[speaking in native tongue] >> translator: what happened today is very close to what happened in 2005 which is close to a war. they want us to give them a segment of submission. what happened then, it looked

like we had to give them the submission check. the same principle now, there is a virtual defeat, plan for syria. there is chaos in the country. under the slogan of reform. this chaos under the title of reform, then they will clash and the defeat of syria will take place. we thwarted this plan in 2005 through popular awareness. today, it is more difficult because their techniques are better, but the popular awareness as we have seen this time around was good enough to react very quickly, but we cannot be complacent. we have reinforced the national popular awareness because that

is the real protection, the shield of the syrian nation. there is a major point. we are talking about the changes that took place in the region. we talked about ways, everybody is calling this a way. whether it is a wave, positive or not. if these ways is carrying us or are we carrying it? this wave comes in to say we have to determine whether if it comes, it's an energy, this energy needs to be channeled toward the good for us, not otherwise. what we announced on thursday when we talked about increasing the salaries, et cetera, the political parties laws, et cetera, the emergency law, i am not adding anything new, but you have to understand how we think. and when you do, then we are live in harmony, we communicate

in harmony. you have to know how the government thinks. sometimes we have a problem of communication. sometimes what we do and what we say is misinterpreted. these reforms, are we opting for these reforms because there is a problem or because there is a crisis? if the question is yes, then the government is more opportunist opportunistic. and this is not good. [applause] [speaking in native tongue] >> translator: mr. president, we are so proud that you are

leading us toward further victories. [applause] [speaking in native tongue] >> translator: but if we said these reforms are taking place under pressure, popular pressure, this is weakness. i think that people who are helping pressures against their own country means that the country is going to yield to those pressures from the outside. so reforms are not built on pressure. they are built on popular needs, social needs, that the state needs to respond to and fulfills. these are the rights of the citizen. and needs our rights of the citizens. so it is, therefore, important that the state needs to gladly fulfill. if it can't, then assess i'm sorry, i can't. let me correct, i wanted to correct this concept.

pressure that the leader comes under is the trust that people put in them. the pressure is the function of the leader. the pressure is the pressure of awareness of the people that have surprised us, and, indeed, every time. this makes us think how to be grateful to this trust in the quality of this nation. [applause] [speaking in native tongue] >> translator: the markers say our blood will shed for you. [applause] [speaking in native tongue] >> translator: so what was announced on thursday were not decisions. decisions are not made twice.

decisions are made once, and those are the decisions that we made back in 2005. why do we talk about them in on thursday? one is about the recent crisis and another -- the first one is not related to the crisis. it's due to our need for reform. when we talked about this in 2005 there were no pressures. in 2004, and in the arab summit it was the first after the invasion of iraq. it was a total collapse and surrender to the americans, and there were parties that the americans were trying to impose reforms on us. and we thought very adamantly against the summit and we brought it down. the same in 2005 suggested forms for our country, democratization, and these are pressure that have to do with

iraq, with resistance and others. these were the reasons behind the pressure that the syria came under. when we talk about the link between the crisis and reform, when we said do what reform, okay. we were late. and we're going to do it. we're going to do it really. those who want reform, all right, we'll go to work for reform. those who want something else, of course you're going to be isolated. i think that popular awareness was good and was enough to stop it. but why we as a state, we also need to be part of this and be proactive. the fragmentation is dealt with of course through popular awareness. the reform of course is something that is a process that

will take some time. the government, the state has promised reform, it did not fulfill. and to understand this, let me quickly go over the reform. i came to the same assembly in 2000, my oath speech. and i talked about what was going on in the mind of the syrians and we talked about this, but it was just with the headlines, it was not clear what kind of reform that appeared in 2005. then after that speech, then the pressure started and september 11 attacks in new york. the pressure that the arabs and muslims that took place after that. the invasion of afghanistan, the

invasion of iraq, then the pressure on syria to stand with the occupation, the war and what happened in lebanon and '05, lebanon and '06, then in gaza, then four years of drought that really hurt -- really hurt the economy and see. what really happened or shifted priorities, i talked many times in interviews and maybe in foreign press, and i said what we went through, push-ups, what happened push-ups, we change our priorities. we have to separate but to what is objective and what is not. when i say there is a drought, that is beyond my power. it's not in my hands. does not mean that there are now other things i can do to help my economy. i know that generations are

coming, coming around, those who were 10 in 2000 are now 20. what matters is stability and syria. we are living this stability. the second priority which is as important as the livelihood of people. i meet with people all the time. 99% of what i talk about is about livelihood of people. there are other problems, but livelihood is the most important employment, et cetera. but that's -- that does not justify the lateness and other reforms, emergency law, local party laws, et cetera. the problem is we can postpone a statement by political party, we can postpone a bike months and years, but we cannot postpone eating a child in the morning. [applause]

[speaking in native tongue] >> translator: we can postpone some kind of suffering that the emergency law or other laws that people suffer, but we cannot postpone providing health care to a child. of course, you all face these hardships. so this is a matter of priorities. this does not prevent this, at least in 2009 and 2010, situation was better. we were able or we could have did that, i'd be frank, the political party law is present, is under study at the emergency law also. we have not discussed that but we cannot say they did not do their job. they did. of course, we were late in implementing. but we will let this evaluation.

these reforms, these reforms are not new. the reform is probably the lack of, maybe it's a bureaucracy, we are all human beings and we know how we work. but i'm trying to explain the situation to understand where we are. the reform, of course, is positive but we need to know what is the context of such reform. what we were planning, there is a new parliament after the elections. there is a new administration. there is a new government that was planned so the government resigns. so we were saying that 2011, we will have new blood into the government and we move to a new step, that we had the regional congress and you say how did you think or take decisions in the

10th congress and in the 11th congress, you still have not implemented any of them. of course, that's what we're trying to do. now, what i want to say about how to deal with this would come what i want to say that the reform is not a seasonal thing, so if it is only a reflection of the way the region is going through, it is of course meaningless. i told "the wall street journal" when things started happening in egypt and i was asked about reform in syria, and i said they asked me, are you ready to do reform? and i said, and i said if you have not started reform, reform before, then you are late. [applause] [speaking in native tongue] >> translator: if we didn't have this plan before, then it is late. the question is, we had this plan from before.

and as you know me, i am always frank with you. many foreigners ask me, they want me to say that the president and those around him are preventing him. and i said no, not true. in fact, they are pushing me. there are no obstacles. there is delay but there are no one is against them. those who are against are a minority of corrupt people. you know them by name, but there are no real obstacles, obstructions, obstacles. the challenge is what kind of reform will we want to achieve. therefore, we have to stay away from submitting reform to the present circumstances which might be just circumstantial. reform needs to be planned on 10

years in the past and plan continues in the future. this is how we think. the current situation might delay something, might accelerate something, might correct the direction the tunisian experience was very helpful for us, more than the egyptian. there were many positive things in tunisia. we are sending experts, we work to learn from the experience. it's not about the distribution of wealth, but distribution between the regions. these points we have overcome and syria, and we are more equal, more balanced and syria between regions. if we say that we don't want reform, we say we cannot state without reform. staying without reform is a destruction of the country. this is what the creativity that we're going to prove when we

start talking about the new laws very shortly. the package of decisions that were announced on thursday did not start from scratch, as i said. the regional leadership had prepared a draft of law regarding the political parties law and emergency law, more than a year ago. in addition to other laws, draft laws, that would be put into the general discussion and into the concerned institutions. there are other measures and as were not announced on thursday, some of them are going to reinforce the national unity, and others are to fight corruption. and also for the media, increasing the employment opportunities that will be announced as soon as they are finished, finalize. the previous government has started and there is going to be priority for new government. for example, raising salaries. we're discussing it with the

economic team. i was there. we discussed a number of measures, just some of them have been announced. and by the way, let me add something about the 1500 salary raise that some people are asking about, that the government in its last meeting yesterday really got this initiative. they received the complaint about an hour ago. i received the amendment. of course, we have to tell those, say that it was a better initiative, not me. i did not intervene in this. [applause] [speaking in native tongue] >> translator: the plotters have failed, our president holds

on his shoulders the glory of our history. all the arab region, we are the protectors of the arab region. [applause] [speaking in native tongue] >> translator: in any case, i'm going to ask the parties and the institutions, i hope that when we prefer to talk about the details when all is done, we are going to ask for a timeline for each one of the measures here you and department and the coming parliament will determine these timelines, because the timelines are the best things, the best way to make sure reforms take place. giving a timeline in this assembly and his speech, of

course i can't do that now. of course, it's a logistical question, so i think it is in our duty to give to this salary -- to the syrian people what is best, not what is fast. [applause] [speaking in native tongue] >> translator: in any case, some on satellite tvs will say this is not enough. we tell them that we don't have enough to destroy our country. [applause] [speaking in native tongue] >> translator: and by the way, don't be angry to what satellite tvs have done or will do. they always fall in the same trap. because they lied and lied and lied, until they admit and they fall into their own lives. [applause] [speaking in native tongue] >> translator: in the name of our nation, when they came out

yesterday, young and old, to express, mr. president, their loyalty to your wisdom, god is with you and we are with you. our soul and with our blood we will sacrifice for you. [applause] [chanting] [speaking in native tongue] >> translator: the people want bashar assad. [speaking in native tongue]

>> translator: you show me so much love when you work so hard for the syrian people. [chanting] [speaking in native tongue] >> translator: the arab world does not think enough for you. you should be a world leader. [applause] [speaking in native tongue] >> translator: dear brothers and sisters, you might hate some

things that is good for you, words of god. but we are humans. we cannot love what happens. we cannot like blood, we cannot like attention. but prices are a positive opportunity if we can control it and get out of it victoria street the secret of the success of syria is the many crises that it has pace -- faced in the past particularly after independence which gave it more protection and more power. so we have to face the crisis with great confidence and with great commitment to succeed. fear has to become a positive feeling, not a negative one that pushes us forward. not to flee forward, not to escape forward. when we escape forward, we will

end up by falling. many people during crisis want to find a solution no matter how, no matter what. so some things are better without solution down with a bad solution. and less you know that your solution is a solution, you are better if you don't do anything. so killing or thwarting the fragmentation, all those who want to participate in the division, the division is worse than murder as the koran says. those who take part in it are willing to kill their own country. so the question is not the state, but the nation, the country. the plot is big, the conspiracy is big, and we don't want battles. the syrian people are a peaceful people, but we will not blink in

defending our principles and our rights. is the battle is forced on us, then welcome. [applause] [speaking in native tongue] >> translator: god is with you, and the nation is with you. and you will take us from one success to another as we are with you. in every battle. [speaking in native tongue] >> translator: let me remind you of the concept of dominoes they came after the invasion of iraq previous administration and the u.s. said the arab countries are dominoes don't, domino pieces and they will fall one after the other. what happens is these projects fell like domino effect. [applause] [speaking in native tongue]

>> translator: and because some have very short memories on satellite channels, let me remind them. not everything that happens our conspiracy. because now they are ready to commence on the speech. but you, sons and daughters of this nation, your dedication to your country that you expressed day after day, and more clearly in times of crisis that you expressed it yesterday with those mass rallies in all parts of the country give me more confidence and make me steadfast, and that you work in face of the division give me hope for the future. and if you said with our soul and with our blood, sacrifice for you, the right thing to say is bashar assad sacrifices for his country.

[chanting] [speaking in native tongue] >> translator: and i answer you, god, syria, the people. [applause] [speaking in native tongue] >> translator: i will always remain the son of this nation, will keep walking among the nation -- among his people. syria is the resistance. syria is the resistance, and god bless you all. [applause] [chanting]

[chanting] [chanting] [cheers and applause]

>> this week ahead of the british treasury george osborne testified in the house of commons about that country's budget. he outlined the conservative government's priorities which include reducing the deficit. he has served in this position

since david cameron became prime minister last may. this is two hours. >> thank you very much for coming before us this afternoon. i know you've got to go to a meeting, and you have a plane to catch. so we'll try to make sure we can finish this by five. >> the french president was giving me a list so i could meet this afternoon so we have plenty of time. >> i would like to start by looking at the growth plan, and in particular one of the proposals, the introduction of a moratorium accepting micro-and started businesses from the

domestic regulation for three years, what regulations do they object to? >> the first thing i would say is, we can't foresee. i see the principle as being stopping but not yet been conceived. but government has a habit of conceding. and, therefore, it acts as a brake on that and then i have some specific measures like, for example, the extension of the right to request time off for training which will now not be applied. >> press secretary asked, the rate, the new regulations of which parties will be waived? health and safety? >> what we have done is speech which are the ones need to worry

about? >> what we've done is we've created a general moratorium, and there are certain specific measures like the right to request time off or training which are not going to be applied. there is explained in this document a get out clause for things like the asset freezing of the libyan money, or essential food safety regulation, or if one could imagine a situation, one would have to think financial regulatory to protect a broader economic stability. so there are exceptions, but in all those exemptions to be in, to take effect, it has to be passed by two cabinet committees, regulatory reform committee and economic committee. we would only, i speak for

myself, i would only ever find an exemption to the moratorium if i absolutely felt that public health was at risk or there was some grave danger of financial stability our foreign policy goals india with a regime. so, you know, there is a get out clause but it's a very difficult -- >> if you're a small business and you want to know whether this is going to look like, how are you going to find out? what are you going to do? are you looking for -- are going to look at a list of those which are exempt? >> i think we will make it very clear, if we were to introduce regulations and other business, and i was out like to keep that as a minimum as well, but if the government were to introduce legislation on other businesses then we would alert small

businesses to whether they were or were not. but there is quite a list, -- >> i understand. let's take a specific example, a new corner shop, they were planning to introduce further restrictions on tobacco advertising. are they going to be exempt from this? >> in fact, that regulation has been determined before the moratorium was announced. however, in the way we are now proceeding with that, government has inherited from its predecessor, we are getting a much longer be done, many, many years to smaller shops, precisely to help them adjust to the impact of this. so you could argue that, although it was announced before the budget, nevertheless an example of a moratorium coming into effect. >> if it is safe to exempt a business for three years, why

not five years or in definitely? >> i think we have to take a decision on what was a sensible length of time. in which to put in place this blanket moratorium. of course, after three years we will consider whether it needs extending, whether a needs modifying, but this measure and some of the other measures is to either slow down or stop the flow of regulation, particularly as it damages small businesses and costs on businesses. i should say that there is unfortunately one area, there's a great deal more to tackle which is the imposition of regulation from the european union. and there i think we're just beginning to make the argument as a country more effectively, that actually europe is pricing

itself out of the world economy if it's not careful. so i'm very clear and i wish they were greater powers of able to me to not apply some european regulation, but i think we need to go and make our argument. >> there's some exemptions plan for enterprise zones, art other? so we'll have a system running for the united states and a system for new business startups within them. and then another system of regulation for the rest of the business community. >> well, i think for startups and small businesses, often of course for startups and small businesses there is a particular burden that comes from additional regulation. and the reason why we chose 10 employees as they cut off was because the evidence is once you have 10 employees or more you

start of one person at least doing a part-time personal function which makes it easier. with enterprise zones yes, we are looking at regulatory exemptions but the main regulatory relaxation if you like that we are seeking from liberal authorities or enterprise partnerships that want to be there, when it comes to planning regulation, with a quid pro quo if you like between, in return which we are prepared to give, and the stream of income that we are prepared to get your local authority, or local authorities, we would expect very light planning controls. that's the deal we are prepared to cut with -- >> you are sure pashtun we are sure you're aware of the enterprise zones given and a good deal of evidence to suggest that they don't work. may be the one in london did, but elsewhere operably the evidence is controversial.

>> well -- >> why do you think you'll make them work? >> i think to be honest when it comes to enterprise zones the opinion is very divided, and you get some people -- i don't think it particularly follows ideological spectrum either to get some people are very disgusted about them. of the people who are more cynical about them. the evidence both when they tried in britain in the 1980s but also they tried in many of the countries in europe, france makes great use of them, is that if you're able to do it with local authority support and cooperation, just imposing the zone from on high can you a much greater chance of success. and looking at what did and didn't work in the 1980s and 1990s, one of the lessons we've drawn from it is that if you are from the beginning and the lockstep with the local authority, in this case a local enterprise partnerships, then

you have a much greater chance of success. my view of looking at, you know, whether we should go ahead with this policy was i didn't see how it could do any harm. and i could see how it could do positive good in the number of areas. i think the enthusiasm with which quite a lot of authorities, many of which are not of my party's political persuasion, but the enthusiasm of which they have embraced the idea, either gone ahead with it if it's one of the 10 announce, or now applying to be one of the next 10, shows there's certainly a lot of local support for the idea. >> just to pick up one more of your schemes, the first scheme, this is where first time buyers will be provided with subsidize finance to buy and build new homes. unless we have more houses built its is going to put house prices up, isn't? >> first of all, of course i agree with you that we want to

increase the supply of new homes being built. and there are a bundle of planning changes here in the growth review and a chart aims to help that happen. equally, it doesn't get much attention on the day but there's a change to the taxation, 72 land tax for residential property, investors, which we hope will increase the supply. this is been a long-standing problem for the british economy. what i was looking for, particularly when mortgage finance is under such pressure as it is at the moment and went first, when deposits have risen to levels not really seen since the late '60s or the early '70s, the deposit required, what i was looking for, as well as these medium to long-term changes to housing supply and incentives for the industry was something that we could really get going immediately. and the idea of sharing the

schemes with first time buyers in new build properties, this is a crucial additional feature of this policy which partly addresses your point about new build. so to shed equity schemes, new build properties was something that we could basically get out the door from the beginning of the new financial year. to spend months, years designing some new scheme and this is something we could move very quickly on. it addresses a particular feature of the credit crunch which has been that people don't have contribution to the deposit are basically frozen out of the housing market. >> my question was, and let you to get some new you will put house prices up and you are agreeing with that? >> except the shared equity product is explicitly linked to in your property. you can't get it unless there is a new property. >> the question is, is there additional property on top of a

new building to take place, so -- >> just for the last three and a half years new builds have been such a low level, i think the lowest since the 1920s. frankly, you know, i think -- i'm not saying this is, this will cure all problems with the u.k. housing but i think it is something that we can activate quickly, that we know is likely to work for those who use the product. and the reason by the way we identify 10,000 is a reasonable number of was that. that was the number. the industry taught us they were able, the capacity that they were able to do. so i could have provided more money if i'd been able to make other choices in the budget, but the industry themselves were clear about their capacity constraints spirit i will just make a point again. if there were 10,000 houses would be built anyway, and they're not coming as a result of your new building was then

you will be creating -- the key question must be how many new houses do you think you're going to get, what is your estimate, the extra houses that are going to come directly as a consequence of your -- >> we're pretty confident of almost all that 10,000 would be additional. >> it is in addition to? >> of what would have happened. >> okay. >> chancellor, the chief economist of the bank of england said last week the risks from continued global price and the effects of a prolonged period of the target of inflation and the level of demand consistent with achieving the inflation target has probably fallen. is talking about a supply shock. you think he is right? >> well, i do broad equity with the analysis expressed by the bank, not just its chief economist but it's governor as well and his recent speech, about the causes and impact of

inflation in the u.k. and one of the things, in one of the, one high degree of caution have been the rather low levels of consumption growth, compared historically. >> there seems to be an opposition among commentators feared they would argue he was talking about a shock which would allow you to fast forward to 2015. where he is saying something different, isn't he? >> well, i mean, you would have to have him here to answer the questions about what he said. the way i see is that the u.k. faces to particular economic challenges at the moment. one is the higher than expected inflation, which as the obr confirm is largely driven by rising commodity prices. the second is the european sovereign debt crisis.

and these are to particular events that we had to do with as and economy of the boat. and clearly, as is good throughout this document, the high than expected inflation has an impact on many of the forecast that they made in development. >> what you see is the major risks for the economy next three years of? >> i would say those are the two that immediately stand out. the rising commodity prices has clearly had an impact. and, of course, in the u.k. exacerbated by the very sharp devaluation, which is part of the rebalancing of the british economy, increase the inflation pressure. then you have the european sovereign debt problems which is the current example of both. and we have to negotiate our way between those threats. i think there's a broader

challenge involved in economic policymaking, which is how we rebalance the british economy in a more convincingly than has been achieved in the past. so it is less dependent on a century debt fueled consumption. and more, it's more like, it invest more and exports more that is an explicit object enough for the british government. i think today's under both the previous labour government and the previous government, the days of the treasury should be entirely mutual about the structure of the economy and i think probably are gone, and we became unbalanced, totally dependent on one industry, financial services, overly dependent on one factor of growth, consumption, and we need to have more investment, more exports. when you do have more balance economy. we did have other sectors to

better. and also other regions do better. achieving that is not easy and i'm certainly not under any illusions, there i say, can sit in their offices and everything happened exactly according to plaintiffs a real word is not like that and i don't believe in that. but i do think that government can do more to encourage this rebalancing than innocent in recent years. >> would you say and overestimation of the outcome gap is the biggest risk to you not meet your fiscal rules? >> i would say that is what the obr have identified is perhaps the central risks, their own forecast. but they are independent. i think the fact week speed issue do you agree? >> i am very careful to have a regard to that independent that i'm not going to try to second-guess that. but they very clearly in this

document identified ass of being one of the central risks in the forecast. by the way, if i can just remark, the fact that this is now an established part of british policy make is basically 10 months existence. >> i think you're to be congratulated for the reason you just have given, chancellor. would like to put a probability on the output gap being -- -- >> no. [laughter] >> i think it's, i guess, future chancellors will have to approach this in their own particular ways. obviously, i'm the first chancellor operating without. and i have taken as the body establishes itself basically a vow of silence on what my view is of the different forecasts and components of the forecast that they have made.

because i just think at the moment, this thing is only been on the statutory for a week. if i start saying, you know, i think they have the outlook gap wrong or whatever then, i think that would be an unhealthy clash which would potentially damage the emphasis of the body, which i don't want. >> final question. why is so much policy emphasis, output gap, being placed on the output gap when everything seems to rest on this. it's not an economic variable, isn't that huge policy emphasis place on it when it comes to meeting these rules. does that worry you at all? >> yeah, again, the governor of the bank has also at times quite skeptical about. the reason at least my point of view is this, we are trying to

construct a subtle fiscal, fiscal mandate that will bring the public finances to health. when it comes to the fiscal mandate, i think it is important to recognize that there is an economic cycle. and that there is, and that there is a structural element to your deficit and that there is a cyclical element. and you need the output gap to enable you to tackle it. and i think, you know, i think there's often a rather black and white debate. one of john keynes important role was to stabilize them and that's what we are very different place than the 1930s as a country and as a government. and you know, i want the automatic stabilize to operate while at the same time having a fiscal deficit, which doesn't

undermine our credibility in bond markets. so that's why the fiscal mandate is a cyclical one. and if you want a cyclical one, then you need to have an idea of what the output gap is. >> i want to turn to a new stabilizer, the fuel stabilizer. you seek a welcome fuel duty, slight surprising increase in the oil and gas taxation. what assessment have you made of the impact on investment going forward? >> our expectation is that it will not damage investments. and what would damage investment is if we were to maintain the new higher rate of tax with a falling oil price, once the oil price sustained and taken down

to the kind of levels that we saw a few years ago and that was the amount many oil companies made their investment decisions on, which is why i've made a very explicit promise to farm and in the budget assure the oil price fall for sustained period below around $55, and we will reintroduce the fuel duty escalator and reduce the supplementary oil tax. so i think what would damage investment is if we would have a loyal oil price and the current tax regime which is why i have set it up as i have. i think with the current oil price, the prospects of increased investment spent when we talk to obr this morning they basically said we accept treasuries assumptions to this matter. but they did also say that they thought they would want to do more work on this. your officials this morning said

they would given advice that if you look in the past, it didn't appear to be a lack of investment following a move like this. although they are just accepting evidence that they have from what has happened there. i put to them the exploration west may be different or if that were not to go ahead as a result of this, would you consider extending the new field regime in order for that deduction to take place in? >> in the doctorate there isn't an explicit commitment to look at new field announcements. i think the truth is that we've not, we've not cracked west of shetland yet which is a difficult environment in which to extract oil. and so, serving new field

allowances would were really introducing 2009, i would have new feature of the regime, you know, we're actively looking at it and i want to certainly encourage new exploration west of shetland. now, as i say, the most recent evidence of what happens when you have a higher overpriced in the tax charge is when gordon brown in late 2005, early 2006 increased attacks by 10% i think, and actually investments increased after that. the industry were, of course industry don't like additional taxes. but i think it is perfectly legitimate for us to look at the price of oil. indicated the increase in the gas price as well, to say that the industry is making profits which they were not forecasting to make from this oil and gas.

that any fiscally neutral budget were untitled of the people as welcome in this case motors, it's perfectly reasonable i think to look to the oil and gas industry for additional taxation. and many other tax regimes in the world as well have a regular return so that when the oil price goes up, they automatically pay tax. we don't have the system in u.k. to be fair, they don't have it in the u.s. either. but we don't have an u.k. so, therefore, you have to take as gordon brown did and as i have now, sort of one off measures to deal with that situation. interesting, if you look at the u.s., the president of the united states is talk about removing some of the. so i don't think we are unique in the world when we look at this industry at the moment and the returns is getting. >> the in line in the most important daily newspaper, this morning was the cancellation by

their investment. i wanted to look specifically at gas. center to have us, or have issued a statement was has all of our north sea projects including those to give the go ahead recent what they believe and doesn't plan to be still are being reevaluated. projects that a viable will be canceled or they also make the point of economics from oil and gas are completely different in that oil has a single world price whereas gas has a multiplicity of prices, a much more diffuse market. they also claim that they'll be there for a much their impact on the domestic inflation. the cost of heating and so forth. have you looked at vassar, the difference? >> first of all, i saw the dynamic committee were interested in what they have said.

they are not canceling. they want to address it about their investment plans, and they are looking at it on which an oil company, the vast majority. the current rate with my increase for the u.k. will be 62%. in no way it is currently 78% tax rate. so they are used today with high tax regimes. when it comes to gas, that has been, of course, oil and gas have become somewhat decoupled. i think that is reasonable observation. however, the gas prices also substantially increased. so for example, last march it was 30p but now it is now 55p. of our big increase. and again, i think it is perfectly reasonable when looking any fiscally neutral budget for where you can help some people had your in a better position to help like that, to look at the oil and gas

industry, and centric a, i am very happy to talk to them about projects. it is our redesigned to be shut off in the summer when it is cheaper. so it is, therefore got quite a lot around the project. and maybe you'd want to speak to centrica but it would be interesting to know what caused per therm production is and what they're sending a four. >> i would be prompted to point out that norway runs a depletion, which we don't understood what that meant. i'm very grateful for the answer i received it but on the point of gas, given as you've admitted that there is a difference between the two, will you undertake what has been put forward by the gas industry, and to at least make sure that the

assumptions that are being made are actually correct, and that is what we're being told by these companies proved the validity that we look to mitigate that? >> well, as i said, certainly in designing this tax we were unaware of the issue around gas. that is why we have explicitly said, we explicitly identified, we might be in a position to identify new field, one of the mighty marginal gas fields to closely recognize that point. however, we did also investigate what had happened to the price of gas recently, and that has quite -- is quite substantially gone up and a lot of investment decisions made for gas, i'm guessing a lot of the u.k., oil and gas is often put on the same field. but investment decisions were made when the gas prices were

lower, and as i say, you know, i think it is a reasonable additional cost to these producers. bearing in mind, this oil and gas is not theirs. it's ours as a nation. to when the oil and gas prices go up substantially, i think we are at least entitled to a parliament and the government to ask if we're getting our fair share of the. and you use that, explicitly, it is rebalancing hydrocarbon taxation. reducing it or stopping it going up. for motorists and businesses. >> the increased charge is a 60%. that makes the basic rate of the tax of 62%, and 81% in the mature fields. coupled with the high cost of the bowman in very deep water,

how can you be so certain as you said earlier, the prospect is for increased investment? >> well, i think given the high price of oil in the increase in the gas price, it is still very profitable to invest and explore these resources. and the profits on the barrel of oil are going to be higher in the next five years than they were in the last five years. you know, just to give the committee the actual numbers, the company from a king 12 pounds and 2p profit over the last five years, and forecast 12,041p in the next five years with a new tactic annex at the moment they're making 30 pounds 20. so the profits are going up even with the additional tax. i think you have a very strong complaint against me if you said that i had made no allowance for the fact price might fall, and

that might damage investment. but i have made very explicit announcement, the oil price, the gas price might fall. and you know, i think given the judge and i had to make about who is a help in a comic i think it was a reasonable one. >> the crisis that you suggested is not one with me. if you're arguing that tax needs to be sensitive to profit levels, i would agree, but investment decisions are also sensitive not just to tax rates but the combination of tax rates among costs. you do recognize the machinery, people can move around in the sector and that are very real dangers to investment. ..

by the way it is also the industry also loses out when it is passed on to the motorists and they find a transition that they had hoped to a less -- >> i want to see some numbers and evidence of that. the announcement you spoke

about, $3 million investment. that is a question -- when talking about 40,000 jobs under the fed. and thirty million on the stock price. doesn't do much if that perception was seen as investment, business values decrease. >> we are going to be speaking to someone who canceled the decision. we are happy to talk about that. and would make another point which is in the end, budgeted a series of judgments and i would not have been able to find the money to stop the fuel increase which was due to take place this week and indeed to cut by the

pay. there are substantial resources elsewhere and then looked at the oil companies that pool of those resources. so again it is a perfectly fair line of argument to say you shouldn't have increased these taxes and shouldn't have changed the plans for the fuel increases but you can't have your cake and eat it. something that is very clearly established in the last we 10 months is there is -- is not possible -- an automatic stabilizer based on the revenues that come in any way when the price goes up because as they say on page 11 the effect

installed neutral increases in the oil prices. to make it work i had to look to an additional tax drive. >> the water windfall, with the rising cost of fuel. you said that that didn't speak as much and that is good. the scott lin were clear but other companies are now cancelling investment projects. have other oil companies been in touch? there was proper dialogue in advance of this decision. 60% supplementary charge. >> i didn't think it was possible to actively consult a business sector on a tax drive, very difficult to undertake and

the previous government which i know you were no fan of either. that didn't consult on. is a very familiar increase in the supplementary judge. we are engaged. as an industry we know great deal about it. there is a dedicated part of the treasury because we run a very specific tax regime. we're constantly engaged in discussions with these companies and we know about the investment decisions and it was a reasonable thing to ask of the oil companies given the high price of oil and the stabilizer is clear. it is not particularly easy for democratically elected politician to say we cut taxes for oil prices and i make this promise and i don't know when that will happen. it could be next year or in

three or four years. but i did that. not because it was easy but because it was the right thing to protect investment. >> you said in answer that we need to be less dependent on debt fuel consumption. that cause the remark last year when you said we need to move away from an economic model being imposed. what, according to vcr, was the total debt in 2010? >> i haven't got another subject. >> they say in 2010, $1,060,000,000,000. >> will increase. i can anticipate your next question.

>> and what are you predicting at the end of this parliament in 2015? in 2015, will be 2,126. in essence you are presiding over five hundred sixty six billion pound increase which is 36. can you remember what the ocr was suggesting that the end of the parliament with the emergency budget forecast? >> you give me the numbers and our land to the question. >> they were saying was going to be $123,000,000,000 so they revised the projection by

$303 billion compared to june. whar our household going to force four fifty-four billion pounds? >> the short answer is we are coming out of an incredibly difficult situation where we have in for the deepest recession of our lifetimes, the biggest banking crisis in our history, the center large budget deficit, much larger, to meet in china and as a result, combine that with the higher than expected inflation and there's a squeeze on the income. that is clearly forecast and that makes life difficult for households. what i'm trying to do is achieved a medium term rebalancing of the british economy and when you look at debt levels in the economy is worth looking at private sector

debt levels in adjustable households and if they are improving so there is a rebalancing taking place but i can achieve this change in the space of a year or couple years. >> even if you inflation-adjusted figures it doesn't really explain the expansion and if you look at the 2010 birdy budget for test they had household debt falling as a percentage of disposable income from 1 fifteen cents to 1 forty-three two cent between 2010, and 2014. the figures that came out last week shows it increasing from 160% to 170% in the same period. how will you explain that? you have a downward trend and an upward trend as you enter?

>> the debt to income level was 174% in 2008. it was substantially higher at the end of that prolonged period of economic expansion. as i say i expect innovation driven by higher than expected rises in poverty prices. one of the principal causes is reflected in the household numbers. fortunately one of those pujols things that -- >> can that be explained that if you compare the figures from june to and the other than the effects of your policy is clear? with more information -- [talking over each other] >> i will make it up.

>> kenna point out, in relation to the release of gdp shown for substantial revision to the household savings ratio. in the fourth quarter it is 24%. up until now they fall to 3.5. on a related basis which obviously they didn't have access now that we found the budget kind of suggests that saving is falling out recently well. that doesn't mean it will happen in the future but the idea is the savings ratio has somehow fallen over the last six months. >> some might think the increase in household debt would lead to income and the figures released today showed household income falling by 0.5% in the fourth quarter of last year following a

rise of 0.5% in the third quarter and the first day annual drop since 1981. both of these things that my constituents -- [talking over each other] >> why, u.s. meanwhile the change. you should ask that. they are very clear that the principal reason for the attention of forecast has a reassessment of government measure. it has been a change in the inflation. and of course when they made the forecast in the autumn and the time of the budget they were aware of the consolidation that was built into -- that was built into their forecasts injun, in november and if that does not change the big thing that has

changed in the world has been the increase in commodity prices. >> there are many independent forecasts that might take issue with what you are saying because you are seeking to blame it all on inflation without much responsibility on yourself. what i was going to ask is what people want to know is what exactly you are going to do to help households reduce their debt and what they do in regards to disposable income, that government can do more to address that but it seems accounting for many of your measures, household debt is going to increase and disposable income falling. what is going forward -- >> there are a number of things governments can do to help families in a different time. not just british families but they bear a particular burden of

the deficit and devaluation added to the inflation pressures. there are quite a lot of measures in this budget. it was designed to try to help for example the increase in personal tax analysis to change what we have been discussing, all targeted at working people to drive to help them with the pressures they face but the truth, which is widely acknowledged around the world is the u.k. is coming out of a difficult situation, particularly severe banking crisis and any countries that have larger banking industries to support them, and as i say we

got this budget deficit and the inheritance which i had to deal with, the plans we put in place and tours not just by international organizations but every international organization, the right one is to invest in jobs which will help families with incomes and help them with the cost of living. >> what do you say to those who suggested a transfer in public debt to private? are you seeing a shifting of that? >> we are all citizens of this country. we shoulder the national debt and the deficit and when you run the budget deficit, at any point in a our peacetime history at

some point, this was pointed out by my predecessor we take difficult decisions and the public has to bear the burden of those. it was exactly a year ago, acknowledging that under his plan the squeeze was tougher than 1980. he acknowledged this. we acknowledge these are difficult decisions we had to make. last night we received a letter from the oecd on the budget. we release it to the committee. it said while this budget includes hard measures we are convinced they are unavoidable in the short term to pave the way to a stronger recovery. the united kingdom will continue on the road to stability. this is doubly rendered given

recent accounts in europe. forcing households to borrow it is unavoidable. >> what is unavoidable is dealing with a large budget deficit. every credible organization in the world has acknowledged that. every employer organization that represents people who will create jobs in this economy recognizes that. much as i would love to have inherited a budget surplus which might have been possible after a sustained period, unfortunately i didn't. i inherited the largest budget deficit in the g 20. [talking over each other] >> it would be helpful to site a few things on the morning -- find out about -- andrea? >> obviously a private sector recovery is key to turning

around our fortune and that is not going to come from the fn the sector. it is from the university sector. the you think project earnings will deliver enough fact finders to be able to support that private sector led recovery? >> that is what it is designed to do and i have taken the judgment which is the principal thing which i am asking of the banking industry, and increase in small business lending. there are things that are more transparent about pay and greater contribution to community projects and the like. the thing that is really possible and secure in the open which is a scarier practice is an increase in small business spending. >> could you comment on why it is a gross spending target? there are a lot of companies finding that the level of debt

is extremely difficult by falling in, finding what is being offered is refinancing at unavoidable rates and going to a new provider very easily. in some ways the net lending target might be better on the ground. >> the previous government friday net lending target in 2009/2010. this was a semi national bank which had a greater degree of control and the targets were grossly missed. the net targets were badly missed and looking at that experience it seemed to me there was the leveraging probably the fall of of the over leveraged

economy. you are in greater control of nts to linda. we had some success at the end of . we had some success at the end of the last governor of. we confirmed that in the budget last week. the industry are very clear that i expect to be met and monitor them carefully. the bank of england will take over that to provide us our independent verification as well. it is something with large banks around the world to keep putting leaflet down on british small business lending is something --

>> does what extent does the penalty have real teeth? if they don't beat the target will they really penalizes the ratio? >> that is what they have committed to. hopefully the committee will seek approval of flooding bflof that is an additional check and we have the bankroll to that. there is itional personal incentive, having a couple of those -- they know about the tension and something that was suggested. something the committee will want to kede an eye on. >> are you concerned about our

concentration of to 90% of lending being in the hands of the five biggest banks? >> one consequence of the banking crisis has been a conglomeration of industry. i would not say unavoidable but due to decisions taken at time. [talking over each other] >> this is accelerated over long term trend. people are very focused when it comes to the independent banking commission on the structure of the universal bank but they have a very important task in looking at the structure of the retail banking industry and issues around competition that comes from the nations of i asked them to look at this from an interim rde ort in april and we will se what they have to say.

>> next qthe rstioed. very large shareholding in some of the british banell. is there any consideration being given to corporate action the personal restructuring of those banell in the u.k. -- by some radical group like that? >> both banks -- [talking over each other] >> these are the two largest, that th have business loans. i would cause a minor panic in the markets--obviously the findings of the independent

banking commission which was looking at cothe uetition in th retail banking sector and very large players in that. >> who did it divest itself of shareholders in the commission's for report? clearly -- [talking over each other] >> that is pretty unlikely. >> you take competition fully into account. uetap ing s ier each othecis >> we are still some way of being able to divest -- you could suddenly see that today. does the country make a lot? we want to get money for monat a kat th consideration and rega to transfer -- we saw that the last couple years and will be a healthy debate about what we do

with the prver lee 9. >> you would have to see data required, business and lending. that th are collected in a way o you thought the agreement required banking? >> we are on top of monitoring the presentation and that inorormation. aspect of it migata be confidential -- [talking over each other] >> i should put down that we want you to provide it in the form -- in a form that will enable the public domain. >> we are happy to look at thate my suggestion having the committee as well helping to --

[tap ing s ier each othecis >> we p[tuld not be active on te subject. >> in answer to a npber of qthe rstions ere vressing conce about the inflation that you read about the target of 2%. you will well aware. ha pharma ha projected to do? first of all in the exchange of

letters that i had done too many occasions -- >> there will be many more. >> we will make a forecast. >> i made it very clear that we are absolutely committed as a government with working with the incentive to maintaining strong inflation stocks. my personal view is the governor's speech this year set out becauses of inflation. it was a good one and i share that analysis. not everyone does. i do share that analysis. and the forecast on inflation is for it to come back. what they are tossed with doing before i arrived in the job.

we are heeding the target in the medium-term. the forecast bears out -- >> the sales say's two years -- we haven't actually gotten there. a group of economists were unanimous in the view that it was too tight and monetary policy--wonder if you had given any consideration to the optimal level to the monetary policy. >> as economists you spoke to

the view of the i man theory cd and the g 20 business organizations in britain. if we were to lose and the policy this would be a judgment -- we want to loosen fiscal policy. that would be a monetary response -- an increase in interest rates. i don't see how that would particularly help the economy. what i am able to dubai providing a credible plan to the budget deficit, give the space to make a decision that it needs to make and it is annoying to make this point before the committee but it is worth noting that the u.k. market is 3.6%. in general they are three.three

cents. in spain their 8%. that is the monetary figure, and fiscal policy can provide. >> the monetary policy committee has something in terms of its monetary policy because the particular fiscal plan -- i accept that would be consequences for your fiscal stance. many people think that the best way forward for the british economy. >> i don't want to speak for the governor buddy in the speech you gave last year, he acknowledged

there was a trade-off. uniate parallel committee over the house of lords but the problem last year was the absence of plan a that labeled nbc to keep the rates lower. very high budget deficit which we are bringing down. you do have to be done anyway. you spend parliament getting down by half as the previous chancellor did but you have to get the next one down. a structural deficit doesn't go away when the late economy bounces back. we spend eight years doing this and provide that critical policy secured on credit rating and

keep interest rates low and enabled -- >> we recently interviewed a court of the bank of england, the governor, has been sucked into political -- the chairman -- was unfortunate the way he was commenting on -- do you accept any responsibility for political issues? >> an extremely independent minded individuals.

somehow hired and in that. and expected himself in a robust and independent >> [talking over each other] >> he is very careful about how he expresses his opinion tuned carefully choreographed speeches. the idea that he doesn't want to be dragged into -- [talking over each other] >> you will know the committee, he is pretty robust in his independent views but anything the government says, the roles in the conduct was about the perception, the perception among the public about -- [talking over each other]

>> -- issues by politicians. >> in public they specifically made that point. to get him to appear and ask questions. >> can i move on to a separate issue? >> if you could. >> all in one. the flagship policy, contributions to small companies and other parts of the country in london. officials -- after six months, the jobs being created in the of thousands, back to the drawing board. >> i want to encourage greater pickup. the problem with this policy is -- that part we might be a timing issue. it only applies to new

businesses so these new businesses have a mission and sometimes it takes time to take on honest employees. [talking over each other] >> what we have done is we want to encourage a great pickup of it but when businesses are aware of it, many said it was a timing issue, but when they are aware of it they are enthusiastic about it. the idea is not to change the policy but encourage take up. >> job losses in a crumbling sector around something -- this policy was or originally intended to create opportunities of 400,000 people who think it was a four year timescale.

is this not a mountain to climb in terms of getting this policy -- the claim that was made at the time of the election that any loss of public sector jobs would be 5% of jobs? >> certainly not the only policy to encourage the recovery or job creation. i do want to see an increase and encourage that. this e. economy created 428,000 private-sector jobs in the last year. there is private sector job creation taking place. now that i mentioned it, they have revised down the forecast of the total number of public sector jobs that will be

removed. we can avoid national -- far higher than what they want and the organization regarded as acceptable, we have got to get through the front. good news about the budget is the private sector represents organizations and the british gun including a longstanding labor support. the but it incurred investment to create growth, jobs and so on. there has been a positive reaction from the organization and businesses that create jobs. [talking over each other] >> if you don't mind. >> we are more philosophical. having to do with the cuts

having contributed. the financially illiterate, spending cuts, nothing you can do about that. very large sections, very targeted. a group of leads came to pensions and pay and another group of women's institute marching on saturday about laundry cuts. how are you going to persuade the nation that you spread the cup and a single group of people are more unfairly treated? >> that is the great challenge. i try to make sure the burden is spread. the distribution tables, it is

interesting but actually showed it is pretty evenly distributed across the income -- when it comes to public sector pensions i go out of my way to get a former labor pension secretary to do a report of a fair future settlements to make it clear we shouldn't be cherry picking on either side. there were things that were a benefit to the exchequer and other things -- they should accept the whole package and more broadly, one of the biggest challenges we had has been the tension between trying to micromanage everything from the center and allowing when it comes to the local authorities to distribute for them to make

their own decisions about their priorities and choices. it would be extremely tempting to be in complete control and -- what we do is allow local authorities to make their own decisions about how of they want to distribute things. that was a long answer but these are the judgments that i have tried to bring together on the budget. i am seeking to spread -- if you look at the narrow sense, the losers in the budget, the people who have to pay more taxes, people who have avoided taxes and the whole tax package, polluters, oil companies, there has been an increase in the banks. i have tried to take decisions that would be brought --

>> fantastic. my second question is philosophical. could the government say the big party's way of making government -- passing down responsibility to communities learning how to get the government, how do you respond to that? >> a philosophical answer. depends how you think the country should be run. personally i think running the finger from the center is not a great success and we should trust local councilors and others to do what they are elected to do and make decisions for their own local community. it is striking how different local authorities have gone about very similar reductions in their budget. just look at different councils. they had some remarkably different results with similar productions in their graph with

public sector job losses and the council minimizing that. city council maximizing it. >> my final question is one of the things that seems to receive remarkably little comment is the philanthropic measures introduced as you look at these tables and contribute $5 billion -- five million to charity over the next -- do you think the coverage on this is a reflection that the philanthropic nation, you see different organizations like run kerns's impact on this? are you especially conscious of that? people have more interest in the price of a liter of petrol than many other things.

>> that will get the headline that the budget got the next day. we spent quite a lot of time working on the package. it has been many months and i think it will have a big impact. not just the changes for it the biggest givers and the richest where we made the change to the inheritance. to charity you get a cut in your inheritance tax bill. that does not benefit children will lead to charities and there are some losers. also i think the biggest change will be the bucket collections in the streets for local charity will be taken and that will be a

huge boost i hope to much smaller charities and smaller donations. what i want to do is establish not just me but -- i have an interest in that and others things. we want to establish a new norm where people give more of their income to charity particularly the wealthy but much lower income and these tax rates by themselves will achieve that but they will help nudge and famine in that direction. >> that depends of what they are. [inaudible] how much is taken by the tax money? >> around 60 odd pence.

it doesn't know how much tax it takes in petrol. is that $0.61 or $0.69? hy am asking if you have chance, you're responsible -- i am asking you how much currently is a leader of petrol -- [talking over each other] >> from 58.95 pence to fifty-seven.95 pence ending january increase to 16.97 pence. >> look. you are all so -- [inaudible] -- how much levee is. how much of the one lb 30 --

that people pay? how much goes to you in tax? >> you charged 70 or 80 on top of that. >> it is -- 1 poll of 30, und 3 to the exchequer. tower much was levied by conservative chancellor including yourself? >> i am responsible for 58.9, and -- >> rod again because you increased -- you have added in your year as chancellor

petro. [talking over each other] >> it will go up 55 pounds. the other affect will be free pens less than it would have been. -- [talking over each other] >> i want to know how much it is now, how much of that $0.18 was brought in by conservative chancellor like yourself? >> no doubt you will tell me. [talking over each other] >> i looked at the situation inherited. [talking over each other] >> 70% of the tax on fuel in this country has been by you and your conservative predecessors.

my question is a philosophical one. why is it that conservative chancellor's like to target that so much? >> let me deal with the situation i am responsible for. i inherited increases in the march budget last year. i have been able because of the north sea oil companies to avoid the increase later this week and delay the rpi elements and next week's increase which was planned and to abolish the escalator which would have been put in place. >> we know that. my -- [talking over each other] >> the basis of the budget, my

patrol -- [talking over each other] >> has gone up by 10 pounds to fill up but for all people -- [talking over each other] >> take responsibility for the things you vote for and believe you are responsible and i happen to believe that we take collective responsibility and can legitimately say we take responsibility -- [talking over each other] >> -- to reduce patrol --petrol. >> you have chosen not to do with your project. to a council who in addition to what you did are also putting on an additional premium on diesel.

the authority you referred to -- >> the counselor is better at making decisions than i am. [talking over each other] >> a stealth tax for small-business, on top of the 20 pounds to fill up -- [talking over each other] >> white fans are bigger than cows. >> we see petro going to one down 50. >> is that acceptable if petrol went over? >> what i said clearly in my budget speech was neither i nor any other british government can be responsible for the international oil price but we can be responsible for taxes we

levy and we are responsible for the votes to be cast about those tactics. >> what we see is petrol going to one pound 50. >> i am not making -- i am not in charge of the oil prices. i am in charge of the taxes. i made a decision which was to delay the rpi increase and abolish the escalator. [talking over each other] >> i can say petrel is going to be less than it would have been. >> small-business people who are the engine of growth, the one thing you and i agree on, having to pay to fill up their vehicles to do their job when the oil chancellorship -- you are not prepared to say that is another

20 pounds. how will businesses white theip mouth? how will they contribute to growth in the economy when you are not prepared to do it? >> without going over the ground about this -- i will just point out the duties they pay will be less than if you are going to carry the day. the second saying is more generally, there are things like extending the rate of holiday -- [talking over each other] >> you run a small-business, petrol prices and diesel prices in particular, to

small-businesses in this country -- >> that is why i have taken two billion pounds out of the oil administration in order to reduce the duty and stop the developing tax rises that were coming down the line and tried to rebound taxation as well as taking other measures to help small-businesses. [talking over each other] >> do i take it you won't do anything about the fact that in the oil chancellorship already 20 pounds more every time they pull up than when you came in and may well go further? do you intend to address this problem in that sector of the economy? >> to make sure that under my chancellorship assuming i can

carry the vote that petrol will be 3 pence than would-be -- 3 pence less than it would be. >> take on fuel prices which is a huge difference to people in rural areas. hy x for the tendency of the commission to -- [inaudible] [talking over each other] >> if i may ask the chancellor in a little time that remains, the fiscal deficit which is slightly targeted in his fiscal mandate. i noticed the public sector --

what has been taken from seven hundred fifty-nine billion last year to avert $1,300,000,000,000 a year at the end of the period. a huge interest costs. >> yes it does. that is why i supplemented the fiscal mandate which is a cyclical measure with a debt target with a proportion of national income. the best way to measures that by the end of the period 2516. that is a supplementary target. that is because i thought it would be extraordinary to get to the end of this parliament and have national debt rising as a proportion of gdp. >> the question of where growth

will come from, essentially says that growth is really set and utilized -- they will of the growth demanded by the death. it at least has as much mortgage -- >> it is a combination of measures. some of these will take longer to come into effect. some planning changes will be felt -- they will have profound effects. supply side changes to the economy are difficult to achieve but are very rewarding and long term. tax measures often have the immediate effect. we were talking about simon

priestly. but they're not accompanied by supplies for the economy. they won't have a lasting effect. >> there has been great public concern about the costs and lack of transparency. and what the treasury has done a long side this -- [inaudible] -- could you just tell the committee would you would like to see in terms of an ideal outcome looking back to what has been done given that we have an inquiry in this area? >> i think a lot of work has to be done because an awful lot of time, we will be paying for it for long time.

the total cost to the government if you discount the value of 1 twenty-one billion pounds, quite a lot of contracts with how high regard on the public sector side to values the money and the industry has done very well out of the arrangement. we have taken one contract and look at it and see if we can't renegotiate and that opens the way to further negotiation rather than rushing into a general negotiation without one specific project to see what we can achieve. >> that would be the basis for a fairly unflinching source of value to the taxpayer. thank you for that. the final hobbyhorse of mine.

we have dozens of pumps at the moment and they are lifelines alongside the primary school and villages. has the treasury ever looked at the question of rebalancing as far as the market trade and the un trade? given the value of supervised drinking for younger people, that has tremendous socialon tr? given the value of supervised drinking for younger people, that has tremendous social benefit as well as -- >> we have considered it and remain open to plans to prove workable and legal and france has tried to reach successful outcome with the european