April press conference

1 April 2008

Gordon Brown answered questions from national and international journalists at 10 Downing Street today. Topics included the economy and the international credit crisis, immigration, public service reform, the Olympics and the elections in Zimbabwe.

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Prime Minister:
Good Afternoon. In advance of the meetings that I will be holding this week and in the next few weeks with world leaders, and as we hear further news of large write-downs in the financial sector, I wanted to say something about people's worries about the economy just in advance of all the questions that I am very happy to answer.

I think we know that in America 2 million people are facing repossessions, 9 million are estimated to be in negative equity and unemployment is rising. And here in Britain as the global credit crunch impacts on all economies, home owners and businesses will be worried about the cost of mortgages, about what is happening to standards of living, particularly utility bills, and what will happen to their jobs. And as on previous occasions where Britain has been challenged to maintain growth in a world downturn, our task will be to steer people through this global financial turbulence and to be on their side.

We have now asked the Financial Stability Forum, which usually meets only at official level, to have its first Ministerial meeting; we have asked international regulators to cooperate and exchange information now on a daily basis about financial conditions in current market circumstances; the Chancellor is calling for a prompt and full disclosure of financial institutions' losses and calling on international standard setting bodies to provide clearer guidance so that we have a proper valuation of these write-offs.

Here in Britain, because of our success in achieving low debt we are able to increase public spending this year, next year and the year after. And just as we took decisive action on public sector pay to support monetary policy in cutting inflation last year, we will maintain this discipline against inflation this year so that interest rates can remain low.

We are however ready to do more. At the end of this week we are extending the scheme that provides loan finance for small businesses to help plug a gap in the market because of the credit crunch, and the Chancellor has today also written to the European Investment Bank to ask them to do more in their review of global loans funds to improve access to finance for our medium sized and small businesses.

And today as one of our first steps to help the housing market the government is offering additional help for new home buyers as our response to tighter mortgage conditions for first time buyers. The new shared equity schemes that are on the market from today are match-funded by the government and they provide more flexibility for home buyers, helping them to take their first step into the property market. And we will continue to examine what more we can do.

Next weekend I will be hosting a Heads of Government meeting, the Progressive Government Summit, a summit of progressive governments, and that will be held just outside London and one of our major discussions will be on the global economy, as well as on climate change and international institutions. I will be asking them to join me in pressing for another measure that will help the world economy, and that is an early conclusion to the Doha trade round, and I will of course discuss all these issues with President Bush on my visit to Washington in two weeks time, and with Chancellor Merkel, as I did with President Sarkozy, when I meet her at the NATO Summit.

Question:
Prime Minister, do you accept that immigration during the years of the Labour government has not benefited those people already here, and in particular do you accept that it has had a deleterious effect on the less skilled and lower income people already here trying to get into the workforce?

Prime Minister:
I have just seen the comments of the Head of Policy at the British Chamber of Commerce and they say the value of migration to our members' businesses and the economy as a whole has been substantial. And I believe that most businesses that have faced labour shortages, skills shortages and a situation where over the last ten years there has been a very high level of vacancies, today vacancies are around 675,000, know the benefit of being able to recruit more widely. But what we have done in the last few months is introduce for the first time a points system, like the Australian points system, that will restrict the numbers of people who can come into this country from outside the European Union. What that effectively will mean is not just a cap on unskilled entrants into the United Kingdom, but there will be no people coming into the United Kingdom who are unskilled from outside the EU. That points system will also be matched by a new citizenship fund that we are consulting on at the moment where we will ask people who come to the United Kingdom to pay a higher contribution for the services that they use. And we have taken on board the effect on services in different areas of the country by providing more money to local authorities to enable them to deal with them, and of course we continue to look at what we can do.

I think we have got to recognise that we have got to get the balance right between the skills that our country gains from people who have these skills coming to our country and being able to offer them to our economy, and I think most people in the City of London know that we have benefited very substantially not just from the inward investment that is coming from international companies, but the number of key workers who have come into join them and to make a huge contribution to the British economy. But we want to get the balance right between that and of course being sensible about the pressures on our economy and that is why the new points system, which we are the first government to introduce, means that there will be no unskilled entry into this country.

Of course those people who are proposing a total cap on immigration have to deal with one important set of points, and that is that they are not proposing a cap on European Union migration into the country, even the House of Lords report today accepts that that is not possible, and they also of course accept that dependants and students should continue to come into the country and meet the rules that we have for that, but without a total restriction on that. So most people who are proposing a cap are proposing on only 20% of possible migrants into this country and of course many of these migrants are today the highly skilled workers that help us fill the vacancies that exist in the economy and are important to the economy.

So the House of Lords report is an important contribution to the debate about this, but I think when people look at the figures and look at the facts they will see that over the last ten years British growth has been high, it has been higher than many other countries. The idea that these skills have not had a positive impact on our economy, as the Chambers of Commerce have said is wrong, when the report asks us to look at GDP per head and not just the overall level of our national income let me just say this, that our GDP - that is our national income per head - has risen from being seventh out of seven in the G7 in 1997 to being second in the G7 today. So the GDP per head has risen from £13,900 in 1997 to £22,840 in the last year. So far from there being a negative impact on our GDP, our GDP has continued to rise and our GDP per head has risen faster than all the major other countries that we are dealing with. So when you look at the situation ahead, and I think this is important for everybody as they look ahead, the new points system, the new Migration Advisory Committee, the new citizenship fund that we are proposing to consult on and to introduce, tougher sanctions against people who employ illegally, £10,000 fines for employers, far greater policing of the minimum wage and proper conditions for anybody who works in our country, I think we have taken much of the action that the House of Lords committee is suggesting and that action is already happening and already being put into place.

Question:
So just to be clear, you don't acknowledge or accept that this report is damaging, you just consider it plain wrong?

Prime Minister:
I accept that what we are doing is first of all introducing a new points system, now that has not been in the country before. So when we see how that is having an impact on the country I think we will answer many of the issues that have been raised by the House of Lords report. And to have a points system and not simply to put a cap, which is suggested by the House of Lords, but effectively to ban large amounts of unskilled labour from coming into the country and say we do not need that unskilled labour any more, certainly we want skills to come to the country where they are of use to us, but we do not want unskilled labour. So we have answered the House of Lords report by the new points system, we have answered it by our Migration Advisory Committee because they want further work done on this, we have answered it by our citizenship fund which is the proposal that people who come to this country pay more of a contribution to public services, we have already done something that they suggested which is to clamp down on people employing illegal workers to increase the fines and of course to police the minimum wage effectively, so we have done these things. Now nobody during the course of this discussion has put an alternative figure for the £6 billion additional income to our economy that comes from migration. That is a very substantial amount of extra income that comes as a result of people being able to use their skills in this country, and I believe if you talked to most employers who need skills, in the short term at least it is important for them to be able to draw on the pool of skills that exists from all over the world, particularly in the technological, scientific and financial services industry, and that is where the points system will choose between those people who we do not need and those people who we now need for the economy. So as I say we have listened to some of the representations that have been made in the past. Since June, when I took over, we have announced a whole series of changes, including the new points system, the Migration Advisory Committee and the new citizenship fund and I believe we are dealing with many of the problems that people have suggested doing, while at the same time acknowledging, as the Chamber of Commerce and indeed the CBI have done, that people with skills are making a big contribution to the British economy.

Question:
Prime Minister isn't there a danger that you are slightly over-egging this report? It is not saying that immigration is a bad thing, it is saying that it is a good thing, it is just simply saying that the levels of net immigration into this country, around 190,000 at the moment, is annually simply too much and you have to do more to curb it, to control it. And your points based system isn't going to cut the mustard, you have to go further and not have an absolute arbitrary cap but to have a much more targeted range of totals that you then apply some kind of points based system to, but you have to have that total, that target in the first place.

Prime Minister:
But I think you misunderstand what the points system is achieving. The points system is looking at the different occupations and the different skills that are necessary for the country. Where we then decide we do not need a particular group of skills we then decide that we do not allow people in in that category. So we are achieving exactly the same thing as the House of Lords has been suggesting by this route. And the points system means, as you say, that where we have skills that we can draw on, where there are skills that are useful to our country we are still happy to invite people in where they can be of use to us, and of course that we want them to pay a contribution to being here, particularly to the use of public services; but at the same time where you are unskilled or semi-skilled and don't have a skill to offer the economy we are saying that the points system allows us to say no this is not the time for you to come into the country.

Now any capping system that is being proposed has only affected 20% of those people who come into the country, and the House of Lords committee acknowledges that it cannot make recommendations for the European Union, it is not proposing to make recommendations for students, it is not proposing to change the law on dependants, so we are dealing with this particular category. Do we close down the possibility of being able to use the skills of people coming from abroad if they have got really good skills that are of use to our economy? And I would think that most people would decide that the answer to that is no, although of course we need to skill up the people here and give them the qualifications that are necessary, do we close down the route, as we are doing, to people who don't have skills from outside the European Union, and that is exactly what we are doing now. So the points system deals with those issues that have been raised and I believe that you will see a change in the number of people who are coming, in other words those people without skills will not be applying or being allowed into the country if they are from outside the European Union.

Question:
Prime Minister this month the Advisory Council on Drugs is due to report back on cannabis. Do you think now it was probably a mistake to reclassify cannabis from B to C?

Prime Minister:
Well I have made my own personal views known and I believe that if we are sending out a signal, particularly to teenagers and particularly those at the most vulnerable age, young teenagers, that in any way we find cannabis acceptable, given all we now know about the change in the way that cannabis is being sold in this country, that that is not the right thing to do. But I will take the advice obviously, as will the government as a whole, from the advisory committee and we will look at what they say. But my personal view has been pretty well known for some time that I don't think that given the changing nature of the stock of cannabis that is coming into the country and the greater damage that that appears to be doing to people who use it, there is a stronger case even now for sending out a signal that cannabis is not only illegal but it is unacceptable and that the use of drugs in this country is something that we want to do nothing to encourage.

Question:
You have often paid tribute to the bravery and professionalism of our forces in Iraq, but I wanted to ask you a slightly separate question. What does it say about their mission in Basra that the Iraqi Prime Minister can launch a major offensive and not even pick up the phone and tell us that he is doing it?

Prime Minister:
Well let me say first of all, because of the casualties in Afghanistan, that the dedication of our forces and what our troops have done in both these theatres of war is something that I think the whole country is right to admire, and I do. And the loss of life yesterday of two of our soldiers in Afghanistan is to be deeply regretted and I pay tribute to their courage and their dedication and professionalism and their contribution to the country.

As far as Iraq is concerned, we made I think the right announcement a few months ago that we wanted to move to what I called overwatch. In other words we want the Iraqi people, and particularly the Iraqi forces, to take more responsibility for policing and for security. And to make that possible we are helping train 30,000 of the Iraqis' own armed forces in the south of the country, and we are making a big contribution, as are others, to the training of Iraqi police. So our whole policy is to make it possible for the Iraqis to take more responsibility for their security through both their own armed forces and their police. And the reason that we talk about overwatch is that while yes we have a re-intervention capability as a first part of overwatch, and yes we can maintain supply lines and have been able to use air force support for the Iraqi troops on the ground in Basra, that our main job in future will be the training of the Iraqi forces. So the important thing about Iraq is that you will see over the next few months Iraqis taking more control over their own affairs.

Now I don't want to comment on the individual events in Basra which were a decision made by the Iraqi government themselves because of the existence of criminal elements and the militias operating in Basra, that is a matter for Mr Maliki to make his statements on. But the important thing is that it is consistent with the new role that we want to play in support of training and supplying where necessary, but an overwatch role that gives the Iraqis themselves more responsibility for their own policing and for their own security.

Question:
On the economy, with all the bills, council tax, road tax, all going up today and showing no signs of coming down, despite what you say about the action you have taken, people want to know when things are going to get better rather than worse. Can you help them?

Prime Minister:
I think you will find that we have frozen petrol duty and we have done that for the next few months because it is a recognition of the problems that people are facing at the moment as a result of what has been a 60% increase in fuel prices around the world. And I think you will find that we are introducing the additional winter allowance for all pensioner households where someone is over 60, an extra £50 to help with the fuel bills so making it £250, and an extra £100 for the over-80s making it £400. And you will also see that this week we are increasing the child benefit and increasing the child tax credit to enable families to cope with what are difficult situations.

Now when you have round the world a 60 - 80% increase in the price of commodities, and that is affecting oil, it is affecting gas, it is affecting coal, then there are undoubtedly pressures that every country is having to deal with. But we have tried to take seriously our responsibilities to pensioners and to families by making it possible for us to make sure that more money is available over the course of the next few months. But our main aim is to make it possible for the economy to continue to grow and jobs to be continuously increased. And as you know, in the last world downturn 15 - 16 years ago what we saw was inflation at 10% and therefore interest rates could not come down, and interest rates in fact went up to 15%, then we saw unemployment go up to 3 million, and then we saw of course that public spending had to be cut and there had to be huge tax rises.

Now I am determined that by having taken the actions we have taken to ensure stability in the economy, cutting debt over the last ten years so that we are able to borrow over the course of the next period to enable public spending still to grow and make its contribution to the growth of the economy, by keeping inflation low and enabling the Bank of England to do what the euro area has been unable to do, and that is cut interest rates twice over the last period of time, and by keeping inflation low to give the Bank of England the options that they need for the future, that we are doing the right thing by the British economy.

But we are also, as I just mentioned today, doing more on mortgage finance and our equity sharing package that is available from now for first time home buyers will help some first time home buyers who otherwise might not be able to get mortgages, and to be able to join on the housing ladder. And as I said, the European Investment Bank has been asked to do more to help businesses where there is a credit crunch affecting them, we want to do more. So we are taking action in all the areas that we believe we can help the British people come through what is a difficult situation that has come out of America, it is a world downturn, it is global financial turbulence but we in Britain will do our best to make sure that we can see how we can steer the economy through that in the interests of all British people.

Question:
Prime Minister to those people planning on demonstrating, possibly disrupting the passage of the Olympic Torch next Sunday here in London, what do you say? And also on a lighter note, and thanks possibly to the Guardian today, do you think that Britain's plc would benefit from a little French savoir faire on resolving certain national problems such as the infrastructure of Britain's railways and also maybe on binge drinking?

Prime Minister:
Well you are pointing to one or two of the issues that people often write about from overseas about Britain. Look we are acting on binge drinking. I think you will find that the problems that exist in city centres and elsewhere we are dealing with. I am sorry about the trouble that has been caused at Heathrow as a result of the failure to get the baggage handling system in line for Terminal 5, and BA and BAA have to take responsibility and make sure that passengers can both get their baggage and flights can be restored to normal. So on both these issues I hope I can assure you that we are doing our best.

As far as the Olympic Torch is concerned, I will be here on Sunday so that I can welcome the Olympic Torch when it comes to London. I think the Olympics are an important sporting event that is shared throughout the whole world. I note the fact that the Dalai Lama has said himself that he does not want to stop the Olympics. I think the key thing at the moment over Tibet and China is that we do everything in our power to make sure that there is restraint on all sides, that there is an ability for there to be reconciliation and at the same time that the Dalai Lama, having accepted the two conditions that the Chinese government have laid down, that he renounces violence from him and his supporters and at the same time he accepts that there will not be an independent Tibet, I hope at some point that people can do more to facilitate discussions between the Chinese authorities and the Dalai Lama.

Question:
Australia has decided they are going to push for one of the temporary seats on the United Nations Security Council, and I know Britain has helped nations in the past. I wonder if Britain under you would actively lobby on Australia's behalf? And if I can ask a question on Afghanistan. A lot of small countries have complained that they don't have access to the top of the table sort of command structure on a day to day basis. Do you think that has cost you, or cost NATO, the support of more troops from smaller countries and should those small countries have access to the top command structure every day?

Prime Minister:
I see you are learning the rules here - you ask two questions at once.

Look the first thing is I am looking forward to welcoming the new Prime Minister of Australia, Kevin Rudd, to Britain this weekend. I am very pleased that after the NATO Summit he is going to be visiting Britain and I am looking forward to having talks with him and to being able to talk to you after that later. And I do applaud the announcements he has made, particularly on climate change in Australia where he is ready to join an international discussion that will be of benefit to the whole world.

As far as the United Nations is concerned we have said that we wish to see Security Council reform. I believe that that is a reform that is overdue but I am not going to get into the business of announcing how.

Question:
Inaudible.

Prime Minister:
But this is a reform, if there is to be a Security Council change it will be part of a wider reform and I think it is important that we don't announce in advance what we are doing in particular areas. But the contribution of Australia to both the world economy and to governance in the world is a very important one indeed and I wish to acknowledge that.

As far as Afghanistan is concerned there are more than 40 countries in Afghanistan, it is a joint coalition mission. I welcome the contribution that Australia has made in Afghanistan and one of the things that we will be discussing tomorrow, Thursday and Friday is the burden sharing between different countries and how countries that perhaps are not making the contribution that they can, could make more of a contribution, and countries that cannot send fighting troops for all sorts of reasons might be able to help with equipment and we can have a better burden sharing amongst our allies.

Afghanistan is the front line against the Taliban. Let's make no mistake about it. If Afghanistan falls again to the Taliban it creates a vulnerability for the whole of the rest of the world and if al Queda, as they are trying to do, are to make progress in Afghanistan that is also a further danger to the world. So it is very important that we act to deal with the problems in Afghanistan. And that is why we put forward a strategy only a few weeks ago that suggested that not only must we make sure that our military strength is there to withstand the Taliban, but we have also got to train up the Afghan army and police, and we are helping to do that and many countries are doing that, and we have also got to give people a stake in the future so that Afghan people themselves can see in local government and national government, and in the economics and social development that we can bring about, that they have a stake in the future of Afghanistan and I believe that all people have a similar interest in achieving that. And I believe that at the NATO meeting when we discuss Afghanistan all voices, voices of small countries and large countries, will be heard.

Question:
Nick Clegg made some frank comments on his personal life in the interview with GQ. I wonder how appropriate you think it is for a senior politician to be talking about things like that and to what extent do you think it is good for politicians to be more open about these themselves?

Prime Minister:
You know you have taught me another lesson - not to talk about these things at all.

Question:
My question is about Iraq and the role of Iran. We heard that Iran helped in stopping the fighting in the last few days. Sir, is that correct? And second, what in the future of Iraq do you foresee as a role for the United Nations? You always think that the United Nations should have a role in every single dispute.

Prime Minister:
In Iraq?

Question:
Yes.

Prime Minister:
Remember the circumstances in which the United Nations had huge difficulties as a result of deaths that happened to their own personnel in Iraq when they were serving both the cause of the United Nations and the cause of peace and there were huge casualties. And I think we have got to understand the difficulties that the United Nations have had, but obviously we welcome the role that they could play in Iraq in the future.

As far as Iran is concerned, I hope that there will be peace in Basra, but I am under no illusions that where there are militias, and where there are extremists, and where they are influenced by people from other countries we have got to take action and support the Iraqi authorities in dealing with that. The future for Iraq is the millions of people who went to vote when Iraq had its democratic elections, a higher proportion of the people went to vote than in most other democracies because they wanted to have a democratic future. We want to see local government established in the Basra area to enable local people to make decisions about their future, not by violence and not because of militias, but because they are working together in the democratic process to achieve the changes they want to see. So that is the future for Iraq and I agree with you, it is local people making local decisions without interference from outside.

Question:
We published a cover story about British kids this week and considered it to be a very measured contribution to an important debate, but it was seized on by quite a few commentators as proof of the kind of decline in Britain's abroad, from Cool Britannia to sort of cruel Britannia if you like. I am wondering both how you think Britain is seen abroad, but also really how concerned you are about the significant minority of British kids who, as our cover line states, are unhappy, unloved and out of control?

Prime Minister:
I believe one of the most difficult challenges that any government faces, and particularly in this country because we are aware of the problems, are the numbers of children who fall through the net and the numbers of children who are in care and then when they leave care find themselves totally on their own, and that is a challenge that we are addressing and looking at at this very moment. We have had huge success in getting teenagers into work under the New Deal, so large numbers of teenagers who had never worked before, as a result of the New Deal we got them into work and many of them are now enjoying very successful careers. And we have seen an 80% fall in youth unemployment. But for that other group who have fallen through the net we need to do far more, and that is why one of our priorities is not simply to deal with the challenges that are caused by children in care, but to give transitions to skills for those people who for some reason or another have not made it at school, for whom school has been a waste of time, for whom truanting has been part of their life at school, and that is why we are concentrating on this issue.

But I don't think in looking at Britain from abroad you should ignore the fact that ten years ago one in every three of children born in Britain were being born into poverty, that we had one of the fastest rises in child poverty in the previous two decades of any country in Europe. We have taken large numbers of children out of poverty. More children are able to read and write, our literacy and numeracy has had a big impact, as well as the other changes we have made, and more people are leaving school with qualifications than ever before, and of course more are going to college and university and we are now expanding apprenticeships.

So for the vast majority of children and young people the investment in education, in schools, in under 5 provision and in universities and colleges is paying off. But we are going to deal with the problems and challenges that come to us as a result of a small minority who have fallen through the net who need special help, and often the help they need is a one to one help, voluntary organisations that we can finance to help them encourage young people to make more of their lives and see that they will have talents too, but if we help them develop they can make a contribution to our society.

Question:
I wonder if you could expand a little bit in your preview of what we can expect from your visit to the United States later this month. For example can we expect a little bit of warming in your relationship with our current President? You were described as a little bit formal, a little bit distant in your last visit. And can we expect you to get a little bit more involved in our discussion about a future President. If I might quote you recently here: "I think Obama would make a great President if he wins. I would definitely look forward to working with him." Is that an endorsement Mr Prime Minister?

Prime Minister:
I think if you are referring to comments that I have made I have said that both Mrs Clinton and Barak Obama would make great Presidents, and I have also enjoyed meeting Mr McCain whom I have talked to about all the international issues as well as what is happening to the international economy. And I am pleased about the good relationship I have with President Bush, I keep in very regular contact with him, and I appreciate the courtesy that he has shown me and the friendship that we have built up to enable us to tackle some of the problems that we face together.

I hope that in my visit to the United States - (Overhead noise - that is by the way the Red Arrows, this is to commemorate the 90th anniversary of the RAF and we are also celebrating today the 100th anniversary of the Territorial Army. I suspect that they might have thought that I would have finished speaking by the time that they did their fly past! We congratulate both the RAF and the Territorial Army on their huge achievements for the country.)

When I visit the United States I will be talking obviously about the international economy and I believe that we can work together very closely to deal with some of the problems that have arisen from the off balance sheet financial activities, the need for write-offs, the need to reform the credit rating agencies, and the need to show that the international community is working together to achieve stability in the world economy. I think we have got a lot to learn from each other and I think Europe and America must work very closely together to show that the economy is going to be both stable and put on a path to higher growth in the next few months.

I will also be talking about climate change, about burden sharing in Afghanistan, about our joint efforts in Iraq, and also about the reform of the international institutions. I believe, as I will say when I am in the States, that in 1945 we made very big decisions to set up the IMF, the World Bank, the United Nations and the different organisations that have contributed to prosperity and peace over these years, I believe 2008 is the time to make decisions about how these institutions that were built for other times can be reformed and renewed for the challenges of this time, and the challenges include a global economy rather than separate national economies only, and the challenges on climate change which have not been addressed by international institutions in the way they should, and the challenges also included of course failed states, terrorism, the poverty, inequality and deprivation that exists in so many parts of the world where people look to us to give leadership about what we can do for the future. Now these are the things I will be discussing.

Question:
When you came into office you made a great play about talking about change in among other things schools and hospitals. Can I ask you what is the Brown recipe for reforming public services and how does it differ, does it differ from the Blair recipe of targets and choice?

Prime Minister:
I have just been talking to 700 civil servants and I have just come from that about the agenda of change for the future. We had a first stage of public sector reforms. Essentially it was dealing with a neglect of investment over 20 years, and that started in 1997 by our determination to invest in schools and hospitals.

Our second stage focused on choice, market mechanisms and on contestability and choice. Now both these essential elements of public sector reform are part of what is the third stage of public sector reform, which we are now inaugurating, and that includes if you like using the pressures that can come from governments wanting change, and also the pressures that come from market forces being put to work. But we also include users themselves, the people, the consumers putting more pressure on for change, and services more personal to the needs of consumers. If you take the Health Service it is no longer enough for us to say that we will provide hospitals and GP services at the courtesy of the GP and the hospital consultant. People want a hospital service that is personal to their needs, that takes them seriously as individuals, that is there for them when they need it and not at the convenience of someone else, but at their convenience. And they want clean hospitals, they want GP access and of course they want what I have been launching today, the new check-ups and screening that will enable people to prevent disease rather than simply have to cope with disease. And that is why today as you have probably seen, we are announcing that for people who may face heart, stroke, liver, kidney, diabetes and other diseases, there will be a very easy check-up to all adults over 40 that they can get a check up with a blood test, or with blood pressure being checked, they can do so in half an hour. This is something that normally you would have to pay for if you have to go private, it will be available on the National Health Service, starting next year, developed in stages, and the evidence is that it will prevent the loss of nearly 10,000 lives a year and allow 25,000 people who have diabetes or kidney disease to be detected and enabled to be treated, while at the moment it is too late when people find out what is wrong.

So the service, personal to people's needs, is what we are talking about for the future. And that is why social care will be about social and individual budgets for many people, but that they control themselves. So the user will be in the driving seat, the consumer will be in charge. We will put more power both in choice and voice into the hands of the patient, the pupil, the teacher, the parent and we will back that up by highly professional services being provided. And that is why we will issue a call to professionals very soon that we want to go to worldwide class standards in every area - education, health, social services, other areas where the public services are active. So the third stage of public sector reform is building on and continuing the work of the first two stages, but putting the citizen, the consumer, the parent, the patient more in charge so that a service in future is not simply a standard uniform service but a service personal to their needs.

Question:
Do you share the over-optimistic view that there will be a Palestinian state this year, judging by the fact that there is no progress achieved? And do you still have the target for the London meeting in May and what would be its objectives as a follow up of Annapolis of course?

Prime Minister:
Well as you know Secretary of State Rice is in the region at the moment. President Bush has indicated that he plans to go back to the region. Tony Blair is working very hard with the Palestinians to enable some support to be given to them for both their infrastructure needs and for the economic and social development of an area that is hit by very substantial poverty and unemployment at the moment. And of course what we need is for the talks between the Israeli Prime Minister Olmert and the leader of the Palestinians, Abbas, to work. And we will do everything in our power to support these talks. That is why we have offered to have a London Conference, that is why there is going to be a Bethlehem conference as well to look at investment in the region, that is why just as in Northern Ireland the promise that the outside world will take seriously the needs of investment for the future is important in this region as well and we will continue to say that we will support and help finance an economic road map that would underpin a peace plan that is to be agreed by the two leaders. So I am optimistic that we can move things forward, despite obviously all the difficulties of recent days when there have been these terrorist incidents and there have been these bombings that we deeply regret and condemn.

Question:
Do you now accept that you are going to have to keep the current level of just over 4,000 British troops in Iraq for the foreseeable future and perhaps even beyond the end of this year?

Prime Minister:
Well troop levels a year ago were about 7,000, they were over 7,000, I think 7,100. They have come down to around 4,000. The Secretary for Defence will announce this afternoon when he makes a statement on what has been happening in Basra the difficulties of course we are facing as a result of the recent incidents in Basra. I think it is for him to announce what we will do for the future. But clearly when you have a series of clashes within Basra we have got to take seriously what we said all along, that we will listen to the military advice on the ground and make sure that we take into account what is happening in the local situation as we make our decisions. Troop numbers have come down from 7,000 to 4,000, we will make any further decisions on the basis of military advice on the ground and our assessment of what the conditions are on the ground.

Question:
Prime Minister how confident are you that the preferences of the people of Zimbabwe will be reflected when we have the final official results of that election? What is Britain doing to ensure that that happens, and if it comes to it what will Britain do to help ensure a peaceful transition of power there?

Prime Minister:
It is very important that the democratic rights of the Zimbabwe people be respected and upheld and recognised. That is why I continue to call for the election results to be published, and not to be withheld, so that we have a full account quickly of what has actually happened in elections that are over now and where the results are available. It is also absolutely critical that the elections are fair and are seen to be fair, and I think the eyes of the world, as I said yesterday, will be upon Zimbabwe so that the doubts that people have, and the questions people have, can be answered. I have of course talked to the President of South Africa, Thabo Mbeki, I am talking to the President of the African Union, Mr Kikwete, later this evening, and I have also talked to Kofi Annan who played a major role of course in Kenya only a few weeks ago and we will keep in touch with the situation. But this is primarily a matter for Africans to express their views, as well as other countries expressing theirs. The democratic rights of the Zimbabwean people have got to be respected and upheld, the results should be published immediately and of course elections must be seen to be fair. I think the background of course is the suffering of other Zimbabwean people, 80% in poverty, 4 million people having to leave the country, the escalating inflation in the country and the problems that people have faced as a result of that, the loss of reserves and therefore the continued suffering of people as a result of the lack of food and help that is available as a result of that. So we have got to bear that in mind, the sufferings of the Zimbabwean people.

Question:
Prime Minister can I take you back to the economy? Banks are withdrawing mortgage offers and raising borrowing costs, even after two interest rate cuts. Are you worried about the impact this might have on the economy and what if anything can the government do to restore normal conditions to the markets?

Prime Minister:
Well what I want to do is to make it possible for the Bank of England to cut interest rates, as they have, and to make it possible for them to have all the options open to them for the future. Now that is why we are bearing down heavily on inflation, that is why we took difficult decisions last year. We foresaw problems if inflation were to rise in this country, it was controversial but we cut obviously inflation by making sure that public sector pay settlements were in order in what we could afford as a country. And this year of course we are also looking for public sector pay settlements that are in line with the inflation needs of the country. So we will try to create the conditions in which it is possible through the attack on inflation for interest rates to be low. At the same time I recognise that there are certain areas of the housing market that are most difficult for people, and I think at the moment that the groups that are experiencing the greatest difficulty are first time buyers being able to get mortgages on conditions that they can afford, at rates that they can afford and without the requirement for large deposits that are often very difficult for them.

And that is why we are looking, as I said today, at at least one area where we can make a difference, and as a result of money made available in the budget we are able to offer new home buyers equity sharing arrangements where they can buy 50% of the house and then gradually buy up 50, 60, 70 and 80, the rest rented from housing associations with the support of government. So we are trying to create a new product, or a better product, it is an existing product but a better product in the market place to give new opportunities for home buyers as well.

Now the most important thing we can do is to make sure there is stability and growth so that we keep seeing employment and jobs created and we keep seeing inflation low enough so that interest rates themselves can remain low, and we will continue to do everything we can to help people with utility bills, as we have done with pensioners.

Question:
Just a follow up to that. When you go to the States will you be discussing your plan for cross-border regulation of multinational banks with President Bush? And could you put a little bit more flesh on the bones of that plan, as it was reported in the FT yesterday?

Prime Minister:
I want the Financial Stability Forum which is responsible as a watch dog for the world economy now to be in regular daily contact with each other. As the important supervisors and regulators of the world they should be in regular daily contact about what is actually happening in the different markets and what can be done. I also want the Financial Stability Forum to meet as a Ministerial group, it has always met as an officials group before, so that the impetus for reform and for the changes that we want to see happen is immediate. And so in the next few weeks I believe that the International Monetary Fund, the Financial Stability Forum and the G7, which will be meeting in the next few days, will decide that first of all there has got to be far greater transparency and disclosure in financial markets. What we had essentially was off balance sheet activities that nobody was required to put on balance sheet, and we need to have greater and higher standards for disclosure and transparency. What we also need is credit rating agencies that are not simply advisors and raters at the same time, and therefore there is a potential conflict of interest, and what we need also is agreement about how the big institutions will write off the losses that they know that they have suffered, and the sooner that is independently validated and the sooner that happens, the greater will be the return of confidence to the economy. And we need to do this at an international and not simply a national level so that people are agreed that the measures that are being taken are the ones that are designed to solve problems that are happening not in simply national markets alone, but happening because of the impact of certain markets on the rest of the world.

So these are the changes we need: greater disclosure, a new approach to rating agencies, write-offs independently validated, we need the Financial Stability Forum to meet regularly at a Ministerial level now, and we need there to be daily contact with the regulators. And we will be working very closely with the United States of America on some of these issues. I believe there is a great deal of common ground. A lot of information that is now available to us shows what needs to be done quickly and I believe in the next few days we can agree some of these changes to the international financial system.

Question:
Prime Minister there is strong opposition to extending the detention period to 42 days, according to ... position from judges, from human rights organisations. Are these new extensions of laws and extension of the detention period substitutes for real work on the ground, intelligence work and bringing terrorist suspects to trial?

Prime Minister:
Well many people have said that there will come a time when there are multiple plots, or particular difficulties emerge where we will have to ask for a greater detention power than 28 days. This is a position that is common to all political parties who have different ways of getting to the same solution because they have all said that there may be occasions where we would have to go beyond 28 days. Even the organisation 'Liberty' - the civil liberties organisation - have said that in circumstances where you may have to go beyond 28 days they have proposed the use of the civil emergencies act by declaring a state of emergency.

So there is not much doubt amongst people that there will be occasions that will arise in the future when because of the sophistication of terrorism, or because of the plots that we face, we will have to assemble a case to detain more than 28 days. The difference in the measure that is now proposed to the House of Commons from the previous measure is that no-one could be detained for more than 28 days without it coming to the House of Commons for approval, and there will be approval asked, not just by an order put forward by the Home Secretary, but an order that requires that the Director of Public Prosecutions and the police to agree that this is the right thing to do. And then when it comes before the House of Commons there will be an independent reviewer who will look at the circumstances in which this detention has happened, there will be a report to parliament on the matter, but the most important thing is that parliament has got to vote. So there is no proposal for a blanket extension of 42 days. That is a myth and that is wrong. There can only be a detention beyond 28 days if the Home Secretary comes to parliament, and the Home Secretary will come to parliament during that period of detention and ask parliament to approve the action that has been taken to declare this particular incident one that requires going beyond 28 days. And even then there will be full safeguards for the individual so that nobody is treated arbitrarily, with having to come to a judge every seven days, with an independent reviewer in place, with in the first place it having to be approved by the Director of Public Prosecutions and the police as well as the Home Secretary, and with a report done on what happens to parliament.

Now what I am trying to do, and what the Home Secretary is trying to do, is to get the balance right between the needs of national security where there will be occasions when with a multiple terrorist plot or another kind of terrorist incident, and with the sophistication of investigations that has to take place often across continents involving multiple numbers of addresses, mobile phones, passports and everything else, so there will be an occasion when we will need more than 28 days but at that stage the arbitrariness that people allege may be used by the authorities against that person is protected against by all the safeguards that we have put in place.

So it is not a blanket extension to 42 days, it could only happen if the Home Secretary was then prepared to come to parliament and ask for approval of what is happening. And that is what is different between the old proposal and the new proposal, and I think gradually people are coming to realise that there is a case for a new proposal which balances off the needs of security which are real and urgent in some cases, with the need to protect the individual liberties of the citizen against arbitrary treatment.

Question:
On the financial crisis there has been a lot of talk over the last six months of measures the international community can take to tackle the crisis, and you have given a list there about transparency, the role of credit agencies and so forth. Aren't you at all concerned that by the time you actually get round to doing something about this, rather than just talking about it, you will be regulating the last crisis, as usual?

Prime Minister:
Well that is why I want to see action at the G7 meeting that takes place in a few days time, and at the IMF meeting, and that is why I want the Financial Stability Forum's regulators to be in daily contact. And so I am saying now, as are other authorities, that we have got to make these changes immediately. I believe there is now a will in the international community to do so. The Chancellor is putting forward these proposals, not just to the American authorities but to all G7 authorities, and to the IMF, and to the Financial Stability Forum, and I think we will get agreement on these in the very near future.

You have got to go back to 1998 when I was Chancellor of the Exchequer. After the Asian crisis we did bring in measures to ensure that there was greater attention to crisis prevention, we did make it possible where there were state issues like reserves off central banks that there could no longer be that lack of transparency. We have now discovered in the private sector that off balance sheet activities that have never been properly declared can threaten and risk the credit worthiness of the whole system. And that is why we need to take this action to ensure that there is proper transparency and disclosure. It is not a blanket regulation, it is not over-active regulation, it is simply transparency so that the markets can work as informed and educated markets in future and that is why I think there is a growing consensus that these things should be done.

So we have put forward our proposals. There is a report in the Financial Times today that the Financial Stability Forum has now reached similar recommendations to what we have been recommending as the United Kingdom and there was a report the day before showing that the UK and the US are working together on common ground on these issues. There is an urgency in taking these actions. I believe we will see in the next week there is an agreement to take many of the proposals seriously and to adopt the ones that are most important to the alleviation of the problems now.

Question:
At the weekend Prime Minister one of your own Ministers talked of a growing sense of disillusionment and angst among the voters, suggested that you were failing dismally to put across what he said was the success of your own policies. Do you see this is a sign that even within your own government people think you are losing it?

Prime Minister:
I think he was talking about the successes of the government, he was talking about policies that were working in health, and education and housing, and of course he is the Minister for Social Care. But he was also saying something that I agree with, that we have got to listen to what people are saying. And one of the reasons I am spending so much time going round the country, I was in Leicester and Coventry yesterday, I am going to a whole series of different events in different regions over the next period of time, is that the only way you can make policy in the future, and this is true of every country, every industrial society, is understanding that you have got to engage people in the process of making these decisions. And that is the important lesson that I said that we would take up when we came in, it is the important lesson that has been shaping our policies on social care for example for the elderly, we have got a report on carers about to be done, Lord Darzi is doing his Health Service consultation, we have got a consultation on the children's plan. People criticise us for having reviews. We are actually listening to what people are saying, as we did on the internet last week with Dr Tanya Byron's report, listening to what people are saying about the problems that families, and particularly mothers and fathers, now face not knowing how to handle the explosive growth of new information on the internet and wanting to be sure that we are doing the right thing by our children.

Now we are listening to what people say, we are in a very difficult economic situation. I understand people's worries and their fears about the future. We have been in difficult economic situations before but we have shown that by the actions we have taken we have maintained stability and growth in the economy. I am confident that we are taking the right actions at the moment, but I do understand that it is a difficult economic situation around the world at the moment and Britain is no different in having to deal with the outcome of what has been a global financial turbulence.

Question:
Are you angered when you see referees being abused on the pitch by Premiership footballers? Do you think there should be better role models? And secondly, do you think it was wise of Harriet Harman to wear a stab vest when she was walking around her constituency?

Prime Minister:
I will be watching the football match, the football matches, tonight. And I think most fathers and mothers when they know that their young children or teenagers are watching football matches, either spectators at games at which they are at, or watching them on television, want their footballers to be better role models. Some are great role models, some do an amazing amount of community and charity work. I have met some of these great footballers who do a great deal, but I think people do not want to see the bad behaviour that sometimes happens on the pitch. And what I have been suggesting is that not only should we take seriously the discipline issues in football, but the captain of the team takes more responsibility. There are some great captains in English football, in British football as a whole, but captains taking responsibility for what happens on the field and perhaps, as in rugby, the referee talking to the captain to cool things down could be something that makes a bigger difference in the behaviour of people on the football pitch. I think all round when we are talking about role models for young people it is really important that we emphasise to the footballers themselves that their skills are highly valued, that the influence they have on young children and teenagers is something that goes way beyond the football pitch and we want them to take seriously the responsibilities to help young people grow up as disciplined and well behaved citizens.

Question:
(party political content)

Prime Minister:
(party political content)

Question:
You just dodged Graham's question about Harriet Harman. We all know she is a nightmare but she is there, she is your Deputy. Can you tell us was she right to wear a stab jacket and should she wear a stab jacket next time she is in Downing Street?

Prime Minister:
When Harriet Harman went out with the neighbourhood policing unit she was working with them and that is why she was wearing what she was wearing. And she was emphasising the importance we attach to neighbourhood policing in the community. And as I have just said to the previous question, London has more than 10,000 more police, London has Community Support Officers, we have created neighbourhood policing units in every area, and what Harriet and other Members of Parliament are doing this week is emphasising the importance that we attach to the work that the police are doing and to the importance of this idea of neighbourhood policing.

Now in case it hasn't percolated through, the importance of neighbourhood policing is that the local resident will have the telephone number on their mobile of their police officer, they will be able to contact them directly, know their name, know their face. The neighbourhood policing teams will be holding regular meetings with local residents, they will be distributing leaflets and information through the doors of local people. The concept of policing which became the police in the police station or in their car is moving to this visible presence on the streets where people can see a Community Support Officer or police officer at work. And I think it is important that we emphasise there are going to be 3,500 of these neighbourhood policing units round the country, this is a change in the way that policing is going to be done for the future, it is exactly what the public want because although crime has come down and the numbers of police have gone up, and although violent crime has come down 30%, people want to know that they can feel safe when they go out at night or even go out during the day. And one of the things that reassures them is that you have policing in the community, a visible presence, there for all to see, and that is what is going to happen in all areas of the country.

Question:
Prime Minister last week President Sarkozy said that he might not attend the Olympic ceremony according to what happens between now and then and between the consultation with other EU leaders, as he will be President of the EU. You said instead that you will be definitely attending, no matter what. I wonder if you can clarify your position. Do that mean that if the EU decides not to attend you will be the only European leader to go?

Prime Minister:
I think President Sarkozy said himself that he expected Britain, because we are going to host the next Olympics, to be present at the Olympic ceremonies and I will certainly be there. And I think we have got to bear in mind that although there is a huge amount of controversy now surrounding the Olympics, because of what has been happening in Tibet, the Dalai Lama himself has made it clear that he does not want to boycott, or there to be a boycott of the Olympics. And I think we have got to bear in mind the views round the world that the Olympics should go ahead as a sporting occasion. Now as far as Tibet is concerned, which is the issue that has brought this about, I want to see restraint and I want to see reconciliation and I want to see an end to the violence. And of course I have telephoned Premier Wen and talked about some of these issues, but surely the way forward is to seek that reconciliation and to facilitate that, and I think that is the important thing for the next few days.

Question:
Did you have any feedback from your wife last week after your passionate kisses to Carla Bruni?

Prime Minister:
Well there are almost as many people in here as were outside Downing Street when Mrs Sarkozy arrived, and she was a very popular visitor to Britain. Look both of us were very pleased to welcome her and we continue to look forward to meeting her again. So that's it. Thank you very much. British reserve. Thank you.

Question:
Prime Minister the £3.5 billion Britain-Bangladeshi curry industry which employs about 70,000 people in this country are suffering from a serious unskilled staff shortage and that concern has been recently repeated by the media. There are about an estimated 25,000 job vacancies and many are facing the danger of closure. Would you consider to do something to meet the needs to enable them to continue their business and even more contribute to the British economy?

Prime Minister:
You are in a way back to the question that we began this press conference with about migration into the country. Let me say that we will make it possible for people who are in this country to be trained to be either chefs or restaurant workers in the industry. We are doing far more to train than ever before. We know there are people who if trained can make a contribution to the industry and we are determined to make it possible for people to get these skills in Britain so they can make their contribution not only to our economy but make their contribution to being skilled and obviously productive workers gaining good salaries. So that is how we propose to deal with the issue that you raise.

I repeat that we have come to a position on migration that I believe people will see is a fair one, that the new Australian points system is one that gives us the opportunity on occasion to decide what are the right needs for the British economy. But I have no doubt at the moment that one of the things that we should be concentrating on is helping people who are in this country train for the industry that is a very important industry and a very important part of our economy and I welcome the contribution it makes.

Question:
This morning John Swinney, Scotland's Finance Secretary, met Yvette Cooper to talk about Scotland's finances. Up for discussion was the subject of the Scottish government's local income tax policy and the reputed £750 million shortfall. Alex Salmond wants you to stump up £400 million in council tax benefits. What is your view on that?

Prime Minister:
Public expenditure is decided by the Barnett Formula. The help that we give to the different regions of the country and the public expenditure contribution that we make is decided as a result of a formula that was agreed more than 30 years ago, that has been sustained by all governments since, Conservative and Labour, and is generally based on the idea that the needs of different parts of the United Kingdom should be taken into account. The idea that we should either offer more money from the public expenditure settlement, or refund something that the Scottish Administration for something they wish to abolish, that is a matter for the Barnett Formula. We are pretty clear that we have been fair to Scotland, Wales and Northern Ireland by it. We are publishing a paper, as you know, on the Barnett Formula and people can see for themselves the benefits that have gone to the different parts of the Union as a result of this. (party political content).