PRIME MINISTER:

Good morning everyone.  Since we last met the news coverage, unsurprisingly, has been dominated by the Hutton Inquiry and the continuing situation in Iraq.  On the first I would simply say let the Judge do the judging, and I ask people to suspend their judgement until we hear his.  That's what I intend to do.

On Iraq itself it is a serious situation, but I think we should get one thing very clear.  This is not the American and British forces versus the Iraqi people.  The terrorist attacks taking place are not the work of ordinary Iraqis.  More Iraqis have been killed than either US or UK forces.  The appalling murder of the UN Special Representative, Sergio de Mello, was not perpetrated by ordinary Iraqi citizens.  On the contrary, this is the British and American forces and the vast majority of Iraqis versus a small number of Saddam's supporters and an increasing number of outside terrorist groups.  They are the ones killing religious leaders, murdering Iraqi citizens, attacking the UN and trying to destroy American and British efforts to improve security and basic services for the Iraqi people. 

Why are they doing it?  Because they fear the prospect of a stable, prosperous and democratic Iraq.  They know such a country, reborn, would spell an end to their hopes of persuading the Arab world down the path of extremism.  So our response here should not be to waver, but to redouble our efforts, to work with the Iraqi people to cast out the extremists and let Iraq become what it can be and to root out and defeat these terrorists, whether in Iraq, Indonesia or elsewhere, who want to put terrorism in the place of peace, democracy and reason. 

Iraq is important to the stability of the Middle East and of the wider world and how it turns out will have global impact, including here in Britain.  But outside of the issues to do with Iraq, there is the crucial domestic agenda on which we as a Government have to concentrate and on which there is much to do.

Since we last met, and when we last met as you know you got the presentation from Michael Barber on delivery, but since we last met here is I would say evidence again of significant progress.  We've had the best ever A-level results, GCSE results, and results for 14-year olds.  For the 11-year olds it is true that we in the last 2 years plateaued, but it is worth pointing out that those results are still way above where they were in 1997.  Average waiting times in the NHS are sharply down, asylum applications have now halved since last October, and though it is true that certain aspects of crime, particularly certain aspects of violent crime, are up crime overall is down according to the British Crime Survey, somewhere in the region of 25% since 1997. 

The point I think is important for us to make is this, none of this progress has been achieved except by change and reform.  What I do accept however is that it is important that people understand why we are reforming.  The measures on economic stability and employment are there to provide opportunity for all, the investment in change in the Health Service and in our schools is to ensure people have access to decent education and healthcare irrespective of their wealth.   The new legislation on crime and anti-social behaviour, which will come into effect over the next few months, is to make our streets safer for the most vulnerable in our society.  The Pensioner Tax Credit, coming in in the Autumn, will help the pensioners who need it most.  The new measures on asylum, together with the existing measures, will continue to solidify the progress made, because the system was not working fairly.

So it's been a tough time for obvious reasons and what should the response of the Government be?  I do not believe we should change our course, because we believe in it.  I believe that what we did in Iraq was right.  I believe that just as we have delivered low mortgages, low inflation and cut unemployment dramatically, so in time we will show the transformation in the National Health Service, in our school system that the country wants and that I want, and the action against crime that we desperately need to see. 

I also believe that the values of fairness and prosperity for all are the right values.  But I know also of the concerns the country has about whether that course that I have set out can indeed by achieved.  Is Iraq going to become impossible for us?  Will the rises in National Insurance that people are paying for really deliver the improvements in the Health Service that we want to see?  Our immediate task is to go out and seek to unify people around an understanding of what we are trying to achieve, and why.  If we do this I have total confidence that however tough the times have been we will win through. 

QUESTION:

Prime Minister, the last couple of days there have been a lot of changes around Downing Street, new structures, Alastair Campbell going, Trade Unions come in for coffee and cup cakes, if not beer and sandwiches.  What was it that went wrong that you felt the need to change and work on over the last few days?

PRIME MINISTER:

I think it is important that we - especially 6 years into government - not that we change our course and direction because I do passionately believe that that course and direction is right and I think that the changes that we have made on the economy, and that we are making in the Health Service and schools and on crime, are the right changes.  But I also think it's important that we are engaging with people and explaining to them why we are making these changes and allowing people to understand that whatever the understandable preoccupations with the Hutton Inquiry are, there is a basic domestic agenda out there that we continue to work upon, and I think centring our operation, making it more accessible, is an important part of that.

QUESTION:

Did I understand you to say that you don't think it is appropriate to talk about the substance of what you said to Hutton?  Is that right?

PRIME MINISTER:

I think not really, no because I think it is important that we ...

QUESTION:

Could I ask you two questions related to presentation.  The first is whether you expect or would like to give evidence - further evidence - to Lord Hutton.  And the second is, in view of what you said in your letter yesterday to Bob Phillis.  The points that he talked about whether you would say here and now that you would like, and would like say the Electoral Commission to start working on a television debate against your main Opposition opponent during the next Election campaign?

PRIME MINISTER:

Well, I think that in respect of the Hutton Inquiry.  Of course I have said I will co-operate with the Inquiry in any way at all, but I wouldn't take that as any indication of what the Inquiry will do.  I think it is u to them to decide that.  In respect of television debates with opponents I think we went through this at length at the last Election.  But obviously we will wait and see what the Phillis Committee comes back with and we have tried to act on the changes that they have made already, but I do think it's important that we also understand that for the vast majority of people out of there is what is concerning them is not frankly how the Lobby is done or who comes into what position.  What they really want to know from us is are we going to make progress on the basic issues upon which they elected us back in 1997. 

QUESTION:

You have a problem haven't you at election time?

PRIME MINISTER:

Yes, absolutely, but in a sense that is a reflection on whether people believe that the Government is going to make progress on the essential things that we have set out, and I think that the whole key to getting people to participate and turn out is a belief by them that politics works and delivers.  If they don't think that politics can deliver change, why should they participate in the political process, and one of the things that we've got to do, and I think this is one of the reasons for changing the way that we work, is so that we are saying to people very clearly look these are the reasons why we are making these changes in the National Health Service, in our school system, in tackling asylum or crime, and these are the things we are going to concentrate upon as a government because in the end for them I think you would probably accept in the last few months, what have people been hearing.  Mainly to do perfectly understandably, I'm not making any criticism of this - but it is to do with the Hutton Inquiry and so on, and what I think is important is that they understand from us as a government meantime there is a huge domestic agenda that we're working on and are trying to get sorted out.

QUESTION:

Prime Minister, the Foreign Secretary is talking of the risk of a strategic failure in Iraq.  Geoff Hoon, the Defence Secretary, is calling for a review of troop levels and resources.  Are you going to give them more troops in Iraq, and would you see that as an encouragement to the Americans to provide more troops as well?

PRIME MINISTER:

I think you can make rather too much of this.  The position on troops is that we keep it constantly under review, but unless there's a recommendation that comes forward from our Military Commanders that they require more troops, we don't provide them.  At the moment we've got around about a third of the numbers that we had at the time of the Gulf Conflict.  It's also worth just pointing out, incidentally - I just got the figures before I came in, but it may be of interest to you - we have now got round about 25 different countries participating also with troops and I think there are 14,000 troops now from other countries in Iraq.  And the British actual participation in Iraq I think is round about 10,000 or 11,000, so we keep it under review constantly, because we've got to get the job done, but there are no decisions that have been taken on additional troops.

QUESTION:

Turning back to the domestic agenda.  Two days ago you agreed with the Trade Unions that you would see them on a regular basis.  The CBI has complained that they don't get the same sort of exclusive access that you've granted to the Trade Unions.  You also said when you came to power you would keep all these organisations at some sort of arm's length.  Does this suggest in some way that you are weakened right now and you are desperately trying to keep the left wing of your party back on side to avoid the revolts that are causing problems?

PRIME MINISTER:

Well that would probably be a hopeless undertaking if it was what I had set out for myself, but no.  For a start I see the CBI as well as the TUC incidentally.  I don't think I was saying we should keep them both at arm's length.  I think we said we should treat them both equally.  And indeed we do.  The CBI gets every bit as much access to us as the TUC.  I was slightly surprised at quite how the concept of a Public Services Forum was taken.  I think it's a good thing to listen to the views of  people who are working in the public services that we are trying to change.  They have got a valuable input to make, but in no sense does it mean that we are going to depart from the reform agenda.  The reform agenda is important.  Look, one of the things that's been happening - I think you can see this particularly in the Health Service - the concept of choice within the Health Service is proving popular both in cardiac surgery and now increasingly in London for people who have been waiting a long time, these new diagnostic and treatment centres that are going to be delivering hundreds of thousands of operations, some private sector organisations, some public sector but all within the NHS.  These are reforms that are popular with the public and in the end will deliver us a better NHS.  Now I don't think there's anything for people to fear who work within the public services from that agenda.  But obviously they have concerns and fears and it's important to have a dialogue with them, but it's a dialogue not in order to weaken the reform process, but to strengthen the understanding of it.

QUESTION:

Two questions if I may.  Isn't there a danger that we are being sucked into a long war that this country didn't want to fight, and a country that doesn't want us to be there, and more generally this morning you seemed to a echo a former Prime Minister - the Prime Minister is not for turning.  Couldn't this be your Thatcher moment that actually some in your Party, concluding that you're now less of an asset than you were, and more of a problem?

PRIME MINISTER:

Right.  Well, I don't know how you're going to describe it.  I'm really going to have to take it as a Blair moment for the moment and what that means I'll leave you guys to work out as you do so brilliantly!

QUESTION:

You did say you weren't for turning in effect though.  You said I don't see the need to change.

PRIME MINISTER:

First of all, I don't think we should change course because I think that it is important that we carry on just as we have had, I think people would accept, success on low inflation, low mortgages, low unemployment, so we've got to show that the changes and investment we are making in the Health Service and our school system, in the new legislation coming in on crime and asylum, is going to make a difference.  That's important for us.  That doesn't mean however that we have got to be so arrogant as not to say it is important to go out and explain to people why we are doing this and give people a sense, which they are bound to have frankly after months of concentration on the Hutton Inquiry, that there is a domestic agenda that we are out there and we are focussing on, and that's why I'll be visiting one of the estates in the inner city in the country later today in order to see for myself what is happening, the changes that are being made, but also what more we have to do.

On Iraq, this has been a difficult time.  Not just for the government in a sense but for the country over Iraq, because you are right in saying that there were very divided views, and there still are divided views, but let me just state to you again.  My opinion on this has not changed, but when I say it hasn't changed, that doesn't mean to say I have disrespect for people who take a different point of view.  But let me just say to you why I still believe Iraq was the right thing to do and why it is essential we see it through now.  This isn't a case in Iraq of the people not wanting liberation from Saddam, and the British and American troops there.  On the contrary the British and American troops are on the same side as the vast majority of Iraqi people.  It's not ordinary Iraqis that are killing UN and Iraqi people and religious leaders. It's these terrorists and the former supporters of Saddam.  It's not the British and Americans who are sabotaging the power and electricity supplies getting through to the Iraqi people.  It's these terrorists.  So what is important is to recognise that this is for the present time the battleground on which this battle in respect of terrorism is being fought out, and we've got to fight it out and we've got to win through, and we will win through in the end.  I've no doubt about that at all.  But every single day we are trying to make changes giving the Iraqi people more power over their own say through the Governing Council, building new power facilities, trying to lay new power lines in order to get the electricity and water through, and these people are coming along and sabotaging it.  So, what I would say to you is this is not a case where we should be concerned about whether we are doing the right thing.  We're doing the right thing and these people are trying to stop us.  Now the interesting question is why are they trying to stop us?  Why are these terrorist groups coming into Iraq at the moment?  Because they know perfectly well that if we succeed in putting Iraq on its feet as a stable, prosperous and democratic country, then what a huge advertisement that is for the values of democracy and human rights, and what a huge defeat it is for these terrorists who want to establish extremist states.  So of course it's a difficult situation and as ever our first thoughts should be with our troops.  They do a fantastic job and doing it in very, very difficult circumstances.  But this is a necessary fight.  Not just for Britain and America but for the whole of the world.  If this goes wrong, then the Middle East goes wrong.

QUESTION:

Can I just return to the question of more troops because the advice from the Foreign Office, as reported this morning, which has not I think been disowned or denied, unless you are about to correct me on that, seems quite stark and seems quite urgent.  It talks about a Brigade and it talks about action by Ramadan, which is only a matter of weeks away.  Are you saying  that's not the case, or that advice is not what's moving things?

PRIME MINISTER:

Well I actually haven't seen this particular thing that's in the newspapers this morning.  All I can say to you is that of course because we have constant meetings on Iraq and the situation there that we keep the situation continually under review.  My own sense of this however is that, as I say, you have got to work out given the tasks that you are setting your troops whether you've got the right numbers of troops to do it, and that's something we take advice on constantly.  The most important thing however is to build up the capacity of the Iraqi Governing Council and the Iraqi people to do much of this work themselves.  Now we already have I think just under 40,000 Iraqi Police but we need special protection teams to protect a lot of the key oil and public service supplies and a lot of what we need to do is less simply with our own troops but making sure that that capacity is there amongst the Iraqis themselves.  And that's why, as well as obviously as I say you constantly keep under review the number of troops you have there yourselves, we are looking at a whole series of things as to how we make progress faster on giving Iraq the capability to sort out its own problems.  And I would point out too - I think it was on Sunday - that we had the first Ministerial appointments from the Iraqi Governing Council.  There is a political process here where power gradually is being turned over to the Iraqi people themselves.  Now we've got a timetable set out for that that I hope and believe that we will achieve, but that's immensely important for Iraq.

QUESTION:

Two questions.  On a personal level, did you use your holiday to reflect at all on your future and whether you really wanted to go on with this job? And on a more general theme, the message you are clearly trying to deliver today is that you are not for changing, you may not want the Thatcher mantel, but you are saying you are not changing.  However at the same time you are saying you want to go out and talk to people.  Isn't it rather arrogant to go out and listen to people's views, but having made up your mind that you are not going to change, particularly given that many in your party would say look at what has happened to your reputation for trust, look at the government's standing now, he has actually got to listen to us, we know better than he does on some issues?

PRIME MINISTER:

I think it is always important that you listen to people, and we do.  We listen to the concerns that people have.  But I think it is also important to do what you believe in, because otherwise there is no point in doing the job at all.

QUESTION:

... look at what has happened in Iraq and say look what happens when you do what you believe in.

PRIME MINISTER:

Well you see where I profoundly disagree with you is in saying that, or implying that Iraq was a mistaken thing to do.  I really do suggest that you talk to some of these people on the Iraqi Governing Council, and whatever the problems, you say to them would you prefer to be living under the old regime, and they would look at you as if you were completely crazy. Now they have got problems, you know there is a problem to sort out because you are being given a problem by a small number of former Saddam sympathisers and by these outside terrorist groups, but they are the people trying to defeat a stable, prosperous and democratic Iraq.  We are the people trying to get there. So let's get this thing straightened out so that we don't end up saying look at these terrible things the British and American troops are doing in Iraq, look at the problems of security, we are not causing the problems of security, we are trying to deal with the problems of security.  But the absolutely disgusting, appalling murder of Sheikh Hakim, that was a terrible thing to happen.  Now the British and American troops, we are trying to prevent that happening, so are the vast majority of Iraqi people.  So I am afraid I don't agree with the implication on the issue.

QUESTION:

Inaudible.

PRIME MINISTER:

Look, I carry on doing the job because I believe in what I am doing and I think I have answered that many,  many times.

QUESTION:

It is a year now almost since the institutions went down. There is a lack of confidence in Northern Ireland about the institutions coming back.  How do you propose to put this thing back together.  I know there is talk of an international monitoring body and so forth, what does that mean?  And does that specifically give the Republic of Ireland a role in the internal affairs in Northern Ireland?

PRIME MINISTER:

First of all, I think you probably accept, most people accept that this summer has actually been one of the quietest summers in Northern Ireland for a long period of time.  That is actually a tremendous plus.  There would have been in years gone by very few summers that we wouldn't have come back with all sorts of terrible things having happened in Northern Ireland.  However I don't think we should be lured by that into a false sense of security in a way.  I think it is vitally important the political institutions get back up and running.  Next week we will be introducing legislation on the Independent Monitoring Commission. Today we are publishing the format of the international agreement to establish such a Commission.  It doesn't in any way transgress our constitutional boundaries with the Republic of Ireland, but it does give us the opportunity of having an independent body that can monitor what is actually happening on the ground, whether the terrorism is ceasing or not, and I think that is very important.

QUESTION:

But the question is you said that the elections were postponed until the autumn.  MLAs, for example the politicians are suffering financially, they want to know when there is going to be an election.  The problem is, is there going to be an election in the autumn or what is the situation?

PRIME MINISTER:

I can't specify at this point in time because we are in discussion with the parties and with the Irish government and so on as to what will happen, and I can't specify exactly at this point in time what is going to take place. But let me tell you the basic principles we are operating to.  Elections do have to take place.  We can't go indefinitely without elections in Northern Ireland. It is however obviously far better that we have those elections against the background of agreement on the way forward. We are working hard now, and will do in the next few weeks, to achieve that agreement. Over the summer obviously people were away and it wasn't possible to get the agreement then, but we are restarting the whole process of trying to get people together round it. The fact that we are introducing legislation next week and publishing the agreement on the International Monitoring Commission today is an indication that we intend to move this thing forward. So I can't say much more, Ken, at this juncture, but I hope in the next couple of weeks I will be able to be a little bit more definitive.

QUESTION:

Taking that timetable of the next couple of weeks, that rules out the possibility of October elections given next week's deadline for legislation surely, so you will have to postpone again?

PRIME MINISTER:

Well let's wait and see.  I think the most important thing is, within limits obviously, not the precise month, but I think the most important thing is that people know that we have got a decent prospect of getting elections held, and also hopefully against the background of agreement. But I don't want to say more about this at the moment other than that we are working on it very hard.  I think there is a prospect we will get agreement.  I know we have come very close, but failed, the last couple of times.  I hope we will be able to get agreement on it, and it is tremendously important for people in Northern Ireland, because the situation there is transformed actually, Northern Ireland is a transformed place from a few years ago, but all of that progress can be put at risk if we don't get a proper political framework within which people can have their differences and move forward.

QUESTION:

I heard what you said about the Hutton Inquiry, but I do think the British public would expect some response to matters that are now a matter of public record, and after yesterday's evidence for instance.  You must be concerned that there was clearly far more concern about that dossier being expressed inside the intelligence services by people who could not be described as junior, and apparently that never made its way to you. What do you think of that?

PRIME MINISTER:

I really think Andy, I know what the headlines are today, but the important thing about this inquiry is that the judge is hearing the totality of the evidence, he is not looking at the headlines, he is looking at the evidence.  And I think what is very, very important, as I said a moment or two ago, is to make our judgments on this once he has made his judgments.  Now I totally understand why people are concerned about it, but in the meantime there is no point in me speculating as to what he is going to find, that is for him.  In the meantime I think what is important is that we concentrate on the domestic agenda.

QUESTION:

I am not asking you to speculate on what he will find, it is your response to this evidence.

PRIME MINISTER:

Of course, but I think if I start giving my response to each piece of evidence that comes, and I could make a response to you on this, but I don't think it is the right thing for me to do.  I think it is important to allow him to determine this, because the difference between the judge, and with the greatest respect, either us or you, is that he is hearing the whole of the evidence, he is not just getting the bits that appear in the headlines, he is getting the whole of the evidence, and I think he should be allowed to get on and do that work.  I am sorry, I don't mean to be unreasonable about it, but I think if I start commenting on that evidence yesterday, there is no reason really why I shouldn't comment on other evidence too.

QUESTION:

The United States has returned to the United Nations now seeking a new resolution that would enable other countries to join in the reconstruction of security operations while still under American military command, as you know.  I have three questions.  Is Britain as engaged in that effort, drawing up the resolution, as it was the last time?  Secondly, are you particularly trying to talk to the French and the Germans, countries that disapproved of the earlier effort and may resent slightly being asked now to chip in in an operation they didn't like in the first place?  And thirdly, do you think you will have success this time where you failed last time?

PRIME MINISTER:

Yes to the first question, yes to the third question and the second question, it is important that we work with everyone, those that were opposed to the war, those that were in favour of it, because everyone has got the same interest now, which is a stable and prosperous Iraq. And whatever disagreements there have been with France and Germany over the issue of the war, I can assure you they are absolutely committed to doing what they can to help Iraq succeed in the future.  And we have been working obviously very closely with the US on the new UN resolution.

QUESTION:

In your opening remarks you talked about the need to unify your wider party behind you, and yet your policy on university top-up fees has caused catastrophic divisions. We know from Mr Campbell's diary that he certainly is aware of this huge stuff about trust surrounding you, and yet the top-up fees policy was ruled out in your manifesto and that is hardly likely to help you on that score.  We read that you are supposedly wanting to be more collegiate and involve Cabinet colleagues and the wider party in devising policy, and yet this policy was imposed on the Labour Party via remnants of the SDP.

PRIME MINISTER:

Are you giving a preview of your column here Patrick?

QUESTION:

A final point.  Is this also undermining your support among middle class voters who will always wish you well, why not go back to the drawing board, devise a policy in consultation with your party and go and get a mandate for it at the next election?

PRIME MINISTER:

You mean on student finance?

QUESTION:

Yes.

PRIME MINISTER:

I think that actually is a good example of where there has got to be a proper and open debate in the country and of course we listen to people's views on it.  But let's be clear why we have taken the action we have, and all I would say to you is when you take on an issue like this, that let's say is not immediately popular, I think it is important that people then at least give us some credit as to why we are trying to do this, and we are trying to do it because if we want to widen access to universities, if we want to make sure that the education people are getting at universities is top quality education, if we want to keep Britain with its university sector as one of our strengths, we have got to increase significantly the amount of funding going to universities.  Now how do we do that?  Well we can get it from ordinary taxpayers, even more money, by putting up their taxes, but is it really fair to ask an ancillary worker in the Health Service who has not gone to university to pay even more taxes so that someone can go to university and get a good education that will allow them to earn 40 - 50% more than a non-graduate?  If we don't get it from extra taxpayers, we could do what the Conservatives are saying which is that you just cut the number of people going to universities.  Under their plans around about 100,000 people fewer than now would go to university, but that is extremely unfair and in any event the universities will tell you they are in a funding crisis even if you keep the present numbers or reduce them. So that is why we came to the notion that you have to balance the individual contribution and the state contribution, and in respect of the individual contribution, no-one will now pay anything up front at all, they will pay it back once they are earning money as a graduate.  Now let's have a debate about which is the fairer system, but surely the proper thing for government to do in these circumstances is to say look this is what we think, there is going to be a full parliamentary debate, I don't doubt there will be a big debate in the country and in the party. But I think, if I can say this respectfully, those people who are opposed to our policy should come forward and say what their alternative is, but we know the Conservative alternative, which is to say cut the numbers going to university. That would be a terrible thing to do.  A whole lot of working class kids wouldn't get access to university.  The Liberal Democrat alternative is to say you have got to go to the university closest to where you live, well that is not very fair either.  So I think it is important we have a debate on the basis of the facts, and I believe we can win that debate.

QUESTION:

Are the changes to the communications structure an admission that the Civil Service was politicised and that was wrong, and to put it crudely, is this an end to spin?

PRIME MINISTER:

I think and hope you would all accept that in the world of 24 hours a day, 7 days a week media, a government has got to have a communications operation.  We made the changes that we made on the back of the recommendations of the Phillis Committee and I think they will strengthen our capacity to communicate in a proper and legitimate way.  But I think it is important too, maybe there are changes that we are making in the way we approach things, I think it is a two-way process that too, for the media also with their responsibility. And in the end, let's be clear, both of us have got an interest in the public being less cynical and more open to the political argument and I hope that is what it brings about.

QUESTION:

Most of the people in Iraq agree about the steps taken by the United States and the United Kingdom in terms of overthrowing the regime, but most of the Iraqis did not support the fact that the Americans were involved heavily in appointing the Governing Council which people were hoping that the appointment of such a Council would reduce the attacks, but on the contrary it has reflected frustration, especially some of the members of this Governing Council are wanted by Interpol for crimes and for fraud.  So how can you retain back the trust of the Iraqi people on the steps taken earlier?

PRIME MINISTER:

Well first of all thank you at least for the admission, which I believe to be true, that the vast majority of the Iraqi people actually did welcome their liberation from Saddam.  I think in respect of the Iraqi Governing Council, it is important to realise this was a process also agreed with the United Nations.  Now it is however only an interim step.  We are then going to agree a constitution in Iraq, and then it is going to go to a mandate of the people.  And so I know there are all sorts of debates, and it is a very difficult situation, we face the same problem in Afghanistan, who do you choose to go on the Governing Council, how do you get the ethnic, regional, religious balances right.  We did our best to do that.  But I think that it is important for people to understand in the Arab and Muslim world that this is only an interim step, in the end it is the Iraqi people that we want to make this decision and they will decide whether if people are running for office from the Governing Council they have done a good job or done a bad job.

QUESTION:

On Iraq, it is 125 days since the war ended.  The whole of the summer the Iraq Survey Group, which you have constantly pointed out is 1,300 strong, has been scouring Iraq for weapons of mass destruction. The initial informal indications from the group seem to suggest that they have given up more or less hope of finding evidence of a major weapons programme. When, if ever, do you think you are going to be able to prove the case for taking Britain to war in the way that you did?

PRIME MINISTER:

Well first of all I don't actually accept the premise, James, I don't think they have given up hope of that at all.

QUESTION:

Do you still expect evidence of a major weapons programme to be discovered?

PRIME MINISTER:

I have got no doubt at all, I have been in this position all the way through, that they will find evidence that those programmes were continuing well after Iraq was saying that they had been discontinued and shut down, but let's wait until they complete their work properly. And I have been through the reasons that I think the war was justified.

QUESTION:

Back to the monitoring body, elements of the Ulster Unionist Party have expressed concern that this gives Dublin a role in the internal affairs of Northern Ireland.  Do you believe that what you are publishing today will satisfy them and help stabilise the position of David Trimble who you know faces another difficult meeting of his party's ruling council on Saturday on this issue?

PRIME MINISTER:

Yes, I don't think we cross any constitutional proprieties or boundaries that we shouldn't in relation to the International Monitoring Commission, but I think this is of enormous value I hope to the Unionist population. Because what is their worry?  Their worry all the way through has been that unless there is some objective way of determining whether any undertaking is given by the Republicans who want to sit in government, whether those undertakings are justified or not, their concern all the way through has been well how do we test this objectively, and their worry has been well the governments will look at this far too politically.  So that is the hope in appointing an independent international commission which is absolutely clearly and objectively going to determine this, and I think that will be of great support I hope for the Unionist community.

QUESTION:

Are you concerned for David Trimble's position, because he has been a bulwark of this whole process?

PRIME MINISTER:

As I think David himself would say, I don't think there has ever been a time in the whole of this process over the last 6 years when there hasn't been a concern about either David's position or the situation within the Unionist community, it is just part of the world we live in. But the fact is that we have come a long way precisely because of the leadership that he has shown.  He however is insisting now, I think reasonably, that we have got to be clear that if we are going to reconstitute a political process that is inclusive, that has got the Republicans sitting in government with the Unionists, it has to be on the basis that the violence is ended completely, and there has got to be a body that can allow us to come to that conclusion independently with proper sanctions to back it up.

QUESTION:

I understand you say it would be improper to comment on the outcome of the Hutton Inquiry, and I accept that, however can you clarify a point of logic for me?  Last Thursday you told Lord Hutton that you chaired a meeting of Downing Street officials to discuss how you would go about naming Dr Kelly, and yet on 22 July when asked on your plane on the way from Shanghai to Hong Kong, why did you authorise the naming of David Kelly, you replied "That is completely untrue".  Asked whether you had authorised the leaking of the name of David Kelly, you replied "Emphatically not.  I did not authorise the leaking of the name of David Kelly."  How can both those statements on 22 July and last Thursday both be true?

PRIME MINISTER:

Well I think Julia I am afraid I am going to say to you, let the Hutton Inquiry make judgments about these things.  I could go into a long and detailed answer, but I won't. Sorry.

QUESTION:

In difficult times do you ever admit to yourself that you are extremely fortunate not to face a forceful opposition?

PRIME MINISTER:

No, I long for such an opposition.

QUESTION:

Do you accept, as Mr Straw appears to be suggesting and advising you, that more money might need to be put into Iraq, both by ourselves and the international community, if we are going to stabilise the situation and accelerate progress?

PRIME MINISTER:

Well I don't think that is really a matter of any surprise, it has always been anticipated, you build up the investment and there are disbursements being made by the provisional authority the whole time, so I don't think that is very surprising.  And it is important particularly in relation to power generation, there are certain key things that we can do to improve the situation and that is what we are going to try to do.

QUESTION:

Can you provide us with some examples from your time as Prime Minister when you have gone out and listened to people and changed your mind?

PRIME MINISTER:

Yes I can. 

QUESTION:

Inaudible.

PRIME MINISTER:

Thank you Michael, but not in that instance. There was a very good example with the 75p on pensions wasn't there, rather famously.  But it is important, of course you have got to listen to what people are saying, but in the end it is a balance, isn't it?  Let's be honest, when you are in a position like mine you have got to balance listening to people, hearing their concerns, with taking difficult decisions. An example was given a short time ago on student finance.  Now I have got to listen to two different types of concerns on that, I have got to listen to the people saying I don't want to pay any money, I want my university education free, I have got to listen to those concerns;  but I have also got to listen to the concerns of the university saying look we cannot any longer provide top quality education and expand our numbers unless we get more access to money. And then I have got to listen to those who are saying I don't want to make a contribution;  and the taxpayer who says well look why should I pay taxes so that this kid can go to university, I am not going to university, why should I pay this money.  So you have always got in politics to balance the listening and the leadership. And I was asked a question a moment ago about the opposition, what have the opposition decided to do on that issue, they have decided to stop thinking. Well you can do that, they have just decided it, and that is actually one of the reasons why they are in the position they are in.  On the one hand you have got them saying they want to spend more money on every single thing under the sun and match our spending, on the other hand they are saying we are spending recklessly and they want to put in tax cuts.  In the end you have got to listen to arguments in difficult situations, but you have also got to decide and otherwise there is no point in being in a position of leadership at all. And of course there is always a balance between you are accused on the one side of arrogance and on the other side of weakness, and I think there is a process by which you can engage with people and have the argument with them, but in the end it is important that they recognise a decision has got to be taken. And I just say this to you as well, because I think people in their lives understand this. Look, every single person in their life has difficult decisions to make about their own household finances, about where their kids should go to school, about when they are going to buy their home and all the rest of it.  There are difficult decisions that people make, but in the end you have got to make a decision, and it is not a question of not listening to people, of course you have got to listen to people and as I say there are examples that I can give of where we have listened and changed, but I think it is important on some of these key questions that we don't listen as a way just of avoiding a decision, because that is actually just weak government.

QUESTION:

I though I might have caught another Hutton moment this morning, Prime Minister.  You are persistently saying that outside terrorists are part of your problem the US and UK face in Iraq, and yet the evidence for that is very scanty.  Presumably  you have some, what is it?

PRIME MINISTER:

Yes well we do, which is basic evidence and intelligence about what is happening in Iraq.

QUESTION:

Can you be more specific, because that is disputed, it is heavily disputed.

PRIME MINISTER:

I don't know how heavily it is disputed.  I think most people would accept there is evidence of such outside groups.

QUESTION:

In increasing numbers?

PRIME MINISTER:

Yes, that is what I believe, that there are increasing numbers.

QUESTION:

Who are they, where are they from?

PRIME MINISTER:

They are from different extremist groups from different parts of that region who are in there causing as much trouble as they possibly can because they know the problems that we are going to face there.

QUESTION:

But it lacks specificity.

PRIME MINISTER:

Well I am sorry if it does.

QUESTION:

You have not banged it to rights there.

PRIME MINISTER:

Yes well I am sorry if it does, but that is what we believe.  You say that nobody else seems to believe that, I would say most people who are looking at the situation do actually accept that.

QUESTION:

When I interviewed you last year you accepted that one of the elements in the special relationship was that Britain sometimes had to pay the blood price.  I just wonder a year on with the war in Iraq, the loss of life of British troops, the loss of trust in you, the loss of two Cabinet Ministers, the fractured relationship with your own party and what is seen on the ground as a desperate mess in Iraq, what you feel now about the price that you have had to pay for your unflinching support of President George Bush?

PRIME MINISTER:

Firstly, it is not the price that I have paid, the price has been paid by British and American soldiers, by Iraqis.  The question is, is it right, is what we did right, and I believe it was right, I believe it to be right.  I think if Iraq, we have to see it through, but if Iraq is reborn as a stable and prosperous and democratic country, that is of huge importance to the people of Iraq and to the wider region and to the wider world. And don't forget that even if it wasn't in the headlines, for every year that Saddam was in power literally thousands of people were dying, thousands of people were dying through malnutrition, thousands of children were dying every year through malnutrition, thousands of people were dying in prisons and in these mass graves that are being uncovered in Iraq.  So far, what, almost 400,000 people I think in total have either been identified as in mass graves or missing. Some people, a member of the Iraqi Governing Council, she told me that she thought it would run into the millions in the end, the people who had been slaughtered by him. So it is a difficult situation, I don't dispute that, but you should also understand this.  The reason that I supported the action in Iraq was not because I thought we simply had to support America, it is because I thought it was right, I still think it is right.  And you know sometimes these judgments that you make are judgments that will be validated or not at a later point, but I happen to believe it was the right thing to do, and I still believe, and I think this is a really difficult argument I know because I think it is not fully accepted by people, I think the link between terrorism and rogue states with weapons of mass destruction is the crucial security threat of the 21st century, and I believe that, I am not infallible in the judgments that I make, of course I am not, and there will be other people who strongly disagree with that, but that is what I believe and that is why I acted in the way that I acted and I think that in the end that is what you have got to do when you hold this position.

QUESTION:

Can I ask you, how will you cope with life after Alastair, are you going to have ... and who are you going to have your mug of tea with in the morning?

PRIME MINISTER:

I have my mug of tea with my wife actually, thank you very much.

QUESTION:

How would you describe your government's relationship with Iran at this particular time? And secondly, regarding the security situation in Iraq, don't you think that you have made certain strategic mistakes like the dissolution of the Iraqi army?

PRIME MINISTER:

On the latter point I think we of course are helping now reconstitute it, but I think it did need to be reconstituted on a different basis, otherwise the Iraqi people, a bit like the police force, would have protested.  In fact there were problems sometimes when we were getting Iraqi police back on the streets again with some people feeling these were former supporters of Saddam, so you have got to be careful as to how you do that.  But in time that will be reconstituted and that will be important, because the more that the Iraqi people end up taking control of the situation the better.  In respect of Iran, well we have a policy of, I would describe it actually as critical engagement, we are engaged with Iran, we have a dialogue with their leadership but we are under no illusions.  It is important both that they adhere completely to the demands of the international community in respect of nuclear weapons, and that they cease all support of terrorist groups.  Now until those two things are done, that engagement is going to remain critical.

QUESTION:

You were a passionate advocate of that pre-war second resolution on Iraq and a vital post-war role for the UN.  How much do you hope and believe that the current serious situation in Iraq has changed the views of those in the US and in Europe who opposed both those things?

PRIME MINISTER:

I think whatever people thought about the justification for the war, as I said a moment or two ago, I think everyone is agreed that it is important that the situation is sorted out.  It is important always, especially in difficult times frankly, to keep your eye on the big picture and the big prize, and that is just imagine if we are able to come through this period and Iraq is governed by the Iraqi people within a democratic framework, what a huge signal that will be right across the whole of the Middle East and the wider region, and instead of a failed state governed by a murderous dictator, you have a state that is stable and prosperous and democratic. So it is going to be difficult, it always was going to be difficult, but we have got to see it through. And the important thing to realise, as I say, is that this isn't, as I think was being indicated indeed by one of our colleagues from the Arab media a short time ago, we are not on the opposite side to the Iraqi people in respect of this, we are on the same side.  It is the small groups who are trying to disrupt this situation that are on the opposite side.

QUESTION:

Do you think it is fair to assume that the debate on the euro is dead and buried by now because of the Hutton Inquiry, the Iraq crisis at large, you need to focus on public services, what are the chances of having a referendum in this parliament?

PRIME MINISTER:

They are exactly what they were, it doesn't change it at all, it shouldn't change it, it has got to be decided on its own merit, and so we will return to it next year when the question is, as it has always been, is it good for the British economy.  If it is good for the British economy it is right to do it irrespective of what else is going on.  If it is not, it is not.

QUESTION:

How can you realistically expect the French President, Jacques Chirac, and also your colleague Mr Aznar, who had populations that were 80 or 90% actually against the Iraq war, to put their troops in harm's way in Iraq? And also don't you think you have got a lot of explaining not only to do to the British public, but also to the Iraqis, and I gather that radio and TV aren't very much available to the ordinary population, isn't that a major problem?

PRIME MINISTER:

First of all in relation to Spain and France, Spanish troops are already part of the coalition force.  In respect of France, obviously it is a decision that France will have to take, but as I say I think most people accept that whatever the issues to do with was it right to get rid of Saddam, or not right to get rid of Saddam, it is important for everyone that the situation is stabilised, and I believe that we will have a perfectly constructive discussion with France about that. Secondly, again I would say to you, I don't think the Iraqi people are in any doubt as to who is blowing up the power supplies, it is the people I have identified, it is not us, we are trying to restore those power supplies, we are putting more money in.  We are actually down in the south for example, the British are doing what we can, and this is where the extra money will be spent in trying to make sure that those power supplies are improved and that the lives of ordinary people are improved. We are on the same side as the Iraqis which I think is the important thing, and I believe that they understand it.

QUESTION:

... have actually resigned from the Governing Council and some of the Iraqi people really feel that they need their own people to be doing more of the policing. That is a real problem.

PRIME MINISTER:

Absolutely, but that is why we are trying to build this policing capability up.  But let's be clear about this.  The Iraqi police force, under Saddam, was not like the Metropolitan Police exactly, it was a police force that was used as an instrument of state oppression.  Now we are having to retrain those people, turn it round and get them to be able to do the ordinary job of policing properly.  We are going to do that, it takes time to do.  But I totally agree, the more that this capacity can be built within Iraq itself the better, and that is why

today as I say, you have got just under 40,000 I think Iraqi police, but we need to get that up, I think 70,000 is the figure that is being talked about, we need to get the army reconstituted, we need to get the Service Protection Force, which I think is somewhere in the region of 14,000 strong increased, and we need proper training and equipment for all these people.  But we are doing that, we are helping with that.

QUESTION:

If we just cast our mind back to the debate over the war, as I recall it wasn't so much about whether to deal with Saddam Hussein or whether to go to war, but when, and the debate was whether to go in spring, which happened, or to go later in the fall, now.  And looking back at what has happened since with the security situation, with the arms issue, the failure to find weapons, in retrospect would it have made sense to wait a little?

PRIME MINISTER:

I think for the reasons that we stated at the time, you had to come to a point where you thought were they serious about complying with the UN weapons regime or not, and we took the view that they weren't.  And I don't think the debate was so much about timing, to be honest, I think in the end it was about was it right to do it or not.

QUESTION:

As you are clarifying everything, maybe you could clarify one big point of confusion for me, could you please state exactly and in detail what the weapons of mass destruction actually are, and by that I mean do they include mortar shells?

PRIME MINISTER:

The best way of looking at this is to go back to the UN reports of what was unaccounted for when the UN inspectors were effectively booted out back in late 1998 when we then engaged in a bombing campaign in Baghdad, and you will see all the facts and figures listed in the UN reports at the time. There is a sense in which sometimes you hear this debate going on as if this issue to do with Saddam and weapons of mass destruction was something that had just arisen in the last year, it has been there all the way through, and the UN weapons inspectors' report from 1991/2 onwards give you absolute details in terms of tonnes of precursor chemicals, VX nerve agent, the lot, and I refer you to them.

QUESTION:

As in last May is a significant IRA active completion an essential precondition of your allowing an election to go ahead, or would you be satisfied if Gerry Adams and others told you that it might be a consequence of your allowing the election to go ahead?

PRIME MINISTER:

I don't think you can tie the election up with that at all, I think the election in a sense is about at some point it has got to be right to let the people of Northern Ireland have their say, and I think for all the reasons that your colleagues were specifying earlier, I am not going to get into specifying a time now for elections, but I do say in principle that you cannot go on indefinitely without the democratic mandate being renewed, and therefore I don't think any things to do with acts of completion are tied to the elections themselves. However, what I do say is that if we want to get a reconstituted political process then we do need acts of completion by everybody. We have got to be clear.  The one thing that is surely right for the Unionist community to say after this length of time is that whatever the problems of transition, anybody who now wants to sit in government has got definitively to stop any paramilitary activity, that the existence of paramilitary activity by someone who is linked to a group sitting in government is wrong. Now it is absolutely true to say, and it is important to emphasise, Republican groups are not the only groups that have been engaged in paramilitary activity, you have had Loyalist groups engaged in it too, but the difference is the Republicans are actually seeking to sit in government with the Unionists, and I think it is not unreasonable for the Unionists to say in those circumstances, we have got to be clear that there is an end to it.

QUESTION:

You say the government shouldn't comment on anything regarding the Hutton Inquiry, and please correct me if I am wrong, I think I heard Mr Blunkett doing just so last week, saying he expects the government to be cleared by Lord Hutton.

PRIME MINISTER:

Right, well I haven't the advantage that you have obviously had of studying what David said, but obviously we have got to wait for the outcome of the inquiry, and I am sure he wasn't saying anything in ... to that.

QUESTION:

Inaudible.

PRIME MINISTER:

Was I?  Well there you are. I don't actually recall that quite being said in that way however.

QUESTION:

Just to ask you about something you said last week to Hutton, you said that you took full responsibility for the decisions of the government at that time.  Does that mean that if the judge criticises those decisions you will consider your position?

PRIME MINISTER:

As I said, I think it is important we allow the   judge to make whatever criticisms, or not criticisms, he wants to make, and what I said last week is I think what you would expect me to say and I stand by it. But no matter how many different ways you tempt me into the same thing, I don't think I should do it, because once you start down that road frankly there is no reason why you shouldn't really answer all the questions on it.  And I do think it is important, the one thing I say isthat it is important that we allow him to make his judgment and it is important too in a sense to say to the British people, as I was saying a moment or two ago, let everyone, no matter what they have read, or no matter what they are hearing from anyone, whether it is the politicians, the media or whoever it is, I think it is a good idea for everyone to wait until the judge who is hearing this, the totality of the evidence, let him make his decision on it.

QUESTION:

I just want to return us briefly to the domestic agenda, because I am a little bit bemused by what you were saying about the changes.  You have got new advisors in, you  have got new structures, you have got a new Permanent Secretary and all the rest of it. Do I take it from what you have been saying that really the only thing that you think has gone wrong in the process of government has been failing to get the message across?

PRIME MINISTER:

No I am not saying that.  I think it is important that you constantly look at how you can improve your operation and also take account of the points that people are making, and there has been a debate about some of these things going on, it is why we asked the Phillis Committee to look at this for us.  And you tell me, you guys, but I think there is a debate about how politics and the media interact and whether we both of us are getting that balance right for the people out there who in the end are the people that matter to both of us.  But there is no point in me saying to you that I think the basic course we have set on policy for the government is wrong because I don't think it is, and I think in the end we will deliver, in exactly the same way as I was saying a moment or two ago that we have delivered, I think people would accept, on issues to do with the economy and unemployment, I think people can see, and will increasingly see the changes in the Health Service, and in education, and crime and anti-social behaviour, and asylum and the things that are really worrying people out there, I think they will see those changes too.

QUESTION:

Will you keep the policies on tax too?

PRIME MINISTER:

Yes, I think it is important that we do that.  But let's be clear, we increased national insurance in order to fund the increased investment in the Health Service, and maybe my constituency is exceptional, but I don't think so, if you go into virtually any constituency in the country you can see the extra investment going into the Health Service and what it has delivered. And if you look at the numbers of people for example waiting for over a year or 18 months, all those things are being dramatically taken down.  If you look at cancer and cardiac care, again don't talk to me about it, I am not an expert, but if you talk to people who are experts, they will say yes there is a long way to go but the treatment of both cancer patients and heart patients in this country is improving, and improving dramatically. And all I say to people is look get the balance right.  I am not sitting here telling you everything is

wonderful, but I don't think it is fair either for people to sit there and say nothing has happened, this money has just disappeared down the drain, it has gone into a big black hole, because it hasn't.

QUESTION:

Can you give me a yes or no answer?  Do you still believe that the weapons of mass destruction will be found in Iraq?   And during the Edinburgh Book Festival, the writer Doris Lessing said she thinks that you are a fantasist and producing magic, that if you say a thing that you believe it is true.  How do you feel about her opinion?  And I think she is not the only person in this country thinking in this way. Do you want to change the opinion of people on you?

PRIME MINISTER:

I think I had better go back and re-read my Doris Lessing in that case.  Look, people have got their views, haven't they, and they are entitled to them. It is what living in a democracy is all about.

QUESTION:

There are 10 days to go to the Swedish referendum on the euro.  How important do you consider the outcome of that to be in general and for the prospects of a British referendum?

PRIME MINISTER:

It is obviously important as to what people within the European family are deciding on these issues, the decision obviously is for the Swedish people. I know I feel this, were I in the position of your Prime Minister, I think it is important that any outside politicians make it very clear it is a decision for the people, in this case of Sweden.  But of course it will have a bearing on the debate everywhere I would say.

QUESTION:

On Iraq, how do you expect the German government to help in future in Iraq, and would that include sending troops sometime in the future?

PRIME MINISTER:

I think it is obviously for the German government to decide any way they want to help, but I don't believe there is a problem for the international community in coming back behind this.  One of the reasons we went back into the UN and got an earlier resolution was in order to say to people very, very clearly, look leave aside the rights and wrongs, the wisdom or not of the conflict in Iraq, we understand that we have come to this basic position where some support the action, some don't support the action, but what is important now is that we all work to get a better Iraq because that is in the interests of everybody.  So I don't think it would be right for me to say to you I expect the German government to do this, or to do that, but I am sure that the German government would want to help in any way that it can that it sees fit.  And I would just emphasise this, because it is very important, you know the German government has taken a lead role in Afghanistan which has been of immense importance. So I think that Germany has shown well its desire to contribute to the peacekeeping work of the international community.