Downing Street

The Prime Minister has set out a raft of planned measures to empower consumers and end sharp practices by financial services providers.

In a podcast released in advance of World Consumer Rights Day, Gordon Brown said the Government wanted to make banks and credit card companies behave responsibly and act fairly towards their customers.

• Listen to the podcast

Proposed measures include changing how repayments are allocated to credit card debt, introducing a statutory right to reject interest rate increases and banning automatic credit limit rises.

Banks and credit card companies should “never again” encourage people to borrow beyond their means, Mr Brown said.

Lenders that do not comply with the new rules could face tough penalties, such as having their licences revoked.

The PM said:

“We want not only to empower and protect you as consumers, but also to make banks and credit card companies behave responsibly and act fairly. And so we will re-write the rules on lending to end the sharp practices which sting so many credit card holders.

“For example, by changing how your repayments are allocated to your credit card debt we will help put hundreds of millions of pounds a year back into your pockets and purses. That’s money you could use for a family outing, a treat for the kids, or a meal in town.”

The Government is also planning to set up a national Money Guidance Service paid for by banks to help people choose financial products and deal with debt.

Speeches and transcripts: Consumer finance podcast

A transcript of a podcast recorded by the Prime Minister about consumer finance.

Read the transcript

You know, one of the challenges we are confronting in the wake of the financial crisis is the behaviour of some banks and credit card companies towards you - their customers.

I know, for example, that the way some treat you - whether it’s unreasonable overdraft charges, interest rate hikes on loans, or simply bad customer service - puts extra pressure on you and your household budgets just at a time when finances are tight for many.

That, of course, is not fair. And it appals me to think that some see an opportunity to exploit families in difficulty to make a few extra pounds profit.

So I’d like to talk to you this week about the action we are taking to change that culture.

On Monday - to coincide with World Consumer Rights Day - we’ll be announcing a number of measures as the next stage in our reinvention of financial services after the global banking crisis.

We want not only to empower and protect you, as consumers, but also to make banks and credit card companies behave responsibly and act fairly.

And so we will re-write the rules on lending to end the sharp practices which sting so many credit card holders.

For example, by changing how your repayments are allocated to your credit card debt we will help put hundreds of millions of pounds a year back into your pockets and purses.

That’s money you could use for a family outing, a treat for the kids, or a meal in town.

We will also give you a statutory right to reject interest rate increases, so that you can keep paying off your old debt at the old rate.

And because we’re on your side, we will ban companies from hiking up the interest rates they charge you - or increasing your credit limit without being asked - if you are struggling to make ends meet.

And never again should banks and credit card companies encourage you to borrow more than you can realistically repay.

To keep better track of your finances: you need to be in control.

There will also be new regulations and guidelines to stop irresponsible and unaffordable lending and there’ll also be new cooling off periods for consumers offered new credit.

Lenders that don’t comply will face tough sanctions, like having their licences revoked.

Now I know that the most important financial summits are those that take place around the kitchen table - and to support you as you manage the family budget we’re also setting up a national ‘Money Guidance Service’ paid for by the banks.

This will help one million of you to choose financial products and to deal with debt. And also - from next month - the Citizens’ Advice Service will receive a further £5 million to pay for longer opening hours.

This kind of action is what we mean when we talk about building a more responsible and a fairer Britain.

In fact, everything we do is driven by my determination to ensure a fair deal for all; for financial services that work for you, not for them.

Thanks for joining me and I look forward to speaking to you next time.

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The Prime Minister has spoken of the close relationship between the UK and France and the two governments’ determination to work together to promote global economic recovery.

In a joint press conference with French President Nicolas Sarkozy at Downing Street, Gordon Brown said the two countries were cooperating more closely than at any time since the Second World War.

They called for nations around the world to work together more closely and speedily to ensure economic recovery.

The PM said:

“We believe that the G20 must move with more determination, more consistency and more speed and we believe we need more global cooperation now, not less. We believe our national growth policies must be consistent with strong, sustainable and balanced global growth so we agreed today that we need to develop a globally coordinated approach to ensure that the banks make a proper contribution to the cost of any crisis and to our society as a whole.”

President Sarkozy also emphasised the importance of the relationship between the two countries, saying they had worked “hand in glove” during the economic downturn.

Mr Brown said he and President Sarkozy had renewed UK-France cooperation on nuclear power and announced partnerships would be formed to share expertise and build skills to ensure “nuclear power can be exploited safely and effectively across the world”.

The two leaders also discussed high speed rail connections between France and the north of Britain, following yesterday’s announcement of plans for a high-speed rail link between London and Birmingham.

Previous story: New high speed rail link announced

Briefing by the Prime Minister’s spokesman on: President Sarkozy and Unite

President Sarkozy

Asked if the Prime Minister and President Sarkozy would be speaking about city and financial regulations at their meeting today, the Prime Minister’s Spokesman (PMS) said that they would talk about economic issues but people should wait for the press conference for full details.

Asked what else would be on the agenda at the meeting, the PMS said economic issues, non-proliferation, the EU council (including energy) and transport matters would be discussed at the meeting.

Unite

Asked if the Prime Minister had any comment to make about the strike action by BA staff, the PMS said that the Prime Minister would not specifically comment on individual strikes but he hoped that some resolution could be found.  These were sensitive negotiations between BA employees and management.

Asked what the Prime Minister’s view was about the likely disruption for travellers, the PMS said that it was important to ensure that people could get about and do their business.

Asked if the Prime Minister had a special relationship with Unite, the PMS said that the Prime Minister had very good relationships with all unions. 

The Prime Minister has re-appointed 13 members to the Council for Science and Technology (CST) until 31 December 2010. The CST is the Government’s top-level advisory body on science, engineering and technology policy.

The 13 re-appointed members are:

• Professor Geoffrey Boulton OBE
• Professor Dame Janet Finch DBE
• Professor Peter Davies
• Professor Dame Wendy Hall DBE
• Dr Hermann Houser CBE
• Professor Alan Hughes
• Dame Susan Ion DBE
• Sir Paul Nurse
• Dr Raj Rajagopal
• Dr Philip Ruffles CBE
• Professor Michael Sterling
• Professor Katherine Sykes OBE
• Sir Mark Walport

The Prime Minister also reappointed Professor Dame Janet Finch DBE  as CST independent co-chair, alongside the Government’s Chief Scientific Advisor, currently Professor John Beddington.

The CST is the UK Government’s top-level advisory body on science and technology policy issues. It reports directly to the Prime Minister. CST’s remit is to advise the Prime Minister, the First Ministers of Scotland and Wales and the responsible Minister at the Northern Ireland Office on strategic science and technology policy issues that cut across the responsibilities of individual government departments. CST’s terms of reference are:

• sustaining and developing science, engineering and technology (SET) in the UK, and promoting international co-operation in SET;
• fostering the practice and perception of science, engineering and technology as an integral part of the culture of the UK;
• promoting excellence in SET education;
• making more effective use of research and scientific advice in the development and delivery of policy and public services across Government; and 
• promoting SET-based innovation in business and the public services to promote the sustainable development of  the UK economy,  the health and quality of life of UK citizens, and global sustainable development.

In developing its advice the Council takes into account the cultural, economic, environmental, ethical and social context of developments in SET.

The Prime Minister said:

“The 13 members I have re-appointed along with the independent co-chair whom I have also reappointed, form an outstanding team from a wide range of backgrounds in business and academia, science and technology, and economics and social science. I am confident that, as in the previous 6 years, CST will continue to provide Government with the necessary top quality strategic advice to help build a society that is confident about science and can gain from all that it offers for the future. “

Notes for editors

Further details on CST’s membership and terms of reference are available from www.cst.gov.uk.

The13 independent members are senior, highly respected people active in the worlds of academia and business, and from charitable sponsors. They were appointed in accordance with the guidance from the Office of the Commissioner for Public Appointments.  Their appointments have been extended until 31 December 2010.

Members are not normally remunerated except for reasonable travel expenses.  The independent co-chair may be remunerated at the rate of £205 per day. 

Biographical Notes

Full biographies can be found on CST’s website, www.cst.gov.uk

Briefing by the Prime Minister’s spokesman on: economy, high speed rail and President Sarkozy visit

The Prime Minister’s Spokesperson (PMS) began by briefing the assembled press about internal changes to the communications departments at the Cabinet Office and Downing Street, with effect from 1st July.

Economy

Asked to comment about Liam Byrne’s remarks on the Government introducing no new taxes as part of the deficit reduction plan, the PMS said, the Government had already set out its position and there would be no further comment.

High Speed Rail

Put that it would be a more achievable option to make trains run on time rather than building new infrastructure, the PMS said, Lord Adonis had already stated that the country had the most efficient railway network in living memory with trains running on time but that the current network cannot deliver trains to run at high speeds.

President Sarkozy Visit

Asked what would be on the agenda at tomorrow’s Prime Ministerial meeting with President Sarkozy, the PMS said, the economy, the forthcoming summit in Brussels and other international issues such as follow up to Copenhagen climate change talks.

Asked if President Sarkozy would meet with David Cameron, the PMS said, he understood the President to have other meetings planned, but that his principal meeting would be with the Prime Minister.

Briefing by the Prime Minister’s spokesman on: high speed rail, money advice service and strike action

High Speed Rail

Asked why the Government had not started introducing high- speed rail 13 years ago, the Prime Minister’s Spokesman (PMS) told the assembled press that technology was changing all the time in regard to high-speed rail and we were at a juncture now where we could take the decision to invest in this kind of initiative. The Transport Secretary had said at Cabinet that we had a patchwork rail system that had served us reasonably well but now was good time to consider this significant step forward.

Asked where the money was coming from to fund the project, the PMS advised people to wait and see what kind of detail was in the statement. No one was underestimating the fact that these were major infrastructure investments, but this was a long-term initiative and therefore there were different ways of financing that.

Asked if any estimates had been given for the number of jobs it would create, the PMS replied that he was sure those estimates had been given, but he would get back to people on the exact number.

Asked why the UK was so far behind some other countries when it came to high-speed rail, the PMS said that he was not a transport expert, but part of the reason was the nature of the way our railway network was set up. The rail network started as a series of railways that ran independently, so therefore they grew up on an independent basis. This had then been joined up subsequently, which differed from some other countries more comprehensive approach.

Money Advice Service

Asked what kind of advice the service would give out, the PMS said the service would not be giving out advice on financial products; it was advice on money issues. The PMS said for more detail people should talk to the Treasury.

Strike Action

Asked whether the Prime Minister would condemn any potential strike action by staff at BA and Network Rail as the UK “struggled out of the recession”, the PMS said that the Prime Minister followed any industrial action issues closely. It was for the relevant departments to make specific comments.

A momument to 179 people who lost their lives in the Iraq war has been re-dedicated at a service in the Midlands today.

The Prime Minister and his wife were among those who attended the ceremony at the Basra Memorial Wall in the National Memorial Arboretum, in Staffordshire.

The wall was originally built in Basra in 2006 and was dismantled and moved to Britain after UK combat operations in Iraq ended last spring.

Following the ceremony, a minute’s silence was held and wreaths were laid at the memorial, including a wreath laid on behalf of the nation by the Prime Minister.

In an interview with the British Forces Broadcasting Service, the PM said:

“It is right that relatives, friends and families of those who died in Iraq are able to visit the National Arboretum in Staffordshire and be able to pay their respects. This is a wall that was built in Basra. I was privileged to lay a wreath at it before it was brought to this country and I think this now gives us a permanent memorial to the 179 who were killed and gave their lives.”

Gordon Brown attended the ceremony during a trip to the Midlands where he also visited a Health and Wellbeing Centre in Burton upon Trent, Staffordshire. The PM toured the facilities and met staff, including dentists, physios and fitness instructors.

Earlier, Mr Brown visited the site of the new central Birmingham station as the Government announced plans for a high speed rail network.

Previous story: New high speed rail link announced

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The Government has announced plans for the development of a high speed rail network linking London to Birmingham.

• Command Paper: High Speed Rail

The network would be capable of carrying trains at up to 250 mph and could be extended to other cities and to Scotland.

Announcing the plans, Transport Secretary Lord Adonis said the London to Birmingham section of the route will run from a point close to Euston station in London and interchange with the Crossrail network.

The PM, who travelled to Birmingham today, visited the site of the new central Birmingham station where the proposed high speed route would interchange.

Lord Adonis said:

“High speed rail is a long term strategic project to equip Britain with the transport infrastructure it needs to flourish in the 21st Century. Now, as we emerge from recession, is the right time to be planning.

“The Government’s view is that high speed rail could play a crucial role not only in meeting reasonable future transport capacity requirements, but also in transforming the connectivity between our major cities, regions and economic centres.”

Lord Adonis also said the high speed trains would be more sustainable and “emit far less carbon than cars or planes per passenger mile”. The new network would also release capacity from the existing West Coast Main Line for commuter and freight services.

The high speed rail strategy was based on analysis from an independent company set up by the Government, High Speed Two Ltd.

The plans will now go out to consultation with construction starting in 2017.

Previous story: Gordon Brown hails the launch of UK high-speed train travel

Read more: Department for Transport - high speed rail

Her Majesty The Queen has approved the re-appointment of three Forestry Commissioners for further terms. They are Judith Webb and Jon Owen Jones, Commissioners for Wales, and Sir Harry Studholme Commissioner for England.

Biographical Details

Judith Webb has been re-appointed for a further four years. Ms Webb runs a business specialising in woodland management, land-use policy and conservation schemes. She is a Secretary of State appointee to the Cotswolds AONB Conservation Board, a member of the Royal Welsh Agricultural Society’s Forestry Committee, an independent member of the Joint Nature Conservation Committee, and a non-executive Director of the National Forest Company. She has previously been Chair of Department for Environment, Food and Rural Affairs’ Rural Development Service and a member of the Forestry Commission’s National Committee for England and Advisory Committee for Wales.

Jon Jones has been re-appointed for a further three years. He chairs the Forestry Commission’s National Committee for Wales, and is a former MP, a former Minister for the Environment, Farming and Forestry in the Welsh Office, and a former member of the UK Parliament’s Environmental Audit and Health Select Committees.

Sir Harry Studholme has been re-appointed for one year. Sir Harry has been involved in business in South West England for more than 30 years in manufacturing, land management and insurance. He is Chairman of the South West Regional Development Agency, the South West Chamber of Rural Enterprise, and the Finding Sanctuary Steering Group working to create Marine Protected Areas off South West England. He is a member of the South West Rural Affairs Forum, and former chairman of South West Food & Drink. His own business interests include the Perridge Estate, which includes farmland, woodland, housing and light industry.

Notes to Editors

The Forestry Commission is the government department responsible for advising on and implementing forestry policy in Great Britain. It is a cross-border public authority responsible separately to Ministers in England, Scotland and Wales, and collectively on GB matters. The Commission manages approximately one million hectares of public forest land, provides advice to Ministers, offers grants for expanding, regenerating and managing forests, regulates tree felling, sets standards for good forestry practice, and works to protect Britain’s forests from pests and diseases. Through its Forest Research arm it conducts world-class scientific research and technical development relevant to forestry for a range of internal and external clients. The Forestry Commissioners advise and oversee the work of the Forestry Commission on behalf of Ministers in the UK, Scottish and Welsh Assembly Governments. They are appointed by Royal Warrant under the Forestry Act 1967, and in accordance with the Commissioner for Public Appointments’ Code of Practice for Ministerial Appointments to Public Bodies.

All appointments are made on merit, and political activity plays no part in the selection process. However, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. Mr Jones is a member of the Labour Party. Ms Webb and Sir Harry Studholme have not declared any political activity.

Ms Webb’s and Sir Harry Studholme’s remuneration is currently £11,001 a year each, and Mr Jones’ is £14,181. Sir Harry and Ms Webb hold the following other Ministerial appointments (with annual remuneration in parentheses). Sir Harry: Chairman of the South West England Regional Development Agency (£80,510); Ms Webb: Independent Member of the Joint Nature Conservation Committee (£9836); Secretary of State appointee to Cotswolds AONB Board (£260); non-executive Director of the National Forest Company (£3168); and Public Appointments Ambassador (unremunerated).

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Photographer Rankin has hosted a private viewing in Number 10 of images from his recent visit to the Democratic Republic of Congo (DRC).

The exhibition, called From Congo with Love, is a collaboration between Oxfam, Rankin and survivors of the ongoing conflict in DRC.

According to MONUC, the UN mission to Congo, more than five million people have been killed, and two million displaced in the eastern part of the country since 1999.

Rankin said the aim of the photographs was to bring the people of DRC to life and empower them rather than making them “objects of charity”.

The Prime Minister, who hosted the reception at Number 10, said the exhibition brought home the fact we are “all citizens of the same world”.

The PM said:

“By allowing the Congolese to bring their country to life in this very innovative way, Rankin has given us the chance to share their daily life and what makes them smile, what worries them, what gives them hope.

And like great art, I think these pictures enrich our understanding of the world.”

The private view of the exhibition comes in the same week that the Prime Minister announced that Baroness Kinnock will take on a new role leading the Government’s work to tackle violence against women overseas.

Baroness Kinnock’s priority is tackling sexual violence in the DRC.

Briefing by the Prime Minister’s spokesman on: President Sarkozy visit and Match of the Day

President Sarkozy visit

Asked what would be on the menu when the Prime Minister had lunch with President Sarkozy, the Prime Minister’s Spokesman (PMS) said we didn’t publish the menu as a matter of course, but if we could offer some guidance we would do.

Asked whether Greece would be on the agenda in the meeting, the PMS replied it wasn’t currently on the agenda. There were discussions going on amongst the Eurozone participants, but we had made our position clear.

Match of the Day

Asked for more details on the proposed bid for the Prime Minister to appear on Match of the Day 2, the PMS replied that he had seen the reports. The PMS said that if the Prime Minister was not appearing, it could be due to the fact that certain programmes would not accept one political leader and would only accept all of them the closer it got to an election.

Asked how the idea came about, the PMS said that the Prime Minister was a football fan but he was not aware of it being discussed recently. Asked if he watched Match of the Day 2, the PMS said the Prime Minister did watch football.

The Government will continue to do “whatever it takes” to protect the recovery of the UK economy, the Prime Minister has said.

In a speech from Canary Wharf in London, Gordon Brown said now was not the time to change course from the measures the Government was following.

He said there would be a tough approach on spending and public sector pay, and announced a freeze on pay for senior staff in the civil service, senior staff in the military, the judiciary and senior NHS managers.

It follows last week’s announcement of a freeze on parliamentary and ministerial salaries of all paid government ministers and controls on pay announced in December. The measures are expected to save more than £3 billion by 2013-14.

Mr Brown said the Budget - which he confirmed will be held on 24 March - will focus on protecting and advancing the recovery by ensuring Britain can succeed in new industries.

The PM said:

“The stakes are high. We dare not risk the recovery. For our task above all else is to preserve and expand the jobs - and lift the standards of life - of the British people. We are weathering the storm; now is no time to turn back. We will hold to our course. And we will complete this mission.

“We have got through this storm together but there are still substantial risks ahead. There will be bumps in the road. And I believe the only way to overcome them is by displaying the same strength and resolve as we did during the crisis.”

Mr Brown emphasised the importance of maintaining a globally consistent approach to economic recovery and urged G20 leaders to recommit themselves to the ambitions they have already agreed.

He also called on leaders to make the opening up of trade one of the key deliverables for the next summit in June.

Read the Written Ministerial Statement on the review of senior salaries

Speeches and transcripts: Speech on the economy

Maternal mortality, public spending and the armed forces were on the agenda at today’s PMQs.

The Prime Minister also took questions on Sure Start childrens centres, crime and school places.

We will offer a summary of the topics covered, as well as the chance to watch the broadcast again, from around 15:00 GMT.

Follow the links below to read the PMQs transcript or listen to the broadcast again.

• Watch PMQs on Number 10 TV
• Listen to PMQs
• Read the transcript (new window)

Question-by-question guide

The Prime Minister answered questions on:

• Armed forces voting
• Lord Ashcroft
• Afghanistan
• Sure Start childrens centres
• Crime
• Maternal mortality
• Counter-terrorism
• School places
• Defence spending
• Public spending
• Tax
• Rail fares
• Broadcasting

Extra information

Prime Minister’s Questions is an opportunity for MPs from all parties to question the Prime Minister on any subject, although they usually focus on the key issues of the day. The half-hour session, which takes place at 12:00 GMT/BST on Wednesdays while Parliament is in session, starts with a routine question from an MP about the Prime Minister’s engagements.

• Watch an archive of PMQs on Number 10 TV player
• More on the history of PMQs
• Parliament website (opens in new window)

Written Ministerial Statement by the Prime Minister on the 32nd Report of the Review Body on Senior Salaries (SSRB).

Read the statement

The 32nd Report of the Review Body on Senior Salaries (SSRB) is being published today. This makes recommendations about the pay of the senior civil service (SCS), senior military personnel, the judiciary and very senior NHS managers.  Copies have been laid in the Vote Office and the Library of the House.  I am grateful to the Chairman and members of the Review Body for their work. 

The Government has decided to accept some but not all of its recommendations.  It is important in the present economic climate that senior staff in the public sector show leadership in the exercise of pay restraint.

Senior Civil Service

For the SCS, the Government has accepted the recommendation of the Review Body that for 2010-11 there should be no increase in base pay or the non-consolidated performance-related pot.

The Government has not accepted the Review Body’s recommendation that the minimum for SCS Pay Band 1 should be increased to £61,500.

These tough decisions complement existing measures to reduce the cost of the Civil Service and protect frontline services, including savings of £500m over three years from reforms to the Civil Service Compensation Scheme; savings of £100m annually within three years from reducing unnecessary Civil Service bureaucracy and the cost of the SCS; and Ian Smith’s new review into the scope for further Civil Service relocations, building on the relocation of more than 20,000 posts since the 2004 Lyons Review.

Senior Military Personnel

The Government has accepted the Review Body’s recommendations that there should be no increase in the senior military pay scales for 2010-11 recommended in last year’s report, and that the bottom step of the senior military 2-star scale should be removed.

Judiciary

The Government has accepted the Review Body’s recommendation that the salaries for the judiciary should remain unchanged. 

Very Senior NHS Managers

For Very Senior NHS Managers, the Government has accepted the Review Body’s recommendation that there should be no increase in base pay for those whose current salary is £81,800 or more, and no increase in the non-consolidated pay pot.
 
The Government has not accepted the Review Body’s specific recommendations that there should be a 2.25 per cent increase in base pay for those whose total salary is less than £80,000, and that there should be an increase in base pay so that the total salary of those currently paid between £80,000 and £81,799 rises to £81,800.

Ministers

The effect of the Government’s response to the SSRB’s recommendations on SCS pay is that there will be no increase in Ministerial pay for 2010-11. All paid Ministers will also waive any increase in their pay as an MP to which they are entitled.

Other Review Body reports for 2010-11

My Right Honourable Friends the Secretaries of State for Justice, Health and Defence are making statements today on the reports of the Prison Service Pay Body, the Doctors and Dentists Review Body and Armed Forces Pay Review Body in respect of pay for the relevant workforces for 2010-11.  The Government’s response to those reports is consistent with the need for senior staff in the public sector to show leadership in the exercise of pay restraint.

Looking ahead, the Government announced in the 2009 Pre-Budget Report (Cm 7747) that it would seek a one per cent cap on basic pay uplifts across the public sector for 2011-12 and 2012-13, generating savings of £3.4 billion a year by 2012-13.

I also announced in Putting the Frontline First: Smarter Government (Cm 7753) a series of fundamental reforms to the scrutiny of senior salaries in the public sector, with new requirements for Ministerial approval of salaries in excess of £150,000 and bonuses greater than £50,000; improved disclosure arrangements above these levels; and a review of senior pay across the public sector led by Bill Cockburn, Chair of the SSRB.

Related story: Putting the frontline first: Smarter Government

The Prime Minister has welcomed news of the Northern Ireland Assembly voting in support of the devolution of policing and justice powers.

He said the completion of devolution sends a powerful message that “democracy and tolerance will prevail”.

The PM said:

“The completion of devolution, supported by all sections of the community in Northern Ireland, is the final end to decades of strife.

It sends the most powerful message to those who would return to violence: that democracy and tolerance will prevail.”

The completion of devolution follows the Hillsborough Castle agreement reached on 5 February 2010 where Northern Ireland’s power-sharing government agreed to take on policing and justice powers from 12 April.

Previous story: Statement on Northern Ireland

A transcript of a speech given by the Prime Minister in London on 10 March 2010 about protecting the economic recovery.

Read the transcript

[Check against delivery]

I want to talk to you today about the economy: about what we have learnt, what we need to do and how we prepare for the future.

The last time I stood here - in October 2008 - the scale of the threat we faced was immense.

I won’t try to pretend I wasn’t concerned. I was.

We were in the midst of what was to prove the greatest economic crisis since the war - and I could sense its magnitude. We all could. The sense of emergency was all pervasive.

It became a global financial crisis so profound that it raised fundamental questions not just about established economic orthodoxies, but about the whole balance between the state, markets and the institutions that regulate and govern them.

And the decisions we took were without precedent.

When I first came into parliament almost three decades ago, I never imagined that I would one day, with Alistair Darling, have to nationalise a major building society - or put up £50 billion pounds of public money to buy majority control of two of the world’s biggest banks.

Or that we would need to reverse decades of orthodoxy by restructuring the banking system - and then agree a very substantial fiscal stimulus and programme of printing money to support a world economy that faced the unprecedented threat of a global credit freeze.

And neither could I have imagined the huge step forward in global economic cooperation that for the first time brought together - in a leaders’ economic summit - China, India, Brazil, South Africa and other emerging economies together with the G8 to repair a broken global financial system.

But this last 18 months has not been a time for allowing the old conventional wisdom or short term headlines to constrain our thinking.

Alistair and I have worked with our international partners to make the tough decisions that were necessary to give us a fighting chance.

It was a period that has provided one of the greatest tests of character.

With hindsight it is now clear just how close the world economy came to complete meltdown.

In the space of just over six months, the equivalent of nearly four years of economic growth vanished as global trade plunged by 40 per cent.

And in 18 months world stock markets fell by almost 50 per cent

But this wasn’t just about numbers. The human cost was all too real, with millions of jobs lost around the world.

During the recession Alastair and I have taken difficult decisions, decisions that have tested our resolve. But we have stuck to them and maintained a consistent course, making it possible for the resourcefulness of the British people to pull us through.

I said we would take action to restructure the banks, tackle unemployment, address the fear of repossessions, and help small businesses with cash flow.

And we did.

I said we would take action to reinvigorate the international economy and change the financial system.

And we did.

And so while we were hit with a great recession we now know that the world has indeed avoided a great depression.

And we avoided that depression not by accident but by design. By learning from the mistakes made and experience gained in previous recessions and making tough but necessary decisions.

We promised immediate and real help for families and businesses - and we did what we said we would do.

I know that many have suffered as a result of the global recession, but unemployment in the UK increased far less than was widely predicted; home repossessions and company insolvencies have been far lower than in the recessions of the 1980s and early ‘90s. And the number of small businesses is in fact growing - with a record number of private sector enterprises in Britain today.

But we knew that domestic action alone would not be enough. The problems were global; and the solutions had to be global too.

In the autumn of 2008 and then again on the eve of the G20 summit in London last April I was all too aware that unless we acted quickly and decisively we could be hit by an economic slump from which it would take years to recover.

I have attended a great many summits and international meetings. But never have I been so acutely conscious that the eyes not just of the financial markets - but of worried citizens all across the world - were on us that day - anxiously hoping that we could agree a strategy that would begin to restore confidence.

And I believe that the measures we agreed that day did indeed make a difference and marked a turning point in confidence.

But let us be clear: although the economy is now growing, recovery is still in its early stages - and remains very fragile. There will be many months ahead of conflicting statistics, false hopes and mixed signals.

In Britain and across the world, we have reached a crossroads in our response to the global economic and financial challenge.

Analysis by the international monetary fund shows that if we get things right - if we repair and reform the financial system, invest in green jobs, and bring down trade barriers - we can return to the world growth rates of 5 per cent a year seen before the crisis, and on a more secure basis.

But if we get things wrong then the IMF estimates that growth rates could be two per cent a year lower. This could cost the world a full $6 trillion and - over the next four years - up to 200 million jobs.

So the progress we have achieved is no excuse to relax our vigilance or resolve. To turn aside now from the course we have set would be an error of incalculable proportions and would hurt our people, our businesses and our country.

We know that the world has much more to do to get banks lending; to increase investment; to get trade moving forward; to bring down unemployment.

In my view we are nearly there in repairing the global financial system. But there is nothing pre-ordained or automatic about the upturn, either here or around the world. While we have come through the worst of this dreadful storm, the waters are still choppy. There are still real risks to the recovery.

And we must be alive to them.

So the choices we will make in the coming months are just as important - and just as urgent - for families, jobs, mortgages and companies, large and small- as the difficult choices we made to protect them at the height of the storm.

I believe that around the world we have to re-discover that sense of urgency and collective ambition that guided us a year ago. For it is our choices - and the wisdom resolve and judgements we bring to bear in making them - at both a national and global level - that will determine whether we secure a lasting recovery and indispensable reforms to safeguard our economic future.

Do we too rapidly and recklessly put into reverse the exceptional fiscal and monetary policy measures of the last two years and risk driving our economies back in to recession - or do we continue to support the private sector recovery until it becomes self-sustaining?

Do we allow a return to business as usual for the banks - or do we drive through radical reform at a global level that ensures we never see a repeat of the crisis?

Do we gamble our future prosperity on the unreliable, inequitable and often unaccountable, status quo in national economic and financial systems - or do we follow through the international processes agreed in Pittsburgh to rebuild the global economy on firm, fair, and consistent principles and practice?

Do we retreat once more into the silos of national markets ringed with protectionism or do we push forward with not just more but better globalisation?

Do we let the progress of recovery be overwhelmed by an ideologically-driven programme to cut the responsibilities of government regardless of economic circumstances - or do we hold firm to our carefully constructed deficit reduction plan - a plan we first set out in last year’s budget and we will continue to implement step by step as sustained recovery is achieved.

Do we undermine our frontline public services - the NHS, our schools, front-line policing - with arbitrary cuts - or protect those frontline services and instead reduce the deficit by taking tough and fair decisions on tax and spending in other parts of our economy– doing so on a clear and firm timetable that strikes the right balance between supporting the economy now and reducing the deficit substantially by the end of the next parliament?

For the first time in British history, the government has made a tough legally binding commitment to reduce the deficit: a contract between the government and the British people. This contract says we will more than halve the deficit over four years, and we will also reduce the size of the structural deficit by two-thirds over the same period.

We will set out in more detail in the Budget in two weeks’ time how we deliver on our commitment to restore the public finances while protecting the fundamental public services that we all depend on.

But our approach is clear and we will not be diverted from it.

We have already announced tax and national insurance increases that are fair so that we can both cut the deficit and protect hospitals schools and policing

And we are taking the tough decisions on spending. This will include forcing all government departments to make real and lasting efficiency savings. Every single penny of taxpayers money will be spent wisely - founded on the same principle that families and businesses employ to decide their spending.

Part of our tough approach on spending will be the tough approach to pay in the public sector we see announced today.

Last week I said that the parliamentary and ministerial salaries of all paid government ministers would be frozen.

We must take an equally disciplined approach to pay and benefits right across the public sector.

So today I can announce that after the reports of the review bodies we will also freeze the pay of senior staff in the civil service, senior staff in the military, the judiciary, senior managers in the health service and the pay of consultants, GPs and dentists.

These measures, along with the new controls on pay which I announced in December, will save money immediately and by 2013-14 save more than £3 billion.

But let me be clear - fairness will be at the heart of the measures we take to reduce the deficit. Unlike the policies of the 1980s and 1990s - where taxes for the wealthiest people in society came down, as the burden on people on middle and modest incomes went up - we will not make those on modest and middle incomes take the greatest strain.

That is why it simply does not make any sense to me to cut tax credits for one million and a half middle class families on modest incomes - while at the same time proposing massive inheritance tax cuts worth £200,000 to a handful of estates.

The budget will focus on protecting and advancing the recovery - on how we protect our children’s and young people’s economic futures by ensuring that Britain can succeed in the new industries and new jobs of the future global economy.

For the final essential element of our plan to reduce the deficit is a determination to get the economy growing faster. Growth creates jobs, stimulates demand and brings in revenue. Growth reduces the wasted costs of unemployment while at the same time helping to avoid the cycle of deprivation and social breakdown we have seen when generations of families are unable to find work. Our opponents build their policy on political ideology. Ours is a policy built on the experience of economic history.

That is why we have rejected from the outset the laissez faire approach that would have let the recession take its course - and it is why we are investing now in the industries of the future.

In the last three years we had a choice to make: whether to leave the status quo as it was with long planning delays and uncertainties for investors, or taking on our opponents, to build for the future and create a new more flexible faster planning environment with a new planning commission. Our choice is clear and we have already set out within the national planning framework for infrastructure plans for ports and for energy.

In these last three years we had a choice to make - to do nothing about our overcrowded airports and lose business to Britain or to build for the future and establish, as we did, an airports policy for the future which keeps Britain at the centre of the global economy.

In these last three years we had a choice on whether to leave the energy status quo with us over- dependent on oil or to build for the future and expand renewables and nuclear power.

And we had a choice - to cut back on student and apprenticeship numbers - or to raise them during a recession.

In making each of these important choices about the future of Britain the right but difficult decisions were made to build for the future

And we have modernised support for British exporters while making changes in regulations and incentives to further encourage the creation and growth of small businesses building on the unprecedented increase in the number of entrepreneurs in this country since the 1990s.

And we have chosen to enhance our already strong relationship with the rest of Europe.

We will not jeopardise British jobs and growth by satisfying the reactionary impulse to isolate ourselves from Europe where 60 per cent of our trade now lies.

Providing we continue this programme of proactive support - in active partnership with business - I believe Britain has all the talent it needs to succeed and lead in the future global economy.

I believe in Britain’s future. Broadband Britain can be a world leader, so too can creative Britain, biotech Britain, Nobel prize-winning science Britain, Olympic Britain, high-speed rail Britain - a Britain that is capable of creating in these and other economic frontiers as many as 1.5 million new skilled jobs in the next five years, and opening up the possibility of the greatest wave of social mobility in the post-war era.

This belief in Britain’s future is why we are modernising incentives and improving the way we supervise digital enterprise and communications and are offering up to £1 billion in incentives and support so that we become a world-leading digital economy.

This belief in Britain’s future is why over the last ten years we have doubled the budget for science; why we are encouraging partnerships between business and universities and why we are creating a new £325 million innovation fund to exploit the benefits of our country’s scientific genius.

This belief in Britain’s future is why we are changing the tax regime for biotech and medical innovations creating a new bio-bank - to find new ways to prevent early death and disability from many different diseases - and investing around £15 billion of public money throughout the next 10 years in medical research.

This belief in Britain’s future is why we will propose in the budget new frameworks to stimulate nuclear and clean energy generation and why we are investing more to become a world leader in a three-trillion pound market for low-carbon environmental goods and services — which offers us the prospects of up to 400,000 new jobs by 2015.

And this belief in Britain’s future is why we will later this week set out proposals for investing in high speed rail. For this is the great transport investment project of the first half of this century. It is a symbol both of our ambitions for Britain and of the low carbon economic growth and prosperity we must deliver if we are to give our children’s generation the best possible chance of prospering in the global economy.

These are the critical domestic economic decisions - the new basis of an industrial partnership between business and government - that will secure the recovery and build for strong and sustainable growth.

But we must also ensure that on a global basis, the recovery is balanced and sustainable.

And this means that far from Britain stepping back, we must step forward in Europe and within the g2o to inject new urgency into the delivery of the international agreements we have reached.

The risk is that despite the traumatic shocks of the last 18 months, the world will all too easily default to former patterns and failed pathways. I believe there is now a real risk that if no action is taken, either the global imbalances which were the background to last year’s crisis will re-emerge with a vengeance in 2011 and beyond - or the global economy will experience a lost decade of low growth and low employment.

So we must now make a reality of the breakthrough we agreed in Pittsburgh- the first genuine attempt by countries representing 80% of global GDP to coordinate and commit to change their national economic policies to aim for higher and sustainable global growth. As Dominique Strauss-Kahn, the managing director of the international monetary fund, has pointed out: without such co-ordination, countries’ individual economic forecasts will simply not add up. We can not all export ourselves to sustainable growth.

Together with a reformed IMF, the framework is the first step to a new system of international economic governance. But now is the time to turn the blue-print into concrete action.

Europe has already been looking at how it, as a union, can contribute to this process. And good intentions are getting an early test within the Eurozone as countries grapple with how best to make it possible for Greece to reduce its own imbalances and rebuild market confidence.

A duty falls upon every government of the G20 to realise the Pittsburgh Accord - reducing imbalances to sustainable levels, achieving exchange rates that reflect sustainable fundamentals, generating new sources of growth from consumption and investment in emerging markets and other surplus countries.

The success of this new growth framework will be one of three acid tests for the G20 in 2010.

The second is financial regulation.

The foundation of the new global banking system must be a sounder, more accountable and, internationally consistent regime for capital.

The fact that banks are returning to profitability does not remove the need for them to become better capitalised over time. Nor does it dispense with the imperative, as we concluded in London, for enforceable international rules on capital and liquidity, leverage and resolution mechanisms - or what we now call living wills.

Of course, the timetable for the implementation of such rules must be carefully calculated and calibrated to the pace of recovery.

The pace of deleveraging must be managed to ensure that businesses and employment can recover first.

But make no mistake, over the coming years, we need to introduce - gradually, and taking account of the needs of the real economy for credit - core requirements that banks hold much more, and much higher quality, capital. This will do more than anything else to prevent a new crisis.

So the process of recapitalisation must be finished. And government has a crucial role to play in ensuring that the timing of this process meets the needs of the economy– and that it tracks with what is happening in other countries too. I want Britain to have the highest standard of supervision in the world - and one that is able to compete on a level playing field against other financial centres.

But we must never forget it was the taxpayer that prevented the collapse of the banking system. And we will ensure that the taxpayer recoups the direct costs of the interventions made last year in the UK through the fees we have charged and the shares we own.

Of course, we cannot act in a vacuum. The costs have been and will be different country to country, and the approaches we adopt to recoup crisis assistance can also differ. But that does not mean we can afford an incoherent and uncoordinated approach internationally, which risks banks again taking advantage of differences between countries to locate their activities where regulation is at its most lax.

Britain has always been at the forefront of this debate. I set out at the G20 Finance Ministers meeting in St Andrews in November the need for a new relationship between banks and society - the range of options that should be considered internationally, and the principles that should govern the process, in order to deliver a fairer balance between risks and rewards.

Since then a number of countries have set out their ideas and specific proposals have been put forward. And the IMF is continuing its work.

I believe that we should now build on the ideas that have emerged in the large financial centres and we should seek consensus on a co-ordinated approach over the coming months, building on four key elements.

First, that a levy on banks seems likely to be the most practical approach.

Second, that the levy should be designed go with the grain of necessary regulatory reform not cut across or remove the need for it.

Third, that the levy should support globalisation and avoid double-taxation of international banks.

And finally that proceeds should be for national governments to use, whether to put them aside in a dedicated insurance fund, to repay interventions or to reduce public debt.

Based on these four principles, we now need to work actively in the G20 to forge an internationally consistent approach.

There is an immense body of reform which demands continuing high level political engagement. Now is the time for G20 leaders both to recommit themselves to the ambitious agenda we have already set, and to go further - by making clear we will adopt a shared approach to the whole range of measures necessary both to reduce systemic risk and to ensure that the financial sector makes a fair contribution, recognising the cumulative effect of these measures as well as the coherence and consistency between them.

And the third test for the G20 this year must be a renewed focus on trade - the crucial driver of growth in the world economy. I believe we must make the opening up of trade one of the key deliverables for the June G20 summit. A world trade deal, which is within reach, would be worth $170bn annually, and would ensure no backsliding towards the protectionism. Two years ago we were very close to a deal, but we could not travel the final mile. Today we have to recognise that we will need an even more ambitious deal than we envisaged then if we are to get agreement - and all players must engage in shaping the agreement.

And not only should we maintain our ambition in the trade round negotiations, but we must go further.

We must focus on the potential new source of growth -not least low carbon industry and technologies - from liberalising trade with, and investing in, low-income countries to spread prosperity and self-sustaining development to the poorest countries so that in the years to come they too can become engines of growth.

We are at a turning point, a crossroads, for our domestic economic recovery where we have to choose now to maintain the stimulus until recovery is assured or cut it and at a crossroads for the global economic governance that will shape the next decades for us and our children, and for families and children all across the world.

We face crucial decisions. Cut now at home; fail to protect our frontline services; fail to invest in the growth sectors of the future; and we could push our economy back into recession threatening the very jobs, homes and businesses we fought to protect from the toxic winds of the great global recession.

But it would be just as dangerous for our own prospects - and for the prospects of our international partners - to fail to deliver the urgent global growth strategy we now need and to fail to complete the work of bank restructuring. Both are essential for strong, balanced and sustainable growth across the world economy.

Just as before - the response of this government will be swift and unwavering– to do whatever it takes to protect the recovery, advance the global reforms and achieve balanced and sustainable growth for the future for families and businesses in Britain. And because it is right, right in principle and right for our own economy, we will work for a prosperity across the world that will fuel prosperity in our own country.

And the stakes are high. We dare not risk the recovery. For our task above all else is to preserve and expand the jobs - and lift the standards of life - of the British people. We are weathering the storm; now is no time to turn back. We will hold to our course. And we will complete this mission.

We have got through this storm together but there are still substantial risks ahead. There will be bumps in the road. And I believe the only way to overcome them is by displaying the same strength and resolve as we did during the crisis.

I will not let you down.

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Britons who saved the lives of Jews and other persecuted groups during the Holocaust have been honoured with a new award in recognition of their bravery.

At a reception at Number 10, the Prime Minister paid tribute to the courage of these “true British heroes” who “answered the call of humanity”.

The award was announced last year by Gordon Brown on a visit to Auschwitz and followed a campaign by the Holocaust Education Trust to recognise British citizens who risked their lives to save others.

The PM said:

“It is right that we reflect and learn from the past as we go forward in the future. That is why I was pleased to create a new award to recognise those amazing British individuals who through extraordinary and selfless acts of bravery protected and rescued Jews and others in the Holocaust.

“These individuals are true British heroes and a source of national pride for all of us. They were shining beacons of hope in the midst of terrible evil because they were prepared to take a stand against prejudice, hatred and intolerance. We pay tribute to them for the inspiration they provide now and for future generations to come.”

The award, a silver medallion inscribed with the words “In the Service of Humanity”, was presented in the name of 28 individuals, many of whom have now died.

Two of the recipients - Sir Nicholas Winton, 100 and Denis Avey, 91 - accepted their award in person at the reception.

Read more: Communities and Local Government website

Previous story: POW’s Auschwitz story gives hope for the future - PM

The Prime Minister has sent his best wishes for Commonwealth Day to nations across the world.

Gordon Brown said the occasion brought together the members of the Commonwealth to reflect on their shared heritage and look at the challenges facing them in the year ahead.

He was among heads of state who took part in the Commonwealth Heads of Government Meeting (CHOGM) in November last year.

The PM said:

“I am pleased to be providing this message for Commonwealth Day, an occasion which brings together all members of the Commonwealth to reflect on our shared heritage, promote our shared values and look ahead to the pressing challenges facing us and our fellow member states in the coming year.

“This year’s theme of Science, Technology and Society has been chosen to help address those challenges by raising awareness of the essential role science plays in all areas of society and its fundamental importance to development throughout the Commonwealth. It plays a role in everything from sanitation and health to digital communications and climate change. Crucial issues which are currently affecting the two billion citizens of the Commonwealth.

“I was delighted to be part of the Commonwealth Heads of Government Meeting in Port of Spain last year. We took vital decisions which will affect our shared future and proved that the Commonwealth - with the shared values of fairness, human rights and good governance at its core - remains a unique international institution.

“I am proud to be Prime Minister of a Commonwealth country and to wish you all a very happy Commonwealth Day.”

Previous story: Commonwealth reaches climate consensus

See photos of CHOGM on Flickr

Briefing by the Prime Minister’s spokesman on: Billy Elliot bursaries, Afghanistan, Somali President, Iraq Inquiry, Venables and the Senior Salaries Report

Billy Elliot bursaries

Asked how much money each individual would get, the Prime Minister’s Spokesperson (PMS) told the assembled press that 40 interns would share £600,000 over two years.

Put that this was far below the minimum wage, the PMS said, it wasn’t directly comparable as this was a bursary scheme.

Asked if £7,500 per year was enough to support these individuals, the PMS said, anything that helps to encourage young talent was welcome.

Afghanistan

Asked when the Prime Minister’s visit to Afghanistan was organised, the PMS said, operational detail is not divulged but that the PM was always planning to go to visit the troops in mid-March.

Somali President

Asked how long the President of Somalia would be visiting the UK, the PMS told the press they should ask the Foreign Office.

Asked if the Chandler kidnapping case would be discussed in meetings with the President, the PMS said, he would be surprised if it wasn’t raised.

Iraq Inquiry

Asked if there were to be any comment following Bill Jeffrey’s evidence at the Iraq Inquiry about the defence budget, the PMS replied that the Prime Minister has said all he is going to say at the inquiry on Friday. The PMS explained the three points the PM made; that core defence spending rose, an extra £8bn was spent on Iraq War on top of the allocated defence budget and the Treasury approved every request for extra funding when the PM was Chancellor, stating the same is also true for Afghanistan.

Venables

Asked if there was anything further to add on the statement to be given to the House of Commons by Justice Secretary Jack Straw, the PMS said, it wouldn’t be appropriate to comment whilst the Justice Secretary was on his feet addressing the House.

Senior Salaries Report

Asked what Alistair Darling had stated about such salaries, the PMS said, the Chancellor expected there to be significant restraint in general in public sector pay.