tv American Politics CSPAN August 9, 2010 12:30am-2:00am EDT
minor procedural change was recommended and accepted. the only real reform of note in all that time was achieved by the liaison committee. in their report shifting the balance in 2002 they suggested that the pm should attend twice a year to answer questions from them. the government vigorously rejected the idea, but only a few months later a good example of the delayed drop effect so often experienced by persistent select committees the prime minister himself agreed to it. the liaison committee format is a huge improvement but nevertheless has limitations. the lengthy cross-examination of a prime minster a year is not a substitute for an effective event every week. all of which leaves us with the pmqs seen in the last parliament.
we reached the point where almost nothing was deemed beyond the personal responsibility of the prime minister of the day, where the party leaders were responsible for a third of all the questions asked (and often more like 50 to 60% of the total time consumed) all set against a background of noise which makes the vuvuzela trumpets of the south african world cup appear but distant whispers by comparison. if it is scrutiny at all, then it is scrutiny by screetch which is a very strange concept to my mind. the academic analysis does not make for enjoyable reading either. a survey by the regulatory policy institute of all pmqs posed in 2009 concluded that the prime minister had answered only 56 per cent of all questions asked of him. if it seems harsh to cite gordon brown in this fashion
then it should be observed that the same survey determined that only 56 per cent of the questions asked of him were actually genuine questions in the first place. what the detailed exercise revealed, depressingly, was that pmqs had become a litany of attacks, soundbites and planted questions from across the spectrum. it was emphatically not an act of scrutiny conducted in a civilised manner. and this, ladies and gentlemen, is what the house of commons has allowed to be placed in what i repeat is the shop window. what could be done about this? it is not for the speaker to dictate in this field or to impose his suggestions on others. it is my duty, as my predecessors before me also felt, to point out to the house the reputational damage that our present arrangements are inflicting. it seems to me that three steps
could be taken which might lead us to a more attractive outcome. the first surrounds the culture of prime minister's questions. no committee can legislate for this. it would require the prime minister and a new leader of the opposition, as so nearly happened in 1994, to agree on a common understanding of behaviour, one which offered teeth to our existing code of conduct which states unequivocally that "members shall at all times conduct themselves in a manner which will tend to maintain and strengthen the public's trust and confidence in the integrity of parliament and never undertake any action which would bring the house of commons, or its members generally, into disrepute". a compact between the party
leaders, endorsed by the whips, would allow speakers present and future to enforce order far more vigorously with the parliamentary equivalent of yellow and red cards available at their disposal if that were to prove absolutely necessary. the second element involves the character of pmqs which has shifted too far away from backbench members. once again, it would be wrong to impose changes unilaterally. the very fact of a coalition administration has opened up a little more space for backbenchers as the two questions previously reserved for the leader of the liberal democrats have been opened up to them. this is helpful in terms of the
balance of pmqs but it is hardly decisive. if the session is to remain 30- minutes long, the next leader of the opposition could usefully ask whether he or she truly needed as many as six questions of the prime minister in order to land a blow or whether, in the spirit of margaret thatcher in the late 1970s, three or four would do instead. arguably, however, a 45-minute or even 60-minute session conducted with mutual respect would be a huge and welcome advance on the status quo. in such circumstances, the current number of questions allocated to the leader of the opposition would be more appropriate. finally, there is the content of the encounter. is it the right device for
ensuring effective scrutiny? does it need to be supplemented by other institutions? are open questions posed in the vain attempt to catch a prime minister out actually the best means of inquiry? it has been 15 years since a procedure committee even addressed these issues, let alone had their findings accepted by colleagues. it seems to me that the hour at which mr blair's assurance of 1997 that the committee would be able to "review the system" must now have arrived. the ideal result for the house in my view would be more scrutiny, more civility, less noise and less abuse masquerading as inquiry. i would like to thank this audience for its patience as well as its hospitality. i have devoted a considerable amount of time to the subject
of pmqs tonight precisely because it has been neglected for so long. i hope that i will at least manage to stimulate a debate about it. i will now apply that red card to myself and seek to answer your questions. thank you very much indeed. [applause] >> mr. speaker, thank you very much for that thought-provoking and interesting speech. i think it is the shop window, the first thing they raised about the u.k. is parliamentary discussions and the fact that the prime minister has been diminished. this is a very timely offer to take this. there is a new opportunity for a
new parliament. i propose taking questions in groups of three. just allow us to get the microphone around. >> raise your hand. if you could tell the rest of the audience your name and your organization that you are associated with, that should be helpful. the microphones will be on their way around. >> i suppose you have made an appeal to history. my name is adam west. the ministry of defence.
about televising parliament. i think it is a really good thing. i think that it has brought more benefits than it has brought disbenefits. insofar as the poor behavior has contributed to a lower benefit. in any case, we are in an age of transparency and that has to be that with which we work. how do we incentivize people to behave in the spirit that i am advocating? that is just a short clip that will be taken. the leaders of the opposition and members of parliament ask searching questions and should
express themselves forcefully. it would be undesirable to have this type of politics though there will always be an element of partisanship. first, people should be seeking information, trying to highlight the merits of a particular course of action that they should pursue. that seems to be of the essence. this does not mean that no one could ever share the enthusiasm. this includes a prohibition on their chanting. i am not saying that no one should ever be prohibited, but we have the opposite and we should cut it out. this institutionalized mass and in some cases orchestrated baracking, heckling and abuse.
i do not want to go too far because we know who they are. what i would say is that their own self assessment is not in accord with others. i once asked my father about a doubtful business colleague. he said that he would buy it at his valuation but he would hope to make a profit in the process. they think they are so funny. it is so boring. the public is not impressed by
it. a display of anger and a bit of a cheer, but this massive shouting and raucous noise is so distasteful and the damages us. >> anyone else from this side? a third question from this side, anyone? >> david [unintelligible] , ministry of defence. i wondered if you could take a moment to reflect on your behavior before you became speaker and how you acted in the house back then and how becoming speaker has changed your view of the house and the
way that you now see it? >> i think this is an occasion where i am grateful for your question. let me deal with this issue of behavior. i do not want to be too introverted about it. in the early years, in 1997 until 2002, my behavior was spectacularly bad. not just bad, but bad on an industrial scale. i was on the front bench one day in the shadow cabinet and i was beside myself with irritation and i kept yelling. speaker martin asked me to be quiet. i told him that i found that
quite difficult. [laughter] [applause] i was very badly behaved. i think i got a lot better and i think the record shows that. i know that the colleagues seem suspicious about what i have done and whether i have done it right and if i can do it better. people often do say that soul- searching is the sign of a balance of mind. it was genuine. a couple of things have interceded, namely elections. instead of ranting, we have to ask if one party is doing it the right way or if i am doing it the right way.
if i press the fast-forward button to my latest stage of development, from about 2005 onwards, i begin a model of exquisite elementary behavior -- parliamentary behavior. you may think that this coincided and did not actively coincide with a formulation of a mission to become the subsequent speaker. it is for you to speculate. [laughter] having become speaker, how do i reflect on it? a lot of backbenchers do get frustrated. some people are naturally a bit livelier and more outgoing and more inclined to speak out from
the backbenches. the house has a sense of humor. that could be a good thing. i suppose the view that i have come to form from the chair is that it is undesirable and it looks and sounds so bad. the people who do this repeatedly, you come to realize that they are not being called at all. given the ferocity, they can deduce some relationship between the excessive noise and the fact that they are unable to [unintelligible]
>> sue, you had your hand up. >> i am from the cabinet office. whether you think that parliamentarians have impacted their reputation, particularly the former military, can you speak more in that area? >> i do have a view about it. the short answer to your question is that i came to the view a while ago that it would be better to pay employees more if that is what was independently recommended. before anybody says that the speaker calls for a pay increase, i am not saying that at all. if it were independently judge, and i think that there pay should be independently just,
that they should be higher, then there would be much to be said for that to be accompanied by a band on paid outside interests. -- but a ban on paid outside interests. there are people who save that it is of great benefit, both to the individual member and to the house, to have that this type of external experience and it would be a great mistake to dispense with it. we have all heard individual mps say that it would be a mistake. [unintelligible] i think that is pretty self- serving, to be honest.
my view is that if colleagues feel that they need current, as distinct of that past professional experience, if they feel that they need continued current such experience, they can get it without having to be paid. there is nothing to stop them from embarking in a fellowship to get experience in the commercial sector. large numbers of colleagues go in the armed forces. i suspect there were not take much -- there would not take much to get quite a lot of them from professional bodies and the commercial world and from the charitable sector to institute programs whereby in these could get experience in those sectors. if that is what the member thinks should be offered, then
fine. but it does not have to be paid. that is my view. i think that we are moving more in that direction. i strongly support the decision of the house to require greater transparency in what those interests are. i think that if people do want to hold those interests, the public, including their constituents, does have a right to know what outside job are doing, how much time it is taking and what they are being paid. that was unpopular with some people. some people were probably worried. when what they were paid is revealed, people would say that you spend three hours a week and they are earning 40 grand a year. their constituents would say that you would spend your time
in a representation of me. ultimately, i would prefer the solution that i have suggested. what's a couple of hands over here. -- >> a couple of hands over here. i wanted to ask you -- i think it is fair to say that many overseas commonwealth parlance -- parliaments look to change ways to conduct themselves. to what extent were your own ideas influenced by commonwealth parliamentarians experience? >> i will be candid with you. they were not. i cannot honestly claim that my thoughts about parliamentary reform were significantly
influenced by commonwealth experience. i have done a little bit of travelling in the commonwealth, but not a great deal. my thoughts were influenced more by two phenomena, one that was the sense that for all witnesses in the american system, there are things that we can't import a. the idea of confirmation hearings in relation to the appointment to members of the cabinet, it has a great deal to be commended. use your one to have very important public persons, they should be accountable to the public. it seems to me there's a great deal to be said for the idea of
confirmation hearings. i think it would be quite wrong for them to be rejected from their post simply because of some aspect of their private lives, but i think that it is perfectly right that they should be subject to scrutiny by the role of the select committee within which their role falls. i think there's a lot to be said for that. the second thing that influenced the was that i suppose around 2001, when the conservative party have been slaughtered and i thought about the other, i thought quite a lot about reform and i thought it had a great deal [unintelligible]
after a pretty short time, there were serious reforms. forgive me if this may seem cheesy or benign, but in my first parliament, i was thrilled to get into the house. i was delighted to be sitting in the chamber at 2:00 a.m. in the morning debating matters late- night and i would interrupt eric. he would be going for 40 minutes or so and he would say that he was really trying to conclude his remarks. we thought that this phenomenon
was the most enormous fund. i was quite convinced that i was at my best at 2:00 a.m. in the morning. there is a difference of thinking you are your best at 2:00 a.m. in the morning and being at your best at 2:00 a.m. in the morning. i started to think how combined effective scrutiny with rounded people that live normal lives. the idea that we should be sitting late into the night, we should be open. i started to think of what was best.
i would love to be able to say australia or new zealand played a big role, but i would say it was losing an election and changes in my own life. >> to join behind you. -- the gentleman behind you. >> julian smith, i just wondered -- there is a balance between genuine scrutiny and the stories for the papers. this sometimes exhibits without the volume in the written questions. sometimes there wasn't no apparent degree of self scrutiny
in terms of the questions being asked i just wonder whether or not it is worth looking at whether or not some of the characteristics that you described regarding pmqs. >> i think there was some evidence in the last parliament and reason parliaments. there is an enormous number of unprecedented questions being tabled by colleagues. [unintelligible] [applause] as a matter of fact, i didn't.
the reason i think it is great, and i do not want to call out any particular colleague because i really don't. they work for you and a series of websites that monitor and track the performance i think when robin cook was still leader of the house, and certainly when jack straw walls, it discontinued. there might have to be some sort of limit. there is a number of questions that you can table, i think it is five a day. >> you are indeed.
>> that you very much. that is heartwarming. you can take the five questions that day, but there's no limit at the number that you cannot table. i would be sorry if we got to the place, but without shan't -- sounding poppas, with freedom comes responsibility. people who work as officials and department who are very burdensome. to some extent that is the price of democracy and i have never been taken and by this calculation of of being done at the restaurant -- showing how enormously expensive this is. an estimated amount of time that an official spends preparing the draft answer.
to some extent, time spent by officials in that way is probably more productive than in other mischief. i am not particularly thinking of it in terms of the workload. one should not try the mess up the system for a competitive exercise. i hope that colleagues will displace some discipline about it. what you could do using technology is blocked things that had been asked before. we might have to look at that. we might have some means of blocking something that had been answered before. by the way, there are a number
of people on board. to free to come in. someone in the back ask me a question. feel free if you wanted ask others. it is a very british thing, being shot. you can ask me anything. please do. i am accountable to you. please. >> i am richard williams. it's good to be the first private secretary to speak. i appreciated the presentation. i want to make a point, and that is that this is not funny. we talk about that occasionally.
this is not considered funny. one of the things i get to do is to travel around the world and see their civil servants. particularly what we talk about, transparency, and our transparency, i did always get questioned about the expenses. that has been going on for two years. so that is not funny. all strengths the your arm. this is very serious indian. -- indeed. my question is, my heart sank when you started giving the history and the number of times as people tried to reform
matters as you are doing. are you going to be successful in doing this? there's not anything that you said that i would not applaud. how are we going to be successful at this? >> i ought to say that the first speaker the very senior and quite respected member robert rogers, who i do not think is here. he is now the clerks assistant, second on the professional side, secondary to the clerk of the house. robert rogers and submitted a paper to candidates listing possible reforms. so many candidates were standing
on a platform of reform. he submitted a paper to all of us and said these are the things that could be done. and there were things that could be done by the speaker, others that would require a decision of the house, and there were some matters that took ministerial action, etc. the things that i could do, i have done. i can speed up question time. not specifically question time, although we do make more progress than we did. we had explained in other speeches and made vast progress on question time than we did. have revived the urgent question is a mean of scrutiny. i can grant an application by a member of parliament. urgent question to be asked of a minister.
a minister has to be conscious that he or she declines to make a statement on which the house wants a statement, someone will put in a urgent question. i think two were granted the year before, entirely for the speaker to decide. of the last 12 months, we've had 25. all of them had one thing in common, the matter is complained of were urgent and of substantial interest and wanted the statement by the minister. there were other instances where i campaigned and needed support from others. i manage to get a procedure report in support of the proposition and the government accepted it, so did the opposition. i have three new deputy speakers who are now might elected deputies.
they got elected select committee chairs that iran through in my speech. -- that i ran through in my speech. i will need the support of major parties for others. i could do it with the backing of the party leader on this matter. i was careful not to be prescriptive. i aired a few suggestions. i was suggesting a procedure committed to it -- procedure committee should look at it quickly. it is not complicated. the house should then come to live view. there tw of things that the council and i favor, if i may say so. one is that i think that there is a pretty widespread recognition that we cannot go on like this. absent the culture and content and character that it is on hold on to the electorate.
we have this chance to do that along with other reforms. there is one difference between me and previous speakers, and is not that i am the shortest period [laughter] the difference is that i was elected after published manifestoes, open castings, and the secret ballot. the character of the election as speaker has changed. he is now a senior executive, that although the speaker should be neutral between the party, the speaker can have views on thing. and he can stand on some sort of manifesto as to what he or she would do for parliament. i do have some mandate. this is not new. when i stood, i made it clear that that ought to be changed. hubris is always the precursor
of nemesis. i may not get there, but i am quite persistent. one might even go as far as to say stubborn. and i do not intend to stop. i think we are on the road. >> mr. speaker, thank you very much. that is a perfect summary of the worke that you've undertaken today in your first year. and we look for to many more years. i like to thank you for coming along and being candid with us about your speech. it is very helpful and rewarding when you have speakers come along and talk to you in such a candid way that you shared with us, and particularly grateful that you chose the speech for
parliament to talk in detail about prime minister's questions. would all like to share our enthusiasm with you for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> neck, the governor of the bank of england talks about the state of the british economy and the banking industry. then the discussion on u.s. relations with iraq. after that, a senate hearing on online privacy. last week the senate passed the education, jobs, and medicate assistance act, 61-39. because of that action, the house will reassemble tuesday to take action on the bill, meeting at 10:00 a.m. eastern for legislative business. live coverage of the house on c-
span. >> book tv has been finding out about the new books coming out this fall. >> jimmy carter for every day of his pregnant -- of his private -- presidency wrote in his journal. this is super top secret and it is bob woodward, and almost anything that he does is meaningful. this is going to be one of the biggest fall titles abound. this is not a memoir sweeping of george bush, but it is about points within his administration were he had to make major decisions. >> learn more about these and other bulls coming out in our 2010 fall preview this weekend. for the latest in nonfiction, like to put tv every weekend. taphole schedule netbook tv -- if the entire schedule at our web team. >> mervyn king recently testified before the british treasury committee. here's a portion of that.
the cpi measure that we use at the moment there is a 0% cost of living. when you think of how much safety >> i think it would be an improvement of the cost of occupying the measured level pricings. i am quite cautious about the way [unintelligible] the way that you do it is quite important. [unintelligible]
>> i think that the initial immediate impact is to increase the amount of money in the economy in the case of a variety of challenges, raid in asset prices, those who got money diversify to other assets, which could lower the yields on those bonds, financing themselves. in terms of normal interest rates, i expected that we would be raising the price and lower in the interest rates.
this is indeed impact of lower interest rates. it probably affected the yield curve further along the maturity spectrum. we have just published a working paper around it to estimate the importance of this. it is bound to be an uncertain estimate. but asset purchases are 1.2 the worst the interest rate. that would you to hold for by the of dancing for the long-term a trade in the market. >> this is incredibly important to you. [unintelligible]
interest rates are incredibly important for millions of households out there. i'm concerned about the sensitivity. >> it will be more difficult in 1990 there is a contrast with united states,, far and away the biggest downturn that we have ever experienced, and the level of mortgage is not only much
lower read in generated an interest-rate which was there to control inflation. >> one of the interesting dynamics tenet of household [unintelligible] begun to see if you people in a few years' time -- to use is this is a problem for the future? >> that is hard to judge. . talking about one other aspect of personal saving pipe -- personal finance, which listed
expectations of pensions. i certainly do think that the issue as a whole is for household planning is to allow the level of savings appropriate, that is a very big question. the decision about what to do on your mortgage cannot lead to permanent isolation from normal expectation and what pension you expect to receive, and i think we need to put them in the round. it is the question of when the problems in this area is that if you get wrong, do it again. it is for light buying something, if you do not like it, buying something different next year. people are stuck with this for very long time.
it is certainly a big question, but i do not think it can be answered for the nature mortgage finance. >> >> business investment. >> kiss in impact on the long- term impact on the banking system, and will affect the recovery of the sector. >> i accept your description of the state of access to credit. i think it is a particular problem. this downturn was driven by a very sharp 20% fall in
investment. i did there is no doubt that this was based reducing their balance sheets quickly in order to improve their capital positions. that is bound to restrict lending, and much of that is lending to the financial sector, but it is also had an effect to restrict lending to the private sector. the larger companies have been able to deal with this if by issuing bonds to the market as a whole. they've been able to get around the banking system. many companies [unintelligible] as a particular difficulty for the medium and small enterprises to go to the banking system.
how far this will slow the recovery is a good point. in the past, a sluggish growth of credit was not an impediment to recovery. i cannot think it is something that we should think of as a major concern for the recovery as a whole. it is something that we should worry about in terms of what it means but those small and medium-sized enterprises and it will have a fax that we will really noticing years to come and it is a significant policy challenge >> last week in an article in the financial times,
a call for fiscal tightening after the fair -- the chairman of the federal reserve had seen that that report was necessary. there are unusually uncertain times that we live in. >> i think you have a cousin exactly those reasons. they are very different in europe including -- they do not have the luxury of the united states before the markets start to question the real difference between them. there is a real difference between uncertainty. what is very clear all
countries need to have a credible medium-term plan within which they can demonstrate in which structural deficits are eliminated. there is plenty of room for debate about of what period that you submit that. >> allied to talk about something that the chairman touched on earlier. a was very struck by the menace of that committee it where you did go so far as to say i assume
that that letter of opinion that that may be at active necessary support. >> >> heat up at the was it time to up the accelerator of a stimulus. many have decided not to withdraw it. that is the opposition so far. made up our minds yet. i do not -- the monetary reported ever played the game of trying to signal included language. >> you did not think it was appropriate to have a board
manner. >> i think we are all aware that there are big risks on either side of the central forecast. said it some more to crystallize, demand would become much weaker. it could drop off very substantially. it would be appropriate, i think, but that is not where we are the moment. >> alice struck by something written in the press. it may be a phenomenon such as the rapid deterioration of
confidence among broad confessed to truancies of households. my understanding that it is uncharted waters. derecognize that? >> we are all in uncharted waters. >> is that potentially at stake. >> i would not use the same form of words. but i assert my show that we are in uncharted waters. with an insurgency about where confidence go. a key point that was brought out in the weekend and immediately after the general election here is that it they
had taken action a month earlier, it may not have done as much as it needed to. and that is sad and unfortunate. though i think it is true. i think in the u.k. -- in the real world, we do not look for convincing statements but afterward we do, and at think we were given a grace and that opportunity, and then after the election, the market were looking for action, not immediately meet the deficit, but over the period of time, getting back to the point where it was possible to say that it was judged that it would be able
to pull back again. bp that is a sensible possession to the move toward. and that is the general strategy that applies to all country. >> let me take you back [unintelligible] you highlighted the small and medium enterprises. the big three employers could be all in the public sector, councils and universities. the private sector are small and medium-size enterprises. i know in your report you say that there is uncertainty about the future supply in the future.
do you share my disappointment that it is almost fatalistic about it? are we waiting for the market to solve it? is there anything you should be doing or the government could do to get this going. this is a key part of the country's economy. would you protect the jobs across the economy? it's important to get the investment and the banks are clearly not playing their part. >> you put it very clearly. add to share that concern. i don't think there is a monetary response that we can make that addresses the particular challenges for small and medium-sized enterprises.
we can provide a degree of monetary stimulus, and that is exactly what we have been doing. but while the bank's restructuring, banks will have to adjust their balance sheets. come up with a new capital requirements. i do not think that we should weaken the standards that businesses have to me. it does not make sense to make businesses adjust quickly. the. i had made to the government and had to think about it, issue a consultation document, and we will see what comes out. at the time, when they slow
their balance sheet growth and restored capital, right now larger towns go out in compensation employees is not there on the mandate or getting their balance sheets stronger. and there's less emphasis on distribution, and back to where they are willing to lend. , could i ask you, or you in the middle of having the banks survived, i was under the impression that the banks would lend. alice already skeptical. the bank said that they were doing and when they said that
there was a few doing it. was there to your knowledge any scrutiny -- disagreements exist? was there scrutiny? does your organization have any part of the scrutiny or any knowledge of the scrutiny? if we have rescued these banks with a great deal of taxpayer money, and it is clear that it is not happening to the extent that you and i would like. is there a way that we can actually put some pressure on the banks out of an agreement that they sign? >> the agreements were not
effective in achieving the objective that was set out for them. in particular, the agreements which as far as i can see in terms of gross lending, they are not going to be effective, because what matters is net lending. i do not see that being affected. we have to understand the pressure that the banks are under. i don't think the banks are deliberately trying to be difficult. i think the banks have weak balance sheets. it is expensive for them to borrow money in order to land on. i do think we should try to encourage -- they will not have the same problem a legacy balance sheets. we need to inspire a new way of transferring savings by going around the banking system. in the long run that would increase competition to the banking system which is desperately necessary. there are a number of long-range
reforms. in the short term, it will be very difficult, and as i said before to this committee, the only instrument at the disposal of the government is to ask itself what is the role of state-owned banks? we have. one bank 84% owned by the taxpayer. they are under private management and they're behaving understandably because that is the instructions they have been given, they are behaving in a way to balance their -- improve their balance sheets. we want -- that would be one way of doing it. not without cost. there's no effective way that the people could keep the base of the long run. but there is not up a panoply of instruments. we need to encourage new entrants into making to introduce competition, and the thick of the estimates whereby
the government my able -- might be offered support to the sector. i have great sympathy but the point of view you make. we do need rebalancing. in that rebalancing will require in the and a schedule of jobs from the public sector into the private sector for the small and medium-sized companies that will be providing the exports on which our economy will help. to in the struggle around this committee we're beginning an investigation into that. shortly. are the instruments advisable apart from state-owned banks? one was to act on -- there for you are presumably ruling out the threat of a profits tax. it is not for me to comment on that.
that really is a fiscal matter for you to take up with the government. what is the that would either persuade or encourage firms to change their judgment about the amount of money which they are willing to lend at present. when it comes to the analysis of taxes, i am happy to leave it to you. >> [unintelligible] is such as access about new funds, but the decades -- these relationships that have been affected for decades.
we are agreeing around a table -- you share that as well? >> absolutely. londonied to get out of and the to the country and see what is happening. many people run small and medium-size enterprises. the thing that makes me angry is that there are companies owned of many generations where they are trying to maintain relationships. they maintained the same banking relationship for 60 or 80 years and then suddenly comes a letter turned out by computer which state the terms of our relationship have changed. and they don't think that that is a sensible and fair way operator relationship. i see many of these. for the banks to say that, it is a not an adequate response.
they're facing problems that their balance sheets have been a mass. and they're having to adjust. they have to adjust. but they need to understand what has been done to client relationships. the only thing we can respond to is not to prevent an adjusting just for testing, but to actually find ways to encourage new bases with new sources of finance. if people want to jeopardize client relationships, but we have to make sure that we have exhausted someplace where they can turn to finance. it is heartbreaking. it is a lot harder to run a business out there than it is then just trade away and the having millions one day and up without a the next.
i did think ken is a pattern of finance that respects the need of client relationships. >> i think we do need to talk to the banks. [unintelligible] just having some transparent evidence of what is going on can help save the banks and the public understanding the situation. >> you get letters from your constituents as a contact for you can put them all together and talk about it. straight to the structure of a, what can we actually do? increasing competition within the banking sector, providing, thinking of alternative sources
of financing, if there are impediments in the current regulatory system that applies, the wish to do our best to find a way floor. >> i think these are good questions for you in terms of economic growth and what happens next. is there a clear path now in terms of the economy's going work quickly for the economy been more sluggish. what is the shape of the world economy. >> that would be the matter. [unintelligible]
>> each of these countries have their own situation. china is a larger economy. >> you do understand that the combination of that group externally plus the companies in the euro area, with exports less than anticipated. [unintelligible] >> the areas that been going for it quickly. places like spain and ireland,
and continental europe. and so we have not had a strong presence in places like that. as opportunity for business. >> part of it will be predicated on downsizing its major companies. what is your view on the impact of the export was? >> things are quite uncertain. we have a reverse situation where we had satellite 25%. it took many years before you could see that as u.k. exports.
it's difficult to maintain it properly. in the initial downturn in demand,, they could manage that -- maximize the benefits. >> in turn said the exchange rate fluctuations, what needs to be done to encourage businesses to reduce their prices as of export? citta on a quick question. >> there's how much [unintelligible]
>> the chairman is tilting that i have to move quickly. i don't expect you to answer this, but i must make the observation that your comments on banking reinforce my judgment that splitting retail and investment banking is the only course to get is backed. i will spare you, and on that but that is my excerpts -- observation. on page 45 of the inflation report, and his published at 10:00 a.m. on the 12th of may, which is called for the government was formed, it states of more detailed and demanding part of history consolidation then set out and the march 2010 budget, and may be needed to avoid that increase of the cost of issued public debt. on the 23rd of june, column 3 11th, the business sector 3, it said the leader and i have
talked since. the advice that i received, uncompromising and unequivocal, and we did not know who they would be at that time, they would have to act immediately and decisively on the budget deficit because there was a serious threat to this country. i took that advice. you take your vices achieve the desired result? -- do you think your advice achieved the desired result? chicken deifies that i gave was in public before a press conference. three days after that, i had one concession. i cannot judge who decided when. you have asked people about that. a
press conference, in response to the new government's and i had one conversation after that. and that is all i said on it. >> my question remains the same. do you believe that the advice that you gave in public -- >> the path of fiscal equality demonstrates how the ratio of debt on a central pathe must again. theve got your foot on accelerator, the government has its foot firmly on the fiscal break. sorry to mix a metaphor. what you think the impact will be of the fiscal consolidation on the private sector?
how fast will the private sector be able to recover to replace the public sector stimulus? judy you will wait for the judgment about the overall outlook. it is not an unreasonable position that they have taken. it will be particularly exciting and not so far away but it will take a long time. i did the reason for that in the fundamental sense was that there was a real adjustment, not something that much policy can prevent. rebalancing of the economy switch from consumption to export investment. it is also a reduction of borrowing, a reduction of debt, after a sort of financial crisis
that we've experienced. it takes many years and relatively slow growth before you get back. i don't see any reason to suppose that we will deviate from that. what is striking is how close the recent past has been to the recent financial crises. i did with iran for the long haul and that don't think we should expect anything greater. jim could i ask you just one question? in a recent speech, he said that some estimates are extremely uncertain that the current tension -- current juncture? why is that? >> command is: a long way. -- demand has fallen a long way. it is good to know what has happened to the supply side of the economy.
that wouldn't imply a much lower inflation that we have currently,. and it is very difficult to see factories closing or shopping centers closed down. it is very difficult to see that. >> this is a question for david miles. he said in a speech earlier this month that it may be sedated with an insurer so. >> the worry is that inflation is above its target level by a substantial amount, and that to become
self reinforcing. i think it is a risk. i don't the is the most likely outcome. despite inflation fluke -- moving up, is still at low levels across the economy. to% or less. and if that were to continue, inflation will move back to the target level. i don't think that is the most likely outcome but it is a risk in a world where there has been of a rigid as been above target for quite some time. >> it would be very hard to move. that will be a key part of that. >> absolutely, and a bad
situation for the country would be one with a came to believe that inflation was not above the target level and starch reinforcing. i think it is a risk that we need to guard against. >> presumably there would be pressure on wage. judith and then why would immigration be falling? a slack in the court -- in the labor market greater than a few days ago. but it would not be immigration being lower, but it is responding to the market.
>> just briefly, at the moment you go see a legislative intervention be necessary. >> that is not quite the question for me. but i would say is that the labor market needs -- it has in some ways works pretty well. we've seen a rise in unemployment, which is probably a lot less than the economists would have expected given the degree of flexibility. it is how many companies said that when the downturn was most severe, how companies and their work forces were able to manage their way through it without the scale of redundancy by flexible
working in temporary wedges. >> their new emerging markets in china, said the biggest single problem is in balance in global demand. has it been a danger for all of us are overlooking? >> i did that there are a number of economies. germany, japan, and china, that requires someone else with the trade deficit. that is formed largely in the u.s. and u.k. and sometimes pain. that cannot go on.
we are adjusting. if they try to contribute. based on the export market, there's an inconsistency there. one way to reconcile it is as a " -- is to have a weak level of demand overall. the the the one of the biggest challenges facing the future is to face up to the fact that unless there is a genuine acceptance around the table that rebalancing applies to all of our economies, that we will end up in the end with it. week rate of growth. this is a major challenge, and i do not see any solution to it. although i am hoping to one day to be allowed to get one. >> going back to the labor a dramatic increase up to 1.2% projected this year to
4.9% in 2013. that is a very significant increase in raising salaries. and the structural deficit is predicated on the tax increases that that increase will bring in. how real is it? ? >> they obviously think it is because it is their own forecasts. we were talking about the inflation target being roads of great -- rates of growth of to 4%. what is interesting is how low earnings increases have been recently. although they are picking up.
you can imagine ways in which the very healthy financial systems could be used to bring up wages, but it is not entirely easy to see. i don't think there's enormous evidence for that the states. i myself would be skeptical that this is serious and which expectancy. significant pickup in nominal wages. it cannot be certain about that. >> that is generated on that presumably in terms of your agreement with the placement. agreement with the placement.
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