough in Bali. I think people can see the possibility now of a post-2012 agreement on climate change. What is interesting is that all countries have agreed that issues like aforestation should now be brought into this agreement for the future, and forests are responsible, or the lack of forests, for 18% of carbon emissions. And I believe that gradually all developing countries, all emerging market countries, as well as America and Europe, will want to be involved in an agreement that will be a binding agreement for the future. So I am confident that the talks that will take place over the next two years will produce an agreement that all can sign up to.
Question:
Going back to the question of Iraq, there is an opportunity next year to reduce the number of forces again in Iraq. Will there come a time when we do not need British forces in Iraq, or is there a strategic need to keep them there do you think?
Prime Minister:
Well I am not working to any artificial timetable, and we work very closely with our allies, the Americans and others who are in the south with us, in discussing what the way forward is. Our plan at the moment is to reduce the number of forces from 4,500 to 2,500 as our overwatch role changes to being one primarily about training and support of the Iraqi armed forces themselves. Then we will review the position in the spring to see where we want to be in future months. But that is the way we will move forward, not with an artificial timetable that is imposed now, but by continuing to review the position. And I just want to emphasise it was possible to make the decision to go to overwatch, to provincial Iraqi control, because of the massive reduction that had taken place in violence. And we of course hope that the situation will remain stable over the next few months and then we can move to local elections in Basra so that local people can have more control democratically over their own affairs, backing up the armed forces and the police that are now growing in numbers in the area. And I would emphasise also the importance of the economic and development programmes that we are operating in Basra and of course we have persuaded British businessmen to take a new interest in the development of what should be a very rich and prosperous area of Iraq in future years.
Question:
One of the reasons of the great success of the British economy in the last 15 years was the inflow of very skilled upper middle class people from the rest of Europe. Now there were recently …we are talking now extra … there were restrictions on visas of foreigners and there is now a plan on taxing the non-domiciled people. Many of these people are doctors or academics and city people, not only billionaires, and there is a bit of nervousness, especially in the city, about these measures.
Prime Minister:
Well there are 200,000 people working in the City who come from other parts of the world and we welcome their contribution to the British economy. The new points system that we will introduce over the course of the next few months will emphasise that where there is a skill that the British economy needs we are willing and ready, subject to people taking up the responsibilities of being in our country as well as the right, to welcome people to our country. Where we do not need the skills and where there are unskilled workers it is less likely that we will want people to come to our country under the points system that we are introducing. This is probably the biggest change in our immigration rules that has been seen for many decades. It is precisely to encourage the skills that we need as a country, and to discourage the skills we don’t need, that we are introducing this new points system in the next few months. So those people who have skills to offer the country and where there are businesses who need these skills, we are going to respond to that. But the whole point of this Australian-style points system is to make sure that we get the skills we need. As far as non-domicile taxation is concerned maybe Alistair wants to say something about that, but we are operating a fair system of taxation to all.
Chancellor:
As I said in the pre-budget report, we are consulting on changing that system. I very much agree with you that the city in particular, but other professions too have benefited from people coming here. There are many people who come here for maybe 4, 5, 6 years and then they go back to America or wherever they came from, and we don’t want to discourage that, and indeed the proposals I put forward, which differed from the proposals that were put forward by the Conservatives, which was to impose a charge from day one, was to recognise the fact that people do come here for a period of years, they work, they contribute, they pay taxes here. But there does come a point that if you stay here indefinitely then it is not unreasonable to suggest that you might want to make a contribution to the running costs of the country.
Question:
Prime Minister thank you for the mince pies. Maybe next year you can get some mulled wine as well.
Prime Minister:
Never satisfied.
Question:
I am a frequent visitor to Basra and I have got reporters there on the ground. I think the non-Muslims, liberal Muslims and women in particular say their lives changed for good because with Talibanisation by the Islamists there, and even some of them openly say it was better for them safely under Saddam. Having said so, and with the heroic job that the British forces have done, one of the problems I hear is the political decision on the ground in the four provinces there were not British political decisions but an American political decision. Are you actually make sure that this mistake doesn’t actually repeat itself in Afghanistan? And for the Chancellor …
Prime Minister:
I think you have got two questions already, you have got Iraq and Afghanistan …
Question:
No, but with the funding of the army Prime Minister, the army was under-funded and under-equipped in Basra and that is actually another part of the problem. Will that be addressed?
Prime Minister:
OK well let’s deal with these three issues very quickly. First of all in Iraq the decisions were made in the way that we have decided over many years since we went into Iraq, the decision on provincial control was made finally by the government of Iraq itself, by Mr Maliki, but it was in consultation with General Petraeus and of course it was in consultation with us. Now these are decisions that we made as part of the coalition in the interests of doing the right thing by the Iraqi people and we remain committed to meet our obligations to the people of Iraq. On Afghanistan, I made a statement to the House of Commons in detail about the change in the way that we will deal with issues in Afghanistan in future. We want to have more Afghan control over the security issues, we want to encourage the economic and social development of Iraq and we are wholly committed to working with local and national politicians who are democratically elected to move that forward. As far as the funding of the armed forces, I realise that to be working in Iraq and Afghanistan, and I do praise the professionalism, the bravery and the dedication of our forces, and particularly at Christmas, I think we have got to remember that many are separated from their families, and we have to pay particular respect to the work that they are doing. And that is one of the reasons why I went to Iraq and Afghanistan to meet them only a few days ago. But I have to say that every year the defence budget is rising. This was not always the case under the previous government where defence expenditure was cut from 1992 - 1997 by 20% in real terms, and where there are urgent operational requirements such as the need for new vehicles, the need for new helicopters, the need for better equipment, we have made sure that that new equipment is made available. And I think you will find if you go to Afghanistan or Iraq that the troops are saying that the equipment is far better than it was a few years ago and we have invested to make sure that people are properly protected. So I don’t accept that we haven’t made a commitment to increasing the resources that are available to the armed forces, we have done exactly that.
Question:
While you are both together I will say thanks for donating some signed whisky to the Evening Standard’s Charity Appeal. It has already raised some hundreds for children in Africa.
Prime Minister:
Very good.
Question:
David Cameron said that it beggared his belief that you didn’t know what was going on in your own back yard Prime Minister. He had a point didn’t he?
Prime Minister:
[party political content]
Question:
Both you and the Chancellor said that the loans to Northern Rock were secured against their mortgage book, their loan book, property collateral. But isn’t it the case that you have now extended those guarantees to go to other products that are not secured against property, it could be anything from covered bonds to derivatives. Is that why you are not willing to give a 100% guarantee that people will get back the money you have loaned Northern Rock?
Prime Minister:
I think the assumption of your question is wrong. I will ask the Chancellor to answer.
Chancellor:
There are really three elements to what we have done. One is to provide lender of last resort facilities and continuing the support from the Bank of England which is secured, that is money that has actually been physically passed over to the bank, lent to the bank because it can’t raise money on the money markets. And as I said in my statement to the House of Commons on 19 November one of the principles is that that money has to come back. The second element is the guarantee to the retail depositors, that is ordinary savers who have got their money in Northern Rock, and I repeat what I said back in September, that money is guaranteed, that guarantee will remain in place while these difficulties endure, but that is simply guaranteeing money that is in Northern Rock bank. The central government hasn’t paid out any money because the money is there. And in relation to the third element, which is the wider guarantee, it represents, as the Governor of the Bank of England said yesterday, about a third of the Northern Rock balance sheet. But as I said earlier on, Northern Rock does have a good mortgage book. Despite all its difficulties, which were around its funding model, it actually has a very good mortgage book and we have made sure, the Bank of England has made sure that it has got that security. So that is why both of us have said is that one of the things that we need to ensure as and when we reach a resolution is we get our money back, but the guarantees are just that, a contingent guarantee.
Prime Minister:
I think the questions here would be very different if we had failed to give guarantees to the depositors and savers at Northern Rock, and if the problems at Northern Rock, which essentially arose from their own business plan, had spread throughout the financial system. So our first action has been to make sure that the deposits of the savers at Northern Rock and to seek to make sure that this does not spread across the financial system. And over the last few months I think people have seen that we have maintained a stability in the economy that people doubted at some points during the course of the autumn weeks.
Question:
Prime Minister Israel has been facing a daily barrage of rockets, up to a dozen today. They have intercepted on virtually a monthly basis would-be suicide bombers. What guarantees, what assurances did you get from the Palestinian leadership yesterday in your talks that those issues would be resolved and that confidence building measures could be introduced? Secondly, the vast amount of money that is going to be given, very necessary money, to the Palestinian economy, what assurances have you got that it is not going to go into a black hole, that it is not going to release other funds for would-be terrorists to carry on their activities?
Prime Minister:
The first question you asked, I raised with President Abbas yesterday the issue about security for the Israeli people and there is no doubt that the rocket attacks, particularly in southern Israel, are both completely unacceptable and are damaging to the peace process which relies on people being assured that security is taken seriously. President Abbas also condemned these rocket attacks and I believe that he was sincere in wanting these attacks to stop. As far as the general issues are concerned, I believe that there is a goodwill now about the possibility of reaching a better agreement over the next few months on both the security of Israel and the viable Palestinian state. And I hope that even although we have had these security issues interfering, and they are important issues, with the progress of negotiations, that the talks can begin on 23 December and I hope they can be moved forward with the regular meetings between Prime Minister Olmert and President Abbas. And to make that possible, and that is why the donors conference that Tony Blair, to his great credit, has played a huge part in organising happen, raised $7 billion, money committed to a peaceful outcome. Now of course that money has got to be well spent, there has got to be value for money, there has got to be proper transparency and we have got to make sure that it is going to the right places. But I think the commitment of the international community to the peace process was shown in Paris on Monday and we have said only in the last day that we will be prepared to host an investment conference, perhaps one in Bethlehem, perhaps one also in London, to push forward new investment in the Palestinian territories so that there are jobs, there is opportunity and there is the hope of prosperity for the future.
Question:
Prime Minister they say that David Cameron is talking with the new leader of the Liberal Democrats about a new alliance for the next parliament. I can’t recall having heard you talking about your ideas about proportional representation. Would you consider changing the electoral system given that we always talk about more democracy in your system.
Prime Minister:
Well I just talked to Nick Clegg, the new leader of the Liberal Party. I have congratulated him on his election and said that we look forward to working together on the issues that unite both our two parties and unite the country. And we have put forward wide ranging constitutional reforms, many of which the Liberals already support. We are going to publish a document on electoral reform in the near future as well and I think the whole constitutional agenda should unite all parties, [party political content]. So I have talked to Mr Clegg this morning.
Question:
Mr Prime Minister when you were in Uganda last month we understand you offered $700 million to Uganda, but I wish to tell you that as of this morning, that is over 10 years anyway, $70 million per annum, I am told this morning for his Christmas shopping list the President has ordered a $50 million jet. Would you take some measures from that? And finally Mr Prime Minister we understand that the Chancellor of the Exchequer and the coach of the England football team are the most difficult jobs in Britain, what advice do you have for the new coach?
Prime Minister:
Well to train up the younger players, that is what Mr Capello wants to do and I do wish him well. He may find out how short the honeymoon lasts when he comes to answer questions in future press conferences. But I wish him well. I believe it is a very good appointment and believe it will yield great results. As far as Uganda is concerned, I was in Uganda, I can’t recall writing the cheque that you are talking about and the Chancellor would have something to say about it. But our international aid budget that helps Uganda is specifically for education and health and specifically for the economic development of the country and it is money that is agreed money going on a long term basis to social and economic projects. So I don’t recognise what you are saying about a British offer for a particular programme that you are talking about.
Question:
You said a few moments ago that you would do everything you could to help Northern Rock. With that in mind, bearing in mind how much taxpayers’ money has now been used to prop up the bank, would either of you be willing to advise taxpayers to take out Northern Rock mortgages, to invest their savings in Northern Rock, and if you wouldn’t do that, why not?
Chancellor:
It is up to individuals who they take their mortgage out with and where they save and they will no doubt look around to see who is offering the best terms. But if we had not taken the action that we did to support Northern Rock then the consequences could have been very serious indeed and I think people would rightly have criticised us if we hadn’t taken that action and taken it quickly. It does mean though that if you take action to support Northern Rock you have got to see it through. Now at the time we announced it had widespread political support, the leader of the opposition said he wholeheartedly welcomed it. Now he is running away from it. If you have a situation like this you have got to stick to it because that is the right thing to do, not just in respect of the current uncertainty in the financial markets, but it is essential for the long term stability of our economy. It is very important that we have the strength and the determination to take these decisions and to see them through and that is exactly what we will do.
Question:
Prime Minister you mentioned Vince Cable earlier. In his introduction to the new leader of the LibDems yesterday Mr Cable talked about his enthusiasm for Strictly Come Dancing and he said that he believed that politicians could learn lessons from TV programmes like that that managed to galvanise people in a way that politics doesn’t seem to be able to. I wonder whether you agree with him and if so what those lessons you think might be?
Prime Minister:
I quite like watching the X-Factor and all these programmes because I see great talent being given the chance to develop itself. But to be honest over Christmas I will be watching more the sports programmes and I am looking forward to seeing the battle at the top of the Premier League and how it is going to develop. I think that Vince Cable said that he watches Strictly Come Dancing with his wife because he is interested in ballroom dancing. I can’t say I am.
Question:
If I could just go back to Northern Rock. Prime Minister you said the bank’s business model was fundamentally unsound. The Chancellor said somebody should have been asking what happens if you can’t get money out of the money markets. If you are right, aren’t you describing a catastrophic failure by the people in charge of regulating the bank, the Financial Services Authority, and why don’t you sack the people in charge?
Chancellor:
This is something that Callum McCarthy, the Chairman of the FSA, has acknowledged himself. When he appeared before the Treasury Select Committee back in October he was asked was there anything the FSA should have done better, and he immediately said, to his credit, that this is a question that should have been asked and should have been pursued. But as in the case of all events like this, lessons need to be learned, we need to tighten up procedures that if there is anything that should have been looked at is looked at in the future. So I am doing no more than saying exactly what I said actually two months ago at the Select Committee, as did Callum McCarthy.
Prime Minister:
One of the purposes of the meeting with President Sarkozy and Chancellor Merkel is to look at what changes are necessary internationally, not just nationally, in the financial system for greater transparency, to evaluate risk in a more effective way, to deal with some of the questions being asked about credit rating agencies and to make the international financial system work better with an early warning set of procedures that could allow supervisors across continents to share information and seek advice from each other in a better way for the future. So lessons are being learned from what has happened, not just to Northern Rock but to major institutions round the world that are now having to write off very substantial sums of money because of the under pricing of their risks over a number of years.
Question:
To continue mounting the Northern Rock rescue operation there will have been a consequential effect on government borrowing itself. Won’t next March when the Chancellor presents his first formal budget, won’t the 40% rule, the one that you spent a decade almost sticking to, become history very quickly?
Chancellor:
Well I will be publishing all figures in relation to the budget next year, as you would expect. But at the moment the money going to Northern Rock has been lent by the Bank of England. Of course the government ultimately stands behind the Bank of England, but as I have said on a number of occasions this morning it is necessary, having taken the decision to support Northern Rock, to see it through to its conclusion and that is what we will do because that is in the long term interests of the country. And I will just add to what was being said, that Gordon was referring to the discussions he has been having with the French President and the German Chancellor. I have been in discussions with my American counterpart, Hank Paulson, as well as Finance Ministers to see what else we can do internationally to give better early warning of problems like this arising, but also greater transparency in the system. One of the big problems we have got just now is that it is taking longer than it should do to become clear as to what the extent of the problems faced by some institutions is concerned, and that is something we are pursuing and we will have the recommendations from the G7 group in February when we meet then.
Prime Minister:
And I think you will know how the fiscal rules have been met, it was in the pre-budget report and you can see that they were being met.
Question:
In two weeks Liverpool’s capital of culture celebrations get under way. Firstly will you be dropping in, but also they do so against the backdrop of a £20 million plus black hole in the city council’s funding. The LibDem city council wants to plug that by selling off some land, it needs government permission to do so for revenue purposes. Can or should the government help the city council out of its financial crisis?
Prime Minister:
That is a matter for any discussions with the local government Minister, Hazel Blears. But let me congratulate Liverpool for being the capital for the City of Culture. I think they have made great preparations. I have managed to see them at first hand. I believe the spirit in Liverpool is to make this a great success over the course of the next year and I look forward to visiting Liverpool to congratulate them on what they are achieving. It is already a great cultural capital and will be more so over the next few months.
Question:
Prime Minister 8 years ago Britain played a leading role in the Balkan crisis. This year talks for a negotiated settlement failed and the Security Council is today due to discuss the issue. What do you expect from the meeting today and also will Britain lead once more into recognising a unilateral declaration of independence?
Prime Minister:
Well it is to the credit of all the parties where there hasn’t been agreement after the Troika talks, that there has been restraint over the last few days and that the region is still at peace. Obviously we hope that the United Nations Security Council will make progress, we doubt whether it is going to be possible given the attitudes already struck by people before the meeting, but what we have agreed as a European Union is that together we will have a defence and security presence, civilian forces, judges, police, backing up the NATO military presence to make sure that everything is done to secure the peace. Now our policy as a government is to support what I called supervised independence, but let us continue to hope that both Serbia and the representatives of Kosovo can reach an agreement over the next few weeks.
Question:
Are we back to a Directoire, the good old idea in the ’70s about Britain, Germany and France ruling in order to isolate Brussels?
Prime Minister:
Not at all. I spoke to President Barroso yesterday, the President of the Commission, to talk to him about some of the reforms that we want to see in the financial system and what we can do to pursue what is the British initiative, the global Europe plan, that we sent to the European Commission and to all member states a few weeks ago. And you may remember there was a globalisation declaration at the summit. We are moving forward with a discussion of reforms of the financial system, that is also a British initiative, but I want to work with all the countries that have taken an interest in this. And there was a joint declaration by Germany, France and Britain a few weeks ago, we have put forward proposals for the international system to be reformed. I believe these proposals can command support right across the world and that is why President Sarkozy, Chancellor Merkel and I will meet over the next few weeks, but I have been keeping President Barroso informed of everything that we are doing and look forward to the whole-hearted support of all members of the European Union for these reforms.
Question:
This is a question on Northern Rock for the Chancellor. It sounds like the taxpayer is underwriting the bulk of Northern Rock’s business. Isn’t that nationalisation in everything but name? Also isn’t nationalisation a disastrous result for you?
Chancellor:
No it isn’t. What it is is exactly what I said earlier, it is providing guarantees, these are contingent guarantees and it is the right thing to do because that is giving Northern Rock time to reach a resolution which will be best for it. And in relation to nationalisation, I have said, as the Prime Minister has said, all options remain on the table. But we will do everything we possibly can, we are doing everything we possibly can, we have been closely engaged now for several weeks in helping the company reach a resolution.
Prime Minister:
I think, if I may say so, the question misunderstands what the problem has been. The problem has been, first of all we want to protect the depositors and savers of Northern Rock, and we have managed to do so; and secondly, we want to prevent that spilling over, the problems of Northern Rock spilling over across the financial system, and that is what we have been trying to do over these past few weeks. And I would have thought that everybody who has a mortgage, and everybody who is concerned about the future stability of the economy, would want us to be successful in doing that. And that is why all options are kept open and that is why particularly of course we are pursuing these two private financial bids that have been put forward, and that surely is the right thing for a government to do, determined to keep the financial stability of the system.
Question:
The Roman Catholic midnight mass at Newcastle Cathedral is being brought forward from midnight to 8.00 pm on Christmas Eve because of fears of drunkenness in Newcastle. Isn’t it a rather sad reflection Prime Minister on the state of our cities at night and what is the government going to do to combat late night drunkenness?
Prime Minister:
Well I hope that the service, at whatever time, is both successful and celebrates the Christmas spirit and I wish all your viewers and listeners in the north well for Christmas. Binge drinking in our city centres is a real problem, binge drinking amongst young people is something that I am concerned about and I think anybody who is here and anybody who is a parent is also concerned about when younger people are involved. We called together the drinks industry, those people who are involved in the retail industry, and all the people who are concerned about the consequences of binge drinking and we will be putting forward I believe quite radical proposals on this in the New Year. I think it is very important to recognise that this is a social problem, it concerns large numbers of people and the level of binge drinking that is taking place in the open air in our cities is something that disturbs lots of decent minded people, and particularly so if it has led to this consequence in Newcastle this year.
Thank you very much and my best wishes to all of you for Christmas and I hope, despite the fact that wine is not here, that the mince pies are at least a satisfactory substitute. Thank you very much. Have a Happy Christmas.
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