Prime Minister's press conference

 

Wednesday July 30, 2003

PRIME MINISTER:

Good morning everyone. Welcome to July's press conference. Now in a moment Michael is going to talk to you about public services, which is what I know you are all interested in, and I will say a few words to you first.

After 6 years in office Britain has the lowest inflation, interests rates and unemployment for decades, half a million children have been lifted out of poverty, there's been record investment in the National Health Service and schools, which have improved results significantly, crime is falling, and Britain is stronger in the world, so there's an enormous amount still to do, but those achievements are real and I believe will be sustainable.

The overall record is one that bears comparison with any government in the past. Despite a serious world slow-down Britain's economy has continued to grow in every quarter since 1997, unlike for example the economies of the US or Germany or Japan. Despite the concerns expressed today about consumer debt, Britain has weathered the economic storm better probably than any of our competitors, which makes a change for a country that has usually been first into recession and last out.

On the public services too I think we have seen significant progress, although there remains much to do. It's on public services that Michael will give his report in a moment and I think it will underline what is solid progress, progress which I state once again is dependent on the enormous commitment of those that work in our public services, the dedicated teachers, doctors, nurses and other ancillary staff within the Health Service, police officers, managers and many others. The National Patients Survey by the Commission for Health Improvement today of 270,000 patients shows that 85% of Accident and Emergency Patients and 94% of Outpatients rated their standard of care as excellent, very good or good.

Thanks to the work that has been done by dedicated NHS staff the waiting lists, which after all before we came to power had risen by some 400,000, are falling in all categories down from where they were in 1997. Maximum In-Patient waiting times have already been reduced to 15 months. This year maximum waiting time has been reduced again to 12 months. Bringing them down further will not be easier, but by 2005 there will be a maximum wait of 6 months, and the average waiting time will then be 7 weeks and that again is a significant improvement on where we were.

It is reform and change, that along with the investment, however, is responsible for the improvement that we have seen. Already we are planning that the new Diagnostic and Treatment Centres will do around 300,000 extra operations by 2005 and 150,000 of those will come from the private sector. We can expand this further as John Hutton is setting out today with plans for at least another 125,000 extra orthopaedic operations over 5 years to be performed in the new DTCs. And we are also extending the formal invitations to those three-star hospitals to apply to become Foundation Trusts.

On crime, there has been real progress in reversing the trend in street robberies, but I also recognise that while crime is down overall, some violent crimes are still increasing.

On education Michael will talk about the steady progress in our secondary schools, with the best results ever. They do put Britain, according to most independent reports, firmly in the top part of the table now on virtually any indicator. Our primary school results are significantly up from 1997, although again it is fair to say there has been some plateauing of those results in the past couple of years.

On asylum the signs are encouraging that we have been able to halve the number of monthly asylum applications, but we will have a clearer idea on this in a couple of months time.

On transport, however, there is no doubt there is rising road and rail usage, but also congestion is making life very difficult for the motorist and our railways have not recovered fully from the Hatfield disaster.

Overall, therefore, I believe that we have done what we were elected to do, to keep the economy stable, to get people back to work, to invest in our public services, and in doing so to create a country that is more modern, stronger and fairer. And it is the combination of economic efficiency and social justice that marks this government out from its predecessors and is the platform on which we must build.

MR MICHAEL BARBER:

[Mr Barber's presentation below includes references to PowerPoint slides he used. The PowerPoint presentation can be downloaded in full below:

Powepoint (Powerpoint, 223kb)]

I want to briefly explain to you how the Delivery Unit works (Slide 2), as I did last year, and then give you an overview of progress on the government's most important delivery objectives (Slide 3). Just to remind you, the government has a number of key goals for public service reform which will be familiar to you. In order to ensure that progress towards those goals can be measured and tracked there are targets which are set out in the Treasury's White Paper of 2002. For each PSA target, the relevant Department has plans which include both milestones - the steps on the way to the goal - and a trajectory - the anticipated progress of the data towards the goal.

Along with the Departments themselves the Delivery Unit monitors progress against these milestones and trajectories and keeps the Prime Minister informed. Periodically for each Department - roughly every 2 months - a stock-take meeting takes place at which the Prime Minister, or I acting on his behalf, review the progress a given Department is making. Where, for whatever reason, progress is not on track, agreement is reached about what needs to be done.

Let me say a little bit more about targets given the recent interest in them. They are an essential element of managing any large organisation, particularly one spending large amounts of taxpayers' money. The government's targets are representations of the real world outcomes that citizens most want to see such as reduced crime, reduced waiting times and so on. They are not substitutes for those real world outcomes, and they enable citizens to hold the government to account.

It is important to emphasise that in these key areas of public service reform the government is seeking to bring about progress which is irreversible, not just marginal, and the degree of challenge involved in bringing this about should not be underestimated. Irreversible progress (Slide 4) involves implementing reform that generates both bottom-up pressure for change as well as top-down incentives. Choice in health and education would be examples. It also involves shifting the culture and achieving visible results.

I now want to examine delivery Department by Department, and the slides that I am going to show you are available in the handout to be collected afterwards. At the outset it is worth reinforcing the point that the Prime Minister has already made that the public service reform programme is possible only because of the sound economic context. Employment, for example, is at a record high. Unemployment is the lowest in the G7 and youth unemployment has fallen by 75.5% since 1997 (Slide 5).

The first graph (Slide 7) shows the health waiting list over recent years, with the steady rise between 1993 and 1998 and then a similarly stead fall, since when it has been at around 1 million. We expect it to fall below a million shortly and then keep on falling. The black line on this second graph (Slide 8) shows the achievement of the 2002 milestone that no-one should wait more than 15 months for elective surgery which I showed you last year. The 2003 12-month milestone (Slide 9,10) was a much bigger challenge and this shows that this was also achieved in March this year. This represented a significant achievement for the Health Service, and a real step forward for patients. However, as the next graph shows, the numbers who are waiting 12 months (Slide 11) was a relatively small proportion of those waiting 9 months, which is the 2004 milestone, and an even smaller proportion of those waiting 6 months or more (Slide 12). Achieving this target of no-one waiting more than 6 months by December 2005 (Slide 13) is one of the most important delivery objectives for the government, and the scale of the challenge remains great. We will be monitoring progress towards it and expect to see progress during the current year to around the level of the red dot in the middle of the chart. The Audit Commission in its recent report has confirmed the government figures that show that waiting times are falling (Slide 14).

Another delivery objective of high priority is that 100% of Accident and Emergency patients should be treated within 4 hours by December 2004.  The milestone for March of this year indicated by the star in the middle of the graph was that 90% should be seen within 4 hours. This graph (Slide 15) which is unchecked management information shows that until January of this year very little progress was made. Performance was hovering between 75% and 80% of patients being treated within the target time.  Two decisions changed that state of affairs. First the Department of Health emphasised the priority it attached to Accident and Emergency by including it in this year's star ratings for Trusts. Second, a best practice for dealing with minor injuries, known as See and Treat, was disseminated from a few Trusts to all of them and here you can see the impact of those decisions on performance. Those reforms brought about a step change in the first half of this year, much to the credit of Accident and Emergency staff. The graph (Slide 16) also shows however that a further step change will be required by December 2004 if the final target is to be reached. In the next star ratings Accident and Emergency Departments will need to demonstrate sustained performance over several months at or above 90%.

Waiting times are not the only sign of improvement in the NHS.  Mortality rates from major killers such as coronary heart disease illustrated here (Slide 17) have continued to fall and in recent years we have caught up with Continental Europe on these key outcome indicators. At the same time capacity has been built up to enable continued progress towards these waiting time targets. The number of doctors illustrated here (Slide 18) and nurses (Slide 19) have both increased significantly over the last few years and can be expected to continue to do so.

Overall on health (Slide 20), therefore, there is demonstrable progress on key outcomes. These Departmental summaries incidentally are in your handout. The challenge of the next two and a half years for health remains very substantial. The Department will need to sustain its focus on key priorities, build capacity rapidly and implement systematically the key reforms such as extending choice for patients.

Turning to asylum and crime, applications on asylum rose rapidly during 2002, as this illustrates (Slide 22). Last Autumn two things changed. First of all the new legislative powers came into practice, and secondly management was changed at the Immigration and Nationality Department and the result has been a dramatic fall in the number of applications by March of this year (Slide 23). Clearly there's a great deal more to do, but this represents real progress and the next quarter's figures are due out towards the end of August.

Turning now to crime, the picture again shows demonstrable progress but not yet irreversible progress. The government is on track to achieve this target of reducing domestic burglary by 25% by 2005 (Slide 24,25). There are however no grounds for complacency, since without sustained effective performance by the Police and other partners, crime does not automatically continue to fall. The large rise in recorded robbery in 2001/02 (Slide 28), shows how particular crime type can rise rapidly. The Street Crime initiative started by the Home Secretary and the Prime Minister in March 2002 in response to these figures, also demonstrates that effective policing and good collaboration with other agencies can reverse an adverse trend. Rising tides are not inevitable. Further substantial falls however will be required to hit the 2005 target as you can see ((Slide 29) and the current level is still far too high by historic standards. Encouragingly, the specific targeting of young people has been very successful in the Metropolitan Police area where the number of 10-17 year olds involved in robbery fell by 37% in the last year (Slide 30). The Joint Inspectorate's report published yesterday confirms the Street Crime initiative as a whole has been an undoubted success (Slide 31).

On violent crime, which has attracted a great deal of attention recently, the overall trend has been steadily downwards since 1997 (Slide 32). The recent British Crime Survey demonstrates a fall of over 800,000 such offences in the last 5 years. The vast majority of violent crime - over 60% of it - is common assault, and results in either minor injury or no injury, which this pie-chart illustrates (Slide 33). However in spite of these positive trends increasing numbers of people believe crime is rising as this graph shows (Slide 34). There are several reasons for this. There are some types of violent crime which are few in overall number, but which are extremely serious and recorded crime suggests that some of these have risen in recent years. Sometimes this is due to changes in recording practice. For example there has been a strong and welcome push to encourage women to report domestic violence. In others, such as gun crime, illustrated here (Slide 35), it is a real trend, largely in London, which has prompted the Police, especially the Metropolitan Police supported by the Home Office, to act vigorously through Operation Trident, and we are confident that this will have a positive impact in the near future.

A second reason for people's belief that crime is rising, is a sense of anxiety about anti-social behaviour (Slide 36). It is this that has prompted the government's action on this issue which includes legislation currently before Parliament. Meanwhile increasing Police numbers which are at record levels should help both to reduce crime and bring greater reassurance (Slide 37).

Overall, therefore, on crime and asylum, the trends show substantial falls, robbery and some aspects of violent crime being the major exception and on these, as you have seen, action is being taken (Slide 38). At the moment the government is on track to hit its key targets. To bring about an irreversible shift will require sustained focus on crime reduction from Police and other partners, especially in high crime areas, continued tackling of gun crime, implementation of the national drug strategy, and the implementation of the anti-social behaviour proposals.

On transport, given the history, progress has proved more intractable.  The story is one of low investment over a generation. This graph (Slide 40) illustrates the problem in relation to rail over the last decade and shows the steadily rising levels in recent years, but this will take some time to impact on performance. Meanwhile, rail patronage has also increased (Slide 41), an obvious benefit but one which puts further stress on a system which has lacked investment. This is the background for this graph on rail performance (Slide 42), punctuality and reliability (Slide 43) over the last 6 years. The dip each Autumn is the famous effect of leaves on the line, and the very big dip is the effect of the Hatfield crash in October 2000. The dark blue line is the rolling 12 month average and shows that two and a half years later the system has not yet fully recovered from Hatfield. However it also shows that there has been incremental progress over 2 years, albeit modest, which with continued sustained emphasis from the Department for Transport, the Strategic Rail Authority and Network Rail, one would expect to see continued in the next 2 years.

On road congestion, historically there has been no satisfactory data, and we are in the process of developing new, much more sensitive indicators which will enable us to monitor congestion road by road, and city by city. However, all the information that is available suggests that current performance is worse than in 1997, both on urban and inter-urban road networks. Here, as with rail, it is a combination of long-term under-investment and growing usage which has put the system under stress. This graph (Slide 44) shows the investment in roads over the last decade, with a dip up until the year 2000, and the sustained rise in very recent years. Meanwhile road usage has been rising remorselessly (Slide 45).

Overall on transport (Slide 46) therefore the challenges remain immense. The good news is that the culture in the rail industry is beginning to shift positively, but both the SRA and Network Rail are increasingly focussed on performance improvement, but there's a great deal to do. Similarly the Highways Agency is being reformed so that it becomes a manager of the road network, rather than the manager of contracts. This new focus plus the investment can be expected to bring some incremental gains in the next few years.

The story on schools is a better one. At primary level, following the dramatic early success, there has been a plateau in both English and in Mathematics (Slide 48,49). Moreover, although the plateau has been frustrating to everyone involved, recent international data shows that we are now sustaining world class performance. The results of a recently published study of reading performance among 10-year olds in 30 countries, shows England - the red line on this graph (Slide 50) - to be third in the world just behind Sweden and the Netherlands and ahead of the USA, France, Germany and Singapore, whereas in the mid-nineties, in a comparable study, England was around the international average marked in blue. At age 14 there has been some progress in all three main subjects since 1997 in English, Mathematics and Science (Slide 51,52,53). As the national key stage 3 strategy for 11-14 year olds impacts, we would expect to see further progress in the next year. In international comparisons for this age group we are not quite in the top three, but undoubtedly in the premier league. We are substantially ahead of countries such as France, the USA and Germany, as this data from the OECD Pisa study demonstrates (Slide 54). This is the result in reading for 15 year olds, this is the result in Mathematics (Slide 55), and this is the result in Science (Slide 56 ), where we are 4th in the world. It has become commonplace in recent years for experts from Germany and elsewhere to look to England as an example of successful school reform, something that would have been unthinkable a decade ago. 

Secondary school improvement is also visible in the GCSE results where there has been a steady rise in recent years (Slide 57). Meanwhile capital expenditure has been increasing very substantially year on year, as you can see here (Slide 58) enabling the overhaul of the entire school building stock.

Summing up on education therefore (Slide 59), the system is significantly better on nearly all key indicators, although on some it is more modest than others. On school attendance, for example, performance is flat while the recent funding issue has been serious and it is essential that the recently announced changes are effectively implemented.

Concluding therefore (Slide 60), this brief review shows progress across the public services is real. On some indicators there has been step change, on others solid progress and on a small number progress has not yet been sufficient. Overall my conclusion therefore is that there is demonstrable progress, but it is not yet irreversible and the government will need to sustain its focus on key priorities, continue to build up capacity, especially in the Health Service, and ensure that the reform programme in each key area is managed through to a result.

PRIME MINISTER:

Thanks Michael, and he is here available to answer any questions should you have them for him.

QUESTION:

One thing you didn't measure was the level of trust which you and your government .... whether you agree that is a problem and what changes you think you need to make to restore trust with the voters, and finally could we just clarify what Alastair Campbell's status is now as your Director of Communications?

PRIME MINISTER:

Well I think you will have to understand that in relation to any member of my staff I am not going to feed any of the speculation about their position. I'm afraid that is just the way it is. But in respect of the first part, yes I do. I accept that there is an issue that we have to confront and I think there are two aspects to it. First of all, people need to know that what we did in Iraq was right and justified and that's a case that we have to not just assert but prove over time, both in relation to weapons of mass destruction and in relation to the improvement of Iraq; and secondly it is vitally important - whatever issues that have been dominating the news for the past year frankly - the public in the end will judge us on the economy, the health service, schools, crime. Those are the big issues for the public and all I say there is, there is a balance to be struck between saying yes there is still a great deal that we have got to do, and people saying nothing has happened at all because if you look at the results, particularly in relation to schools and the National Health Service, there have undoubtedly been improvements, significant improvements even though there is a long way to go, and I think that in the end the issue to do with trust is to do particularly with Iraq, because of what has been said over these past few months, but then also more generally because people want to know both that the government is improving public services, running the economy effectively and that we are committed to carrying on doing so.

QUESTION:

Prime Minister, I know you don't want to say anything about the death of Dr Kelly as obviously the Hutton Inquiry is beginning, but do you think that at the very least there ought to be a change in the political culture in this country, particularly often the divisive and bitter relationship between politicians and journalists which at the very least seem to form a backdrop to recent tragic events?

PRIME MINISTER:

I think that is a perfectly reasonable question. I think there are issues there for both sides of the political culture to look at, both the media and the politicians, and perhaps when the Hutton Inquiry has finalised its judgements and publishes those, then that debate can take place in a more informed way, but I think there are things for us both to reflect on, yes.

QUESTION:

Turning to the economy, reports out this week say various things including that there has been pretty much an explosion in the number of public servants hired under your government. At the same time the European Central Bank are saying that Britain's Civil Service is so inefficient you could save 70 billion a year and still have the same results. There doesn't seem to be much proof really in the country that despite some of your figures up there, things are progressing as quickly as certainly voters would like, and perhaps you would like in the public services. How can you guarantee that the economy is not being skewed towards public service at the expense of the private sector, and how can you guarantee that there will be the changes that you have promised?

PRIME MINISTER:

If I could disentangle certain elements of that. First of all on the economy, whatever the difficulties let's be clear that this country has weathered the economic slow down better than probably any other comparable country in the world, and we have got inflation rates, mortgage rates, unemployment rates the lowest they have been for decades. Now it's true we have expanded the number of people working in the public services, but as you can see from that, we've expanded the number of teachers, the number of teaching assistants, the number of nurses, the number of doctors, the number of police officers. These are things we need to do. One of the biggest problems in the National Health Service has been the shortage of nurses. We now have 40/50,000 extra nurses. Now I don't apologise for that, but it is also true to say that if you look at overall levels of employment, private and public sector have risen. And I think that the clue to this as to why people have a concern as to whether the public service improvements are coming through is shown actually by the Commission of Health Improvement Patient Survey this morning. Now that is 270,000 people, so that's like 200 times the size of the average opinion poll, it is a big, big survey of people. What does it show? It shows that if people are asked about their own experience in the National Health Service, not everybody but the vast majority are positive. If you look then at different polling and ask people the question what is the overall state of the Health Service they are liable to say it is not really getting better by a majority. Now I think actually most people recognise who are experiencing the Health Service that there are improvements. Not everybody, don't misunderstand me. It treats a million people every 36 hours. But I have visited many, many parts of the country, most recently in the north-west and seen for myself the enormous improvements there in health care. You have some negative reports about cancer care in this country this morning. There is no doubt that cancer care is getting better in this country today. Absolutely no doubt. If you go out and talk to people working in the cancer field, it is not that they will say that everything is sorted, they won't, but they will say that things are getting better and I think it is very important that we don't fall for this line that everybody in the Health Service doesn't get properly treated. Actually the vast majority of people do, and I think when you ask people about their own personal experience the majority - not all, we all know people who have had bad experiences - but the majority get decent treatment.

QUESTION:

Prime Minister, according to the opinion polls, two-thirds of this country now regard you and your government as dishonest, and according to those same opinion polls they believe the BBC much more than they believe you. Do you now regret encouraging Alastair Campbell to make decent events a personal battle between you and the BBC? And on Dr Kelly, was the decision to out him, or were the key decisions in the outing of Dr Kelly taken by your team in Downing Street or by the Department of Defence.

PRIME MINISTER:

First of all in relation to Dr Kelly, I think it is right we have an inquiry in place and I think it is right that the inquiry is able to do its work, and all we ever wanted was an incorrect story corrected. But I do think in the meantime that the country does expect the government, and expect me, to concentrate on the issues that we have been talking about today - the economy, and jobs, and crime, and the Health Service and schools. And I totally understand there are very legitimate questions to be asked and answered, but that should be done in the context of the inquiry.

QUESTION:

But the battle with the BBC is not a matter for the inquiry. Do you regret that?

PRIME MINISTER:

No, as I said to you a moment or two ago, all we ever wanted was an incorrect story corrected.

QUESTION:

People will understand the Hutton inquiry will look at the detailed circumstances leading up to the death of Dr David Kelly, but I think people would expect an answer to this question. David Kelly's widow said after he died that she wanted people around him to examine their consciences. Have you examined your conscience and do you find it in any way wanting?

PRIME MINISTER:

I think it is important that all of us, once the inquiry reports, learn the lessons of that, but let us wait and allow the inquiry to report. And as I say, I totally understand why you want to press me on questions in relation to this, but I think it is important, having announced the inquiry, that we let it take its course, and I do really very strongly believe that for the public out there, they expect the government to carry on governing on the issues that they elected us for.

QUESTION:

At the weekend your friend and Lord Chancellor, Lord Falconer, said quite categorically that you would stand at the next election and serve a full third term. Was he speaking with your full authority?

PRIME MINISTER:

Well as you can see from the work that we have outlined here, there is a big job of work still to do, and my appetite for doing it is undiminished. But who the country elects is ultimately a matter for the country.

QUESTION:

Just on the broader question of the BBC, what is your attitude to how well it is doing its job at the moment, and your reaction to the comments of its Chairman about the government's attitude?

PRIME MINISTER:

Well that is very tempting, but I have learnt to resist temptation.

QUESTION:

You say your appetite for power is not diminished, but will there come a point if weapons of mass destruction aren't found, where you would feel you would have to resign, because advertently or misadvertently you had misled the country? And if I may, just on your own priority of public services, there is a big increase in borrowing, do you think you are going to be able to sustain those public spending plans without either an unacceptable increase in borrowing, or an increase in taxation right up to the election?

PRIME MINISTER:

On the first point, again we have a group of people, the Iraq Survey Group, that have gone in. I can tell you that they are interviewing the scientists and the experts who worked on the Iraqi programme now. And I have said this for the last 2 or 3 months, let them ...

QUESTION:

But nothing has been found.

PRIME MINISTER:

Hang on a minute, they haven't reported yet.

QUESTION:

Well have they found something?

PRIME MINISTER:

Let us wait and see when they come up with their report what the true facts are. I have said all the way through, there has always been something bizarre about the notion that Saddam never had any weapons of mass destruction. I mean we had a 12 year history with the UN for a reason. He had them, he used them against his own people. The proposition is that having cleared the inspectors out effectively in 1998, he then set about destroying the weapons, but never told anyone. I have always thought that was a very unlikely hypothesis.

QUESTION:

... people expect an answer.

PRIME MINISTER:

I appreciate that.

QUESTION:

Well can't you give us an answer, OK now, speak, give us the answer.

PRIME MINISTER:

I can only give you an answer if you will allow me to give one. As I have said constantly to you, I believe the intelligence we received is correct. So that is my view, it has been my view all the way through, and I think in relation to finding the actual evidence, well let the Iraq Survey Group do their work. In relation to the economy, first of all I would just point out to you, I think this is important to realise, that in respect of household debt, because there is some stuff in the newspapers about this this morning, it is just worth pointing out, I am not saying there aren't legitimate issues again to raise there, but it is just worth pointing out that as a percentage of household income, that is actually down over the years, not up. But in relation to government debt, government debt has been falling very substantially under this government, I think we have reduced it down from over 43% down to just over 30%, and if you look at the overall state of the British economy, the fundamentals are strong, and they have been strong in part because of the huge changes we have brought about in the way that the British economy is run.

QUESTION:

If you don't mind, Prime Minister, I would like to ask two questions. The first one is that the Israeli media talked lately about an agreement between you and Prime Minister Sharon to open an intelligence channel, a direct one, and actually they named the person who had this channel on that side. And I would like to know what is the purpose of this channel, what is its relation to the intelligence establishment in England, and who is going to head it? And my second question is about this desire to either capture or kill Saddam Hussein. Some people believe that by killing him actually the resistance is going to be stronger, because a lot of Iraqis might not like to resist the occupation, fearing that Saddam Hussein comes back while you and the Americans believe the other way round, that if he is killed or captured then the resistance would vanish. What is your evaluation on that?

PRIME MINISTER:

Well actually I am glad you asked me a question from Al Jazeera, so let me give you my answer. On the intelligence, I don't know anything about the speculation in newspapers about such a thing.

QUESTION:

Inaudible.

PRIME MINISTER:

Well I don't know anything about any such speculation about intelligence between the Israeli Services and the British services, so I can't make any more comment about that.

QUESTION:

... the Prime Minister of Israel, and yourself, he said you agreed after dinner with him.

PRIME MINISTER:

All I can say is that that is news to me. In relation to Iraq, let's just be quite clear, and I have been talking to people in Iraq who have been in Iraq right throughout Saddam's rule, people who are now on the governing council, people who are Iraqi citizens and Muslims, and they tell me there is no doubt at all that the vast majority of people in Iraq are delighted that Saddam has gone, that for all the difficulties on security and services and all the rest of it, they are overjoyed that their country has been liberated from the rule of Saddam. And I really think what is important is, particularly with Al Jazeera, you go and talk to some of the ordinary Iraqis and actually ask them, because now they are free to speak about their experiences of life under Saddam, where we have already discovered, what, 115 mass graves, 300,000 missing people, probably the numbers of people Saddam killed - all of them Muslims - run into millions. And that is why, for all the difficulties, people in Iraq are glad that their country has been freed from Saddam. And all I say to you is I think it is just important that you give at least a balanced picture that yes there may be people who are sad if Saddam is killed or if he has lost power, but I suspect they are a tiny percentage of the population, and the most powerful evidence of that comes not from me, or with respect from you, but from people actually living in Iraq.

QUESTION:

Do you think on that point of Saddam Hussein, that the noose is tightening, that you are closer to catching him or to killing him? And when you said in your speech to Congress that you might be wrong on the threat from Iraq, what exactly did you mean there, that the weapons might not be found?

PRIME MINISTER:

First of all, I don't think I did say that I might be wrong on the threat from Iraq, I think what I said was that the link between terrorism and weapons of mass destruction and rogue states and so on, and that is an arguable point I happen to believe, I think I then went on to say that I believe with every fibre of instinct and conviction I am right. So I don't think it was quite an admission that we were wrong in respect of this, and I have got no doubt at all that Iraq had to be dealt with in its own terms. In relation to Saddam, the honest truth is that I know what you know, which is that the two sons have been killed, the bodyguards have been captured and are being interrogated. Does that make it more likely that we can get Saddam? Yes I suppose it does, but I am simply drawing that obvious conclusion from those facts in the way that anyone can. One thing that is for sure however, that for ordinary Iraqi people it is incredibly important, we have noticed right up to the sons' death, which is why we had to publicise it in the way that we did, right up to that point there were still a lot of Iraqis that feared he was going to come back.

QUESTION:

Would you prefer him to be captured or killed?

PRIME MINISTER:

I think that the most important thing is that he ceases to be an obstacle to progress in Iraq. Because let's be clear, a lot of the problems for example on services in Iraq - water and electricity - is a problem sabotaged by former Saddam supporters. It is not to do with the fact we are not trying to do our best to get these services running, and so I think the important thing is that he is removed as an obstacle one way or another.

QUESTION:

How do you explain the shambles surrounding the introduction of the new tax credit system?

PRIME MINISTER:

Well I would simply point out that if you take as a comparison the old family credit, actually the take-up there was worse than in terms of the child tax credit, and the vast majority of people got it, we have apologised to those people that didn't, but whenever you have a tax benefit or a credit like that and it comes into being, there are people who don't get it straight away.

QUESTION:

 

I am not talking about take-up, I am not talking about people applying for it, I am talking about people applying and not getting it. With the family credit people didn't apply because they didn't know about it, here people are applying and not getting the money they need.

PRIME MINISTER:

Yes, but it wasn't just that, there are always problems when you set up something. I am not minimising the apology that we have already given to the people who haven't had their money and they should have had it, that is absolutely correct. All I am saying is that whenever you introduce a tax benefit or a credit like this, there is a gap between the numbers who should get it and the numbers who do get it. And even in respect of the family credit, it wasn't that they didn't know about it, it was also that administering this system is a huge undertaking. But let's also not leave the other part of the agenda which is that the average family with children today as a result of child benefit, the child tax credit, the extra help in nursery education, the working families tax credit, the average family with children today is markedly better off than it was 6 years ago. And the poorer families most particularly, some of the poorest families in this country, I know it from my own constituency, have had huge rises in their living standards as a result of what the government has done.

QUESTION:

On Iraq again, with hindsight, what are the lessons that you are going to draw from that, and would it be possible to repeat again this experience, will it be in other words possible to bring a democracy into a pre-emptive war again? After what happened the hostility in public opinion now, if something serious may appear again, North Korea or Iran, would it be almost impossible to repeat this experience?

PRIME MINISTER:

Well I think people will judge each of these things on their merits in the end. But I think in respect of Iraq, and I may be wrong about this, but I think that people will come to a considered view after a period of time. I don't think for everybody in the country they have come to a fixed view. Now obviously they have heard a lot about weapons of mass destruction and they worry, well was the original justification right or not, they hear a lot about the problems in Iraq and they worry well is the country better, is it going to get better? And I think for a lot of people they will make up their minds on the basis of the evidence, and I remain very firm in my view, both that this was a threat that needed to be dealt with, and also that Iraq will be a significantly better place as a result of the action that we have taken. And as I say, the best evidence for that is the words of ordinary Iraqis who lived through the period of Saddam. And of course there are going to be difficulties, it is like when you see people out protesting in the streets about the Americans or the British, people protest, that is a democracy, in previous times they would have been executed if they protested, now they protest. But as one of the representatives of the Governing Council said to me the other day, she simply said to me look, yes people are protesting, but it is like in your country there are people protesting outside Downing Street the whole time, it doesn't mean to say that they necessarily represent the whole of the country. And I think people will make a judgement over a period of time, but the biggest problem, if I can be absolutely honest with you, that I think that I personally have on this issue, is that I think a lot of people, including frankly a lot of people in the media, don't really believe that there is a threat arising from terrorism and weapons of mass destruction, I think they think it is you know a convenient construct politically or something. And I just tell you absolutely passionately, I believe this is the security threat of the 21st century, and if we don't deal with it then at some point we will rue the consequences of it. That is my view.

QUESTION:

It has been a relatively quiet summer in Northern Ireland, but we do have this political stalemate, turmoil apparently within the Ulster Unionist Party, Republicans not knowing what is going to happen within Unionism. Do you think that we have the prospects of a breakthrough; and secondly and perhaps most importantly, will there be an election in the autumn, and if so when?

PRIME MINISTER:

Well I certainly want to see an election in Northern Ireland, as we have said throughout. Will we get a breakthrough? I think we have got to work very hard for it. In my view the position remains that the vast bulk of people want us to have a breakthrough, and as you say rightly, the most significant thing about Northern Ireland is that actually this summer, thankfully, has been so far relatively peaceful. Now let's touch everything we need to touch and hope that that stays the position. But I think sometimes with Northern Ireland it is a classic example, if people step back and ask have we moved on from a few years ago in Northern Ireland, I think people would be very hard put to say we haven't moved on. The situation is dramatically different than it was a few years ago, but I am convinced to sustain that progress we do need a political settlement. In other words the present situation, the status quo, is too fragile. We need the political institutions back up and running again, and that is what we are going to work towards and I hope we will be successful.

QUESTION:

There is a fear this direct rule is becoming comfortable for people in Northern Ireland.

PRIME MINISTER:

Well I think that would be understandable, but mistaken. In the end devolution in Northern Ireland is an essential part of making this peace process irreversible. And I think what there is, what is fascinating about the situation in Northern Ireland is that the political crisis has not produced a security crisis, but we should not be in the least complacent about that. The dangers and the risks still remain and I am convinced myself that we need that political progress in order to be sure of moving this forward.

QUESTION:

In our programme tonight we have brought together a significant group of relatives of British Servicemen who have been killed in the war in Iraq, and whilst they are deeply divided about the cause for which their loved ones died, they have two questions, one a very simple one: why neither you, nor The queen, nor anybody else at the top of the British state have written with condolences for their absolute loss; and secondly, they want to know why you are prepared to have an inquiry for one man who died, for David Kelly, but not for their loved ones who died in the war in Iraq, an inquiry that will span shortage of equipment through to whether you told the whole truth about why we went to war?

PRIME MINISTER:

First of all let me again express my condolences and sympathy to the families of the Servicemen who died in the conflict. There is a particular procedure that is gone through with letters of condolence, though I respond to anyone who writes to me personally. And in respect of the justification for the war, the justification remains as I have stated it, and I believe that that justification, which is about the threat that Saddam posed about the nature of his regime, about the potential link between rogue states with weapons of mass destruction and terrorism is true and is correct. And all I say, as I was saying in answer to a question a moment or two ago, I simply ask you and others, who have a very strong view of this, which you are entitled to have, let us make our judgements based on the evidence when the Iraq Survey Group reports and when we see what has actually happened inside Iraq over the past few years.

QUESTION:

At that point you would consider an inquiry?

PRIME MINISTER:

Well let us just wait and see what happens. No, I have made it clear that I don't believe an inquiry is justified, but let us at least make our judgements respectively, once we have seen what the full picture and evidence is. And I would simply remind people yet again that the whole of the international community, not just Britain or America, came together last November in Resolution 1441, the whole of the international community, and said that Saddam was a threat, that the weapons of mass destruction had to be dealt with and he had to comply fully with the UN inspectors, which he did not do. Now there was a disagreement then in the international community as to how we dealt with that situation, but there was no disagreement about the threat that he posed. And as I said a moment or two ago, there are interviews being continued now with the experts and scientists working on the programmes, I am not going to say anything about the content of those things, but I simply say to people I think it is a good idea to wait until that group is in a position to report.

QUESTION:

I want to ask you a question about the Middle East peace process. Do you have a view about the Israeli government's plan to continue building the fence? And I ask that in the context of Aerial Sharon having told President Bush in Washington this week that he will continue to build it, despite misgivings that have been expressed by the American government.

PRIME MINISTER:

We have expressed our own misgivings too because what we don't want is a situation where de facto the boundaries are changed, because that would mean that a peace settlement is less likely and less possible. But I have got no doubt at all that the only way of dealing with this ultimately is to get the agreement on the security measures that need to be taken by the Palestinian Authority, on the Israeli side as well, in cooperation together because that is the only way we are going to take away the pressure on the Israeli government to carry on doing what it can to protect its citizens. And I have learnt enough from the process that we have engaged in in Northern Ireland to realise you can stand here and disagree with certain measures that are taken by the Israeli government or the Palestinian Authority, but in the end unless you get an agreement, and that agreement has got to start with the security measures, you are not going to make progress on this. So yes, we have the same misgivings, but in the end the only way we are going to get that security fence taken down is to make the progress in the peace deal.

QUESTION:

One of your former Cabinet Ministers, Stephen Byers, is proposing today that you should only get access to housing and to schools if you are a registered asylum seeker, and in some ways you went towards that with your proposals yesterday for emergency operations, and I was just wondering whether you felt there is a case for looking at that, or whether in fact we need ID cards to introduce a system like that?

PRIME MINISTER:

John Hutton was talking about this yesterday and making the point already in respect of failed asylum seekers and the NHS, and there is an issue here and we are looking at whatever measures we can take in order to minimise the problem. Although of course what is vitally important with all these questions to do with asylum is to get the numbers of applications down. Believe you me, when Michael was going through all this stuff, I have worked on asylum as much as anything else in the past 2 or 3 years as a specific issue, and I have come to the very, very strong conclusion that there is only one way of dealing with this in the end, and that is to change the system so that the numbers of applications come down. That is why we have got the target to halve them in September, I believe that we will meet that target very comfortably. I think we have then got to go further, which is why we are talking about further legislation. But in respect of ID cards, let me just say this to you, that in principle there is a case in my view for Britain moving towards a system of ID cards, I believe there is a case for that. However, there are huge logistical and cost issues that need to be resolved. Now it is worth looking, and this is what we are doing, at how you can resolve them, but it is not a quick fix for the system because of the amount of time and the logistical process in introducing them. Now I happen to think that in the long term that is the direction in which we need to move, but every government that has looked at this, and I seem to remember that the last government looked at it over a period of years as well, has concluded the same thing. In principle, yes, but you have got to make sure that the system you put in place has its logistics properly secured and worked out, and you have got to look at the issues to do with cost. So that is what we are looking at at the present time.

QUESTION:

It was said that the next priority on your agenda, and Mr Bush's agenda, will be after the Iraq war North Korea. The mood has changed lately. How can you justify the war in Iraq now and you are not doing anything about North Korea?

PRIME MINISTER:

Well we are doing something about North Korea, we are trying to lock them into a process of dialogue between America, China, and then I hope Japan and South Korea as well. But the difference with Iraq is, which is why Iraq was the right place to start, is that there is 12 years of UN resolutions in relation to Iraq. This is why I keep saying to people, Iraq didn't pop out of nowhere, for 12 years we were trying to deal with Iraq. In 1998 I actually authorised military action against Baghdad back then. So that is the reason why we took Iraq as the place that we had to start in respect of this issue. I agree North Korea raises real questions. It is not acceptable for North Korea to develop nuclear weapons capability, as I was saying when I was out in the Far East, but there is a process that we have in place that we have got to see where it can take us, and hopefully we will yield results through that.

QUESTION:

One of your objectives when you came into office was to play a leading role in Europe and to have harmonious relations with France and Germany. How far do you think that objective has been set back by the events of this year in Iraq and by your Euro decision?

PRIME MINISTER:

In respect of the single currency, it is a statement of the obvious that in respect of single currency policy, if we are outside the single currency we have less of an influence on it. But it is important to recognise we have had a big influence on the economic reform agenda within Europe, and in respect for example of European defence, again on the European Convention, we have had I think pretty much a leading role in all those issues. And I would say that the position of Britain compared with 6 years ago is pretty much transformed in Europe, not as much as I would like it to be, but certainly I think we have made substantial progress. It would be very hard I think for people to say Britain has played no real constructive part in Europe in the last 6 years. In respect of Iraq, this may seem a slightly counter-intuitive thing for me to say, I think in a curious way, after the disagreement on Iraq, having been through that experience, all of us, there is a genuine desire not to repeat it if at all possible. And I would say that our relationship with France and Germany at the moment is strong, and it is accepted that we had a disagreement over Iraq, we took different positions, but I thought what was interesting was that both at the most recent European Council, where Javier Solana presented a paper on European security which was very pro-transatlantic alliance, and when I was over in Congress recently where I thought, I won't say I was surprised, but on the other hand I was pleased to find that a statement that we had to work with Europe was well received. I think on both sides of the Atlantic there is a recognition that this alliance is necessary. And I think that provided we can create a sense of partnership, rather than rival poles of power, if we can create a genuine sense of partnership then I think that is ground upon which France, Germany and Britain can congregate in the same place.

QUESTION:

Comparing the causalities between the British and the American forces in post-war Iraq, don't you think that the British are better running the country?

PRIME MINISTER:

No, I don't think that would be a fair conclusion actually, because I think that everybody knows that in and around Baghdad, that has been the toughest part because it is where the Baath regime was strongest. And truthfully, although I congratulate and am immensely proud of the work that British troops have done, I think that truthfully it has been easier in security terms in the south than in Baghdad, for very obvious reasons, and I don't think we should take anything away from the quite magnificent contribution the American troops have made, and as you can see still putting their lives at risk and in certain circumstances losing their lives. But I hope that over time we can improve the situation there as well.

QUESTION:

Can I ask you about the case of Tony Martin. Do you understand why people feel the need to have a change in the law to allow them to better protect their homes? And if you do understand it, are you able to say you are going to be able to do anything about it?

PRIME MINISTER:

Well of course I understand it. What is important though, as I think David Blunkett has been saying, is that any changes are considered in a reflective way. And I think and hope people understand that it is not appropriate or right for me to comment on individual court cases, that is not what the Prime Minister should do.

QUESTION:

After Nasser Hussein's shock resignation earlier this week, I wondered if you too shared his feelings that the burdens of captaining your country weigh very heavily, and in his words he was feeling rather stale and running out of ideas.

PRIME MINISTER:

No, I think captaining the England cricket team is probably a harder job.

QUESTION:

Can I ask you in the context of the Middle East and in the post-Iraq situation, what leverage have you got over countries which are worrying for the Middle East region, such as Iran and Syria, to make them far more involved in the peace process, stopping their involvement in terrorism. In your talks with the Lebanese over the last few days, have you got any indications that they are going to patrol Israel's northern border and rid the area of Hezbollah? And finally what is going to be done to bolster Abu Mazen against a Yasser Arafat that is trying to undermine him all the time?

PRIME MINISTER:

In respect of the last point, the most important thing we can do you know is to show real practical progress, that is what Abu Mazen needs to show his people, that his way of working, which is to advocate and work closely for a Palestinian state, but in a way where there is peaceful co-existence with the state of Israel, and that delivers results, and that is the most important thing that we can do to help him do that, which is what we are trying to do. In respect of the Middle East, you see I think that Iraq has brought about the possibility of real change, because certainly from my talks with the Lebanese yesterday, and from what we know of the attitude of other countries too, there is a real sense in which people know that a changed Iraq is going to change the Middle East, that a renewed Middle East peace process is going to change the Middle East, and I think many of those countries want to be part of this change rather than set apart from it. And in the end that is their choice. And I have noticed in the whole of the Middle East a real sense that provided we pursue the cause of the Middle East peace process with vigour, and genuine even-handedness and fairness, provided we do that and we support Abu Mazen in the progress he wants to achieve, I think there is every possibility that Iraq in retrospect will be seen, whatever else it is seen as, as a transformative event for prospects in the Middle East. And that, as I said in my speech to Congress, is what it should be.

QUESTION:

In your New Year message you said it was going to be a difficult year. I know we are only in July.

PRIME MINISTER:

An accurate prediction then wasn't it?

QUESTION:

I wonder if you could tell us whether you thought that had lived up to your billing? And secondly some of your friends have suggested - or former friends some of them - that the lesson you should take out of these difficulties is a new style of government when you come back from your holiday. I wondered if we could expect to see that?

PRIME MINISTER:

It is always great when your predictions are proved right, even if it might have been better if they had been proved wrong. I was saying this earlier, I think there are all sorts of lessons that we can reflect on, and a holiday is probably the best time to reflect on them. But I think in the end you know that people will judge us on the momentum and purpose we have for changing the country for the better, and I think that is in part about explaining to people that we have come a certain way, and sometimes it is easy for people to forget that, that there has been real progress, but it also has got to encompass an acknowledgement by us that we have got a long way to go and that there are lots of things that we have got to do better, and I accept that as much as anyone.

QUESTION:

I was going to ask you about momentum you were just talking about then. Do you think there is any way in which the focus on international events has actually retarded your progress towards these targets that we have been looking at today? And in a similar vein, Peter Hain earlier this week expressed the fear that impetus towards the Euro would be derailed by distractions. It came as a surprise to quite a lot of us that there was impetus towards the Euro, but I wondered if you shared his views?

PRIME MINISTER:

I think again, to be frank about it, there is no doubt at all that in the last year Iraq has formed a very large part of the agenda. There is no point in standing here and disputing that. The only thing I would say to you, which is why we did this presentation again, which I think we did at the same time last year, is to say in fact the bulk of my time is still being taken up, apart from in the very intense moments just before and just after the conflict started, with the public service agenda. And all the way through there have been things happening and progress made, and what I think is important is to show and demonstrate very clearly that whether it is in relation to our education system, and that includes higher education or the National Health Service, or the issues to do with crime and antisocial behaviour, we have a real reform programme under way and we are pushing it forward. Now I thought what was interesting yesterday is when you have the street crime report, they said two things, they said it has been a success and that is as a result of the engagement we have had, but it also said there was a mis-chance because of the issue to do with drugs. However, the fact is that several months ago we started working on a proper drugs/crime programme to be rolled out in the 30 top basic command unit crime areas across the country, and then if it works, rolled out across the whole of the country, and so we are actually working on these things. Now I don't suppose any of you will have ever heard of that programme, but nonetheless we have been working on it and I think in the end it will yield significant results for us, because if you don't tackle the drugs issue you don't tackle the crime issue. And I would say for example in relation to the National Health Service, the fact that you had, I think one of the things was in relation to heart disease, you have got a 19% drop in the number of deaths from heart disease in the past few years, that is in part because we have had an increase of 30% in the spending on statins, the life enhancing drugs for those people with serious heart problems. Now when people know this, I think they will accept there has been a certain amount of progress. What we have got to do frankly is to make sure that people understand that whatever is happening, and going in and out of the media day by day, and some of it is very important and are big issues, in the end there is steady constant work going on on the agenda that the country is really interested in. Because in the end they are not going to elect or not elect the government to do with any of the things that have been dominating, perfectly understandably, the news of the past few weeks, they will do it on the issues of the economy, jobs, crime, the National Health Service, education, living standards, and that is as it should be. And on the Euro, I would say after the June statement there is a significant change in relation to that because we have done all the detailed work on it and said no we are right to be in principle in favour, we have set out measures to get us there, and I think that is a significant change of gear.

QUESTION:

Later today you are going to be announcing detailed plans for 120,000 new homes in the south east. In the light of this continued economic expansion of the south-east, how on earth does your government propose to meet its declared target of reducing disparities in growth rates between regions by 2012, which is a public service target that the ODPM has reported.

PRIME MINISTER:

Well the best way of doing that is to expand growth throughout the whole of the economy. The reason why we are expanding housing, and the Thames Gateway is a very, very important issue incidentally, because you have got this massive brownfield site stretching over a very long distance which if it is properly developed, not merely in relation to housing, but in relation to transport and business, will be an immensely important link with Europe, never mind a boost to the growth rate of the whole country. But it is worth pointing out that in the north east we have also had record falls in long term unemployment, growth in employment, growth in business. Now we have got to keep that going, but the best way of reducing disparities in growth rates is to keep growth going throughout the economy. But housing obviously is an issue particularly important for the south east.

QUESTION:

Just following on from that, isn't there a danger that you are going to build all these new houses in the Thames Gateway, and for that matter in Ashford, but the people of Kent just won't have the infrastructure to support it, railways, roads, schools, hospitals, GP surgeries. How can you be sure that that infrastructure will be there when the houses come on stream?

PRIME MINISTER:

That is a very good point, it is exactly what we will be talking about today. The houses can't be built simply, you have got to build the infrastructure along with it, you have got to use the opportunities of the Channel Tunnel rail link and all the rest of it in order to regenerate the area. But we do need to do that and this expansion of the housing programme is vitally important because the numbers of housing being built in the private sector, not the public sector, is insufficient. But of course, as we will say later today, you have got to have provision in that for the schools, and the hospitals and the healthcare system, and particularly the transport infrastructure links.

QUESTION:

Will you take a decision before you go on holiday on the contest between BAE and the Airmachi over the provision of jet trainers for the MOD?

PRIME MINISTER:

The decision will be taken shortly, is all I can say to you. I can't exactly say whether it coincides with my precise holiday dates, but obviously we have got to take the decision shortly and we have got to take the decision based on the interests of British industry, but also making sure that any solution is cost-competitive.

QUESTION:

A lot of people in Iraq are still asking the question why the coalition forces have to change from a liberating force to an occupation force. And the other question, why the failure on the part of the coalition to restore services in terms of electricity, water, sanitation, after more than 100 days of overthrowing the regime?

PRIME MINISTER:

I think the answer to both is very simple. There are certain elements still of the old Baathist regime that are sabotaging power lines and therefore affecting electricity and water supplies, and engaged in attacks upon American soldiers, and British soldiers for that matter, which is why it is important that we don't drop our guard on the security. But we can transform the services situation when the security situation is better, and also as the investment comes in. We will be over the next few months letting contracts that will be building new power station facilities, that will be enhancing the public services in Iraq. According to the reports I have just had out, if you look at what the police or teachers are being paid compared with what they were being paid under Saddam, they are paid significantly more. This country can now be run as a proper country. And what is essential for us I think is that as soon as possible, those Iraqis that are in leadership positions in Iraq take over fully the governance of Iraq. And all I can say to you, and it is a very important message for the whole of the Arab world, is that as soon as we can, we do not want to stay a minute longer than we need to stay. What we want to do is to see Iraq back on is feet as a proper stable democratic country, which it can be, which I believe its people desperately want it to be, and then it is potentially a wealthy country. It has got huge oil wealth that it can use for the benefit of its people, because that oil wealth has been denied the people for many years, and down in the south of the country for example, the problem on the infrastructure, it is not just the sabotage, but the fact that there has been absolutely no money spent on it for decades. And so the Iraqi people have been left without the fruits of the wealth that they have. We have got to make sure that they can enjoy that wealth and then can govern themselves.

QUESTION:

... you mentioned on asylum that you were going to halve the number of asylum seekers coming into the country, but you said you should still be able to go further. Can you (a) clear that up? And secondly, I should have asked this in my original question, can you guarantee that there won't have to be tax increases to make up for any shortfalls which might come about because of low growth?

PRIME MINISTER:

In relation to the economic figures, obviously the Chancellor revisits that in the pre-budget report, you will have to wait for the pre-budget report in respect of that, but we have budgeted for the increases in investment in the Health Service in the way that we described, which is the principal increase there has been. In relation to asylum, I think I have said this before incidentally, but I am very happy if it is said again, I think it is necessary to then look at how we go further. I believe that we will meet this September target, indeed I think it is pretty clear that that is already the case, but I think we need to see then as to what further measures we can take, and that is why David Blunkett sometime ago said that he wanted to take further asylum measures, in particular to do with some of the procedures, and in particular to do with some of the people that come in when obviously they have destroyed their documentation.

QUESTION:

Inaudible.

PRIME MINISTER:

No, I am sorry. And on that very ungenerous note, I bid you Good Morning and a happy holiday

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